OTE2601 Assignment 2 (DETAILED ANSWERS) 2024 - DISTINCTION GUARANTEED

OTE2601 Assignment 2 (DETAILED ANSWERS) 2024 - DISTINCTION GUARANTEED - DISTINCTION GUARANTEED Answers, guidelines, workings and references..... QUESTION 1 Every entrepreneur has certain expectations and goals when choosing a business. 1.1 What is a close corporation in business? Give one examples. (5) 1.2 You are a Grade 7 teacher leading a discussion on the different kinds of franchising. 1.2.1 What are the issues to consider when discussing about capital requirement for a franchise (10). 1.2.2 Do you agree with the assertion that businesses fail for a number of reasons? Substantiate on your answer by discussing the following; 1.2.2.1 Incompetent management (2) 1.2.2.2 Lack of experience (2) 1.2.2.3 Poor financial control (2) 1.2.3.4 Inflexibility (2) 1.2.3.5 Unrealistic time frames (9) [25] QUESTION 2 2.1 Profit is the compensation that someone is entitled to when delivering a service. In other words, when an article is sold at a higher price than what it was bought for, the difference is the profit. When, however, the expenses exceed the income, we have a loss. Sometimes this is the case, but when a business makes too much profit because of too high prices, clients will go and buy from other businesses in the vicinity. This will force the retailer to lower the prices. Elaborate on any five factors which influence profit /15/ 2.2 After the entrepreneur chooses a specific form of business, the business is established by complying with the legal requirements. There are general as well as specific legal provisions for the different forms of business. Discuss the general legislation of business. You answer should focus on the following; 2.2.1 Licensing (3) 2.2.2 Name (3) 2.2.3 Registration of trade marks, patents and design (3) 2.2.4 Contractual capacity (3) 2.2.5 Registration of the new business (3) /15/ [30] QUESTION 3 Financial management means planning, organising, directing and controlling the financial activities such as procurement and the utilisation of funds of the enterprise. It means applying general management principles to the financial resources of the enterprise. Discuss the following functions of financial management and give suitable examples; 31. Estimation of capital requirements (6) 3.2 Determination of capital composition (6) 3.3 Choice of source of funds (6) 3.4 Investment of funds (6) 3.5 Financial controls (6) [30] QUESTON 4 The law protects the consumer. The prices of certain goods are fixed, for example the price of specific kinds of bread. This means that nobody is allowed to sell these goods at more than the fixed prices. Discuss any 3 the following factors which influence profit: 4.1 Kind of business (5) 4.2 Element of Risk (5) 4.3 Competence of the entrepreneur (5) 4.4 Turnover and market size (5) 4.5 New production techniques (5)