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Date May 2018 Marks available 6 Reference code 18M.1.SL.TZ0.3
Level Standard level Paper Paper 1 Time zone Time zone 0
Command term Explain Question number 3 Adapted from N/A

Question

Refer to Afghan Sun case study SL/HL P1 May and Nov 2018

Describe two advantages for AS of using cellular manufacturing in the production of its solar power systems.

[4]
a.

Refer to Afghan Sun case study SL/HL P1 May and Nov 2018

Explain the advantages for Su of forming AS as a private limited company.

[6]
b.

Markscheme

PLEASE NOTE: Cellular production is not included in the syllabus for 2024 exams onward. Related parts of this multi-part question may be used.

• Cellular production relies on team work, which helps motivation. Tasks are completed by the team.

• This could help AS achieve its desired high quality, efficient use of resources, reduction of waste.
• Complexity of assembling solar panels which may require teams.

Context includes: AS is based on teamwork (volunteers), good way to empower employees which is what Su wants to do, quality is important to AS.

Accept any other relevant advantage.

Mark as 2 + 2.

Award [1] for each advantage identified, and [1] for the development of each of these advantages in the context of AS, up to a maximum of [2].

a.

Refer to Paper 1 markbands for May 2016 forward, available under the "Your tests" tab > supplemental resources.

Advantages:
• Limited liability – the business is fairly high risk so Su may need protection of her personal finances.
• Limited number of shareholders – may be important to retain the high ethical values.
• Difficult to takeover – Su will want to keep this project hers.
• Separate legal entity.
• Able to raise additional finance without losing control.
• Continuity assured.

Context includes:
Protects Su’s other assets.
Afghanistan is high risk, incorporation reduces the risks to Su.
AK Bank may not want to work with an unincorporated business.
May be easier to arrange finance as shown in cash flow.

Accept any other relevant advantage.

Marks should be allocated according to the paper 1 markbands for May 2016 forward, section A.

Award a maximum [3] for a theoretical answer.

Award a maximum [4] if only one advantage, in context, is considered.

Award a maximum [5] if the explanation is mainly descriptive, but in context.

b.

Examiners report

[N/A]
a.
[N/A]
b.

Syllabus sections

Last exams 2023 » Unit 1: Business organization and environment » 1.2 Types of organizations » The main features of the following types of for-profit (commercial) organizations: sole traders, partnerships, companies/corporations
First exams 2024 » Unit 1: Introduction to business management » 1.2 Types of business entities » 1.2.2 The main features of the following types of organizations: Sole traders, Partnerships, Privately held companies, Publicly held companies
Last exams 2023 » Unit 1: Business organization and environment » 1.2 Types of organizations
First exams 2024 » Unit 1: Introduction to business management » 1.2 Types of business entities
Last exams 2023 » Unit 1: Business organization and environment
First exams 2024 » Unit 1: Introduction to business management
Last exams 2023
First exams 2024

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