BUSSINESS, MANAGEMENT & FINANCE – Page 7

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 – SA – Q16 – The Role of Professional Accountants in Business and Society

Identify an example of an agency relationship in a typical business organization.

Question

Which of the following provides a good example of an agency relationship in a typical business organization?

A. Employees and Employer
B. Employees and Creditors
C. Creditors and Shareholders
D. Creditors and Governments
E. Debtors and Creditors

Answer

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Tags: Agency Relationship, Business Governance, Employer-Employee
Level: Level 1

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

BMF – Nov 2014 – L1 – SA – Q15 – The Role of Professional Accountants in Business and Society

Identify the main objective of a not-for-profit organization.

Question

The objective of a not-for-profit organization should be the pursuit of:

A. Cost effectiveness
B. Profit minimization
C. Shareholders’ wealth maximization
D. Value for money
E. Market position

Answer

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Tags: Cost Effectiveness, Not-for-profit, Value for Money
Level: Level 1

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

BMF – Nov 2014 – L1 – SA – Q14 – The Business Environment

Identify the factor influencing the threat of entry in Porter’s Five Forces model.

Question

The “threat of entry” part of the Porter’s Five Forces Model is influenced by:

A. Supplier competitiveness
B. Economies of scale
C. Inflation
D. Terrorism
E. Financial Reporting Council Regulation

Answer

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Tags: Economies of scale, Porter’s Five Forces, Threat of Entry
Level: Level 1

Topic: The Business Environment
Series: NOV 2014

BMF – Nov 2014 – L1 – SA – Q13 – The Role of Professional Accountants in Business and Society

Identify the type of group that manages its own work and practices.

Question

A work group that manages its own work practices and job allocation within the group is known as:

A. Team group
B. Operative work group
C. Autonomous work group
D. Cooperative work group
E. Joint work group

Answer

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Tags: Autonomous Group, Team Management, Work Group
Level: Level 1

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

BMF – Nov 2014 – L1 – SA – Q12 – Business and Organizational Structures and Choices

Identifies an element that does not relate to organizational culture.

Question

Organizational culture relates to all of the following EXCEPT
A. Norms
B. Belief
C. Values
D. Change
E. Tradition

Answer

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Tags: Change Management, Norms, Organizational Culture, Values
Level: Level 1

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

BMF – Nov 2014 – L1 – SA – Q11 – Basics of Business Finance and Financial Markets

Identifies the type of leaders who bring about innovation in organizational processes.

Question

Leaders who possess special ability to bring about innovation in organizational processes and development can be referred to as
A. Transactional leaders
B. Transformational leaders
C. Inventional leaders
D. Facilitative leaders
E. Strategic leaders

Answer

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Tags: Innovation, Leadership, Organizational Development
Level: Level 1

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

BMF – Nov 2014 – L1 – SA – Q10 – The Role of Professional Accountants in Business and Society

Identifies the field that ethics as a science belongs to.

Question

Ethics is a science of
A. Religion
B. Philosophy
C. Psychology
D. Physiology
E. Morals

Answer

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Tags: Ethics, Morals, Philosophy
Level: Level 1

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

BMF – Nov 2014 – L1 – SA – Q9 – Investment Decisions

Identifies which option is not a discounted cash flow investment appraisal technique.

Question

Which of the following is NOT a discounted cash flow investment appraisal technique?
A. Net present value
B. Internal rate of return
C. Profitability index
D. Discounted payback period
E. Payback period

Answer

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Tags: Discounted Cash Flow, Investment Appraisal
Level: Level 1

Topic: Investment Decisions
Series: NOV 2014

BMF – Nov 2014 – L1 – SA – Q8 – The Business Environment

Identifies what PEST analysis assesses in business.

Question

Political, Economic, Social and Technological (PEST) analysis is used to assess:

A. Staff of the organisation
B. Business environment
C. Board of Directors
D. Shareholders
E. Corporate Affairs Commission

Answer

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Tags: Business Environment, Economic, PEST Analysis, Political, Social, Technological
Level: Level 1

Topic: The Business Environment
Series: NOV 2014

BMF – Nov 2014 – L1 – SA – Q7 – Basics of Business Finance and Financial Markets

Identifies the component not part of the financial structure of a firm.

Question

The financial structure of a firm is made up of the following components EXCEPT:

A. Ordinary shares
B. Preference shares
C. Debentures
D. Undistributed profits
E. Dividends

Answer

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Tags: Debentures, Financial structure, Shares, Undistributed Profits
Level: Level 1

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

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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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BMF – Nov 2014 – L1 – SA – Q16 – The Role of Professional Accountants in Business and Society

Identify an example of an agency relationship in a typical business organization.

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BMF – Nov 2014 – L1 – SA – Q15 – The Role of Professional Accountants in Business and Society

Identify the main objective of a not-for-profit organization.

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BMF – Nov 2014 – L1 – SA – Q14 – The Business Environment

Identify the factor influencing the threat of entry in Porter’s Five Forces model.

You're reporting an error for "BMF – Nov 2014 – L1 – SA – Q14 – The Business Environment"

BMF – Nov 2014 – L1 – SA – Q13 – The Role of Professional Accountants in Business and Society

Identify the type of group that manages its own work and practices.

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BMF – Nov 2014 – L1 – SA – Q12 – Business and Organizational Structures and Choices

Identifies an element that does not relate to organizational culture.

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BMF – Nov 2014 – L1 – SA – Q11 – Basics of Business Finance and Financial Markets

Identifies the type of leaders who bring about innovation in organizational processes.

You're reporting an error for "BMF – Nov 2014 – L1 – SA – Q11 – Basics of Business Finance and Financial Markets"

BMF – Nov 2014 – L1 – SA – Q10 – The Role of Professional Accountants in Business and Society

Identifies the field that ethics as a science belongs to.

You're reporting an error for "BMF – Nov 2014 – L1 – SA – Q10 – The Role of Professional Accountants in Business and Society"

BMF – Nov 2014 – L1 – SA – Q9 – Investment Decisions

Identifies which option is not a discounted cash flow investment appraisal technique.

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BMF – Nov 2014 – L1 – SA – Q8 – The Business Environment

Identifies what PEST analysis assesses in business.

You're reporting an error for "BMF – Nov 2014 – L1 – SA – Q8 – The Business Environment"

BMF – Nov 2014 – L1 – SA – Q7 – Basics of Business Finance and Financial Markets

Identifies the component not part of the financial structure of a firm.

You're reporting an error for "BMF – Nov 2014 – L1 – SA – Q7 – Basics of Business Finance and Financial Markets"

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