Business Studies · Oct / Nov 2021 · Paper 11 · Question 4

BGR is a private limited company. It operates 6 cinemas in different towns. Effective internal communication is important for BGR. The Finance Director has been analysing BGR’s accounts and an extract is shown in Table 4.1. BGR plans to open another cinema and will need to recruit 10 new employees. The new cinema will cost $8m. The Finance Director has to decide whether BGR should issue new shares or use a bank loan to finance the expansion. Table 4.1 Extract from BGR’s Income statement for year ending 2020 ($000’s) Revenue X Cost of sales 180 Gross profit 720 Expenses Y Profit 400

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