Can someone 🙏 help me answer this alevel business question
An ice cream seller has two options to expand their business for the summer season (June-September inclusive)
Option 1: Rent an ice cream van for £4,000. This is expected to generate net cash flows of £1,500 in June, increasing by 20% each month until September.
Option 2: Rent a beach shack for £6,000. This extends the season to October. Net cash flows are expected to be £2,500 per month, except for October, when they'll fall by 1/5.
Calculate the monthly Average Rate of Return (ARR) for each option.
Option 1: Rent an ice cream van for £4,000. This is expected to generate net cash flows of £1,500 in June, increasing by 20% each month until September.
Option 2: Rent a beach shack for £6,000. This extends the season to October. Net cash flows are expected to be £2,500 per month, except for October, when they'll fall by 1/5.
Calculate the monthly Average Rate of Return (ARR) for each option.
Reply 1
18
Original post
by rushing-interplaAn ice cream seller has two options to expand their business for the summer season (June-September inclusive)
Option 1: Rent an ice cream van for £4,000. This is expected to generate net cash flows of £1,500 in June, increasing by 20% each month until September.
Option 2: Rent a beach shack for £6,000. This extends the season to October. Net cash flows are expected to be £2,500 per month, except for October, when they'll fall by 1/5.
Calculate the monthly Average Rate of Return (ARR) for each option.
Option 1: Rent an ice cream van for £4,000. This is expected to generate net cash flows of £1,500 in June, increasing by 20% each month until September.
Option 2: Rent a beach shack for £6,000. This extends the season to October. Net cash flows are expected to be £2,500 per month, except for October, when they'll fall by 1/5.
Calculate the monthly Average Rate of Return (ARR) for each option.
I am no business person, but is this just simple maths?
The van is going to cost £1000 a month over four months. The shack will cost £1200 each month over five months. Then the first will bring in £1500, then £1500 + 20% then £1500 + 20% etc for four months - you do the maths! The second will bring in £2500 each month and in October a fifth of that - you do the maths.
According to google, RoR = ( (Final Value - Initial Value) / Initial Value ) * 100
So there we go. Now if you have listened in lessons, the rest should be simple no?
Reply 2
Original post
by hotpudI am no business person, but is this just simple maths?
The van is going to cost £1000 a month over four months. The shack will cost £1200 each month over five months. Then the first will bring in £1500, then £1500 + 20% then £1500 + 20% etc for four months - you do the maths! The second will bring in £2500 each month and in October a fifth of that - you do the maths.
According to google, RoR = ( (Final Value - Initial Value) / Initial Value ) * 100
So there we go. Now if you have listened in lessons, the rest should be simple no?
The van is going to cost £1000 a month over four months. The shack will cost £1200 each month over five months. Then the first will bring in £1500, then £1500 + 20% then £1500 + 20% etc for four months - you do the maths! The second will bring in £2500 each month and in October a fifth of that - you do the maths.
According to google, RoR = ( (Final Value - Initial Value) / Initial Value ) * 100
So there we go. Now if you have listened in lessons, the rest should be simple no?
Appreciate the reply and thank you for trying to help me ( it means alot ), but I do actually get the maths — it’s the business side of the ARR I need help with. Like, I’ve done all the calculations properly (my teacher even got the same answer as me for Option 1), and I think my figures are right. It’s just when I go to actually calculate the ARR, I get one answer, ChatGPT gets another,i am not able to contact my teacher and now I’ve got 12.5% for Option 2 but I don’t know if that’s correct or if I’ve misunderstood something as the method i used to get option 1 isn't replicable .
And as I recall... you don’t even do business, do you? 😅 So yeah, I did listen in lesson, I’m just struggling to revise it all and figure out if I’ve got this question right so I can finally move on with the rest of my business revision.Anywhooo Thank u soo much for the reply 😂
Quick Reply
Related discussions
- Alevel business eduqas question structure
- Business bio geo
- Alevel business edexcel
- Alevel Choices
- Self Studying for A Level Business studies, through fast-tracking A Levels
- Alevel arabic reserach
- Ask Me Anything - Uni Edition!
- struggling gcse maths
- A level college enquiry..helpp pls
- Predicted grades
- Alevel maths
- Alevel business edexcel
- procrastination alevels
- Alevel subjects
- A-Level Please HELP URGENT!!!!
- Medicine
- Warwick Uni foundation year
- Any 2025 Alevel Edexcel Business Predictions???
- Bad mock grades (yr 12)
- Uni recommendations
Latest
Trending
Last reply 5 months ago
A-Level Business Studies Study Group 2024-25Last reply 8 months ago
year 1 AS edexcel business practice papers from tutor2uLast reply 9 months ago
can someone mark this a level business edexcel 12 marker plssssPosted 10 months ago
{*cool*} tℰℳu кыргызÑтан арзандатуу коду {acw229016} 5000 com бардык кардарларга акыÑLast reply 10 months ago
aqa a level business may 2025 paper 1Last reply 11 months ago
anyone purchase the prim rose kitten predicted papers?Last reply 11 months ago
i need help with my ey assessment interviewLast reply 11 months ago
Is it possible to get a 7 in Edexcel Business without studying?
How The Student Room is moderated
To keep The Student Room safe for everyone, we moderate posts that are added to the site.
