Unit 3 - Peacewick potential questions

Question 1

1. Evaluate the strategies Peacewick University used to tackle cash flow problems

Answer 1

“(L.57) reduce outflows, made 10% of teaching staff and support staff redundant, 20% staff moved to part-time employment”
\+ reduce cash outflow immediately, part time employment (lower fixed/variable costs, don't have to pay full benefit)
decrease motivation (needs theory, social needs not fulfilled as staff are losing coworkers, less opportunities for teamwork), part-time employment (less stable relationship with employee = worker less motivated = works less hard)

Question 2

2. Sources of finance used to fund for their student accomodation/government grant

Answer 2

Bank loans (loans that do not have to be repaid for at least one year), as cash-flow is a major problem, bank loans won’t affect it rn; + fixed interest, - interest payment, as the student accommodation would be a long term need a long term finance is smart

Question 3

3. Identify and explain two potential sources of finance that PU could use to refurbish teaching facilities that were damaged by the accident

Answer 3

“(L.23) will remain unusable for at least two years”, same answer as questions above ?

Retained profit : “(L.135) the successes of some of the research projects suggest further growth and investment in this areas of the universities activités, areas included in PU long term plan are refurbish teaching facilities”, use money generated from the research projects and invest in teaching facilities

Venture capitalists or business angels are likely to invest in PU due to their positive brand image, ethical objectives, and potential for further growth.

Question 4

5. What is capital expenditure?

Answer 4

Spending on fixed assets

Question 5

6. Explain how the cash flow problem in 2021/22 has influenced PU’s marketing Strategies. (Lines 56-61)

Answer 5

“Adriana decided to maintain PU’s aggressive marketing strategies”, cash-flow problems did not influence the marketing strategies

Question 6

7. With reference to PU, outline two benefits of capital expenditure in the development of technology and medicine faculties

Answer 6

Capital expenditure is the spending on fixed assets (eg building)

Question 7

8. Describe one capital expenditure and one revenue expenditure for PU (lines 56–59).

Answer 7

One Capital expenditure that PU is considering is moving to country B

One revenue expenditure that PU uses on day-to-day basis are utility bills and payment of employees