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Study the information supplied and answer the questions which follow: Sinéad has been working for a number of years in a busy department store in Dublin, a distance of 50 kilometres from her home - Leaving Cert Business - Question 5 - 2008

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Study the information supplied and answer the questions which follow: Sinéad has been working for a number of years in a busy department store in Dublin, a distance... show full transcript

Worked Solution & Example Answer:Study the information supplied and answer the questions which follow: Sinéad has been working for a number of years in a busy department store in Dublin, a distance of 50 kilometres from her home - Leaving Cert Business - Question 5 - 2008

Step 1

Identify two risks and two rewards for Sinéad if she sets up her own business.

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Answer

Risks:

  1. Personal Failure: There is a significant risk that the business may not succeed, leading to personal failure and discouragement.
  2. Loss of Personal Assets: If the business incurs debts, Sinéad risks losing personal assets, such as her house, to cover these financial losses.

Rewards:

  1. Profit Generation: Sinéad has the potential to earn profits and income, significantly improving her financial stability.
  2. Personal Satisfaction: Establishing her own business can provide a sense of personal achievement, fulfillment, and the satisfaction of seeing her ideas come to fruition.

Step 2

Outline three sources of new business ideas for Sinéad.

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Answer

  1. Personal Interests: Sinéad could explore her own hobbies and passions to generate business ideas that she is passionate about.
  2. Market Research: Conducting research to identify gaps in the market or trends can lead to innovative business ideas.
  3. Government Agencies: Collaborating with governmental organizations that support entrepreneurship may provide insights and inspiration for new business opportunities.

Step 3

Outline three methods Sinéad could use to recruit employees for her business.

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Answer

  1. Advertising: Placing job advertisements in local newspapers or on local radio could help Sinéad reach potential candidates in her area.
  2. Online Platforms: Utilizing online resources, such as Recruit Ireland or job listing sites, can enhance her recruitment efforts.
  3. Word of Mouth: Encouraging referrals from friends, family, and acquaintances may also help find suitable candidates for her business.

Step 4

Name two taxes Sinéad would expect to pay.

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Answer

  1. Commercial Rates: This is a local authority charge levied on business properties.
  2. Value Added Tax (VAT): A tax that Sinéad would charge on goods and services sold, which she would need to remit to the government.

Step 5

Name two long term sources of finance Sinéad could use to start her business and explain one of them.

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Answer

  1. Mortgage: This is a loan specifically for purchasing property, which could be used to buy a premises for her business.
  2. Owner's Capital/Savings: Utilizing her own savings can be an effective way to fund her business without incurring debt.

Explanation of Mortgage: A mortgage allows Sinéad to obtain the capital necessary to acquire property while spreading the repayment of the loan over several years, typically at a set interest rate. This can be beneficial as it provides a stable payment plan and allows her to leverage real estate for her business.

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