Business (AS & A Level) · May / June 2021 · Paper 23 · Question 1

Bilal’s Homes (BH) Bilal is a sole trader, who buys and sells apartments for a profit. Bilal left university two years ago and moved back to his parent’s home in city W. He lacks social skills but he has always been good at self-management, so he wanted to start his own business. Bilal bought his first apartment using money that he borrowed from his parents. He spent some time and money improving and upgrading the apartment and was able to sell it for a profit. Bilal paid his parents back and then had enough capital to purchase his second apartment. Since then, Bilal has bought three more apartments. Table 1.1 shows some financial details about the last three apartments that Bilal bought and sold. Table 1.1: Financial details about the last three apartments that Bilal bought and sold Apartment Purchase price ($) Cost of improvements and upgrades ($) Selling price ($) A 58 000 8 000 80 000 B 120 000 10 000 150 000 C 65 000 15 000 70 000 Bilal has done some market research and has found out that customer demand for buying apartments in city W is increasing. He knows that he needs to purchase as many apartments as he can before the prices increase. However, he is limited by the capital he has in the business. Bilal has been approached by Sophie, another entrepreneur, who also buys and sells apartments. Sophie would like to enter into a business partnership with Bilal. She has provided Bilal with some details from the last year about her business. Bilal can use this data to help him decide if he would like to enter into the partnership (see Table 1.2). Table 1.2: Details about Sophie and her business in 2020 Number of apartments bought and sold 6 Number of apartments that made a profit 4 Number of apartments that made a loss 2 Profit margin 11% Capital available at end of year $150 000 Sophie’s main competencies Social skills and social awareness 5 10 15 20 25

Read automatically from the paper; the printed page above is exact.