BTEC Level 3 Nationals in Business: Unit 3, Lecture notes of Business

Download BTEC Level 3 Nationals in Business: Unit 3 and more Lecture notes Business in PDF only on Docsity! BTEC Level 3 Nationals in Business: Unit 3 Your free sample of the student book: preparation for assessment (BTEC National Business: Student Book 1 (with ActiveBook), ISBN: 9781292126241) UNIT 3 Personal and Business Finance180 Getting ready for assessment This section has been written to help you to do your best when you take the external examination. Read through it carefully and ask your tutor if there is anything you are not sure about. This unit is externally assessed using an unseen paper-based examination. Pearson sets and marks the examination. The assessment must be taken under examination conditions. The test is in two sections: • Part A: personal finance • Part B: business finance. There are three types of questions: • short answer questions • calculation questions • longer answer questions. About the test Sitting the test Listen to, and read carefully, any instructions you are given. Lots of marks are often lost through not reading questions properly and misunderstanding what the question is asking. Most questions contain command words. Understanding what these words mean will help you understand what the question is asking you to do. As the guidelines for assessment can change, you should refer to the official assessment guidance on the Pearson Qualifications website for the latest definitive guidance. Command word Definition – what it is asking you to do Give You can provide: • examples • justifications. Outline Your work, performance or practice provides a summary or overview or a brief description of something. Identify Indicate the main features or purpose of something by recognising it and/or being able to discern and understand facts or qualities. Illustrate Include examples, images or diagrams to show what is meant within a specific context. Calculate Work out an answer, usually by adding, multiplying, subtracting or dividing. Can involve the use of formulas. Explain Your work shows clear details and gives reasons and/or evidence to support an opinion, view or argument. It could show how conclusions are drawn (arrived at). You are able to show that you understand the origins, functions and objectives of a subject, and its suitability for purpose. Discuss Consider different aspects of: • a theme or topic • how they interrelate • the extent to which they are important. A conclusion is not required. Analyse Present the outcome of methodical and detailed examination either by breaking down: a theme, topic or situation in order to interpret and study the relationships between the parts and/or information or data to interpret and study key trends and interrelationships. Assess Present a careful consideration of varied factors or events that apply to a specific situation or identify those which are the most important or relevant and arrive at a conclusion. Evaluate Your work draws on varied information, themes or concepts to consider aspects such as: • strengths or weaknesses • advantages or disadvantages • alternative actions • relevance or significance. Your inquiries should lead to a supported judgement showing relationship to its context. This will often be in a conclusion. M03_BUSINESS_SB_BTEC_6241_U3_113-184.indd 180 10/9/17 1:32 PM 183 Personal and Business Finance Travel insurance protects the holder from fi nancial losses incurred while away from home. One benefi t of this is that if personal belongings are lost or stolen they will be covered by the insurance policy. Therefore, the holder will be able to make a claim so that they can get back the cost of replacing the lost items, e.g. money or a camera. This means that the person travelling has not lost a lot of money because they had taken out protection in advance. A second benefi t is that the traveller may be protected if the holiday is cancelled or other changes are made, such as fl ight delays. This means that, although the inconvenience will still exist, the traveller could be compensated for this. This would allow them to cover additional expenses incurred while waiting for fl ights, etc. A third b enefi t is the traveller would be insured if they fell sick. This would mean that they could receive treatment without having to worry about big medical bills. These would be paid for by the insurance company or paid for and then reclaimed. This means that the traveller will feel more confi dent while away and be happy that if they need medical care that they can seek this. Answering extended answer questions – discuss, analyse, assess, evaluate Read the question carefully. Highlight or underline key words. Look at the number of marks available as an indication of how many arguments are required and the depth of arguments. You are required to develop a line of argument using linking words such as therefore, so that, because. Start your answer by making a relevant point and expand on this using two or three steps in a line of argument. Avoid moving on to new points until the point you have made has been fully developed. You will need to present two arguments from diff erent viewpoints, e.g. one advantage and one disadvantage or one argument for and one argument against. You do not need to make judgements and write a conclusion. It is a good idea to start by identifying the key term in the question. Here the answer starts by showing the examiner that the candidate understands what travel insurance is. It is important here that the candidate has said ‘while away from home’, so they are not just talking about insurance in general but the answer is speci c to travel insurance. A number of steps have then been given in a logical line of argument, e.g. covered – claim – get back the cost – not lost money. Three different aspects of travel insurance have been identi ed and explained in context. Example: Explain the benefi ts of an individual taking out travel insurance before travelling abroad. [6] Worked example M03_BUSINESS_SB_BTEC_6241_U3_113-184.indd 183 10/9/17 1:32 PM UNIT 3 Personal and Business Finance184 External sources of fi nance are from outside the business, e.g. bank loans and leasing. Karen could use a bank loan. This would involve receiving a lump sum from the bank. She could use this to buy the lorries. However, it is expensive. Karen could lease the lorries rather than buy them. The advantage of this is that she would be able to expand the business as she would have the lorries now. However, she would not be paying a lump sum for them but paying in smaller amounts on a regular basis to the lease company. This helps spread out the payment for the lorries and could help Karen’s cash fl ow. She would also avoid potentially high interest payments. However, although this is a good source of fi nance in the short run, in the long run it is likely to be more expensive as Karen will have to keep paying to lease the lorries for as long as she wants to use them. She will never actually own them. Therefore, this may have a negative eff ect on her profi t margins in the long run. Overall, a bank loan may be the better option as Karen wants to expand the business and she will therefore benefi t from owning the lorries rather than leasing them. Or she could look at asking friends and family or a venture capitalist to invest money into the business to help her expand. This answer shows a good understanding of the topic, i.e. external sources of  nance, and uses technical language throughout the answer. The  rst paragraph makes a relevant point and some judgement but lacks development. It is rather descriptive. The second paragraph is much better, discussing the issues related to leasing in a more developed way. It also provides a balanced argument. The conclusion tries to weigh up the two options but then moves on to bring in new points/ideas. It is not a good idea to bring in new points in the conclusion. This should be a judgement made based on the arguments that have already been presented. The candidate would have gained more marks if they had brought in additional sources of  nance earlier and discussed the advantages and disadvantages of these to help present a more balanced argument. Example: Karen runs a road haulage business. She is looking to expand the business and wants to purchase two more lorries. Assess the use of external sources of fi nance to Karen. [10] Worked example M03_BUSINESS_SB_BTEC_6241_U3_113-184.indd 184 10/9/17 1:32 PM