Predicted Paper 3
90 marks • 2 hours • June 2026
Personal and Business Finance
Meridian Bank • TechStart Ventures • Community Health Trust • Capital Growth Ltd
| Question | 1 | 2 | 3 | 4 | Total |
|---|
| Marks Available | 18 | 26 | 22 | 24 | 90 |
| Marks Awarded | | | | | |
Instructions to Candidates
- Answer ALL questions
- Show working in calculations
- Use black ink or pen
Information for Candidates
- Marks are shown in brackets
- Total marks: 90
- Time allowed: 2 hours
Meridian Bank — Government Policy and Regulation
Meridian Bank is a high-street bank serving customers nationwide. The Chief Executive wants to understand how government taxation and benefit systems affect customer financial planning decisions, and how FCA regulations impact business operations.
(a)Identify two forms of taxation that affect personal finance decisions.(2)
(b)Explain one government benefit that helps support individuals during difficult financial periods.(2)
(c)Discuss the impact of FCA regulations on how Meridian Bank operates and offers financial products.(6)
(d)Evaluate the effectiveness of the FSCS and FOS in protecting Meridian Bank's customers.(8)
Question 1 Total: 18 marks
TechStart Ventures — Alternative Finance and Investment Decisions
TechStart Ventures is a software development startup. The founders need £300,000 to develop their flagship product. They are considering three options: (1) Personal investment and bank loans; (2) Crowdfunding campaign; (3) Venture capital investment. The founders are concerned about maintaining control of the business.
(a)Explain what venture capital is and identify two advantages of seeking venture capital investment.(6)
(b)Analyse the benefits and drawbacks of using crowdfunding to raise the required capital.(8)
(c)Evaluate which finance source would be most suitable for TechStart Ventures, considering their need to maintain control.(10)
Question 2 Total: 24 marks
Community Health Trust — Budgeting and Cost Control
Community Health Trust operates outreach services in three regions. For Q4 2025, they budgeted for staff costs of £280,000, equipment costs of £45,000, and administration costs of £35,000. Actual expenditure was: staff costs £295,000, equipment costs £38,000, and administration costs £42,000.
(a)Calculate the budget variance for each cost category and overall.(9)
(b)Identify which cost categories have favourable or adverse variances, and explain what this means.(6)
(c)Suggest reasons why staff costs exceeded the budget and recommend control measures.(7)
Question 3 Total: 22 marks
Capital Growth Ltd — Depreciation and Working Capital
Capital Growth Ltd acquired delivery vehicles on 1 January 2024 at a cost of £120,000. They have a useful life of 5 years with an estimated residual value of £20,000. The Finance Director wants to understand how different depreciation methods affect financial statements and working capital decisions.
(a)Calculate the annual depreciation charge using the straight-line method.(3)
(b)Calculate the net book value of the vehicles after two years using straight-line depreciation.(3)
(c)Explain the difference between straight-line and reducing balance depreciation methods.(6)
(d)Evaluate how depreciation affects working capital management and cash flow for Capital Growth Ltd.(10)
Question 4 Total: 22 marks
END OF PAPER
Total marks available: 90
For revision purposes. Not an official Pearson paper.