Thai Sikh International School
E-Learning Programme – Online
Assignment – 03/02/2015
Name
: Subject
: Business Studies
Year : 9 A/B Schedule No. : 6
Chapter 5
ReRead
the case study and then complete the table by identifying what source of
finance is used at each stage whwere a letter appears in bold.
JeJed
and Nicola had wanted to buy a hi-fi system for years. They had visited shops
regularly and
investigated mamany different types of equipment. Jed also worked
as a DJ at birthday parties,
weddings and other events. He He was an expert in
setting up and troubleshooting the equipment he used.
Because of his expertise
they dedecided to turn their hobby into a business of opening a shop in the
town
centre.
t hey
found a shop premises to rent but needed money for display equipment and
initial stock. The
business wawas called Hi-Life Sounds. Fortunately they had
enough money in their savings to do this. (A).
Business
was slow at the beginning, but satisfied customers told their friends about the
shop and within
six momonths, Jed and Nicola had made enough profit to invest
in a special booth where customers could
assess the so quality of the equipment
more easily. (B)
The
business continued to do well and Jed and Nicola decided that their customers
would appreciate
having ththe equipment they purchased being delivered to their
homes. However instead of buying a van
they found a mmethod whereby they could
pay each month and all the servicing and repair bills would be
included. (C)
After
a couple of years they decided to open another ship in a neighbouring town.
Profits had been good,
but ththere was not enough to set up the new shop so
they approached a bank to borrow the money
needed. They dddecided to pay back
the money within 3 years. (D)
After
six years. Jed and Nicola owned five shops, all of which were within a 15 mile
radius and the first
shop. OnThe day they received a telephone call from Paul.
Paul worked for a finance company called
‘FastTrack’. Paul explained that his
company specialised in investing in small businesses which were doing
well and
had the potential to grown even bigger. (E)
After
several meetings, it was agreed that FastTrack would have a 50% share in
Hi-Life Sounds. Part of
the agreement was that FastTrack would advise on how to
expand the business rapidly with the eventual
aim of hahaving 50 more shops
around the country. Three of the shops were set up with assistance
because of
high local unemployment. (F)
After
12 years, 50 extra shops had been opened. Fast Track was happy that the value
of its investment
had grown but now wanted to release its money for other
ventures. Paul suggested that it was time to use
the Stock Exchange to raise
money. (G)
Though
the business was healthy at this stage, progress had not been without it
problems. In the middle
of ththe expansion, the economy had a couple of years
of recession and people could not afford to buy
products frfrom Hi-Life Sounds,
therefore their profits fell. As a temporary measure, 5 shops were sold
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Statement
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Source
of finance
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Advantage
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Disadvantage
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A
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B
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C
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D
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E
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F
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G
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H
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