BUSSINESS, MANAGEMENT & FINANCE – Page 12

BMF – Nov 2020 – L1 – SB – Q6 – Basics of Business Finance and Financial Markets

Explanation of loan covenants, reasons and benefits for share repurchase, and features of a finance lease arrangement.

Question

(a) For many loan agreements, the borrower is required to provide undertakings or guarantees of some kind.
Distinguish between covenants and guarantees. (5 Marks)

(b) State THREE reasons why a company will repurchase its shares and THREE benefits that will accrue to the company for doing so. (6 Marks)

(c) Companies can acquire assets with finance lease instead of buying assets with equity or debt capital.
State SIX main features of a finance lease arrangement. (9 Marks)

(Total 20 Marks)

Answer

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Tags: Corporate finance, Finance lease, Guarantees, Loan Covenants, Share repurchase
Level: Level 1

Topic: Basics of Business Finance and Financial Markets
Series: NOV 2020

BMF – Nov 2020 – L1 – SB – Q5 – Investment Decisions

Evaluate the investment project using IRR and advise management on the project feasibility.

Question

Uhuru Nigeria Limited wants to buy a new item of equipment which will be used to improve service delivery to its customers. Using the internal rate of return (IRR) method of investment appraisal, you are required to evaluate the project and advise the management of the company. Estimated cash flows from the project are as provided below:

Year	Cash Flow (N)
0	(400,000)
1	140,000
2	150,000
3	170,000
4	190,000

The expected minimum required rate of return of the company is fixed at 25%.

Answer

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Tags: Capital Budgeting, Cash Flow Analysis, Internal Rate of Return (IRR), Investment Appraisal, Rate of Return
Level: Level 1

Topic: Investment Decisions
Series: NOV 2020

BMF – Nov 2020 – L1 – SB – Q4 – The Role of Professional Accountants in Business and

Explanation of ethical dilemmas, powers of professional bodies, and methods for resolving ethical dilemmas.

Question

(a) Distinguish between ethical dilemma and conflict of interest. (4 Marks)
(b) Globally, professional bodies are backed by law, consequently, a measure of authority is conferred upon them which they regularly exercise whenever the situation or circumstance demands.
State THREE powers of a professional body. (6 Marks)
(c) State FIVE possible ways of resolving ethical dilemma in a business environment. (10 Marks)

(Total 20 Marks)

Answer

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Tags: Business Ethics, Conflict of Interest, Conflict Resolution, Ethical dilemma, Professional Body Powers
Level: Level 1

Topic: The Role of Professional Accountants in Business and Society
Series: NOV 2020

BMF – Nov 2020 – L1 – SB – Q2 – Management, Individual, and Organisational Behaviour

Explanation of reinforcement theory and self-efficacy, and their applications in the business environment.

Question

(a) Describe reinforcement theory and state the main assumption that guides reinforcement theory.
(b) Explain the ways by which reinforcement theory can be employed in the business environment.
(c) What is self-efficacy? State and explain the ways by which levels of self-efficacy impact human functions.

(Total 20 Marks)

Answer

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Tags: Behavioral Theory, Motivation, Positive Reinforcement, Reinforcement Theory
Level: Level 1

Topic: Management, Individual, and Organizational Behavior
Series: NOV 2020

BMF – Nov 2020 – L1 – SB – Q1b – The Business Environment

State five functions each for the Administration and Finance departments of an organization.

Question

Innoson Transport Company plans to create two new departments, administration and finance. In view of this, two managers will be hired to oversee these functional units.
State FIVE functions of each of the two departments.

Answer

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Tags: Cultural Differences, Hofstede's Dimensions, International business, National Culture
Level: Level 1

Topic: The Business Environment
Series: NOV 2020

BMF – Nov 2020 – L1 – SB – Q1a – The Business Environment

Identify and explain Hofstede's five dimensions of national culture.

Question

Geert Hofstede gave an international perspective on suggesting that culture differs among nations.

Identify and explain the FIVE dimensions of national culture as suggested by Hofstede.

Answer

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Tags: Cultural Analysis, Cultural Dimensions, Hofstede, International business, National Culture
Level: Level 1

Topic: The Business Environment
Series: NOV 2020

BMF- Nov 2020 – L1 – SA – Q20 – The Business Environment

Identify the correct statement regarding the laws of demand and supply.

Question

Which of the following statements in relation to the laws of demand and supply is correct?
A. An increase in price leads to an increase in demand
B. A decrease in price leads to a decrease in demand
C. If demand is highly elastic, a reduction in the sales price will result in an increase in total sales revenue
D. The quantity of a good that suppliers are willing to sell falls when the price of the good rises
E. The quantity of a good that suppliers are willing to sell rises when the price of the good falls

Answer

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Tags: Demand, Economic Laws, Supply
Level: Level 1

Topic: The Business Environment
Series: NOV 2020

BMF – Nov 2020 – L1 – SA – Q19 – The Business Environment

Identify a feature of monopolistic competition.

Question

Which of the following is a feature of monopolistic competition?
A. Small number of suppliers
B. Monitors the actions of the other firms
C. Faces a kinked demand curve
D. Knowledge is widespread, but not perfect
E. Decisions of one firm influence the decisions of other firms

Answer

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Tags: Economic theory, Market Features, Monopolistic Competition
Level: Level 1

Topic: The Business Environment
Series: NOV 2020

BMF – Nov 2020 – L1 – SA – Q18 – Business and Organizational Structures and Choices

Identify a key characteristic of a global company.

Question

One of the characteristics of a global company is that:
A. Management makes strategic decisions for each foreign market
B. Products are adapted to the requirements of the local market
C. Marketing is adapted in each country to suit the local culture
D. The value chain in each country of operation is optimised
E. The senior managers are likely to come from different countries

Answer

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Tags: Global Company, International Strategy, Management
Level: Level 1

Topic: Business and Organizational Structures and Choices
Series: NOV 2020

BMF – Nov 2020 – L1 – SA – Q17 – Communications in Business

Identify the decade when early communication models were developed.

Question

Early communication models were developed in the:
A. 1910s
B. 1920s
C. 1930s
D. 1940s
E. 1950s

Answer

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Tags: Business Communications, Communication Models, History
Level: Level 1

Topic: Communications in Business
Series: NOV 2020

BF – Nov 2015 – L1 – SA – Q19 – Communications in Business

Identifying what is not a standard method of business communication.

Question

Which of the following is NOT a standard example of business communication method?
A. Circulars
B. Newsletters
C. Memorandum
D. Requisition
E. Telegram

Answer

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Tags: Business Communication, Methods, Standards
Level: Level 1

Topic: Communications in Business
Series: NOV 2015

BF – Nov 2015 – L1 – SA – Q18 – Basic Management Functions

Identifying what is not a functional strategy.

Question

Which of the following options is NOT a functional strategy?
A. Marketing strategy
B. Production strategy
C. Personnel strategy
D. Financial strategy
E. Diversification strategy

Answer

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Tags: Business, Functional Strategy, Strategy
Level: Level 1

Series: NOV 2015

BF – Nov 2015 – L1 – SA – Q17 – The Business Environment

Identifying what is not an advantage of a partnership business.

Question

Which of the following is NOT an advantage of a partnership business?
A. More financial resources
B. Registration with Corporate Affairs Commission
C. Payment of Corporate Income Tax
D. Sharing of risk and losses
E. Continuity

Answer

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Tags: Advantages, Business Structure, Partnership
Level: Level 1

Topic: The Business Environment
Series: NOV 2015

BF – Nov 2015 – L1 – SA – Q16 – Basic Management Functions

Identifying how public sector strategy differs from private sector strategy.

Question

Strategy in the public sector differs from that in the private sector because:
A. They do not have customers
B. They do not have stakeholders
C. Planning horizons are determined by political considerations rather than market conditions
D. They do not have to make a profit
E. They do not manage cost

Answer

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Tags: Private Sector, Public Sector, Strategy
Level: Level 1

Topic: Basic Management Functions
Series: NOV 2015

BF – Nov 2015 – L1 – SA – Q15 – Communications in Business

Identifying the term for communication flowing between superior and subordinate.

Question

Communication that flows from the superior to the subordinates and back from the subordinates to the superior is called:
A. Vertical
B. Horizontal
C. External
D. Oral
E. Written

Answer

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Topic: Communications in Business
Series: NOV 2015

BF – Nov 2015 – L1 – SA – Q14 – Communications in Business

Identifying what is not a barrier to effective communication.

Question

Which of the following is NOT a barrier to effective communication?
A. Status differences
B. Fear
C. Information overload
D. Information download
E. Verbal difficulties

Answer

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Tags: Barriers, Communication, Effective communication
Level: Level 1

Topic: Communications in Business
Series: NOV 2015

BF – Nov 2015 – L1 – SA – Q13 – Basic Management Functions

Identifying the term for superior performance relative to rivals.

Question

The appropriate term for anything that a firm does better especially when compared to rival firms is called:
A. Opportunities
B. Core competence
C. Performance
D. Competitive advantage
E. Capability

Answer

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Tags: Competitive Advantage, Core Competence, Strategy
Level: Level 1

Topic: Basic Management Functions
Series: NOV 2015

BF – Nov 2015 – L1 – SA – Q12 – Management, Individual, and Organisational Behaviour

Understanding the term related to perceived performance and rewards.

Question

The extent to which the individual perceives that effective performance will lead to desired rewards is described as:
A. Expectancy
B. Instrumentality
C. Valence
D. Perception
E. Productivity

Answer

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Tags: Expectancy, Motivation, Rewards
Level: Level 1

Topic: Management, Individual, and Organizational Behavior
Series: NOV 2015

BF – Nov 2015 – L1 – SA – Q11 – Basics of Business Finance and Financial Markets

Identifying the philosopher who propounded the virtue ethics theory.

Question

The virtue ethics theory was propounded by:
A. Immanuel Kant
B. Aristotle
C. Socrates
D. Plato
E. Hegel

Answer

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Tags: Ethics, Philosophy, Virtue
Level: Level 1

Topic: Basics of Business Finance and Financial Markets
Series: NOV 2015

BF – Nov 2015 – L1 – SA – Q10 – Investment Decisions

Identifying the correct formula for calculating Net Present Value (NPV) of an investment.

Question

The formula for calculating Net Present Value (NPV) of an investment is:
A. Σₜ=₁ⁿ [(Cₜ / (1 + r)ᵗ)] – C₀
B. Σₜ=₀ⁿ [(Cₜ / (1 + r)ᵗ)] – C₀
C. Σₜ=₀ⁿ [(C₀ / (1 + r)ᵗ)] – C₀
D. Σₜ=₁ⁿ [(C₀ / (1 + r)ᵗ)] – C₀
E. Σₜ=₁ⁿ [(Cₜ / (1 + r)ᵗ)] + C₀

Answer

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Tags: Financial management, Investment, NPV
Level: Level 1

Topic: Investment Decisions
Series: NOV 2015

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BMF – Nov 2020 – L1 – SB – Q6 – Basics of Business Finance and Financial Markets

Explanation of loan covenants, reasons and benefits for share repurchase, and features of a finance lease arrangement.

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BMF – Nov 2020 – L1 – SB – Q5 – Investment Decisions

Evaluate the investment project using IRR and advise management on the project feasibility.

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BMF – Nov 2020 – L1 – SB – Q4 – The Role of Professional Accountants in Business and

Explanation of ethical dilemmas, powers of professional bodies, and methods for resolving ethical dilemmas.

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BMF – Nov 2020 – L1 – SB – Q2 – Management, Individual, and Organisational Behaviour

Explanation of reinforcement theory and self-efficacy, and their applications in the business environment.

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BMF – Nov 2020 – L1 – SB – Q1b – The Business Environment

State five functions each for the Administration and Finance departments of an organization.

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BMF – Nov 2020 – L1 – SB – Q1a – The Business Environment

Identify and explain Hofstede's five dimensions of national culture.

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BMF- Nov 2020 – L1 – SA – Q20 – The Business Environment

Identify the correct statement regarding the laws of demand and supply.

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BMF – Nov 2020 – L1 – SA – Q19 – The Business Environment

Identify a feature of monopolistic competition.

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BMF – Nov 2020 – L1 – SA – Q18 – Business and Organizational Structures and Choices

Identify a key characteristic of a global company.

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BMF – Nov 2020 – L1 – SA – Q17 – Communications in Business

Identify the decade when early communication models were developed.

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BF – Nov 2015 – L1 – SA – Q19 – Communications in Business

Identifying what is not a standard method of business communication.

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BF – Nov 2015 – L1 – SA – Q18 – Basic Management Functions

Identifying what is not a functional strategy.

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BF – Nov 2015 – L1 – SA – Q17 – The Business Environment

Identifying what is not an advantage of a partnership business.

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BF – Nov 2015 – L1 – SA – Q16 – Basic Management Functions

Identifying how public sector strategy differs from private sector strategy.

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BF – Nov 2015 – L1 – SA – Q15 – Communications in Business

Identifying the term for communication flowing between superior and subordinate.

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BF – Nov 2015 – L1 – SA – Q14 – Communications in Business

Identifying what is not a barrier to effective communication.

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BF – Nov 2015 – L1 – SA – Q13 – Basic Management Functions

Identifying the term for superior performance relative to rivals.

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BF – Nov 2015 – L1 – SA – Q12 – Management, Individual, and Organisational Behaviour

Understanding the term related to perceived performance and rewards.

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BF – Nov 2015 – L1 – SA – Q11 – Basics of Business Finance and Financial Markets

Identifying the philosopher who propounded the virtue ethics theory.

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BF – Nov 2015 – L1 – SA – Q10 – Investment Decisions

Identifying the correct formula for calculating Net Present Value (NPV) of an investment.

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