AQA A-level BUSINESS Paper 2 Business 2 QP 2020
Please write clearly in block capitals.
Centre number Candidate number
Surname
Forename(s)
Candidate signature
I declare this is my own work.
A-level
BUSINESS
Paper 2 Business 2
Monday 1 June 2020 Afternoon Time allowed: 2 hours
Materials For Examiner’s Use
For this paper you must have:
• a calculator. Question Mark
1.1
Instructions 1.2
• Use black ink or black ball-point pen.
1.3
• Fill in the boxes at the top of this page.
• Answer all questions. 1.4
• You must answer the questions in the spaces provided. Do not write 2.1
outside the box around each page or on blank pages. 2.2
• Do all rough work in this answer book. Cross through any work you
do not want to be marked. 2.3
2.4
Information 3.1
• The marks for questions are shown in brackets.
3.2
• The maximum mark for this paper is 100.
3.3
3.4
TOTAL
*jun207132201* IB/G/Jun20/E12 7132/2
, 2
Do not write
outside the
Answer all questions in the spaces provided. box
0 1 Read the information below and then answer the questions that follow.
Drake Hotels PLC owns 20 budget hotels in the UK. Each one is located in a different
city. The industry is very competitive and Drake’s managers all have an objective to
help the business to be as efficient as possible.
Drake Hotels PLC’s operating profit for the financial year 2019–20 was £18 million.
Last month the company appointed a new Chief Executive, Mary Myers, to increase
the profitability of the business. Mary was previously the Marketing Manager of an
upmarket hotel chain.
Mary is already considering an investment proposal for a luxury hotel in Oxford. This
hotel would target overseas visitors who might want to visit the city. Drake Hotels has
found a suitable building but needs to invest to develop it.
Appendix A Investment appraisal results for the proposed investment into a new
hotel in Oxford (based on net inflows for first eight years).
Average rate of return 12% per year
Net Present Value £25 million
Source: Chief Executive
Appendix B Sensitivity analysis for the new Oxford hotel investment proposal
Estimated
Two possible changes in the economy that might affect
probability of this
the investment appraisal results in Appendix A
change happening
The value of the pound against other currencies is 10%
20%
higher than originally forecasted.
The average GDP growth in overseas countries is 1.5%
30%
higher than originally forecasted.
Source: Chief Executive
Appendix C Selected financial data for Drake Hotels PLC
£ million as at
1 May 2020
Current assets 15
Current liabilities 18
Total equity 170
Non-current liabilities 280
*02*
IB/G/Jun20/7132/2
, 3
Do not write
outside the
Appendix D Forecasted data for Drake Hotels PLC’s new Oxford hotel box
investment proposal
Initial investment required £20 million
Estimated income elasticity of demand +2
Percentage of customers visiting from overseas 70%
Estimated cost of borrowing for this investment 8% per annum
Appendix E Room bookings by month and day of the week in Drake Hotels
PLC’s budget hotels 2019
Turn over ►
*03*
IB/G/Jun20/7132/2
Please write clearly in block capitals.
Centre number Candidate number
Surname
Forename(s)
Candidate signature
I declare this is my own work.
A-level
BUSINESS
Paper 2 Business 2
Monday 1 June 2020 Afternoon Time allowed: 2 hours
Materials For Examiner’s Use
For this paper you must have:
• a calculator. Question Mark
1.1
Instructions 1.2
• Use black ink or black ball-point pen.
1.3
• Fill in the boxes at the top of this page.
• Answer all questions. 1.4
• You must answer the questions in the spaces provided. Do not write 2.1
outside the box around each page or on blank pages. 2.2
• Do all rough work in this answer book. Cross through any work you
do not want to be marked. 2.3
2.4
Information 3.1
• The marks for questions are shown in brackets.
3.2
• The maximum mark for this paper is 100.
3.3
3.4
TOTAL
*jun207132201* IB/G/Jun20/E12 7132/2
, 2
Do not write
outside the
Answer all questions in the spaces provided. box
0 1 Read the information below and then answer the questions that follow.
Drake Hotels PLC owns 20 budget hotels in the UK. Each one is located in a different
city. The industry is very competitive and Drake’s managers all have an objective to
help the business to be as efficient as possible.
Drake Hotels PLC’s operating profit for the financial year 2019–20 was £18 million.
Last month the company appointed a new Chief Executive, Mary Myers, to increase
the profitability of the business. Mary was previously the Marketing Manager of an
upmarket hotel chain.
Mary is already considering an investment proposal for a luxury hotel in Oxford. This
hotel would target overseas visitors who might want to visit the city. Drake Hotels has
found a suitable building but needs to invest to develop it.
Appendix A Investment appraisal results for the proposed investment into a new
hotel in Oxford (based on net inflows for first eight years).
Average rate of return 12% per year
Net Present Value £25 million
Source: Chief Executive
Appendix B Sensitivity analysis for the new Oxford hotel investment proposal
Estimated
Two possible changes in the economy that might affect
probability of this
the investment appraisal results in Appendix A
change happening
The value of the pound against other currencies is 10%
20%
higher than originally forecasted.
The average GDP growth in overseas countries is 1.5%
30%
higher than originally forecasted.
Source: Chief Executive
Appendix C Selected financial data for Drake Hotels PLC
£ million as at
1 May 2020
Current assets 15
Current liabilities 18
Total equity 170
Non-current liabilities 280
*02*
IB/G/Jun20/7132/2
, 3
Do not write
outside the
Appendix D Forecasted data for Drake Hotels PLC’s new Oxford hotel box
investment proposal
Initial investment required £20 million
Estimated income elasticity of demand +2
Percentage of customers visiting from overseas 70%
Estimated cost of borrowing for this investment 8% per annum
Appendix E Room bookings by month and day of the week in Drake Hotels
PLC’s budget hotels 2019
Turn over ►
*03*
IB/G/Jun20/7132/2
