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

BMF – May 2016 – L1 – SA – Q9 – Basics of Business Finance and Financial Markets

This question tests the calculation of Accounting Rate of Return (ARR) for a project based on financial data provided.

Question

ABC Limited is considering investing in a project with the following financial data:

The project life span is FOUR years and has no residual value at the end of the FOUR years. Calculate the ARR.

A. 25%
B. 30%
C. 32%
D. 33%
E. 35%

Answer

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Tags: ARR, Investment decisions, Project Appraisal
Level: Level 1

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

BMF – May 2016 – L1 – SA – Q8 – Basics of Business Finance and Financial Markets

This question focuses on identifying sources of short-term funds for a business.

Question

The following are sources of short-term funds, EXCEPT:
A. Bank Overdraft
B. Trade Payables
C. Operating Leases
D. Lease Finance
E. Debt Factoring

Answer

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Tags: Business Loans, Funding Options, Short-term Finance
Level: Level 1

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

QTB – Nov 2014 – L1 – SA – Q6 – Forecasting

Identifies the method that is not considered a quantitative forecasting technique.

Question

The following are quantitative techniques of forecasting in business analysis EXCEPT:
A. Regression analysis
B. Delphi method
C. Moving average
D. Exponential smoothing
E. Time series analysis

Answer

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Tags: Business Analysis, Forecasting, Quantitative Techniques
Level: Level 1

Topic: Forecasting
Series: NOV 2014

BMF – May 2016 – L1 – SA – Q7 – Basic Management Functions

This question evaluates knowledge of the objective of market skimming as a pricing strategy.

Question

The aim of market skimming is to ………………………..
A. Build customer demand
B. Offer an attractive price
C. Increase sales volume
D. Maximise the gross profit per unit sold
E. Penetrate the market

Answer

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Tags: Market Skimming, Pricing Strategy, Sales Strategy
Level: Level 1

Topic: Basic Management Functions
Series: MAY 2016

BMF – May 2016 – L1 – SA – Q6 – The Business Environment

This question assesses the understanding of the type of unemployment caused by economic downturns.

Question

Unemployment that results from a ‘slump’ in the economy can be described as:
A. Frictional unemployment
B. Seasonal unemployment
C. Residual unemployment
D. Cyclical unemployment
E. Recessional unemployment

Answer

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Tags: Economic Cycles, Labor Market, Unemployment
Level: Level 1

Topic: The Business Environment
Series: MAY 2016

BMF – May 2016 – L1 – SA – Q5 – Nature of Business, Types, and Objectives

This question assesses the understanding of corporate objectives in relation to stakeholders.

Question

It is often assumed that the main objective of a company should be to maximise the wealth of its shareholders. Johnson, Scholes, and Whittington state that the objective of an entity should be to ………………
A. Fulfil ‘stakeholder’ expectations
B. Fulfil ‘stakeholder’ values
C. Fulfil ‘shareholder’ expectations
D. Fulfil ‘government’ expectations
E. Fulfil ‘stakeholder’ thinking

Answer

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Tags: Business Objectives, Corporate Goals, Stakeholders
Level: Level 1

Topic: Nature of Business, Types, and Objectives
Series: MAY 2016

BMF – May 2016 – L1 – SA – Q4 – The Business Environment

This question tests knowledge of what constitutes a Non-Governmental Organization (NGO).

Question

Which of the following is NOT a Non-Governmental Organization?
A. Women in Management and Business
B. University of Lagos
C. Access to Education for Children
D. Action Aid International Nigeria
E. Lagos Digital Village

Answer

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Tags: Business Management, Non-Governmental Organizations
Level: Level 1

Topic: The Business Environment
Series: MAY 2016

BMF – May 2016 – L1 – SA – Q3 – The Role of Professional Accountants in Business and Society

This question tests the student's understanding of characteristics and objectives of not-for-profit organizations.

Question

The following are TRUE about Not-For-Profit Organisations EXCEPT:
A. They exist for purposes other than making profit
B. They operate within the funding and cash available
C. They are wholly or partly funded from non-government sources
D. The operating surplus is retained for the organisation
E. They will aim to operate at a surplus

Answer

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Tags: Accounting, Business Objectives, Not-for-profit organizations
Level: Level 1

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

BMF – May 2016 – L1 – SA – Q2 – Business and Organizational Structures and Choices

This question evaluates understanding of common business organizational structures.

Question

“Organisation structure” is the framework wherein the activities of people within the organisation are coordinated and managed. The following are common forms of business organisation structures EXCEPT:
A. Entrepreneurial structure
B. Functional structure
C. Divisional structure
D. Matrix structure
E. Boundary structure

Answer

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Tags: Business Management, Organization Types, Organizational Structures
Level: Level 1

Topic: Business and Organizational Structures and Choices
Series: MAY 2016

BMF – May 2016 – L1 – SA – Q1 – Business and Organizational Structures and Choices

This question focuses on identifying the business strategy of an entity with no strategic ambition to gain a larger market position.

Question

An entity that does not have any strategic ambition to gain a position in the larger market environment is called …………………… Strategy:
A. Leader
B. Challenger
C. Follower
D. Sole Trader
E. Nicher

Answer

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Tags: Business Strategy, Market Positioning, Organizational Choices
Level: Level 1

Topic: Business and Organizational Structures and Choices
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.

You're reporting an error for "BMF – Nov 2020 – L1 – SB – Q6 – Basics of Business Finance and Financial Markets"

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.

You're reporting an error for "BMF – Nov 2020 – L1 – SB – Q4 – The Role of Professional Accountants in Business and"

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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BMF – May 2016 – L1 – SA – Q9 – Basics of Business Finance and Financial Markets

This question tests the calculation of Accounting Rate of Return (ARR) for a project based on financial data provided.

You're reporting an error for "BMF – May 2016 – L1 – SA – Q9 – Basics of Business Finance and Financial Markets"

BMF – May 2016 – L1 – SA – Q8 – Basics of Business Finance and Financial Markets

This question focuses on identifying sources of short-term funds for a business.

You're reporting an error for "BMF – May 2016 – L1 – SA – Q8 – Basics of Business Finance and Financial Markets"

QTB – Nov 2014 – L1 – SA – Q6 – Forecasting

Identifies the method that is not considered a quantitative forecasting technique.

You're reporting an error for "QTB – Nov 2014 – L1 – SA – Q6 – Forecasting"

BMF – May 2016 – L1 – SA – Q7 – Basic Management Functions

This question evaluates knowledge of the objective of market skimming as a pricing strategy.

You're reporting an error for "BMF – May 2016 – L1 – SA – Q7 – Basic Management Functions"

BMF – May 2016 – L1 – SA – Q6 – The Business Environment

This question assesses the understanding of the type of unemployment caused by economic downturns.

You're reporting an error for "BMF – May 2016 – L1 – SA – Q6 – The Business Environment"

BMF – May 2016 – L1 – SA – Q5 – Nature of Business, Types, and Objectives

This question assesses the understanding of corporate objectives in relation to stakeholders.

You're reporting an error for "BMF – May 2016 – L1 – SA – Q5 – Nature of Business, Types, and Objectives"

BMF – May 2016 – L1 – SA – Q4 – The Business Environment

This question tests knowledge of what constitutes a Non-Governmental Organization (NGO).

You're reporting an error for "BMF – May 2016 – L1 – SA – Q4 – The Business Environment"

BMF – May 2016 – L1 – SA – Q3 – The Role of Professional Accountants in Business and Society

This question tests the student's understanding of characteristics and objectives of not-for-profit organizations.

You're reporting an error for "BMF – May 2016 – L1 – SA – Q3 – The Role of Professional Accountants in Business and Society"

BMF – May 2016 – L1 – SA – Q2 – Business and Organizational Structures and Choices

This question evaluates understanding of common business organizational structures.

You're reporting an error for "BMF – May 2016 – L1 – SA – Q2 – Business and Organizational Structures and Choices"

BMF – May 2016 – L1 – SA – Q1 – Business and Organizational Structures and Choices

This question focuses on identifying the business strategy of an entity with no strategic ambition to gain a larger market position.

You're reporting an error for "BMF – May 2016 – L1 – SA – Q1 – Business and Organizational Structures and Choices"

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