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  • 20 Marks

BMF – May 2015 – L1 – SB – Q6 – Basics of Business Finance and Financial Markets

Describe the Boston Consulting Group (BCG) matrix used for business portfolio management.

Describe the Boston Consulting Group (BCG) matrix.

The Boston Consulting Group (BCG) matrix is a model by which businesses are
classified in relation to market growth and relative market share.
The strategy of each business is determined on the basis of the following factors:
(i) The growth rate of its market
(ii) The market share it enjoys

The matrix can be depicted by the following quadrant:

b. Product-Market Strategies:

i. Stars:
Stars operate in high-growth markets and dominate their sectors. They require substantial investment to maintain market position but promise high returns. The recommended product-market strategy is to continue heavy investment in advertising, promotion, and product development to ensure growth in market share and revenue.

ii. Question Marks (Problem Children):
These products operate in high-growth markets but have low market share. They create opportunities for long-term growth but need significant cash investments. The suggested strategy is to either invest heavily to turn them into stars or divest if the market position does not improve. This may involve strategic decisions like harvesting or liquidation.

iii. Cash Cows:
These products have high market share in low-growth markets. They generate consistent cash flows but offer limited growth opportunities. The strategy is to maintain or consolidate their position, using their revenue to fund other areas of the business that require investment (such as Stars or Question Marks).

iv. Dogs:
Dogs have low market share in low-growth markets, providing little to no profit potential. The strategy is often to divest or liquidate these products, as they are not worth the continued investment given their bleak future.

c. Weaknesses of the BCG Matrix:

  1. The model ignores the synergies between different business units, which can affect overall profitability.
  2. High market share does not always guarantee profitability, as it depends on other factors such as cost structure and competitive advantage.

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  • 20 Marks

BMF – May 2015 – L1 – SB – Q6 – Basics of Business Finance and Financial Markets

Describe the Boston Consulting Group (BCG) matrix used for business portfolio management.

Describe the Boston Consulting Group (BCG) matrix.

The Boston Consulting Group (BCG) matrix is a model by which businesses are
classified in relation to market growth and relative market share.
The strategy of each business is determined on the basis of the following factors:
(i) The growth rate of its market
(ii) The market share it enjoys

The matrix can be depicted by the following quadrant:

b. Product-Market Strategies:

i. Stars:
Stars operate in high-growth markets and dominate their sectors. They require substantial investment to maintain market position but promise high returns. The recommended product-market strategy is to continue heavy investment in advertising, promotion, and product development to ensure growth in market share and revenue.

ii. Question Marks (Problem Children):
These products operate in high-growth markets but have low market share. They create opportunities for long-term growth but need significant cash investments. The suggested strategy is to either invest heavily to turn them into stars or divest if the market position does not improve. This may involve strategic decisions like harvesting or liquidation.

iii. Cash Cows:
These products have high market share in low-growth markets. They generate consistent cash flows but offer limited growth opportunities. The strategy is to maintain or consolidate their position, using their revenue to fund other areas of the business that require investment (such as Stars or Question Marks).

iv. Dogs:
Dogs have low market share in low-growth markets, providing little to no profit potential. The strategy is often to divest or liquidate these products, as they are not worth the continued investment given their bleak future.

c. Weaknesses of the BCG Matrix:

  1. The model ignores the synergies between different business units, which can affect overall profitability.
  2. High market share does not always guarantee profitability, as it depends on other factors such as cost structure and competitive advantage.

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  • 5 Marks

BMF – May 2015 – L1 – SB – Q5b – Management, Individual, and Organisational Behaviour

Discuss hygiene factors and motivators in Herzberg’s two-factor theory.

Write briefly on the following:
i. Hygiene factors
ii. Motivators

i. Hygiene Factors: These are factors that can lead to dissatisfaction in the workplace if they are absent or inadequate, but their presence does not necessarily create satisfaction. They include aspects like working conditions, salary, company policies, job security, and relationships with supervisors and colleagues. Inadequate hygiene factors result in employee dissatisfaction, but improving these factors alone will not boost job satisfaction.

ii. Motivators: These are factors that positively influence job satisfaction and encourage employees to improve performance. They include recognition, responsibility, opportunities for advancement, achievement, and personal growth. Unlike hygiene factors, motivators directly impact an employee’s level of job satisfaction and contribute to higher levels of performance and motivation.

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  • 5 Marks

BMF – May 2015 – L1 – SB – Q5b – Management, Individual, and Organisational Behaviour

Discuss hygiene factors and motivators in Herzberg’s two-factor theory.

Write briefly on the following:
i. Hygiene factors
ii. Motivators

i. Hygiene Factors: These are factors that can lead to dissatisfaction in the workplace if they are absent or inadequate, but their presence does not necessarily create satisfaction. They include aspects like working conditions, salary, company policies, job security, and relationships with supervisors and colleagues. Inadequate hygiene factors result in employee dissatisfaction, but improving these factors alone will not boost job satisfaction.

ii. Motivators: These are factors that positively influence job satisfaction and encourage employees to improve performance. They include recognition, responsibility, opportunities for advancement, achievement, and personal growth. Unlike hygiene factors, motivators directly impact an employee’s level of job satisfaction and contribute to higher levels of performance and motivation.

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  • 15 Marks

BMF – May 2015 – L1 – SB – Q5a – Management, Individual, and Organisational Behaviour

List and explain the five levels of human needs as per Maslow’s hierarchy.

List and explain the FIVE general types of human needs in ascending order.

  1. Physiological Needs: These are the basic survival needs for human life, such as food, water, shelter, air, and clothing. In an organizational context, these are equated to adequate salary, heat, and air to ensure employees’ survival and well-being.
  2. Safety Needs: Once physiological needs are met, individuals seek protection and security, both physically and psychologically. In the workplace, this relates to job security, safe working conditions, and a stable environment free from physical harm.
  3. Belongingness/Social Needs: After safety, individuals look for social connections, love, and belonging. In an organization, this refers to forming relationships with colleagues and feeling accepted as part of a team. Employees value a friendly work environment and camaraderie among coworkers.
  4. Esteem Needs: These involve the need for recognition, respect, and self-esteem. Employees strive to achieve recognition for their work, which can be fulfilled through awards, promotions, or being acknowledged as valuable team members.
  5. Self-Actualization Needs: The highest level, where individuals strive to realize their full potential. In the workplace, this involves opportunities for personal growth, creativity, and achieving career goals. Managers can help employees meet these needs by providing challenging tasks and encouraging innovation.

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  • 15 Marks

BMF – May 2015 – L1 – SB – Q5a – Management, Individual, and Organisational Behaviour

List and explain the five levels of human needs as per Maslow’s hierarchy.

List and explain the FIVE general types of human needs in ascending order.

  1. Physiological Needs: These are the basic survival needs for human life, such as food, water, shelter, air, and clothing. In an organizational context, these are equated to adequate salary, heat, and air to ensure employees’ survival and well-being.
  2. Safety Needs: Once physiological needs are met, individuals seek protection and security, both physically and psychologically. In the workplace, this relates to job security, safe working conditions, and a stable environment free from physical harm.
  3. Belongingness/Social Needs: After safety, individuals look for social connections, love, and belonging. In an organization, this refers to forming relationships with colleagues and feeling accepted as part of a team. Employees value a friendly work environment and camaraderie among coworkers.
  4. Esteem Needs: These involve the need for recognition, respect, and self-esteem. Employees strive to achieve recognition for their work, which can be fulfilled through awards, promotions, or being acknowledged as valuable team members.
  5. Self-Actualization Needs: The highest level, where individuals strive to realize their full potential. In the workplace, this involves opportunities for personal growth, creativity, and achieving career goals. Managers can help employees meet these needs by providing challenging tasks and encouraging innovation.

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  • 20 Marks

BMF – May 2015 – L1 – SB – Q4 – Basics of Business Finance and Financial Markets

Discuss major cash flow items in capital investment projects and explain the payback period investment appraisal method.

a. List and explain FOUR major cashflow items to be included in a capital investment project. (8 Marks)
b.
i. Explain the payback period technique of investment appraisal. (4 Marks)
ii. State TWO advantages and TWO disadvantages of payback period. (8 Marks)

a. Major cashflow items to be included in a capital investment project:

  1. Initial capital outlay: This is the cash expenditure required at the beginning of the project, usually spent on fixed assets.
  2. Operating cash flows: These include cash inflows from sales and cash outflows for operating expenses like wages, utilities, and materials.
  3. Terminal cash flows: These are the cash flows at the end of the project, such as salvage value or disposal of assets.
  4. Incremental cash flows: These refer to the additional cash flows generated directly by the investment, which wouldn’t have been earned otherwise.

b. i. Payback Period Investment Appraisal Technique:
This technique calculates the time needed for the cash inflows generated by a project to recover the initial investment. It emphasizes liquidity by focusing on the period over which the project will generate enough cash inflows to cover the initial outlay. It does not take into account the time value of money or cash flows beyond the payback period.

ii. Advantages of Payback Period:

  1. Simple to calculate and understand.
  2. It is useful for projects where liquidity is important because it focuses on recovering the initial investment quickly.

Disadvantages of Payback Period:

  1. It ignores cash flows that occur after the payback period, potentially overlooking the profitability of longer-term projects.
  2. It does not consider the time value of money.

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  • 20 Marks

BMF – May 2015 – L1 – SB – Q4 – Basics of Business Finance and Financial Markets

Discuss major cash flow items in capital investment projects and explain the payback period investment appraisal method.

a. List and explain FOUR major cashflow items to be included in a capital investment project. (8 Marks)
b.
i. Explain the payback period technique of investment appraisal. (4 Marks)
ii. State TWO advantages and TWO disadvantages of payback period. (8 Marks)

a. Major cashflow items to be included in a capital investment project:

  1. Initial capital outlay: This is the cash expenditure required at the beginning of the project, usually spent on fixed assets.
  2. Operating cash flows: These include cash inflows from sales and cash outflows for operating expenses like wages, utilities, and materials.
  3. Terminal cash flows: These are the cash flows at the end of the project, such as salvage value or disposal of assets.
  4. Incremental cash flows: These refer to the additional cash flows generated directly by the investment, which wouldn’t have been earned otherwise.

b. i. Payback Period Investment Appraisal Technique:
This technique calculates the time needed for the cash inflows generated by a project to recover the initial investment. It emphasizes liquidity by focusing on the period over which the project will generate enough cash inflows to cover the initial outlay. It does not take into account the time value of money or cash flows beyond the payback period.

ii. Advantages of Payback Period:

  1. Simple to calculate and understand.
  2. It is useful for projects where liquidity is important because it focuses on recovering the initial investment quickly.

Disadvantages of Payback Period:

  1. It ignores cash flows that occur after the payback period, potentially overlooking the profitability of longer-term projects.
  2. It does not consider the time value of money.

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  • 20 Marks

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.

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)

a. Reasons for the Increasing Role of Government in the Nigerian Financial System:

  1. To maintain monetary stability: The government needs to ensure that the financial system remains stable to control inflation and manage the economy effectively.
  2. To promote economic growth: Government interventions are essential to stimulate growth and support the development of various sectors of the economy.
  3. To ensure healthy competition: By regulating the financial system, the government prevents monopolies and ensures fair competition, both domestically and internationally.
  4. To protect the public from fraud and exploitation: Government policies are crucial to safeguarding the public from unethical financial practices.
  5. To attract foreign investment: A stable financial system encourages international investors, contributing to the growth of the economy.

b. Mechanisms for Government Intervention in the Financial System:

  1. Open Market Operations (OMO): The government buys and sells treasury bills and bonds to control the money supply.
  2. Changes in monetary policy rates (MPR): Adjusting the MPR influences interest rates, which in turn affects borrowing and investment levels in the economy.
  3. Liquidity ratio adjustments: The government can change the liquidity ratio to control the amount of cash that banks must hold as reserves, impacting the availability of credit.
  4. Fiscal policy (taxation and spending): The government uses taxes and public spending to influence the financial system and stimulate or slow down the economy.
  5. Recapitalization of banks: To maintain stability, the government may require banks to recapitalize, ensuring that they have enough funds to meet their obligations.

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  • 20 Marks

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.

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)

a. Reasons for the Increasing Role of Government in the Nigerian Financial System:

  1. To maintain monetary stability: The government needs to ensure that the financial system remains stable to control inflation and manage the economy effectively.
  2. To promote economic growth: Government interventions are essential to stimulate growth and support the development of various sectors of the economy.
  3. To ensure healthy competition: By regulating the financial system, the government prevents monopolies and ensures fair competition, both domestically and internationally.
  4. To protect the public from fraud and exploitation: Government policies are crucial to safeguarding the public from unethical financial practices.
  5. To attract foreign investment: A stable financial system encourages international investors, contributing to the growth of the economy.

b. Mechanisms for Government Intervention in the Financial System:

  1. Open Market Operations (OMO): The government buys and sells treasury bills and bonds to control the money supply.
  2. Changes in monetary policy rates (MPR): Adjusting the MPR influences interest rates, which in turn affects borrowing and investment levels in the economy.
  3. Liquidity ratio adjustments: The government can change the liquidity ratio to control the amount of cash that banks must hold as reserves, impacting the availability of credit.
  4. Fiscal policy (taxation and spending): The government uses taxes and public spending to influence the financial system and stimulate or slow down the economy.
  5. Recapitalization of banks: To maintain stability, the government may require banks to recapitalize, ensuring that they have enough funds to meet their obligations.

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  • 20 Marks

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

Discuss four external environmental factors that impact business operations.

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.

  1. Political Factors:
    Political factors affect the level of opportunities and threats within the business environment. Factors such as the stability of the political system, government policies, and regulations have a major influence on how businesses operate. A change in government or political instability can affect market conditions and disrupt business operations.
  2. Economic Factors:
    Economic conditions, including inflation rates, interest rates, economic growth, and exchange rates, play a crucial role in business performance. A strong economy encourages businesses to expand, whereas a weak economy may force businesses to downsize or halt operations.
  3. Socio-Cultural Factors:
    Socio-cultural aspects include the beliefs, values, attitudes, and lifestyles of people. These factors influence consumer behavior and market demand. A business must understand these cultural nuances to tailor products and services that meet the expectations of its customers.
  4. Technological Factors:
    The level of technological advancement within a country or industry determines the efficiency of production processes and service delivery. Businesses must keep up with technological changes to remain competitive. This includes automation, internet usage, and new software or tools that improve operational efficiency.

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  • 20 Marks

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

Discuss four external environmental factors that impact business operations.

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.

  1. Political Factors:
    Political factors affect the level of opportunities and threats within the business environment. Factors such as the stability of the political system, government policies, and regulations have a major influence on how businesses operate. A change in government or political instability can affect market conditions and disrupt business operations.
  2. Economic Factors:
    Economic conditions, including inflation rates, interest rates, economic growth, and exchange rates, play a crucial role in business performance. A strong economy encourages businesses to expand, whereas a weak economy may force businesses to downsize or halt operations.
  3. Socio-Cultural Factors:
    Socio-cultural aspects include the beliefs, values, attitudes, and lifestyles of people. These factors influence consumer behavior and market demand. A business must understand these cultural nuances to tailor products and services that meet the expectations of its customers.
  4. Technological Factors:
    The level of technological advancement within a country or industry determines the efficiency of production processes and service delivery. Businesses must keep up with technological changes to remain competitive. This includes automation, internet usage, and new software or tools that improve operational efficiency.

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  • 5 Marks

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

Identifying the advantages of a partnership business.

Identify FIVE advantages of a partnership business.

  1. Shared management and pooled knowledge: Partners bring in varied expertise and skills to manage the business.
  2. Attraction of more financial resources: Partnerships can attract more capital compared to sole proprietorships.
  3. Continuity in comparison with sole proprietorship: Unlike sole proprietorships, partnerships can continue even when one partner exits.
  4. Division of labor: Partners can divide work based on their strengths, leading to more efficient management.
  5. Sharing of risks and losses: The risks and financial losses are shared among partners, reducing the burden on a single individual.

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  • 5 Marks

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

Identifying the advantages of a partnership business.

Identify FIVE advantages of a partnership business.

  1. Shared management and pooled knowledge: Partners bring in varied expertise and skills to manage the business.
  2. Attraction of more financial resources: Partnerships can attract more capital compared to sole proprietorships.
  3. Continuity in comparison with sole proprietorship: Unlike sole proprietorships, partnerships can continue even when one partner exits.
  4. Division of labor: Partners can divide work based on their strengths, leading to more efficient management.
  5. Sharing of risks and losses: The risks and financial losses are shared among partners, reducing the burden on a single individual.

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  • 15 Marks

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.

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)

i. Features of Memorandum of Association:

  • The name of the company.
  • The names and addresses of the shareholders.
  • The number of shares held by each shareholder.
  • The location of the registered office.
  • The objectives of the company.

ii. Features of Articles of Association:

  • The internal relations of the company.
  • The rights of shareholders.
  • How meetings are convened.
  • Appointment and renewal of directors and other officers.
  • Power and duties of directors.

iii. Features of Public Sector Entity:

  • It is owned by the government.
  • It is created by an Act of Parliament.
  • It is managed by a board of directors appointed by the government.
  • It renders essential services.
  • It is not established for profit.

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  • 15 Marks

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.

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)

i. Features of Memorandum of Association:

  • The name of the company.
  • The names and addresses of the shareholders.
  • The number of shares held by each shareholder.
  • The location of the registered office.
  • The objectives of the company.

ii. Features of Articles of Association:

  • The internal relations of the company.
  • The rights of shareholders.
  • How meetings are convened.
  • Appointment and renewal of directors and other officers.
  • Power and duties of directors.

iii. Features of Public Sector Entity:

  • It is owned by the government.
  • It is created by an Act of Parliament.
  • It is managed by a board of directors appointed by the government.
  • It renders essential services.
  • It is not established for profit.

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  • 1 Marks

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

Defining the process of information transmission in business contexts.

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: B. Communication

Explanation:
Communication refers to the process of transmitting information from one entity to another, encompassing various methods and channels. It is essential for effective interaction within and between organizations.

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  • 1 Marks

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

Defining the process of information transmission in business contexts.

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: B. Communication

Explanation:
Communication refers to the process of transmitting information from one entity to another, encompassing various methods and channels. It is essential for effective interaction within and between organizations.

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  • 1 Marks

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

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

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: D. Autocratic leadership

Explanation:
Autocratic leadership is characterized by a leader who has significant control over decision-making and the authority to reward or punish subordinates. This style does not typically involve team input or collaboration, focusing instead on the leader’s authority and directives.

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  • 1 Marks

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

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

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: D. Autocratic leadership

Explanation:
Autocratic leadership is characterized by a leader who has significant control over decision-making and the authority to reward or punish subordinates. This style does not typically involve team input or collaboration, focusing instead on the leader’s authority and directives.

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  • 1 Marks

QTB – May 2015 – L1 – SA – Q6 – Operations Research

Finding revenue changes, total cost, and profit using marginal cost and marginal revenue functions.

In its efforts to reposition the fortune of the firm, the Board of Directors of AJE Enterprise Limited targeted a profit function of π = 16q − q2 − 10. The firm’s profit-maximizing output level is obtained as:

A. 2/5
B. 8/5
C. 8
D. 10
E. 16

Answer:
D. 10

Explanation:
To find the profit-maximizing output level, take the derivative of the profit function π = 16q − q2 − 10 with respect to and set it equal to zero:

Solving for q, we get q = 10 which represents the profit-maximizing output level.

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  • 1 Marks

QTB – May 2015 – L1 – SA – Q6 – Operations Research

Finding revenue changes, total cost, and profit using marginal cost and marginal revenue functions.

In its efforts to reposition the fortune of the firm, the Board of Directors of AJE Enterprise Limited targeted a profit function of π = 16q − q2 − 10. The firm’s profit-maximizing output level is obtained as:

A. 2/5
B. 8/5
C. 8
D. 10
E. 16

Answer:
D. 10

Explanation:
To find the profit-maximizing output level, take the derivative of the profit function π = 16q − q2 − 10 with respect to and set it equal to zero:

Solving for q, we get q = 10 which represents the profit-maximizing output level.

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  • 1 Marks

QTB – May 2015 – L1 – SA – Q5 – Operations Research

Identifying marginal productivity functions for labor and capital in a given production function.

ABC Plc announced at its AGM in March 2014 that its production function for the year 2013 was Q=5L^0.4K^0.6Q =, where Q is the output level, is the labor input, and is the capital input. Therefore, the marginal productivity functions for both L and are respectively given as:

 

 

Explanation:
The marginal productivity of labor L and capital are derived from the production function by differentiating Q = 5L^{0.4} K^{0.6} with respect to and respectively. The correct functions are 2L{-0.6} K^{0.6} and L^{0.4} K^{-0.4}, indicating how output changes with additional input of labor and capital under these

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  • 1 Marks

QTB – May 2015 – L1 – SA – Q5 – Operations Research

Identifying marginal productivity functions for labor and capital in a given production function.

ABC Plc announced at its AGM in March 2014 that its production function for the year 2013 was Q=5L^0.4K^0.6Q =, where Q is the output level, is the labor input, and is the capital input. Therefore, the marginal productivity functions for both L and are respectively given as:

 

 

Explanation:
The marginal productivity of labor L and capital are derived from the production function by differentiating Q = 5L^{0.4} K^{0.6} with respect to and respectively. The correct functions are 2L{-0.6} K^{0.6} and L^{0.4} K^{-0.4}, indicating how output changes with additional input of labor and capital under these

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  • 1 Marks

QTB – May 2015 – L1 – SA – Q4 – Operations Research

Understanding when a business venture is considered worthwhile.

A business venture is considered as worthwhile when the:

A. Present value of revenue is positive
B. Present value of the cost is positive
C. Net present value is positive
D. Net present value is equal to zero
E. Internal rate of return is positive

Answer:
C. Net present value is positive

Explanation:
A business venture is deemed worthwhile when the net present value (NPV) is positive. NPV is the difference between the present value of inflows and outflows. When it is positive, the project is expected to generate more value than its cost, indicating profitability.

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  • 1 Marks

QTB – May 2015 – L1 – SA – Q4 – Operations Research

Understanding when a business venture is considered worthwhile.

A business venture is considered as worthwhile when the:

A. Present value of revenue is positive
B. Present value of the cost is positive
C. Net present value is positive
D. Net present value is equal to zero
E. Internal rate of return is positive

Answer:
C. Net present value is positive

Explanation:
A business venture is deemed worthwhile when the net present value (NPV) is positive. NPV is the difference between the present value of inflows and outflows. When it is positive, the project is expected to generate more value than its cost, indicating profitability.

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  • 1 Marks

QTB – May 2015 – L1 – SA – Q3 – Mathematics

Determining the production level at which average production cost is zero.

The total cost function for SUNNY Enterprises is c(x)=x^3−13x^2+40^x, where is the number of units produced (in hundreds). At what production level does the average production cost equal to zero?

A. 0, 500, 800
B. 500, 800
C. 0, 400, 900
D. 400
E. 400, 900

Answer:
E. 400, 900

Explanation:
To find the production level at which the average production cost equals zero, we divide the total cost function by xx and solve for xx. This yields critical points at 400 and 900 units. Thus, the production levels where the average cost is zero are at 400 and 900 units.

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  • 1 Marks

QTB – May 2015 – L1 – SA – Q3 – Mathematics

Determining the production level at which average production cost is zero.

The total cost function for SUNNY Enterprises is c(x)=x^3−13x^2+40^x, where is the number of units produced (in hundreds). At what production level does the average production cost equal to zero?

A. 0, 500, 800
B. 500, 800
C. 0, 400, 900
D. 400
E. 400, 900

Answer:
E. 400, 900

Explanation:
To find the production level at which the average production cost equals zero, we divide the total cost function by xx and solve for xx. This yields critical points at 400 and 900 units. Thus, the production levels where the average cost is zero are at 400 and 900 units.

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  • 1 Marks

QTB – May 2015 – L1 – SA – Q2 – Mathematics

Deriving the equation of a straight line for cost relation with given production and cost data.

A firm produced 300 units of a commodity at a total cost of N680 and 700 units of the same commodity at a total cost of N1,060. If it is known that the cost relation is a straight line, derive the equation of this line.

A. y = – 0.95x + 395
B. y = 1.05x – 415.79
C. y = 0.95x + 395
D. y = 9.5x + 395
E. y = 1.05x + 419.75

Answer:
C. y = 0.95x + 395

Explanation:
To derive the equation of a straight line, use the formula y = mx + c, where mm is the slope and cc is the intercept. The slope is calculated as:

m = 1060 − 680 / 700 – 300 = 0.95 

Substitute one of the points into the equation to find the intercept cc. Using the point (300, 680):

680=0.95(300) +c gives c=395

Thus, the equation is y = 395.

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  • 1 Marks

QTB – May 2015 – L1 – SA – Q2 – Mathematics

Deriving the equation of a straight line for cost relation with given production and cost data.

A firm produced 300 units of a commodity at a total cost of N680 and 700 units of the same commodity at a total cost of N1,060. If it is known that the cost relation is a straight line, derive the equation of this line.

A. y = – 0.95x + 395
B. y = 1.05x – 415.79
C. y = 0.95x + 395
D. y = 9.5x + 395
E. y = 1.05x + 419.75

Answer:
C. y = 0.95x + 395

Explanation:
To derive the equation of a straight line, use the formula y = mx + c, where mm is the slope and cc is the intercept. The slope is calculated as:

m = 1060 − 680 / 700 – 300 = 0.95 

Substitute one of the points into the equation to find the intercept cc. Using the point (300, 680):

680=0.95(300) +c gives c=395

Thus, the equation is y = 395.

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  • 1 Marks

QTB – May 2015 – L1 – SA – Q1 – Mathematics

Calculating how long it takes for N500 to appreciate to N10,000 at 5% continuous interest.

The present value of NA to be paid in t years in the future (assuming 5% continuous interest rate) is P (A, t) = Ae^0.05t. How long will it take N500 to appreciate to N10,000?

A. 5.99 years
B. 26.00 years
C. 52.00 years
D. 59.91 years
E. 599.10 years

Answer:
D. 59.91 years

Explanation:
To calculate how long it will take for N500 to appreciate to N10,000 under continuous compounding interest, we use the formula for future value in continuous compounding:

Here, P=10,000, A=500A and the interest rate is 5%. Solving for yields approximately 59.91 years.

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  • 1 Marks

QTB – May 2015 – L1 – SA – Q1 – Mathematics

Calculating how long it takes for N500 to appreciate to N10,000 at 5% continuous interest.

The present value of NA to be paid in t years in the future (assuming 5% continuous interest rate) is P (A, t) = Ae^0.05t. How long will it take N500 to appreciate to N10,000?

A. 5.99 years
B. 26.00 years
C. 52.00 years
D. 59.91 years
E. 599.10 years

Answer:
D. 59.91 years

Explanation:
To calculate how long it will take for N500 to appreciate to N10,000 under continuous compounding interest, we use the formula for future value in continuous compounding:

Here, P=10,000, A=500A and the interest rate is 5%. Solving for yields approximately 59.91 years.

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  • 8 Marks

BL – Nov 2015 – L2 – SB – Q1a – Sources of Nigerian Law

Define Statutes of General Application and list six sources of Nigerian law.

a. Statutes of General Application are parts of the laws applicable in Nigeria.

i. What are Statutes of General Application?
(2 Marks)

ii. State SIX sources of Nigerian Law.
(6 Marks)

i. Statutes of General Application:
Statutes of General Application are laws that were enacted by the British Parliament and applied generally throughout England by a certain date, specifically before January 1, 1900, and subsequently adopted into Nigerian law, unless they conflict with local laws or have been specifically repealed.

ii. Six Sources of Nigerian Law:

  1. The Constitution of the Federal Republic of Nigeria
  2. Legislation (Acts of the National Assembly and Laws of the States)
  3. English Law (Common law, doctrines of equity, and statutes of general application)
  4. Judicial Precedents (Case law)
  5. Customary Law
  6. Islamic Law

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  • 8 Marks

BL – Nov 2015 – L2 – SB – Q1a – Sources of Nigerian Law

Define Statutes of General Application and list six sources of Nigerian law.

a. Statutes of General Application are parts of the laws applicable in Nigeria.

i. What are Statutes of General Application?
(2 Marks)

ii. State SIX sources of Nigerian Law.
(6 Marks)

i. Statutes of General Application:
Statutes of General Application are laws that were enacted by the British Parliament and applied generally throughout England by a certain date, specifically before January 1, 1900, and subsequently adopted into Nigerian law, unless they conflict with local laws or have been specifically repealed.

ii. Six Sources of Nigerian Law:

  1. The Constitution of the Federal Republic of Nigeria
  2. Legislation (Acts of the National Assembly and Laws of the States)
  3. English Law (Common law, doctrines of equity, and statutes of general application)
  4. Judicial Precedents (Case law)
  5. Customary Law
  6. Islamic Law

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  • 3 Marks

BL – May 2015 – L1 – SB – Q6e – Employment Law

Identify situations when an employee is entitled to redundancy benefits.

State any THREE instances in which an employee may be entitled to redundancy benefits. (3 Marks)

Redundancy benefits may be payable to an employee in any of the following instances:

  1. Where the number of employees is more than the available jobs, and the employer has agreed to the payment with the employees’ trade union.
  2. The employer has ceased or intends to cease to carry on the business for which the employee was employed.
  3. The employer has ceased, or intends to cease, to carry on the business in the place where the employee was employed.
  4. If there is provision for redundancy payment to employees in the conditions of service and the prescribed conditions are satisfied​

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  • 3 Marks

BL – May 2015 – L1 – SB – Q6e – Employment Law

Identify situations when an employee is entitled to redundancy benefits.

State any THREE instances in which an employee may be entitled to redundancy benefits. (3 Marks)

Redundancy benefits may be payable to an employee in any of the following instances:

  1. Where the number of employees is more than the available jobs, and the employer has agreed to the payment with the employees’ trade union.
  2. The employer has ceased or intends to cease to carry on the business for which the employee was employed.
  3. The employer has ceased, or intends to cease, to carry on the business in the place where the employee was employed.
  4. If there is provision for redundancy payment to employees in the conditions of service and the prescribed conditions are satisfied​

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  • 4 Marks

BL – May 2015 – L1 – SB – Q6d – Law of Trusts

Enumerate two duties of a personal representative in the administration of an estate.

Enumerate any TWO duties of a Personal Representative. (4 Marks)

The duties of a Personal Representative include:

  1. Bury the deceased: The personal representative is responsible for ensuring the burial of the deceased.
  2. Pay justifiable debts: The personal representative must settle the debts of the deceased in order of priority.

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  • 4 Marks

BL – May 2015 – L1 – SB – Q6d – Law of Trusts

Enumerate two duties of a personal representative in the administration of an estate.

Enumerate any TWO duties of a Personal Representative. (4 Marks)

The duties of a Personal Representative include:

  1. Bury the deceased: The personal representative is responsible for ensuring the burial of the deceased.
  2. Pay justifiable debts: The personal representative must settle the debts of the deceased in order of priority.

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  • 4 Marks

BL – May 2015 – L1 – SB – Q6c – Hire Purchase and Consumer Credit Transactions

State two duties of a hirer in a hire purchase contract.

State any TWO duties of a hirer. (4 Marks)

Two duties of a hirer under a hire purchase contract are:

  1. Duty to take reasonable care of the goods: The hirer must ensure that the goods are kept in good condition during the hire period.
  2. Duty to pay installments when due: The hirer must fulfill the payment obligations according to the agreed schedule in the contract.

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  • 4 Marks

BL – May 2015 – L1 – SB – Q6c – Hire Purchase and Consumer Credit Transactions

State two duties of a hirer in a hire purchase contract.

State any TWO duties of a hirer. (4 Marks)

Two duties of a hirer under a hire purchase contract are:

  1. Duty to take reasonable care of the goods: The hirer must ensure that the goods are kept in good condition during the hire period.
  2. Duty to pay installments when due: The hirer must fulfill the payment obligations according to the agreed schedule in the contract.

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