BUSSINESS, MANAGEMENT & FINANCE – Page 9

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 2015 – L1 – SB – Q3 – The Role of Professional Accountants in Business and Society

Discuss reasons for government involvement in the Nigerian financial system and mechanisms for intervention.

Question

a. State FIVE reasons for the increasing role of Government in the Nigerian Financial System.
(10 Marks)

b. State FIVE mechanisms for government intervention in the financial system.
(10 Marks)

Answer

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Tags: Fiscal Policy, Government intervention, Monetary Policy, Nigerian Financial System
Level: Level 1

Topic: The Role of Professional Accountants in Business and Society
Series: MAY 2015

BMF – May 2015 – L1 – SB – Q2 – The Business Environment

Discuss four external environmental factors that impact business operations.

Question

Businesses do not operate in a vacuum. There is a combination of internal and external factors that affect how businesses function.
State and explain any FOUR external environmental factors that affect a business.

Answer

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Tags: Business Environment, Economic, External Environment, Political, Social, Technological
Level: Level 1

Topic: The Business Environment
Series: MAY 2015

BMF – May 2015 – L1 – SB – Q1b – Business and Organizational Structures and Choices

Identifying the advantages of a partnership business.

Question

Identify FIVE advantages of a partnership business.

Answer

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Tags: Business Advantages, Business organization, Partnership
Level: Level 1

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

BMF – May 2015 – L1 – SB – Q1a – Business and Organizational Structures and Choices

Features of the Memorandum of Association, Articles of Association, and Public Sector Entities.

Question

State FIVE features of each of the following:
i. Memorandum of Association (5 Marks)
ii. Articles of Association (5 Marks)
iii. Public Sector Entity (5 Marks)

Answer

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Tags: Articles of Association, Memorandum of Association, Public Sector Entity
Level: Level 1

Topic: Business and Organisational Structure
Series: MAY 2015

BMF – MAY 2015 – L1 – SA – Q20 – Communications in Business

Defining the process of information transmission in business contexts.

Question

The process of transmission of information from one person, group or organisation to another is called:

A. Decoding
B. Communication
C. Globalization
D. Presentation
E. Translation

Answer

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Tags: Business Communication, Communication, Decoding, Information transmission
Level: Level 1

Topic: Communications in Business
Series: MAY 2015

BMF – MAY 2015 – L1 – SA – Q19 – Management, Individual, and Organisational Behaviour

Identifying the leadership style based on authority and control over rewards.

Question

A leadership style in which the leader has the authority to withhold or give reward and punishment is referred to as ………………. style.

A. Democratic leadership
B. Participative leadership
C. Contingency leadership
D. Autocratic leadership
E. Laissez faire leadership

Answer

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Tags: Authority, Leadership Style, Management Theory, Rewards and punishments
Level: Level 1

Topic: Management, Individual, and Organizational Behavior
Series: MAY 2015

BMF – MAY 2015 – L1 – SA – Q18 – Basics of Business Finance and Financial Markets

Identifying which option is not a financial instrument in the money market.

Question

Which of these is NOT a financial instrument traded in the money market?

A. Treasury Bills
B. Call money
C. Development stock
D. Stabilization securities
E. Bill Finance scheme

Answer

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Tags: Call money, Development stock, Financial instruments, Money market, Treasury bills
Level: Level 1

Topic: Basics of Business Finance and Financial Markets
Series: MAY 2015

BMF – MAY 2015 – L1 – SA – Q17 – Investment Decisions

Understanding the decision rule for investment acceptance based on NPV.

Question

The decision rule for the acceptance of investment using Net Present Value (NPV) method is, accept if the:

A. NPV ≥ 0
B. NPV > 0
C. NPV < 0
D. NPV ≤ 0
E. NPV = 0

Answer

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Tags: Decision rule, Financial management, Investment Analysis, Net Present Value
Level: Level 1

Topic: Investment Decisions
Series: MAY 2015

BMF – MAY 2015 – L1 – SA – Q16 – The Business Environment

Defining the process of grouping prospective buyers in marketing.

Question

Aggregating prospective buyers into groups is called:

A. Market categorisation
B. Market mix
C. Market segmentation
D. Market modelling
E. BCG matrix analysis

Answer

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Tags: Consumer Behavior, Market Analysis, Market Segmentation, Marketing Strategy
Level: Level 1

Topic: The Business Environment
Series: MAY 2015

BMF – MAY 2015 – L1 – SA – Q15 – Basics of Business Finance and Financial Markets

Identifying the most commonly used source of short-term finance for businesses.

Question

Which of the following sources of finance available to businesses is the most frequently used for short-term finance?

A. Bank borrowing
B. Rights issues
C. New share issues
D. Retained earnings
E. Trade credit

Answer

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Tags: Bank borrowing, Financial management, Short-term Finance, Sources of finance, Trade Credit
Level: Level 1

Topic: Basics of Business Finance and Financial Markets
Series: MAY 2015

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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 – May 2015 – L1 – SB – Q3 – The Role of Professional Accountants in Business and Society

Discuss reasons for government involvement in the Nigerian financial system and mechanisms for intervention.

You're reporting an error for "BMF – May 2015 – L1 – SB – Q3 – The Role of Professional Accountants in Business and Society"

BMF – May 2015 – L1 – SB – Q2 – The Business Environment

Discuss four external environmental factors that impact business operations.

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BMF – May 2015 – L1 – SB – Q1b – Business and Organizational Structures and Choices

Identifying the advantages of a partnership business.

You're reporting an error for "BMF – May 2015 – L1 – SB – Q1b – Business and Organizational Structures and Choices"

BMF – May 2015 – L1 – SB – Q1a – Business and Organizational Structures and Choices

Features of the Memorandum of Association, Articles of Association, and Public Sector Entities.

You're reporting an error for "BMF – May 2015 – L1 – SB – Q1a – Business and Organizational Structures and Choices"

BMF – MAY 2015 – L1 – SA – Q20 – Communications in Business

Defining the process of information transmission in business contexts.

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BMF – MAY 2015 – L1 – SA – Q19 – Management, Individual, and Organisational Behaviour

Identifying the leadership style based on authority and control over rewards.

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BMF – MAY 2015 – L1 – SA – Q18 – Basics of Business Finance and Financial Markets

Identifying which option is not a financial instrument in the money market.

You're reporting an error for "BMF – MAY 2015 – L1 – SA – Q18 – Basics of Business Finance and Financial Markets"

BMF – MAY 2015 – L1 – SA – Q17 – Investment Decisions

Understanding the decision rule for investment acceptance based on NPV.

You're reporting an error for "BMF – MAY 2015 – L1 – SA – Q17 – Investment Decisions"

BMF – MAY 2015 – L1 – SA – Q16 – The Business Environment

Defining the process of grouping prospective buyers in marketing.

You're reporting an error for "BMF – MAY 2015 – L1 – SA – Q16 – The Business Environment"

BMF – MAY 2015 – L1 – SA – Q15 – Basics of Business Finance and Financial Markets

Identifying the most commonly used source of short-term finance for businesses.

You're reporting an error for "BMF – MAY 2015 – L1 – SA – Q15 – Basics of Business Finance and Financial Markets"

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