Business 9609/32 October/November 2025: question paper and mark scheme

Mark scheme

1 Analyse one advantage and one disadvantage to KTJ of delegation. 8 Level AO1 Knowledge and AO2 Application 2 AO3 Analysis 4 marks understanding marks 2 marks 2 3–4 marks Developed analysis • Developed analysis that identifies connections between causes, impacts and/or consequences of two points. • Developed analysis that identifies connections between causes, impacts and/or consequences of one point. 1 1–2 marks 1–2 marks 1–2 marks Limited analysis • Knowledge of two • Application of two • Limited analysis that identifies connections relevant points is relevant points to a between causes, impacts and/or consequences of used to answer the business context. two points. question. • Application of one • Limited analysis that identifies connections • Knowledge of one relevant point to a between causes, impacts and/or consequences of • relevant point is business context. one point. used to answer the question. 0 0 marks 0 marks 0 marks No creditable response. No creditable response. No creditable response. Note: • If more than one advantage and/or more than one disadvantage is identified reward the best advantage and best disadvantage. • L2AN (3 marks) is possible for just one point made. • All annotation ( ) should be in the left margin. 1 Responses may include AO1 Knowledge and understanding Definition of delegation (max K 1 mark) is passing authority down the organisational hierarchy. Note: Do not reward ‘manager giving a task to a subordinate’. Definition needs to include some reference to authority or responsibility. Knowledge of advantage to KTJ of delegation (max K 1 mark) • Motivational impact on employees. • Enables senior management to focus on strategic issues. • Preparation for promotion. • Improves quality and speed of decision making. Knowledge of disadvantage to KTJ of delegation (max K 1 mark) • Poor decision making possible. • Cost of ensuring employees are capable of accepting authority. • Negative impact on consistency of decision making. • May demotivate employees who do not want any further responsibility. AO2 Application Limited application, applies knowledge to KTJ once. Developed application, + applies knowledge to KTJ twice. Max one for application for the first element and max one for application for the second element. Application is making use of relevant case information not just repeating it. • KTJ has won awards for investment in employee training. • KTJ’s training investment supports effective delegation. • KTJ has a flat hierarchical structure which supports use of delegation. • Using examples from the case of delegation in action: – Research into use of plastic bottles. – Junior market analyst given task of recommending an important strategic change. – US marketing manager given responsibility for devising and implementing new marketing plan. 1 AO2 Analysis Limited analysis – candidate shows one link in the chain of analysis. Developed analysis – candidate shows two or more links in the chain of analysis. Chains of reasoning highlighting likely impacts of delegation: • Delegation will give employees experience of taking responsibility and therefore prepare them for promotion resulting in more effective senior managers in the future • Employees need to be equipped with the skills necessary for taking authority and therefore KTJ must invest in • training thus increasing costs and potentially reducing profits • Delegation free up senior management time for strategic growth decisions resulting in more effective management of the long term growth of the business • There is a risk of inconsistent decision-making across markets affecting the brand image of KTJ and thus resulting in a loss of revenue Accept all valid responses.

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2 Analyse two impacts on KTJ of its commitment towards corporate social responsibility (CSR). 8 Level AO1 Knowledge and AO2 Application AO3 Analysis 4 marks understanding 2 marks 2 marks 2 3–4 marks Developed analysis • Developed analysis that identifies connections between causes, impacts and/or consequences of two points. • Developed analysis that identifies connections between causes, impacts and/or consequences of one point. 1 1–2 marks 1–2 marks 1–2 marks Limited analysis • Knowledge of two • Application of two • Limited analysis that identifies connections relevant points is relevant points to a between causes, impacts and/or consequences of used to answer the business context. two points. question. • Application of one • Limited analysis that identifies connections • Knowledge of one relevant point to a between causes, impacts and/or consequences of relevant point is business context. one point. used to answer the question. 0 0 marks 0 marks 0 marks No creditable response. No creditable response. No creditable response. • If more than two impacts are identified reward the best two impacts. • L2AN (3 marks) is possible for just one point made. • All annotation ( ) should be in the left margin. 2 Responses may include AO1 Knowledge and understanding Definition of CSR (max K 1 mark) • When businesses consider the interests of society by taking responsibility for the impact of their decisions and activities on stakeholders. • Benefits of CSR (max K 2 marks) • Can enhance brand image. • Increased sales. • Competitive advantage. • Greater control over prices – make demand more price inelastic. Limitations of CSR (max K 2 marks) • Cost. • Impact on cash flow. AO2 Application Limited application, applies knowledge to KTJ once. Developed application, + applies knowledge to KTJ twice. Max one for application for the first method and max one for application for the second method. Application is making use of relevant case information not just repeating it. • Research into plastic bottles to reduce environmental impact of packaging. • Using seasonal fruits in juices with no added sugar. • Purchasing fruit from local farm cooperatives. • Need to audit the farming methods of suppliers. • ‘Soft’ approach to managing human resources. • KTJ markets juices as premium products. • Seasonal local fruit reinforces KTJ’s sustainability strategy. • Linking to mission statement 2 AO3 Analysis Limited analysis – candidate shows one link in the chain of analysis. Developed analysis – candidate shows two or more links in the chain of analysis. • Effective CSR can enhance the branding of KTJ resulting in more loyal customers and therefore increase profit • Having to change packaging of bottles will increase costs making juices more expensive reducing competitiveness against other rival brands leading to a reduction in sales. • Purchasing fruit from local farm cooperatives may increase costs making juices more expensive which will decrease profits • KTJ will need to spend more money on auditing its activities which will increase costs • Commitment to sustainability can reduce price elasticity of demand and therefore enable KTJ to increase prices and therefore increase profit Accept all valid responses.

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3(a) Using the data in Table 1.2, calculate the payback of the country C location. 2 Responses may include Payback is in the fifth year (1) Cumulative Year Net cashflow ($m) Cashflow 0 (10) (10) 1 0.5 (9.5) 2 1.5 (8) 3 3 (5) 4 4 (1) 5 4 3 Payback is 4 years 3 months OR 4.25 years (2) Units required for full marks (Years/months) Common error 5 years 3 months (1 mark if with evidence of appropriate working e.g. attempt at cumulative cashflow) 3(b) Using the data in Table 1.3, calculate the accounting rate of return (ARR) of the country D location. 2 Responses may include ARR = Average profit / average investment × 100 (1) = 2.8 / 12 × 100 = 23.3% (2) Answer of 23.3 or $23.3 (1 mark only) Using alternative ARR equation: 2.8 / 20 × 100 = 14% (1) 3(c) Evaluate which location KTJ should choose for its new factory. 12 Level AO1 Knowledge AO2 Application AO3 Analysis AO4 Evaluation 6 marks and understanding 2 marks 2 marks 2 marks 3 5–6 marks Developed evaluation in context • A developed judgement/conclusion is made in the business context. • Developed evaluative comments which balance some key arguments in the business context. 2 2 marks Developed 2 marks Developed 2 marks 3–4 marks knowledge of application of Developed Developed evaluation relevant key term(s) relevant point(s) to analysis that • A developed judgement/conclusion and/or factor(s) is the business identifies is made. used to answer the context. connections • Developed evaluative comments question. between causes, which balance some key impacts and/or arguments. consequences. 1 1 mark 1 mark 1 mark 1–2 marks Limited knowledge Limited application Limited analysis Limited evaluation of relevant key of relevant point(s) that identifies • A judgement/conclusion is made term(s) and/or to the business connections with limited supporting factor(s) is used to context. between causes, comment/evidence. answer the question. impacts and/or • An attempt is made to balance the consequences. arguments. 0 0 marks 0 marks 0 marks 0 marks No creditable No creditable No creditable No creditable response. response. response. response. 3(c) Responses may include: AO1 Knowledge and understanding Definition of payback / ARR / NPV (max 1 mark for definitions of any or all of these terms) Factors in the decision • Shorter payback. • Higher ARR. • Capital cost. • Revenue expenditure required. • Quality of infrastructure. • Access to labour and utilities. • Political/legal environment. • Quantitative and qualitative factors. AO2 Application Limited application, applies knowledge to KTJ once. Developed application, + applies knowledge to KTJ twice. Application is making use of relevant case information not just repeating it. Using data from Tables 1.1, 1.2 and 1.3 • Country D location is double the capital cost • Country C has quicker payback by 9 months • Country C has higher ARR by 1.7% points • Country C may have lower wages • Easier to export from Country D • Bigger potential market in Country D • Competition between farmers in country C • Economies of scale in country D farming of fruit • Mission statement regarding sustainability and ethical relationships with farmers. 3(c) AO3 Analysis Limited analysis – candidate shows one link in the chain of analysis. Developed analysis – candidate shows two or more links in the chain of analysis or balance of argument. • Country D is a middle-income country and therefore households will have a higher income this will result in higher sales of juices • KTJ juices are a premium product so will be relatively expensive so juices may be less affordable in country C • leading to lower sales • Seaport in country D will facilitate exports of KTJ’s juice resulting in higher sales and may therefore increase profit • Reliable infrastructure in D could reduce delays and protect brand image resulting in higher sales . • Lower fixed costs in C could improve cash flow reducing risk of liquidity problems for KTJ • Economies of scale in D may reduce per-unit costs and therefore increase profit . AO4 Evaluation Limited evaluation – limited supported judgement and/or a weak attempt at evaluative comment. Developed evaluation – supported judgement and/or reasonable evaluative comment. Developed evaluation in context – supported judgement in context and/or reasonable evaluative comment in context. • Supported judgement as to whether country C or D is better. • Factors that decision might depend on: – Ability of KTJ to raise finance for more expensive option. – Willingness to take risk – electricity supply in country C and additional capital cost in D – Fit with KTJ’s CSR – small farms rather than large scale fruit production – Importance of profit. C is marginally more profitable that D. – Depends on KTJ’s tolerance for operational risk versus willingness to commit higher capital expenditure – Country D offers greater stability and scalability but requires larger upfront investment – Country C better supports CSR positioning but may compromise operational reliability – A phased investment strategy could balance initial risk with future growth potential – Decision may be influenced by external factors such as currency movements, access to finance and market growth trends • Questioning whether Gudaf has the necessary experience / skill to conduct this investment appraisal. Accept all valid responses.

Mark scheme

4(a) Using the data in Table 1.4, calculate the four period centred moving average for Quarter 1 2025. 4 Responses may include: 4 period moving average = 8 period moving total / 8 (1 mark if no relevant calculation) Calculation of one or two relevant 4 period totals (1) 7 + 5.5 + 4.2 + 6.4 = 23.1 AND/OR 5.5 + 4.2 + 6.4 + 7.6 = 23.7 Calculation of relevant 4 period totals and relevant 8 period total OR calculation of relevant 8 period total (2 marks) 8 period total = 23.1 + 23.7 = 46.8 (2) Centred quarterly moving average = 46.8 / 8 (3) = 5.85 or $5.85m (4) Other common answers: 23.1 / 4 = 5.775 OR 23.7 / 4 = 5.925 (2) Not using the correct sales volume figures. 4 consecutive quarterly sales volumes added together and divided by 4 = 1 mark e.g. (6 + 7 + 5.5 + 4.2) / 4 = 22.7 / 4 = 5.675 (1) 4(b) Evaluate the usefulness of time series analysis to KTJ in making business decisions. 12 Level AO1 Knowledge AO2 Application AO3 Analysis AO4 Evaluation 6 marks and understanding 2 marks 2 marks 2 marks 3 5–6 marks Developed evaluation in context • A developed judgement/conclusion is made in the business context. • Developed evaluative comments which balance some key arguments in the business context. 2 2 marks Developed 2 marks Developed 2 marks 3–4 marks knowledge of application of Developed Developed evaluation relevant key term(s) relevant point(s) to analysis that • A developed judgement/conclusion and/or factor(s) is the business identifies is made. used to answer the context. connections • Developed evaluative comments question. between causes, which balance some key impacts and/or arguments. consequences. 1 1 mark 1 mark 1 mark 1–2 marks Limited knowledge Limited application Limited analysis Limited evaluation of relevant key of relevant point(s) that identifies • A judgement/conclusion is made term(s) and/or to the business connections with limited supporting factor(s) is used to context. between causes, comment/evidence. answer the question. impacts and/or • An attempt is made to balance the consequences. arguments. 0 0 marks 0 marks 0 marks 0 marks No creditable No creditable No creditable No creditable response. response. response. response. 4(b) Responses may include: AO1 Knowledge and understanding Limited knowledge will be demonstrated through knowledge of TSA. Developed knowledge + will be demonstrated through knowledge of TSA and its usefulness. Examiner note: Do not reward comments that TSA is time consuming or calculations are complex or that workers require training. • Sales forecasting involves making a prediction of future sales. • Time series analysis is a method of forecasting based on extrapolation from past data. (maximum of 1 mark for definition of TSA / sales forecasting) • Benefits include: – Contribution to workforce planning. – Planning purchase of resources. – Greater accuracy in cash flow forecasting. – Aids operational decisions such as need to increase capacity. – Aids decisions about pricing. – Improves forecasting accuracy – Identifies both trend and seasonal variation. • Limitations – Based on historical data – Does not account for external changes AO2 Application Limited application, applies knowledge to KTJ once. Developed application, + applies knowledge to KTJ twice. Application is making use of relevant case information not just repeating it. • Q3 is peak month for sales. • Juice is not produced in the US but is imported. • Helps plan fruit imports. • The US market is very competitive. • Fluctuations in country B’s exchange rate. 4(b) AO3 Analysis Limited analysis – candidate shows one link in the chain of analysis. Developed analysis – candidate shows two or more links in the chain of analysis. • Helps ensure efficient use of labour and machinery helping to control costs of production and therefore profit. • • Contributes to creating cash flow forecast which will help ensure that KTJ has sufficient finance in place to deal with future needs. • Identifying the trend in sales growth will help set realistic marketing objectives in the marketing plan thus ensuring that resources are not wasted AO4 Evaluation Limited evaluation – limited supported judgement and/or a weak attempt at evaluative comment. Developed evaluation – supported judgement and/or reasonable evaluative comment. Developed evaluation in context – supported judgement in context and/or reasonable evaluative comment in context. • Using 4 period moving average fits the data well as there are clear seasonal variations ensuring that the technique is more likely to give reliable results. • Unexpected changes in the external environment such as entry of a new competitor will result in the predictions being incorrect and therefore less useful in making the best decisions. • TSA relies on future events behaving as in the past so may not be reliable as markets are dynamic • May be advisable to introduce an element of probability to the forecasts – what if analysis • Usefulness depends on stability of seasonal trends over time • Forecasts may be less reliable if market conditions change unexpectedly • Most effective when combined with other forecasting methods • More suitable for short-term operational planning than for long-term strategic decisions • Practical value depends on KTJ’s capacity to adjust production and procurement in response to forecasts Accept all valid responses.

Mark scheme

5 Evaluate the likely impact on KTJ of fluctuations in the exchange rate of country B’s currency. 12 Level AO1 Knowledge AO2 Application AO3 Analysis AO4 Evaluation 6 marks and understanding 2 marks 2 marks 2 marks 3 5–6 marks Developed evaluation in context • A developed judgement/conclusion is made in the business context. • Developed evaluative comments which balance some key arguments in the business context. 2 2 marks Developed 2 marks Developed 2 marks 3–4 marks knowledge of application of Developed Developed evaluation relevant key term(s) relevant point(s) to analysis that • A developed judgement/conclusion and/or factor(s) is the business identifies is made. used to answer the context. connections • Developed evaluative comments question. between causes, which balance some key impacts and/or arguments. consequences. 1 1 mark 1 mark 1 mark 1–2 marks Limited knowledge Limited application Limited analysis Limited evaluation of relevant key of relevant point(s) that identifies • A judgement/conclusion is made term(s) and/or to the business connections with limited supporting factor(s) is used to context. between causes, comment/evidence. answer the question. impacts and/or • An attempt is made to balance the consequences. arguments. 0 0 marks 0 marks 0 marks 0 marks No creditable No creditable No creditable No creditable response. response. response. response. 5 Responses may include: AO1 Knowledge and understanding Limited knowledge will be demonstrated through knowledge of exchange rate or knowledge of how it impacts KTJ Developed knowledge + will be demonstrated through knowledge of exchange rate and knowledge of how it impacts KTJ Exchange rate – price of one currency in terms of another. Explanation of fluctuation in exchange rate • depreciation – a decrease in the price of a currency in terms of another OR • appreciation – an increase in the price of a currency in terms of another Knowledge of impact of ER fluctuations • Fluctuations in the exchange increases uncertainty making decision making more difficult for KTJ Impact of depreciation • Beneficial for exporting • Imports more expensive • Imported goods in country B may be less price competitive following depreciation AO2 Application Limited application, applies knowledge to KTJ once. Developed application, + applies knowledge to KTJ twice. Application is making use of relevant case information not just repeating it. Use of case material to answer question • KTJ exports to US and other countries. • Link to achievement of mission statement. • KTJ imports fruits from West Africa. • Investment in country C or D. • Depreciation makes exports cheaper to US, increasing competitiveness. • Importing fruit becomes more expensive. • Margin squeeze despite higher export volume. • Impact on ARR for C/D investment. • Movements influence pricing strategy and profitability. 5 AO3 Analysis Limited analysis – candidate shows one link in the chain of analysis. Developed analysis – candidate shows two or more links in the chain of analysis or balanced argument. • Depreciation will reduce the price of KTJ juices in international markets such as the US resulting in greater price competitiveness and this will increase sales and market share of KTJ • The cost of investing in country C or D will increase which will reduce the ARR of the investment and may result • in a delay to opening a new factory • As KTJ imports fruit from West Africa its price will increase and therefore KTJ’s variable costs will increase resulting in a reduction in profit AO4 Evaluation Limited evaluation – limited supported judgement and/or a weak attempt at evaluative comment. Developed evaluation – supported judgement and/or reasonable evaluative comment. Developed evaluation in context – supported judgement in context and/or reasonable evaluative comment in context. • Supported judgement as to overall impact of depreciation on KTJ. – KTJ likely to benefit as although imported fruit costs rise this is only a part of KTJ’s costs of production so • should still be more price competitive when KTJ exports the final product. – Inflationary impact of depreciation on the economy as a whole – Net impact depends on the balance between export revenue gains and import cost increases – Short-term depreciation may be beneficial but long-term volatility complicates planning • Factors that the impact might depend on: – Extent to which customers are impacted by changes in price – PED • Whether the depreciation is long term • Effects may be mitigated if exports are invoiced in foreign currency or supply sources can be diversified • Hedging strategies can reduce risk from currency volatility • Pricing power in export markets affects KTJ’s ability to pass on cost changes