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PST311L A1 S1 2018
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PST311L- Economic Literacy and Entrepreurship, Assignment 1 marked, Semester 1 2018.
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PST311LSemester 1 Assignment 1
Student Number: 57814775
Unique Number: 804932
Question 1
1.1 Manipulating Existing Products: This involves improving a service or
product which already exists. It is considered a new product and saves on costs
for small businesses. The entrepreneur should conduct marketing research to
determine whether the improved product or service is required. An example is if
an entrepreneur buys plain white shirts in a bulk and decorates it before
reselling it. This way he/she will resell it more than the original price and gain a
profit. If the original product does well, by altering it one can create a unique
product or service to your specific business.
1.2 Attribute Analysis: This method is where existing products or services
features are listed and evaluated. Alternative suggestions are made and written
down for the different qualities. It helps by improving the product to be more
effective. Usually one can find „New and Improved‟ on food products such as
cereal.
Entrepreneurs analyse their products and often come up with ideas to improve
the weaker aspects of it.
1.3 Brainstorming: Use this technique to create as many ideas as possible. After
assembling a long list of ideas and having established that no ideas can be
added, evaluate all the ideas to decide the most practical one. This method acts
as a starting point and guidelines on your goals for the business. It is the best
course to plan your business and identify potential risks and opportunities.
1.4 Metaphorical Analogy: This method uses solutions to certain problems to
solve corresponding problems in different contexts. By analogy, an elderly
person could use an electric device developed to serve as a defense mechanism
against attackers.
, Question 2
2.1 Direct taxation: Personal taxation is the most vital form of direct taxation.
Personal taxes are paid on the taxable income of individuals, companies,
partnerships and closed corporations. Direct tax includes taxes that cannot be
transferred to another person, for example, income tax is sent directly to the
government. South Africa has a progressive personal tax arrangement, which
means people who earn a higher income have to pay higher percentages of their
income than people who earn lower. The purpose of direct tax is for the money
to be redistributed into the nation.
Indirect taxation: Indirect taxes are taxes that can be shifted to another person.
Value-added Tax (VAT), customs and excise duties are the most important
forms of indirect taxation. VAT is the government‟s second largest source of
income. VAT is added to all goods and services which is purchased from others.
The initial tax is levied on the producer or service provider, who then shifts the
liability to consumers.
2.2 Characteristics of a Close Corporation:
A closed corporation consists of one to ten members. These members
must be natural individuals. Other corporations may not be members of a
close corporation.
The name must end in “CC.”
A close corporation has an unrestricted existence. It remains legal
regardless of the changes in membership.
A close corporation does not issue shares. The interest of the members is
known as the member‟s funds and is conveyed as a percentage of the total
amount of the member‟s funds in the corporation.
In order to enable the transfer of a member‟s interest, the corporation is
allowed to buy the interest of a member who has died or resigned.
Members who wish to join the corporation must, at registration,
contribute money, property or a service.
The internal relationship between members can be stipulated in a
collaboration agreement. If such an agreement is not settled, the Act will
stipulate the internal relations.
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