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ICAN KNOWLEDGE LEVEL

BUSINESS AND FINANCE

MOCK EXAMINATION QUESTIONS FOR MAY 2016 DIET.

OBJECTIVE QUESTIONS

1. The latin word “agenda” means

A. Matters arising

B. Notice

C. Correspondence

D. Report

E. Things to be done

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2. Which of the following should NOT be the objective of a business

organisation?

A. Pay tax as at when due

B. Obey laws enacted by the National Assembly

C. Keep clean environment

D. Encourage tax avoidance

E. Encourage tax evasion

3. Which of the following is NOT a factor to be considered when deciding the

form of a business enterprise?

A. The degree of personal liability

B. The willingness to share decision making powers and risks

C. The cost of establishing the business

D. The location of the business

E. The legal requirements concerning the provision of public information




4. The following are advantages of decentralisation EXCEPT that it

A. Promotes development of general managers

B. Aids adaptation to fast-changing environment

C. Enhances a uniform policy

D. Relieves top management of some burden of decision making

E. Gives managers more freedom and independence in decision making

5. Which of the following options is NOT a characteristic of business

environment?

F. Complexity

G. Dynamism

H. Multi-facets

I. Far-reaching impact

J. Predictability




6. Management function is synonymous with

A. Management process

B. Scientific management

C. Managerial roles

D. Managerial skills

E. Strategic management

7. Which of the following statements is NOT true of objectives?

A. Specific

B. Measurable

C. Time bound

D. Relevant to the context of the vision of an organisation

E. Achievable within the undefined time frame

8. Which of the underlisted short-term finance sources can be regarded as a

spontaneous source of short term fund?




A. Bank overdrafts

B. Accruals

C. Line of credit

D. Revolving credit agreement

E. Commercial paper

9. Which of the following is NOT a feature of SWOT analysis?

A. Strategic gap

B. Competitive threats

C. Opportunities availability

D. Weaknesses

E. Competitive advantage

10. The formula for calculating Net Present Value (NPV) of investment is




11. The virtue ethics theory was propounded by

A. Immanuel Kant

B. Aristotle

C. Socrates

D. Plato

E. Hegel

12. The extent to which the individual perceives that effective performance will

lead to desired rewards is described as

A. Expectancy

B. Instrumentality

C. Valance

D. Perception

E. Productivity

13. The appropriate term for anything that a firm does better especially when

compared to rival firms is called




A. Opportunities

B. Core competence

C. Performance

D. Competitive advantage

E. Capability

14. Which of the following is NOT a barrier to effective communication?

A. Status differences

B. Fear

C. Information overload

D. Information download

E. Verbal difficulties

15. Communication that flows from the superior to the subordinates and back

from the subordinates to the superior is called .....................communication

A. Vertical




B. Horizontal

C. External

D. Oral

E. Written

16. Strategy in the public sector differs from that in the private sector because

A. They do not have customers

B. They do not have stakeholders

C. Planning horizons are determined by political considerations rather than

market conditions

D. They do not have to make a profit

E. They do not manage cost

17. Which of the following is NOT an advantage of a partnership business?

A. More financial resources

B. Registration with Corporate Affairs Commission




C. Payment of Corporate Income Tax

D. Sharing of risk and loses

E. Continuity

18. Which of the following options is NOT a functional strategy?

A. Marketing strategy

B. Production strategy

C. Personnel strategy

D. Financial strategy

E. Diversification strategy

19. Which of the following is NOT a standard example of business

communication method?

A. Circulars

B. Newsletters




C. memorandum

D. Requisition

E. Telegram

20. Which of the following is NOT correct about a professional accountant?

A. Providing crucial contributions to streamline business plans

B. Serving as part of management team of any organisation

C. Specialising in finance and accounting matters only

D. Involved in wide range of activities beyond finance reporting and accounting

matters

E. Procuring capital for current and future success of the company

21. A business organization that is owned, managed, controlled and financed

by one person is called----




22. An organization that is established for the purpose of rendering essential

services to the people is called ……..

23. A business enterprise that is purely established for the motive of making

profit is termed …

24. Partnership business is distinct from public enterprises simply because of

…… motive.

25. An enterprise that is established by the state or government for

promoting the total welfare of the populace is called …

26. The concentration of powers and responsibilities in a single or central

authority is called …

27. The term that is used to describe the division of powers and authorities of

an organization among various units or departments is called …

28. The exchange, buying and selling of goods and services only between two

countries is called …

29. …… is the direct exchange, buying and selling of goods and services

between two or more countries of the world is called …




30. One of the major advantages of international trade is dumping of goods

and services especially in developing countries. A) True b) False c)

Undecided d) Ambiguous.

31. The term that describes the coming together of various countries of the

world to operate a common market is called …

32. …… refer to those factors that are within an organization which also can

be influenced by the organization.

33. …… refer to those factors that are not within but outside an organization

which the organization cannot also influence.

34. ….. is any arrangement or place where buyers and sellers are into direct

contact for the purpose of buying and selling of goods and services.

35. …… refers to the agglomeration of firms producing similar or

differentiated products.

36. A member of an organization that is described as a force to reckon in the

day-to-day management of the organization is referred to as ….




37. A plan of an organization designed to influence day-to-day management

of the business is usually termed ……

38. A plan that is designed to influence effective and efficient operations of

an activity in an organization is called ….

39. A strategy designed to achieve the goals and objectives of an organization

as a whole is called ….

40. A strategy developed by an organization for the purpose of influencing

the achievement of goals and objectives of various units, departments or

functions is called ….

41. An integral part of an organization that is designed to facilitate the direct

production of goods and services in an organization is called ……

42. The main sources of finance are ………, …….. and ………

43. The application of varAn integral part of an organization that is intendious

tools and techniques to facilitate the allocation of scarce financial

resources in organization to achieve ultimate goals is called …..




44. A market designed for the mobilization of short term funds and long term

funds is called …..

45. The two broad divisions of financial markets are ……… and ……..

46. …….. is the use of effective and efficient means of allocating financial

resources in an organization.

47. A model that is developed for the purpose of determining the strengths

and weaknesses of an organization is called ….

48. What does the acronym SWOT stand for?

49. A model that is majorly designed for determining or identifying the major

stages that a product undergoes before it reaches extinction stage is

termed …..

50. ….. is a model that is based on the product life cycle theory that can be

used to determine what priorities should be given in the product portfolio

of a business unit.

51. An investment appraisal technique that considers the time value of

money is called ….




52. An investment appraisal technique that does not consider the concept of

time value of money in its analysis is called …..

53. The two commonly used techniques in project analysis or investment

appraisal are ……. and ……

54. ……. Implies the norms, principles and conduct that guide the

establishment of a given business.

55. An organization that is majorly established with a given set of rules and

regulations is called ….

56. …… is an organization with a loose structure.

57. The general way of life of a people of an organization is usually termed …..

58. The term that is basically concerned with the act of getting things done

through others in order to achieve results is often called …..

59. ……… is a position of a leader in an organization

60. ……. is the responsibility of those who manage people as well as being the

description of the work of those who are employed as specialist.




61. A business organization that is formed by people with mutual or common

interest to promote or protect the interest of its members is called ….

62. One major distinguishing feature of cooperative society is one man one

vote A) True b) False c) Undecided d) Ambiguous.

63. PEST model analysis is a good example of ………. Environments.

64. An advantage that an organization enjoys at the expense of other

organizations within the same environment or location is called …..

65. A process by which information or message is passed or received from

one person or organization to another is called ……

66. A type of communication that is based on a set of rules and regulations is

usually known as ……

67. Gossips and grapevines are example of what type of communication

………..

68. The 4Ps of marketing are …….. , ……… , ……… and ………

69. ……. Is any service or activity rendered for the purpose of satisfying the

needs and wants of the general public?




70. The major five (5) elements of Porter’s Five Forces analysis are ……. , ………

, ………. , ………. and …….

71. The Latin word “Agenda” mean

A. Matters arising

B. Notice

C. Correspondence

D. Report

E. Things to be done.




72 Which of the following should NOT be the

social objective of business organization?

A. Pay tax as at when due

B. Obey laws enacted by the National

Assembly

C. Keep clean environment

D. Encourage tax avoidance

E. Encourage tax evasion

73. Which of the following is NOT a factor to be considered when deciding the

form of a business enterprise?

A. A. The degree of personal liability

B.The willingness to share decision B.




C. making powers and risks

C.The cost of establishing the business

D. The location of the business

E. The legal requirements concerning

the provision of public information

D.

E.

74. The following are the advantages of decentralization except that it:

A. Promotes development of general managers

B. Aids adaptation to fast changing environment.

C. Enhances uniform policy

D. Relieves to management of some burden of decision making

E. Gives managers more freedom and independence in decision making.

75. Which of the following defines the purpose of an organization and gives

the direction in which it is heading?




A. Vision Statement.

B. Mission Statement

C. Business Objective

D, Strategic intent

E. Organizational goal

76. The management function that ensures that things are done in

accordance with established policies and practices is called

A. Organising

B. coordinating

C. Controlling

D. Planning

E. Motivating

77. The financial structure of a firm is made up of the following components

EXCEPT




A. Ordinary shares

B. Preference shares

C. Debentures

D. Undistributed profit

E. Dividends

C

.

78. Political, Economic, Social and Technological (Pest) analysis is used to assess

Staff of the organization

1. Business Environment

2. Board of Directors

3. Shareholders

4. Corporate Affairs Commission

79. 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

80. Ethics is a science of

A. Religion

B. Philosophy

C. Psychology

D. Physiology

E. Moral

81. 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

82. Organisational culture relates to all of the following EXCEPT

A. Norms

B. Beliefs

C. Values

D. Change

E. Tradition

83. A work group which 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

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

by

A. Suppliers competitiveness

B. Economic of Scale

C. Inflation

D. Terrorism

E. Financial Reporting Council Regulation.

85 The objective of 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




86. Which of the following provides a good example of 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

87 The environment of a business operating outside its own country of

incorporation is called………………….environment.

A. international

B. Multilateral

C. Cultural

D. Multinational

E. National




88 Organizational design that is influenced and facilitated by the advent of

the internet and other communication technologies is called……………………………

organization.

A. Network

B. Virtual

C. Horizontal

D. Matrix

E. Department

89. The plan that explains how the business is structured, what resources are

required and how these resources are employed to achieve business objective

is called……………………………….plan?

A. operational

B. Strategic

C. Budget




D. Marketing

E. Tactical

90. Which of these management writers is regarded as the father of “Scientific

Management” .

A. Charles Babbage

B. Robert Katz

C. Henry Mintzberg

D. Fredrick Taylor

E. Henri Fayol




THEORY PART

INSTRUCTION: ANSWER QUESTION 1 AND ANY OTHER FOUR OF YOUR

CHOICE.

Question 1 (Compulsory)

(a). Bums Way Nig Plc is considering a capital project costing N25, 000. The

cost is to be incurred at the beginning of the project to last for 5 years with

expected cash flows.

Year N

1 8, 000

2 7, 000

3 5, 000

4 6, 000

5 11, 000




Required:

i. Determine the desirability of the project using the IRR criterion if the cut-

off rate is 13%

ii. Show the relationship between your NPV and IRR using a graph.

(b). Bosprints Nig. Ltd wishes to acquire a new machine and has relating to

two alternatives the information below;

Machine X Machine Y

Cost 20, 000 20, 000

Estimated Residuals 5, 000 4, 000

Estimated life span 4 years 4 years

Estimated profit Yr 1 8, 000 7, 000

Yr 2 8, 000 7, 000




Yr 3 10, 000 11, 000

Yr 4 5, 500 9, 000

The profit figures were arrived at before depreciation. Using Accounting Rate

of Return (ARR) method, advise on which of the machines to choose if the

required rate of return is 21%. Assume a tax rate of 40%.

Question 2

a). What is partnership? Highlight its major distinguishing features.

b). Distinguish clearly between cooperative society and public enterprises in

terms of definitions and their basic features.

c). Centralization and decentralization are one and the same? Defend your

stand salient points.




Question 3

a). What is a Finance? Discuss its major sources.

b). Differentiate succinctly between financial markets and financial

engineering.

c). Explain the relationships between business objectives and financial

management objectives.

Question 4

a). What do you understand by SWOT as a model of business analysis? State

the major criticisms of the model.

b). Explain the basic elements of Porter’s five forces as a business analysis

model. What factors limit the applicability of the model?




c). Differentiate between macroeconomic environments and microeconomic

environments.

Question 5

a). What is business ethics?

b). List and discuss the fundamental principles of business ethics.

c)( i). Differentiate clearly between formal and informal organization.

c) (ii). Explain the relationship between leadership and management.

Question 6

a). What is competitive advantage? Describe its major types.

b). Discuss the basic elements of report writing.




c). Write short notes on the following;

i. formal communication

ii. informal communication

iii. Internal communication

iv. External communication



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