BUSSINESS, MANAGEMENT & FINANCE – Page 13

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 – Q9 – Investment Decisions

dentifying what is NOT a feature of SWOT analysis.

Question

Which of the following is NOT a feature of SWOT analysis?
A. Strategic gap
B. Competitive threats
C. Opportunities availability
D. Weaknesses
E. Competitive advantage

Answer

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Tags: Business Planning, Strategy, SWOT Analysis
Level: Level 1

Topic: Basic Management Functions
Series: NOV 2015

BF – Nov 2015 – L1 – SA – Q8 – Investment Decisions

Identifying the spontaneous source of short-term finance.

Question

Which of the underlisted short-term finance sources can be regarded as a spontaneous source of short term fund?
A. Bank overdrafts
B. Accruals
C. Line of credit
D. Revolving credit agreement
E. Commercial paper

Answer

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Tags: Short-term Finance, Spontaneous Fund
Level: Level 1

Topic: Investment Decisions
Series: NOV 2015

BF – Nov 2015 – L1 – SA – Q7 – Nature of Business, Types, and Objectives

Identifying the incorrect statement about objectives.

Question

Which of the following statements is NOT true of objectives?
A. Specific
B. Measurable
C. Time bound
D. Relevant to the context of the vision of an organisation
E. Achievable within the undefined time frame

Answer

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Tags: Objectives, SMART, Time Frame
Level: Level 1

Topic: Nature of Business, Types, and Objectives
Series: NOV 2015

BF – Nov 2015 – L1 – SA – Q6 – Basic Management Functions

Identifying the term synonymous with management function.

Question

Management function is synonymous with:
A. Management process
B. Scientific management
C. Managerial roles
D. Managerial skills
E. Strategic management

Answer

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Tags: Management, Process, Roles
Level: Level 1

Topic: Basic Management Functions
Series: NOV 2015

BF – Nov 2015 – L1 – SA – Q5 – The Business Environment

dentifying what is not a characteristic of the business environment.

Question

Which of the following options is NOT a characteristic of the business environment?
A. Complexity
B. Dynamism
C. Multi-facets
D. Far-reaching impact
E. Predictability

Answer

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Tags: Business Environment, Characteristics, Predictability

Topic: The Business Environment
Series: NOV 2015

BF – Nov 2015 – L1 – SA – Q4 – Basic Management Functions

Identifying the exception among the advantages of decentralization.

Question

The following are advantages of decentralisation EXCEPT that it
A. Promotes development of general managers
B. Aids adaptation to fast-changing environment
C. Enhances a uniform policy
D. Relieves top management of some burden of decision making
E. Gives managers more freedom and independence in decision making

Answer

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Tags: Decentralization, Management, Policy
Level: Level 1

Topic: Basic Management Functions
Series: NOV 2015

BF – Nov 2015 – L1 – SA – Q3 – Business and Organizational Structures and Choices

Deciding what factors are not to be considered when choosing a business form.

Question

Which of the following is NOT a factor to be considered when deciding the form of a business enterprise?
A. The degree of personal liability
B. The willingness to share decision making powers and risks
C. The cost of establishing the business
D. The location of the business
E. The legal requirements concerning the provision of public information

Answer

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Tags: Business, Decision Factors, Formation
Level: Level 1

Topic: Business and Organizational Structures and Choices
Series: NOV 2015

BF – Nov 2015 – L1 – SA – Q2 – Nature of Business, Types, and Objectives

Identifying what should not be an objective of a business organization.

Question

Which of the following should NOT be the objective of a business organisation?
A. Pay tax as at when due
B. Obey laws enacted by the National Assembly
C. Keep clean environment
D. Encourage tax avoidance
E. Encourage tax evasion

Answer

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Tags: Business, Ethics, Objectives
Level: Level 1

Topic: Nature of Business, Types, and Objectives
Series: NOV 2015

BF – Nov 2015 – L1 – SA – Q1 – Nature of Business, Types, and Objectives

Understanding the meaning of the term "agenda" from a list of options.

Question

The Latin word “agenda” means:
A. Matters arising
B. Notice
C. Correspondence
D. Report
E. Things to be done

Answer

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Tags: Agenda, Business, Latin, Terminology
Level: Level 1

Topic: Nature of Business, Types, and Objectives
Series: NOV 2015

BMF – May 2018 – L1 – SB – Q6 – Communications in Business

Discusses methods of communication and the pros and cons of video conferencing.

Question

Effective communication skills are essential to any manager or professional accountant in the 21st century.

a. List FIVE methods of communication and state FIVE benefits of using e-mail. (10 Marks)

b. Explain briefly the advantages and disadvantages of video conferencing. (10 Marks)

Answer

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Tags: Business Communication, Communication Technology, Video Conferencing
Level: Level 1

Topic: Communications in Business
Series: MAY 2018

Subject: BUSSINESS, MANAGEMENT & FINANCE

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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 – Q9 – Investment Decisions

dentifying what is NOT a feature of SWOT analysis.

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BF – Nov 2015 – L1 – SA – Q8 – Investment Decisions

Identifying the spontaneous source of short-term finance.

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BF – Nov 2015 – L1 – SA – Q7 – Nature of Business, Types, and Objectives

Identifying the incorrect statement about objectives.

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BF – Nov 2015 – L1 – SA – Q6 – Basic Management Functions

Identifying the term synonymous with management function.

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BF – Nov 2015 – L1 – SA – Q5 – The Business Environment

dentifying what is not a characteristic of the business environment.

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BF – Nov 2015 – L1 – SA – Q4 – Basic Management Functions

Identifying the exception among the advantages of decentralization.

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BF – Nov 2015 – L1 – SA – Q3 – Business and Organizational Structures and Choices

Deciding what factors are not to be considered when choosing a business form.

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BF – Nov 2015 – L1 – SA – Q2 – Nature of Business, Types, and Objectives

Identifying what should not be an objective of a business organization.

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BF – Nov 2015 – L1 – SA – Q1 – Nature of Business, Types, and Objectives

Understanding the meaning of the term "agenda" from a list of options.

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BMF – May 2018 – L1 – SB – Q6 – Communications in Business

Discusses methods of communication and the pros and cons of video conferencing.

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