Viand Associates is a public limited company that owns livestock farms and meat processing factories in several countries.

Mark scheme

Marking points from the official mark scheme (Oct/Nov 2012). The mark or mark type is shown in brackets.

1. [4] (a) Any two benefits explained x 2 marks:
2. • limited liability for shareholders – personal assets protected
3. • access to large amounts of capital – anyone can invest through stock exchange
4. • no upper limit to number of shareholders so easier to raise capital
5. • continuity of existence although ownership of shares may change
6. • controls imposed e.g. by stock exchanges make investors more willing to invest in them
7. • legal entity so directors could not be sued personally.
8. [2] (b)(i) Any two points x 1 mark each or one circumstance described x 2 marks:
9. • when a discussion is needed
10. • when decisions need to be made quickly/immediate feedback is required
11. • when a particular person is required quickly/give urgent message
12. • when email is not available/not working
13. • for personal calls.
14. [2] (b)(ii) Any two points x 1 mark each or one circumstance described x 2 marks:
15. • when a meeting is needed involving people in several different places
16. • when there is insufficient time for travelling
17. • when decisions need to be made involving several people in different places
18. • when costs of travel/accommodation need to be saved
19. • so that the body language of participants can be observed.
20. [4] (c) Any four points x 1 mark each that shows the differences:
21. • collective advertising is advertising of a particular product e.g. meat
22. • by all the producers acting together to promote that particular product
23. • persuasive advertising is advertising of a particular brand or product + example
24. • to persuade the consumer to buy that product rather than another product or brand.
25. NB 2 marks max for each type of advertising.
26. [4] (d) Level 2 (3-4 marks) Has shown the level of importance of the protection of the consumer in context and presented a reasoned argument. (If a candidate has considered consumer protection with no context or not shown the level of importance, award 3 marks max)
27. The consumer is very important to Viand Associates as the consumer is the person who buys the meat and without which there would be no sales and no profits. Viand Associates needs to make sure that consumers are protected against poor quality meat, mis-description and incorrect weights, otherwise they will complain and will not buy the products. Consumer protection is, therefore, very important, otherwise consumers will buy elsewhere.
28. Level 1 (1-2 marks) Has commented on the importance of the consumer and/or consumer protection in/not in context.
29. Viand Associates needs consumers. They buy the products. These consumers need to be protected. VA is not involved in this. Consumers should look after themselves.
30. [2] (e)(i) Any two purposes of working capital x 1 mark each:
31. • definition = 0 marks
32. • to maintain cash flow
33. • to pay for daily expenses/day to day running + example (2)
34. • to meet unexpected payments
35. • to take account of seasonal fluctuations in VA's sales revenue.
36. [2] (e)(ii) Any two ways x 1 mark each:
37. • try not to overstock/holding too much feed
38. • be more efficient
39. • have less wastage
40. • reduce the time given for payments by debtors
41. • try to extend the time taken to pay creditors
42. • reduce short-term borrowing/reduce overdraft
43. • improve sales – more income
44. • sell off assets.