(a) State one example of how CT could demonstrate corporate social responsibility (CSR). [1 mark]

(b) Describe one disadvantage for CT of operating as a private limited company. [2 marks]

(c) Taking all costs into consideration, calculate the predicted outcome of renovating CT with

the bar tables (Option 2a).

[1 mark]

(d) Taking all costs into consideration, calculate the predicted outcome of renovating CT with

the patio (Option 2b).

[1 mark]

(e) Using a separate sheet of paper, construct a fully labelled decision tree for CT. (show all

your working). [4 marks]

(f) Based on your calculations and the decision tree constructed in part (e), identify the best

option for CT. [1 mark]

Cup of Tea (CT) Since pursuing their IB Diploma in school, one of the fondest memories shared by Ruth and Cody was their CAS Project where they volunteered at a special educational needs school, working with young students. They learned the potential and abilities of these students. With their entrepreneurial mindset, they opened a caf called Cup of Tea (CT). They are the main shareholders of CT, a private limited company, along with a few other family members. CT takes prides in its corporate social responsibility (CSR) and hires most of its baristas from graduates of the special educational needs school they volunteered at. However, CT faces a 60% fall in sales revenue so to improve the situation, Ruth and Cody are considering one of two options: Option 1: sell the caf for $1m Option 2: renovate the premises at a cost of $500,000 in an attempt to attract more customers. If CT goes ahead with Option 2, it needs to decide whether to use bar tables in the caf (which costs $100,000) or to include a patio (which costs $250,000), with the following forecasted outcomes: Option 2 2a. Include bar tables 2b. Include a patio Success (Probability: 60%) $2m $2.5m Failure (Probability: 40%) $1.5m $2m Cup of Tea (CT) Since pursuing their IB Diploma in school, one of the fondest memories shared by Ruth and Cody was their CAS Project where they volunteered at a special educational needs school, working with young students. They learned the potential and abilities of these students. With their entrepreneurial mindset, they opened a caf called Cup of Tea (CT). They are the main shareholders of CT, a private limited company, along with a few other family members. CT takes prides in its corporate social responsibility (CSR) and hires most of its baristas from graduates of the special educational needs school they volunteered at. However, CT faces a 60% fall in sales revenue so to improve the situation, Ruth and Cody are considering one of two options: Option 1: sell the caf for $1m Option 2: renovate the premises at a cost of $500,000 in an attempt to attract more customers. If CT goes ahead with Option 2, it needs to decide whether to use bar tables in the caf (which costs $100,000) or to include a patio (which costs $250,000), with the following forecasted outcomes: Option 2 2a. Include bar tables 2b. Include a patio Success (Probability: 60%) $2m $2.5m Failure (Probability: 40%) $1.5m $2m