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.

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

QTB – Nov 2014 – L1 – SA – Q18 – Mathematics of Business Finance

Identifies the correct definition of an annuity.

Question

An annuity is defined as the:
A. Specific amount of money saved at regular intervals meant to be used in funding some future financial commitments
B. Lump sum investment designed to produce a sequence of equal regular payments over time
C. Specific amount of money received at intervals which is not necessarily equal to fund some future financial commitments
D. Lump sum investment designed to produce a sequence of unequal but regular payments over time
E. Repayment of interest-bearing debts through a series of equal regular payments until the debt is entirely paid off with the accrued interest

Answer

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Tags: Annuity, Financial Commitments, Payments
Level: Level 1

Topic: Mathematics of Business Finance
Series: NOV 2015

BMF – MAY 2016 – L1 – SA – Q16 – Communications in Business

Multiple choice question on the primary ways of exchanging information in workplaces.

Question

In work places, as in all aspects of living, people must communicate. What are the TWO ways of exchanging information?

A. Formal and informal communication
B. Telephone and fax messages
C. Television and newspapers
D. Television and print media
E. Email messages and mobile phones

Answer

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Tags: Business Communication, Communication, Information Exchange
Level: Level 1

Topic: Communications in Business
Series: MAY 2016

BMF – MAY 2016 – L1 – SA – Q15 – Basic Management Functions

Multiple choice question on management's role in building successful teams.

Question

A role of management in building a team is to provide ………………. to teams and workgroups, so that the term can be successful.

A. Supervision
B. Coordination
C. Leadership
D. Control
E. Motivate

Answer

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Tags: Leadership, Management, Team Building
Level: Level 1

Topic: Basic Management Functions
Series: MAY 2016

BMF – MAY 2016 – L1 – SA – Q14 – The Business Environment

Multiple choice question on areas of public concern regarding actions of major companies.

Question

The general public might consider that it has a stake or interest in major companies, because the actions of these companies can affect society as a whole. Areas of public concern may include any of the following EXCEPT

A. Public health, especially in the case of food manufacturers and manufacturers of drugs and medicines
B. Protection of the environment, reducing pollution, and creating ‘sustainable businesses’
C. Corruption in business practices
D. The exploitation of the consumer through misleading descriptions of goods
E. Excess profit made by these companies

Answer

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Tags: Business Ethics, Corporate Responsibility, Public Concern
Level: Level 1

Topic: The Business Environment
Series: MAY 2016

BMF – MAY 2016 – L1 – SA – Q13 – The Role of Professional Accountants in Business and Society

Multiple choice question on matters not typically associated with public interest in accountancy.

Question

It is usual for accountants to associate public interest with the following matters EXCEPT

A. Detecting and reporting any serious misdemeanour or crime
B. Protecting health and public safety
C. Preventing the public from being misled by a statement or action of an individual or an organisation
D. Protecting health and personal safety
E. Revealing the existence of any conflict of interests of those individuals who are in a position of power or influence

Answer

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Tags: Accountancy, Professional Ethics, Public Interest
Level: Level 1

Topic: The Role of Professional Accountants in Business and Society
Series: MAY 2016

BMF – MAY 2016 – L1 – SA – Q12 – Basics of Business Finance and Financial Markets

Multiple choice question on the functions of a stock exchange.

Question

Which of the following is NOT a function of a stock exchange?

A. Provide a system in which shares can be traded in a regulated manner
B. Enforce rules of business conduct on market participants
C. Ensure availability of shares and bonds to be traded by investors
D. Ensure that there is an efficient system for providing new financial information about companies to investors in the market
E. Provide a system for recording information about the prices at which shares are bought and sold and making them available to participants

Answer

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Tags: Financial Markets, Securities Trading, Stock Exchange
Level: Level 1

Topic: Basics of Business Finance and Financial Markets
Series: MAY 2016

QTB – Nov 2014 – L1 – SA – Q15 – Mathematics of Business Finance

Determines the smallest number of units to produce for break-even.

Question

Assume that the standard selling price of a medium-size detergent produced by BICU Nigeria Limited is N250 per unit. If the total fixed cost is N85,000 and the cost of producing each unit is N130, what is the smallest number of units which the company should produce in order to break even?
A. 709
B. 708
C. 707
D. 706
E. 700

Answer

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Tags: Break-Even Point, Cost Analysis, Production
Level: Level 1

Topic: Mathematics of Business Finance
Series: NOV 2014

BMF – MAY 2016 – L1 – SA – Q12 – Basics of Business Finance and Financial Markets

Multiple choice question on the functions of a stock exchange.

Question

Which of the following is NOT a function of a stock exchange?

Answer

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Tags: Financial Markets, Securities Trading, Stock Exchange
Level: Level 1

Topic: Basics of Business Finance and Financial Markets
Series: MAY 2016

BMF – May 2016 – L1 – SA – Q11 – Basics of Business Finance and Financial Markets

This question assesses the understanding of sources of business financing.

Question

Which of the following is NOT a source of financing?
A. Bank overdrafts
B. Short-term bank loans
C. Suppliers
D. Proceeds of disposal of fixed assets
E. Operating leases

Answer

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Tags: Asset Disposal, Financing, Short-term Finance
Level: Level 1

Topic: Basics of Business Finance and Financial Markets
Series: MAY 2016

BMF – May 2016 – L1 – SA – Q10 – Basic Management Functions

This question evaluates the student's knowledge of Porter's Strategic Management Model and which element is not a part of it.

Question

Which of the following is NOT part of Porters’ Model of Strategic Management?
A. The Strategic goal for a company should be to achieve a superior long-term return on investment
B. Strategy must offer a unique value proposition for the customer
C. There should also be a distinctive value chain
D. The selected strategy will not involve some trade-offs
E. There should be continuity of strategic direction

Answer

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Tags: Competitive Strategy, Porter's Model, Strategic Management
Level: Level 1

Topic: Basic Management Functions
Series: MAY 2016

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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QTB – Nov 2014 – L1 – SA – Q18 – Mathematics of Business Finance

Identifies the correct definition of an annuity.

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BMF – MAY 2016 – L1 – SA – Q16 – Communications in Business

Multiple choice question on the primary ways of exchanging information in workplaces.

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BMF – MAY 2016 – L1 – SA – Q15 – Basic Management Functions

Multiple choice question on management's role in building successful teams.

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BMF – MAY 2016 – L1 – SA – Q14 – The Business Environment

Multiple choice question on areas of public concern regarding actions of major companies.

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BMF – MAY 2016 – L1 – SA – Q13 – The Role of Professional Accountants in Business and Society

Multiple choice question on matters not typically associated with public interest in accountancy.

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BMF – MAY 2016 – L1 – SA – Q12 – Basics of Business Finance and Financial Markets

Multiple choice question on the functions of a stock exchange.

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QTB – Nov 2014 – L1 – SA – Q15 – Mathematics of Business Finance

Determines the smallest number of units to produce for break-even.

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BMF – MAY 2016 – L1 – SA – Q12 – Basics of Business Finance and Financial Markets

Multiple choice question on the functions of a stock exchange.

You're reporting an error for "BMF – MAY 2016 – L1 – SA – Q12 – Basics of Business Finance and Financial Markets"

BMF – May 2016 – L1 – SA – Q11 – Basics of Business Finance and Financial Markets

This question assesses the understanding of sources of business financing.

You're reporting an error for "BMF – May 2016 – L1 – SA – Q11 – Basics of Business Finance and Financial Markets"

BMF – May 2016 – L1 – SA – Q10 – Basic Management Functions

This question evaluates the student's knowledge of Porter's Strategic Management Model and which element is not a part of it.

You're reporting an error for "BMF – May 2016 – L1 – SA – Q10 – Basic Management Functions"

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