Sample

Paper-DSE
BAFS
HONG KONG EXAMINATIONS AND ASSESSMENT AUTHORITY
PAPER 2B
HONG KONG DIPLOMA OF SECONDARY EDUCATION EXAMINATION

BUSINESS, ACCOUNTING AND FINANCIAL STUDIES PAPER 2B

Business Management Strand
Sample Paper

10:15 am – 12:45 pm (2 hours 30 minutes)

This paper must be answered in English

INSTRUCTIONS

(1) There are three sections in this paper.

(2) All questions in Sections A and B are compulsory. You are required to answer
one of the two questions in Section C.

(3) Write your answers in the answer book. Start each question (not part of a
question) on a new page.

香 港 考 試 及 評 核 局 保留版權
Hong Kong Examinations and Assessment Authority
All Rights Reserved 2020

Sample Paper-DSE-BAFS 2B-1 1

This sample paper aims to illustrate the revised rubrics, instructions and paper layout,
effective from the 2025 examination. The questions are adapted from past papers as follows:

HKDSE
Sample Paper
Year Question
1 2018 Paper 1 Q2(a)(b)
2(a) 2017 2
2(b) 2016 5(a)
3 2017 3
4(a) 2016 Paper 1 Q.4(c)(i)
4(b) 2016 Paper 1 Q.4(c)(ii)
5 2014 4
6(a) 2016 2
6(b) 2016 3
7(a) 2015 Paper 1 Q1(a)
7(b)(c)(d) 2017 5(a)(c)(d)
8(a) 2018 Paper 1 Q4(c)
8(b)(c)(d)(e) 2017 6(a)(c)(d)(e)
9 2017 7
10 2016 9

Sample Paper-DSE-BAFS 2B-2 2

SECTION A Answer ALL questions. (38 marks)

1. (a) Apart from the number of employees, state two other characteristics of small and medium enterprises.
(2 marks)

(b) Explain two contributions of entrepreneurship to the development of business. (4 marks)

2. (a) Explain any two components of the ‘5Cs’ of the credit standard that a bank considers when deciding
whether to grant credit to a borrower. (4 marks)

(b) Budgeting is an important financial function in a company. Explain two purposes of budgeting.
(4 marks)

3. Outline three objectives of providing training to the drivers of a transportation company. (6 marks)

4. John runs a small supermarket. A business consultant advises John to adopt Management by Objectives in his
supermarket.

(a) How are objectives set under Management by Objectives in John’s supermarket? (2 marks)

(b) Explain two advantages of adopting Management by Objectives in a business. (4 marks)

5. Briefly describe three sampling techniques that can be used in marketing research. (6 marks)

6. (a) With reference to Herzberg’s Dual-factor Theory, suggest two factors that can lead to job satisfaction for
designers in a fashion company. Illustrate your answer with an example of each. (4 marks)

(b) Explain one benefit to a company of adopting a direct distribution channel for its products. (2 marks)

Sample Paper-DSE-BAFS 2B-3 3

SECTION B Answer ALL questions. (32 marks)

7. Marco is the owner in the form of a sole proprietorship of an eyewear retail chain, selling different brands of
glasses. Currently, the chain has 11 retail stores all over Hong Kong, and has 30 administrative staff and 60
salespersons. The goal of the retail chain is as follows:

‘To increase the sales revenues substantially in the near future.’

To grasp the opportunity offered by market expansion, Marco wants to open more branches in the coming five
years. He is considering various ways to finance his expansion plan.

In a meeting, Daisy, the Marketing Manager reported, ‘According to research, the market demand for eyewear
is increasing. Customers are more willing to spend money on trendy and high class eyewear. We have
already put more resources into advertising in the past three months. I believe that this marketing strategy has
helped bring in new customers.’

David, the Finance Manager agreed, ‘With increased advertising, our sales have increased substantially.’

John, the Human Resources Manager responded, ‘I am pleased to know that the sales performance has
improved. However, our recent staff appraisals show that many salespersons are not satisfied with their jobs.
In fact, their salary level is higher than the market rate. We have also offered long-term employment
contracts and comprehensive benefits to them. We may need to find other ways to improve their morale.’

Marco asked, ‘Besides enhancing salespersons’ morale, what else can we do to further increase sales?’

Daisy replied, ‘Many companies have started implementing a customer relationship management (CRM)
system to help increase sales to existing customers. Shall we also introduce a CRM system to achieve this
goal?’

John added, ‘If we decide to adopt a CRM system, then we have to recruit a manager to lead this new project.
We may consider appointing the customer relationship manager through internal promotion.’

(a) Refer to the goal of the retail chain stated above, explain two characteristics of a SMART goal that are
missing from the above goal. (4 marks)

(b) List two types of methods that Marco could use to finance his five-year expansion plan. Give one
disadvantage of each of them. (4 marks)

(c) Give two reasons why customer relationship management could help increase sales to existing
customers. (4 marks)

(d) Outline two limitations of appointing a customer relationship manager through internal promotion.
(4 marks)
(Total: 16 marks)

Sample Paper-DSE-BAFS 2B-4 4

8. King’s Restaurant, an international catering chain, has been operating in Hong Kong for a few decades.
The market position of King’s Restaurant is to provide customers with innovative catering services at an
affordable price. Its sales and profits have been growing steadily. The General Manager, Peter, is a leader
who is willing to accept subordinates’ opinions and involve them in the decision-making process.

Recently, the chain has been troubled by complaints about its deteriorating service quality.

In a meeting, May, the Marketing Manager said, ‘We are facing keen competition in the catering industry, so
it is important to maintain our service quality. However, we have received complaints from customers that
the dining environment is unpleasant and some waiters are rude. Sometimes customers need to wait for a
long time to be served.’

The Finance Manager, Simon, responded, ‘Our revenue is growing at a decreasing rate, and improving our
service quality will certainly boost sales.’

The Information Technology Manager, Danny, suggested, ‘Some restaurants in other countries have started
using robots to take orders and deliver dishes to customers. We should conduct a feasibility study on the
introduction of this technology.’

May said, ‘I agree with adopting the robotic system as it can provide innovative service which matches our
market position. We could do market research to explore whether customers would accept robot service in
general. I suggest sending questionnaires to all customers in our membership scheme to collect their views
on a robotic system.’

Peter, queried the reliability of the information collected from questionnaires. He wanted to examine the
project’s feasibility from the financial perspective.

After the meeting, Simon estimated that the initial outlay for the robotic system would be $4 000 000, with a
project life of 3 years. The cost of capital would be 6%. Taking into consideration the annual expenses
incurred and savings in labour costs, the net cash flow generated by the robotic system would be $1 420 000
per year.

(a) Explain two disadvantages of the leadership style adopted by Peter. (4 marks)

(b) With reference to any two characteristics of service, explain how King’s Restaurant can solve the
problems with its service quality. (4 marks)

(c) Based on Simon’s financial estimates,

(i) calculate the payback period of the robotic system (round to 2 decimal places). (2 marks)

(ii) calculate the net present value of the robotic system (round to an integer). (2 marks)

(d) Based on the net present value calculated in (c)(ii) above, explain whether the robotic system project
should be accepted. (2 marks)

(e) Other than the payback period method and the net present value method, suggest and explain one
other capital investment appraisal method for evaluating the robotic system project. (2 marks)

(Total: 16 marks)

Sample Paper-DSE-BAFS 2B-5 5

SECTION C Answer ONE question. (18 marks)

9. An airline company is considering enhancing the fringe benefits of its employees. In order to investigate
the financial affordability of this measure, the company uses accounting ratios to evaluate its performance.

(a) Describe the aspects of the airline company’s performance that could be evaluated using accounting
ratios. (8 marks)

(b) Illustrate with examples the purposes of providing fringe benefits to the employees of an airline
company. (10 marks)
(Total: 18 marks)

10. A smartphone manufacturer has developed a new mobile phone model and is considering setting a price for
the new mobile phone. It is also planning to analyse the purchase decision-making process of its customers
in order to launch the product successfully.

(a) Describe the factors to be considered by the smartphone manufacturer when setting the price for its
new mobile phone. (8 marks)

(b) With reference to the purchase decision-making process, explain the steps customers would go
through for the purchase of a new mobile phone. (10 marks)

(Total: 18 marks)

END OF PAPER

Sample Paper-DSE-BAFS 2B-6 6