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 – Nov 2014 – L1 – SB – Q6 – Communications in Business

Identify communication barriers and methods to improve communication effectiveness.

Question

Communication permeates every managerial function in work organizations. Communication can only be said to be effective if the message is interpreted in its intended form.

Required:

a. Identify FIVE factors that can constitute barriers to effective communication. (10 Marks)
b. State FIVE methods that can be used to improve communication effectiveness. (10 Marks)

(Total 20 Marks)

Answer

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Tags: Communication Barriers, Communication Effectiveness, Improving Communication
Level: Level 1

Topic: Communications in Business
Series: NOV 2014

BMF – Nov 2014 – L1 – SB – Q5 – Basic Management Functions

Explain the concept of power and identify five sources of power for leaders in organizations.

Question

Leadership power promotes vision, creativity, and change in the organization. Identifying the sources of a leader’s power is important in understanding leadership.

Required:

a. Explain the concept of power. (5 Marks)
b. State and explain FIVE sources of power. (15 Marks)

(Total 20 Marks)

Answer

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Tags: Leadership, Organizational Change, Power, Sources of Power
Level: Level 1

Topic: Basic Management Functions
Series: NOV 2014

BMF – Nov 2014 – L1 – SB – Q4 – Investment Decisions

Appraise a proposed investment using the Internal Rate of Return and evaluate the use of the Accounting Rate of Return.

Question

Management decisions regarding the acquisition of non-current assets and other long-term investments involve huge capital outlay, and they are critical to the future profitability and success of the company.

Gboza Limited proposed to buy a plant costing N2,000,000 which is expected to generate annual net cash flow of N600,000 for six years at a cost of capital of 10%.

Required:

a. Appraise the project using the internal rate of return. (13 Marks)
b. Should the plant be purchased? (2 Marks)
c. State TWO advantages and THREE disadvantages of accounting rate of return (ARR) as an investment appraisal technique. (5 Marks)

(Total 20 Marks)

Answer

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Tags: Accounting Rate of Return, Capital Budgeting, Internal Rate of Return, Investment Appraisal
Level: Level 1

Topic: Investment Decisions
Series: NOV 2014

BMF – Nov 2014 – L1 – SB – Q3 – Basics of Business Finance and Financial Markets

Discuss the segments of the Nigerian financial market, the advantages of listing on the stock exchange, and the listing requirements for the First-Tier and Alternative Securities Markets.

Question

The financial market is a mechanism by which surplus and deficit units of an economy can be brought together to accelerate the growth and development of the economy.

Required:

a. Explain the primary and secondary segments of the Nigerian financial market. (4 Marks)
b. State and explain FOUR advantages that a company would derive from listing on the stock exchange. (8 Marks)
c. List in a tabular form FOUR listing requirements each for the First-Tier and Alternative Securities Markets. (8 Marks)

(Total 20 Marks)

Answer

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Tags: Alternative Securities Market, First-Tier, Listing Requirements, Primary Market, Secondary Market, Stock Exchange
Level: Level 1

Topic: Basics of Business Finance and Financial Markets
Series: NOV 2014

BMF – Nov 2014 – L1 – SB – Q2 – Business and Organizational Structures and Choices

Explain various organizational structures and the advantages and disadvantages of decentralisation.

Question

a. In today’s business environment, organizational structure is an important element of business management because the way an organization is structured will go a long way in determining the organization’s efficiency and effectiveness.
Explain briefly the following forms of organizational structure: i. Centralisation
ii. Decentralisation
iii. Matrix
iv. Network organisation (Total 10 Marks)

b. Continuous pressure on modern business organizations has made many top managers concede more authority to middle-level and lower-level managers.
State FIVE advantages and FIVE disadvantages of decentralisation. (10 Marks)

(Total 20 Marks)

Answer

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Tags: centralisation, Decentralisation, Matrix Structure, Network Organisation, Organisational Structure
Level: Level 1

Topic: Business and Organizational Structures and Choices
Series: NOV 2014

BMF – Nov 2014 – L1 – SB – Q1 – Business and Organizational Structures and Choices

Discuss the features of a sole proprietorship and the characteristics of a public limited liability company.

Question

The business environment comprises a diversity of business organizations ranging from very simple enterprises to huge multinational corporations.

a. Identify FIVE features of a sole proprietorship. (10 Marks)
b. Identify FIVE characteristics of a Public Limited Liability Company. (10 Marks)

(Total 20 Marks)

Answer

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Tags: Business Structures, Public Limited Liability Company, Sole Proprietorship
Level: Level 1

Topic: Business and Organizational Structures and Choices
Series: NOV 2014

BMF – Nov 2014 – L1 – SA – Q20 – The Role of Professional Accountants in Business and Society

Identify the individual regarded as the father of "Scientific Management."

Question

Which of these management writers is regarded as the father of “Scientific Management”?

A. Charles Babbage
B. Robert Katz
C. Henry Mintzberg
D. Frederick Taylor
E. Henri Fayol

Answer

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Tags: Frederick Taylor, Management Theory, Scientific Management
Level: Level 1

Topic: The Role of Professional Accountants in Business and Society
Series: NOV 2014

BMF – Nov 2014 – L1 – SA – Q19 – Basic Management Functions

Identify the type of plan that outlines the structure, resources, and objectives of a business.

Question

The plan that explains how the business is structured, what resources are required, and how these resources are employed to achieve business objectives is:

A. Operational
B. Strategic
C. Budget
D. Marketing
E. Tactical

Answer

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Tags: Business Plan, Operational Planning, Resource management
Level: Level 1

Topic: Basic Management Functions
Series: NOV 2014

BMF – Nov 2014 – L1 – SA – Q18 – Business and Organizational Structures and Choices

Identify the organizational design influenced by the internet and communication technologies.

Question

Organizational design that is influenced and facilitated by the advent of the internet and other communication technologies is known as a __________ organization.

A. Network
B. Virtual
C. Horizontal
D. Matrix
E. Departmental

Answer

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Tags: Business Plan, Operational Planning, Resource management
Level: Level 1

Topic: Business and Organizational Structures and Choices
Series: NOV 2014

BMF – Nov 2014 – L1 – SA – Q17 – The Business Environment

Identify the term used to describe the business environment outside a company's country of incorporation.

Question

The environment of a business operating outside its own country of incorporation is called:

A. International
B. Multilateral
C. Cultural
D. Multinational
E. National

Answer

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Tags: Business Environment, Country of Incorporation, International business
Level: Level 1

Topic: The Business Environment
Series: NOV 2014

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 – Nov 2014 – L1 – SB – Q6 – Communications in Business

Identify communication barriers and methods to improve communication effectiveness.

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BMF – Nov 2014 – L1 – SB – Q5 – Basic Management Functions

Explain the concept of power and identify five sources of power for leaders in organizations.

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BMF – Nov 2014 – L1 – SB – Q4 – Investment Decisions

Appraise a proposed investment using the Internal Rate of Return and evaluate the use of the Accounting Rate of Return.

You're reporting an error for "BMF – Nov 2014 – L1 – SB – Q4 – Investment Decisions"

BMF – Nov 2014 – L1 – SB – Q3 – Basics of Business Finance and Financial Markets

Discuss the segments of the Nigerian financial market, the advantages of listing on the stock exchange, and the listing requirements for the First-Tier and Alternative Securities Markets.

You're reporting an error for "BMF – Nov 2014 – L1 – SB – Q3 – Basics of Business Finance and Financial Markets"

BMF – Nov 2014 – L1 – SB – Q2 – Business and Organizational Structures and Choices

Explain various organizational structures and the advantages and disadvantages of decentralisation.

You're reporting an error for "BMF – Nov 2014 – L1 – SB – Q2 – Business and Organizational Structures and Choices"

BMF – Nov 2014 – L1 – SB – Q1 – Business and Organizational Structures and Choices

Discuss the features of a sole proprietorship and the characteristics of a public limited liability company.

You're reporting an error for "BMF – Nov 2014 – L1 – SB – Q1 – Business and Organizational Structures and Choices"

BMF – Nov 2014 – L1 – SA – Q20 – The Role of Professional Accountants in Business and Society

Identify the individual regarded as the father of "Scientific Management."

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BMF – Nov 2014 – L1 – SA – Q19 – Basic Management Functions

Identify the type of plan that outlines the structure, resources, and objectives of a business.

You're reporting an error for "BMF – Nov 2014 – L1 – SA – Q19 – Basic Management Functions"

BMF – Nov 2014 – L1 – SA – Q18 – Business and Organizational Structures and Choices

Identify the organizational design influenced by the internet and communication technologies.

You're reporting an error for "BMF – Nov 2014 – L1 – SA – Q18 – Business and Organizational Structures and Choices"

BMF – Nov 2014 – L1 – SA – Q17 – The Business Environment

Identify the term used to describe the business environment outside a company's country of incorporation.

You're reporting an error for "BMF – Nov 2014 – L1 – SA – Q17 – The Business Environment"

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