-2 SECTION A MODULE 1 BUSINESS AND ITS ENVIRONMENT Answer ONE question from this section. 1.

Discuss how your country's economic system impacts on the operations of a local business entity. Total 25 marks 2. .A country's success in the global marketplace is a direct result of the company 's multi-faceted approach to cross-cultural preparation'. Explain the challenges faced by Caribbe an business organisations as aresult of globalisation. Total 25 marks SECTION B MODULE 2 THE MANAGEMENT OF PEOPLE Answer ONE question from this section. I 3. 'Motivation of subordinates is an important aspect of a manager's job' . I F (a) Examine THREE factors that motivate a person to work well. [13 marksl I I (b) Identify and evaluate FOUR steps managers may take to motivate their subor dinates. [12 marks] I I i 4. Tlvo important strategies for effective management of an organisation include: ( i) training of employees and (ii) conflict management. With reference to the above statement:

(a) DiscussTHREE advantages andTWO disadvantages of an 'on the job'system of trainin g. [15 marks] O) Discuss THREE major strategies a manager may use to resolve conflict in his o rganisation. [10 marksl GO ON TO THE NEXT PAGE m/'37USPEC,m2

-3 SECTION C MODULE 3 BUSINESS FINANCE AND ACCOUNTING Answer ONE question from this section. 5. (a) What are the advantages of debt financing to a firm? f6 mu.t\, _., "1 O) A medium-sized retail chain wishesgg+xpanA*L-deLlo it needs to raise addition al capital. suggestT!![lE possible r rn4 tgur9!!-g:Tglg*-d this exercise and comment on the relative merits of financing thdrefi;inder byEiTHER equity OR debt method s. [19 marks] Total 25 marks 6. The following relates to the Income Statement and Balance Sheet of Blackwood and Company Ltd for the period ending 3Il12/98. Sales 10,795,000 Cost of Sales 8,650,000 Less Overheads: Administration Expenses: Wages & Salaries 235,000 Supplies & Stationery 96,000 Heat & Light 50,000 Rates, Rent & Insurance 75,000 Depreciation 10,000 465,000 Finance Interest 100,000 Bad debts 95,000 195,000 Selline Salaries 100,000 Distribution 50,000 Advertising 100,000 300,000 t\ r ---.'^ if -)t ,jfr t^G, ltr+' i ', dOr^t^;-.*b{l f GO ON TO THE NEXT PAGE oa4372tSPEC2002 ,/,

I i fl ii lr u\ -4 BALANCE SHEET Fixed Assets Freehold Premises 3,(X)0,U)0 Leasehold Premises 630,000 Plant&Machinery 2,645,000 MotorVehicle 770,000 LongTerm Investments 795,000 7,840,000 Current Assets Inventories (Stock) 5,500,000 Debtors Prepayment 1,500,000 Marketable Securities 500,000 Bank Balance 100,000 7,6i00,000 Total Assets 15,440,000 Share Capital-& Reserves Ordinary Shares 5.300.000 Preference Shares 2,100,000 Reserves 2,500,000 9,900,000 Long Term Liability Debentures r 2,500,000 2,500,000 Current Liabilities Creditors l,'754,ON Tax Payable 5m,qn BankOverdraft 45l,mo Proposed Dividends 33s,mo 3,040,000 Total Capital Liabilities 15,440,000 From the above financial statements, calculate the following ratios and state TW O important features of EACH. (a) Current Ratio [5 marks] O) Inventory Tirnover [5 marks] (c) Gross ProfrtMargin [5 marksl (d) Interest Cover Ratio [5 marks] (e) Gearing Ratio [5 marks] Total25 marks END OF TEST

00437ASPEC2ffi2 .

-2SECTION A MODI'LE T _ BUSINESS AI\TD ITS ENYIRONMENT Answer OflE question from this section.. I t r Identiff TWO ways in which a multinational company may have to adapt its operati ons to (b) .hich stab cmbol of privale business is just ified. 18 marks l Total25 marks SECTION B MODTILE 2 _ MANAGEMENT OF PEOPLE Answer OI\E question from this scction. [8 marls I (b) Suggsstadjustifyll{REE objcctivesyouthinkapublicly owned business should Pursue[ 9 marks I With the aid of TWO examples. (a) Identiff and evaluate FIVE ways in which multi-national iorporations ha ve impacted on [15 marks] countries of the region.ir'' Total25 marks 2. . and the possi ble effect 4\fr'lt . : V 1. explain the concept of 'franchising'.q' U r l' [10 marlsl .9 r. (c) (r) (iD Discuss TWO benefits of this practice to the franchisee.'L of EACH adaPtation on the comPany' .f suit the Caribbean business environment Explain the rationale for. (a) Discuss FOUR circtmstmccs undcrq.

food suppliis and monitoring aircraft maintenance to two of his supervisors' [2 marla I (a) Distinguishbetween'delegation' and'decentralization'' (b) outline Two benefits and TWo disadvantages of delegation. [8 marks I (c) Authority. Define EACH concepl give an example of EACII and explain how these concepts may impact on the success of the Managing Director's attempt at delegat ion at [15 marks] Flyerbee.accointabilrty are three concepts related to the p rocess of .The OM (Operations Manager) of Flyerbee Airlines is considering delegating the t ask of procuring 3. Total25 marks GO ON TO THE NEXT PAGE 004372 CAPE 2003 . responsibility and.delegation.

[4 marks I o) Cornmunication. vases and cooking utensils. calculate THREE p-1qfi@b_itity ratigs and use your resuls to comment on the company's performance in 2000. published accouhts and recorded the fol lowing information for the last two years of operations: \ tgv. lfs r. The firm is stort of w orking u/s' capital.200 m $700 m (a) Using the information above. 2000 Profit before tax and interest $10 m $20 m Net assets employed $300 m $250 m Sales furnover $8. Cornwall School and Oflice Supplies Ltd.-3 1-(a) Distinguish betrvqr leadershipsHb and lea&rship roles and give an example of EACH. DsscrlUe EAC! of the fonigoingpehaviours and with the aid of aamplcs. [10 mer]rl Total25 mutr 6. [21 marksl Total25 marks SECTION C MODT'LE 3 _ BUSINESS FINAhICE AITD Ac(](X'NIIIIG Answer OI\IE question fium this section. Arawak Limited manufactures cutlery. discnss fuT! of EACH in effective leadership. 115 marksl .rbl -t I O) State THREE criteriaArawak Limited may use to chose among the altemative s idcdifcd in (a) above and explain how EACH criterion may be used to make the choice. pfrqqing ceching and inspiration are some of the behaviours expected of *Ectiv= btiEs. describe and explain the impact of THREE alternatives which the trrm m ey use to increase its working capital. Assume a tax rate of 25Vo. considcrdioo. (a) Identiff.

[10 marlsl Total25 marks END.3TACAPE 2003 .(b) Explain THREE limitations of accounting ratios and suggest how EACH of these mig ht be overcome.OF TEST O0/.

-2 SECTION A MODI. (a) Explain. with specific examples. " She is pondering whether to maintain the sole proprietorship sbe hr*. TWO ways in which each of the following can fac ilitate an ir insurance company in conducting its business (i) legislation (ii) information technology (iii) trade liberalization [12 marksl (b) Explain. company rather than a partnership.cl of the following can hin der an insurance company in conducting its business (i) competition (ii) . whetber sh e should organize the business as a partnership with two friends or form a private limited cmpmy with them. [ 9 marks] ol' (b) Discuss TWO advantages and TWO disadvantages of organizing the restaunut as a li mited L. :l (a) Describe THREE features of each form of business Carmen is considering. ^0 'rt.' -)-t. Question I t I' Carmen Martin is contemplating turning her itinerant (mohile) cmeen into a full fast-food restaurant. with specific examples.u /1. TWO ways in which c. [16marks] Ibtal25 marks Question 2 The success of an insurance company is strongly influenced by external environme ntal forces.'LE 1 BUSIhTESS AI\TD ITS EhTVIRONMENT Answer ONE $cstion ftom thb section.

(iii) globalization [13 marks] Total25 marks GO ON TO THE NEXT PAGE vn32azorcAPE200/ .nahml environment .

r:: " Explain how the Two factors outlined in (a) above lead to job satisfaction oR dissatisfaction (b) [ 8marks] inLorganization. Joy nL naO no training in HR management. recruitment. would us e to bring about job satisfaction in an organization based on Herzberg's theory' [ 7 marks] Total25 marks Question 4 Joy Manning has just been appointed the Human Resources (HR) Manager for a cemen t manufacturing plant. -'-.tlt (c) Outline a three-phase plan which you. . as a Human Resources Manager. training. [ 4 mark s] ^L! 1". [ 4marks] (ii) Describe the factors you narned in (a) (i) above' (iiD Give TWO examples of ach of the frtqs described in (a) (ii) above. t. . however. performance assessnrent and remuneration. she recalls vaguely tha t HR managers are Lrponriut" for five major activities in an organization viz.' (a) Describe the FIVE activities which HR managers have responsibility for' [ 5 mark sl Explain ONE way in which clear policies for the execution of each activity can c ontribute to (b) .t. Question 3 inwhich Frederick Herzberghas developed what is referred to as the 'twofrctor theory of motivation" he argues that job satisfaction and dissatisfaction are caused by two distinct s ets of factors. Name the TWO factors of motivatim ideatified by H lzb rg-[ 2marks] (a) (i) . select ion.SECTION B MODULE 2 MANAGEMENT OF PEOPLE Answer ONE question from this section.

the effectiv" -un"g"-"nt of people in her organization. (c) [ 6 marks] Describe TWO waYs in which JoY Manning can ensure a healthy and safe working env irorunent' (d) [ 4 marks] Total25 marks GO ON TO THE NEXT PAGE o2l32020lcAPE ?CO4 . [10 marksl Explain THREE ways in which labour unions can impact on the HR manager's job.

tl 1t c-os\ " BUSINESS FINAI\CE AhiD ACCOUNTING &so\^ca-\ oJ \Q'lrcs /-lo.t* L t ?* avtt aowcJ .wo tr'oJ AnsrerONE quesCion frrom this section.l F']r'. 19x9.'LE 3 Et--*.) 53a J33 59 &oD -4 4tl --n. \a. $$ Sales 40 800 Opening Stock 8mo 5j oc>. 19x9.9o * reo (3> G. leD ( or* o't oe2 I '75 {'-'-e'l 'J-' ^" MODI.o ('t) Sfa. lt/ Question 5 gtoN --"\ Following are the financial statements of L.4/z-1 Ket. Magan fc year ending June 30.b'L <. Income Staternent fc Year Ending Jrme 3O.l * 61oe-h'chases 32 000 4 40 000 '6400 .e) ?3.\ic'2 3R6op z 17'l'l tlln SECTION C t.

ll .les 33 60d Y:Dcl.Closing Stock f' 0?P ' 4os'l of' Se. = Gross Profit 7zffi Expenses I 850 Net Profit _l 3sq Balance Sheet as at 30 June 19x9. ll0 mark sl Total25 marks .liI (i) Net hofit Margin 'l (ii) Mart Up I (iii) Current Ratio J (iv) ' Stock-nrrnover (v) Long-terrr Debt to Equiry [l5marks] rl (b) Explain what EACH ratio shows about the performance of the company. Fixed Assets 30 000 Opening Capital 30 000. Stock 6 400 Net Profit 5 350 irr ii i " Debtors 8 800 35 350 " Bank n1<a 4750 Drawings 800 li _49 950 34 550 Loans 10 000 iri 44 550 ili Creditors 2 800 trli l/ Accrued Expenses-2ffi _49 950 l (a) Compute the following ratios for the year ending June 3O l9x9 cqrecr to one decimal place: .

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(v) Accumulated Depreciation: Equip.5 Question 6 (a) Draft the journal entries using the general journal format to record the followi ng adjustments to the final accounts of KD Ltd for the year ended September 30' 1999' N.B. * [10 marks] (b) LIFO and FIFO arc bases for valuing clcing stock. how EACH is used to determine t he value of closing stock-U. . (i) Rent in arrears $172 (ii) Insurance PrePaid $104 (iii) Bad debts to be written off $320 (iv) The provision for bad debs tp be increased by $215 .ment is to be inseas d by $3 450. State the meaning of these abb reviations and outline. wiih 6e ai{t of nurcrical examples.5 marksl Total25 marks END OFTEST -!i o2t33020lcAPE200/.: Narratives not required.

t ) has exceeded the $10. [20 marks] Total25 marks a Ms Smart is planning to start an auto parts business. (a) Outline THREE objectives that Ms Smart's Auto Business should aim to achieve.95 times in the last year-For several months in the last year he r overdraft . The srock ornover has declined from 5 times in the frrst year to 0. to solve the problem being faced by the store. t#: (a) The rational decision-making process can be summarized into five steps. [10 marksl (b) Discuss THREE reasons why it is necessary for companies to establish and periodi cally review their objectives. (a) Explain briefly TWO reasons why subordinates in an organisation might resist change. The st ore is four years old.000limit and the bank manager has indicated that she must b ring 'v t' J the overdraft down to the allowable limit in ftree monrhsExplain how Ms Butcher may use the rational decision-making process outlined in (a) above. Ms Wise has advised her th at she should first establish the business objectives. 3. [ 5 marks] (b) Ms Butcher owns a computer storc located in Bishop City. Flamingo Island.-2SECTION A MODULE 1: BUSINF^SS AND ITS ENVIRONMENT Answer ONE question from this section. Identify those steps. [15 marks] Total25 marks SECTION B MODLTLE 2: MANAGEMENT OF PEOPLE Answer OIrIE question from this section. Sales increasd over the first nvo years but sharp decreases have been experienced over the last two years. [ 4 marks] (b) Discuss FIVE approaches that managers can use to increase the likelihood that wo rkers .

Total25 marks 4.will co-operate with a proposed change. [21 marks] . [12 marks] (b) Evaluate THREE benefits of using a team approach. [ 4 marks] (ii) Explain how EACH of the factors identified in (a) (i) above may affect effective teamwork. [ 9 marks] Total25 marks GO ON TO THE NEXT PAGE o2t33020tcAPE 2005 . (a) (D Identify FOUR factors which can influence effective teamwork.

880 Capital Net Profit Drawings I-oans Creditors 20.000 11.000 4.220 23. Coryute the following ratio s and explain what EACH ONE indicares abod tu pcrfumre of fu company betrreen 2002 and the previous year. Following is the condensed Balance Sheet of Carib Entertainment.5%o) (b) Mark up (6ovo) ?"-".600 'l I I : StJ' >'.800 1.1) (d) Acid TeSt Ratio (0. -L-): Sales for the year amounted to $50.''r-9.280 2.880 29.400 3.880 24.500 1. The ratios for tre previrrc ycr (Anf ) re fucm in brrket5 N. I2S marksl Total25 marks GO ON TO TTIE NEXT PAGE 02t33020lcAPE 2005 .98 : l) (e) Return on Capital Employed (L8Vo) .(m dccdrhs $3Z(m.'J'ji .B.000 4.680 19. Average capital is used to compute th Rrturn cryrd Em@yod ratio' (a) NetProfitMatgin(l2.-3SECTION C MODLILE3:BUSINESSFINANCEANDACCOI']NTING Answer ONE question from this section l. year ending 30 June 2OO2: a sole proprietorship." rq> (c) Current Ratio (2.s00 29. for the Fixed Assets Stock Debtors Bank 6.

t 4 marksl Total25 marks -4 A.086 13.. The company has the option of bo rrowing the amount to cover the cost of either project at 9Vo interest per annum.715 14. [ 3 marks] (c) Outline ONE advantage and ONE disadvantage of the Net Present Value criterio n r compared to the Payback Period.r {-rc I f.i . lL8 marksl (b) On the basis of the Net Present Value criterion. 8.z 2'. B or C.M5 + ?s 15' q + te +J.772 (a) Compute the Net Present Value of EACH project..}.Z + e?3t.l00 9.'. -f--) + :" 4 u ":*.702 11.a {-r:-:}.r22 .400 lo. Year Factor Year Factor I o. .640 lt t3q * aTlv.?-: I'r \ ? ?" rt A:' Fr1 I 8. ! Discount factors at 9Vo per annum: t >q"4.tp.*.500 42. The init ial cost and net cash inflows from EACH project are shown below. . A company is considering investing in one of three projects.-e *:' 9:}i * . ooo (Initial Cost) 43.708 2 o.842 5 0..917 4 0.}: 9.666 I I.* .q t *572'1 5 11..)f i i' :!i .605 to.820 10.249 lr. ftj'rr4 {' Cash Flow Project A Pmject B Project C -$2.t t bqf'x$'?ot: 13 tf *{ * F"{B*.69l t r 31 .000 40. in which project should the com pany invest? Give ONE reason for your answer. &-f Eg) xflt":Stc* A : i! 'iv *J + {4a oa x {:. .-4 6.187 12.000 q 6q& ra* O' ql}.. A. g f \ -i*i.650 3 o.134 4 10.

* .? : -S6**5.at.}1 J :+ AoZ..0rcAPE200s c6b??-'$ t* 1r+s'1 : g Z. A.t ugg X p.Q3. . ooJ . *: * 9.+ END OF TEST G =-\?.rl + *6t*.ioC"rpE" ?t n..1. 3.q + q-Pilt. a n) a-ir i i:'*rtu lL &'? ftryd + f.l* f *. + { .4 + 2"r 87. 6.to.z*5.{'. VZt?. ir h 't .rJ luut:z + Fq?q..g{.? +:&tyZt*'.{rU) q?oi'. i1r i i\{ } +.

4 40 Low . [ 3marks] (b) Outline THREE factors which have contributed to the growth of globalization. John.2 -20 $rrnny Isle Level of Demand Probability $000 High _4 60 Medium . and why. FOUR ways in which globalization may impact o n organizations operating within the Caribbean Business Environment. [ 6 marks] (c) Discuss. the country in which he should locate the production plant. He is provided with the following data on both countries.2 30 (a) (i) Draw a Decision Tree to illustrate the above scenario. [ 9 marks] (ii) Calculate the expected value for: (a) Moonlight Island (b) Sunny Isle [ 4 marks] (iii) Recommend to John. has an option of locating his firm's production plant in Moonlight Island or Sunny Isle. l. Moonlight Island Level of Demand Probability ${no Hieh . (a) Defineglobalization. [16marks] Total25 marks 2.4 80 Medium .-2 SECTION A MODULE 1 BUSINESS AND ITS ENVIRONMENT Answer ONE question from this section. giving suitable examples.4 40 Low . the hoduction Manager of Carib Incorporated. [ 2 marks] GO ON TO THE NEXT PAGE o2r33020tcAPE 2006 .

.

[ 9 marksl (b) Explain ONE way in which EACH barrier discussed in (a) above might be overcome. [12 marks] O) Discuss FOUR conditions which are necessary for change to be successfully implemented.-J rr (b) Apart from the decision tree. (i) Define "Network Analysis". [ 2 marks] Total25 marks 4. 3. (a) Discuss FOUR reasons why people resist change. can also be used as a decision-making tool. [ 4 marks] (d) Outline TWO advantages of face-to-face communication over written communication. (a) Discuss THREE principal barriers to good communication in an organization. [13 marks] Total25 marks GO ON TO TIIE NEXT PAGE o2r33020tcAPE 2006 . Many organizations suffer from poor communication. John has been informed that the Critical Path Anal ysis (CPA). a Network Analysis Technique. [ 8 marks] Total25 marks SECTION B MODULE 2 MANAGEMENT OF PEOPLE Answer ONE question from this section. I 6 marfrdJ (c) Describe TWO important features of: (i) The Formal Communication Network [ 4 marks] (ii) The Informal Communication Network. [ 2 marks] (ii) Outline TWO advantages and TWO disadvantages of using the Critical Path Analysis as a decision-making tool. Change is a crucial element in an organization's ability to survive and grow.

. A company has three projects.a. The interest rate facing the compan y is llVo p. A. .4 SECTION C MODULE 3 BUSINESS FINANCE AND ACCOUNTING Answer ONE question from this section. I A Bc . the company can only invest in one project. The initial investment i n the projects and the expected cash flows are shown below. B and C which it is considering for investment. i t $ $$ i Initial outlay 9 200 18 300 26 000 I I Cash Flows I I I Year I 2 500 5 100 3 200 l Year 2 3 100 5 200 7 500 tl' Year 3 3 100 5 600 8 125 Year 4 3 200 5 700 9 450 I i Year 5 3 800 5 775 10 200 i . i 5. Since funds are scarce.

Present value of $1 received at the end of a number of years at ll% is as follow s I 1 Year 12 345 PV of $l 0. [l8marks] (b) Based on the NPV determine which project the company should invest in and justif y yourrecornmendation.901 4.6s9 0.593 (a) Compute the Net Present Value (NPV) of EACH project using a discount rate of llV o. [ 3 marks] Total25 marks 02r33020/cAPE 2006 GO ON TO TI{E NEXT PAGE . [ 4marks] (c) Compare the implication of the NPV of project B and project C.8r2 o.731 0.

(iv) April Budgeted purchases are as follows:I 100 units May I 440 units June 1 280 units (v) The purchase price of each unit is $30 and goods bought are paid for in the same montli of the purchase. Carter is a wholesaler whose financial year ends in March. an operational budget and a capital budget and give an example of [ 4 mirks] (b) L. Prepare a Cash Budget in columnai (tabular) form in as much detail as possible f or the months of April and May 2005. Utility expenses are as follows: -April $1 240. 75Vo of goods sold on month of the sale and 25Vo in the month following. His balance sh eet at March 31. $ $ Fixed.Assets at cost Accumulated Depreciation 40 000 2 400 Ordinary Share Capital 30 000 ' Creditors 27 3OO 37 600 Accrued Expenses 4 150 Stock 6 000 Debtors 9450. (a) Distil_guish between EACH. (vii) Accrued rent is to be paid in April. [21 marks] Total25 marks END OF TEST o2l33020tcAPE 2006 . Bank 8 400 23 850 61 450 61 450 rl NOTES (i) March Budgeted sales (in units) are as follows:900 '1 April 1 000 May I 500 June I 200 (ii) Each unit sells at $42.-5 6. (iii) credit is collecfed in theAll sales are made on credit. May $1 300 and June $1 400. (viii) Utilities are paid one month in arrears. Round all final figures to the nearest whole numbe r.2005 and as well as additional information are shown below. rent for the current quarter is to be paid in each month as it becomes due. (vi) Accrued expenses consist of rent owing for the months February and March ($3 000) and utilities for the month of March.

-! -2 SECTIONA MODULE 1: BUSIITIESS AND ITS ETWIRONMENT Answer ONE question from this section. With reference to this statement. (a) Define'globalization'. discuss FIVE main functions of the Huma n Resource . Human Resource Management is broad and far re aching in scope. [22 marksl Total25 marks ) (a) Discuss TWO main contributions of small businesses to the development of you r colmtry'seconomy. [ 8 marks] Total25 marks 4. [17 marks] (b) Suggest FOTIR major causes of poor communication between management and staff. In today's business organizations. [ 3 marks] (b) Discuss THREE positive and TWO negative impacts of globalization on Caribbean business organizations. 1. [ 6marks] o) Discuss THREE challenges faced by small lusinssses in the Caribbean. [ 9 marks] (c) Identiff THREE criteria used for measuring the size of a business and state ONE advantage and ONE disadvantage of EACH criterion. (a) Using examples from organizations that you have studied. evaluate FOUR major methods of communication that exist between management and staff. The concept of globalization has been one of the most current topics of discussi on in the Business World.JLE 2: MANAGEMENT OF PEOPLE Answer OI\E question from this section. [10 marks] Total25 marks SECTION B MODI. 3.

Department. [25 marks] Total25 marks GO ON TO TTIE NEXT PAGE 02r33020tcAPE 2007 .

to one decimal place.SECTION C MODULE 3: BUSINESS FINANCE AI\D ACCOUNTING Answer ONE question from this section. [12 marks] . for EACH project. 5. [ 6 marks] (c) Indicate which project the company should accept and why. [ 2 marks] (e) Assume the IRR [Intemal Rates of Return] for the respective projects are as foll ows: A lL. Cash FIow ProjectA Project B Project C tnitial Cost $40 m0 $28 000 $30 400 I 12 Ofi) l0 m0 8 100 2 t2200 10 100 8 600 3 11 8m 9 600 t2 000 4 142W 9 900 13 lm 5 14 380 10 100 15 000 (a) Show the gymu!1i_v9 cash flow for EACH project. [ 3 marks] Total25 marks GO ON TO TI{E NEXT PAGE 02t33020tcAPE 2007 . The initi al cost and cash flows of each project are shown below.57o B 87o C l1Vo Indicate which project the company should accept. B or C. [ 2 marks] (d) Outline ONE advantage and ONE disadvantage of using the payback period as a proj ect appraisal criterion. giving ONE reason for your cho ice. (b) Compute the payback perid in years. A company is considering investing in one of three projects A. The company has the option of borrowing t he amount to cover the cost of each project at IlVo interest per annum.

the company sold 18 units. At the beginning of January the company h ad opening stock of 15 units @ $20 per unit. The following facts relate to its inventory for the six-month period. [10 marksl Total25 marks END OF TEST E I -v -ol -CA 02r33020tcAPE2W7 . Kensington Creations markets a single product.-'1 -4 6. the company bought 10 units @ $22p erunit and in June it sold 16 units. January to June. InApril. [10 marks] (b) Compute the Cost of Goods Sold EACH month. draw up a Trading Account for the six-month period ending June 30. In February. and in March. [ 5 marks] (c) If the items are sold for $52 each. the company bought 25 units @ $18 per unit. (a) Construct a table which shows the value of the closing stock at the end of EACH month using the 'Last In First Out' method of accounting for stock. for the six-month period.

[13 marks] Total25 marks SECTION B MODULE 2: MANAGEMENT OF PEOPLE Answer ONB question from this section. Technil. the purchasing manager of a large hardware firm. Discuss FOUR positive impacts and FOUR negative impacts that a multinational cor poration may have on the host country. is thinking about purchasing four new computers for his departrnent. 3. (a) Discuss FOUR factors that may influence effective teamwork. [12 marks] (b) Evaluate THREE benefits of using a team approach in the workplace. [17 marks] Total25 marks . [13 marks] Total25 marks 4.n SECTION A MODULE I: BUSINESS AI\D ITS ENVIRONMENT Answer ONE question from this section. Technil can use EACH step outlined in (a) above in deciding whic h computers to purchase. 1. t25 marksl Total25 marks (a) Describe the following steps in the Rational Decision Making Process: (i) Defining the problem (ii) Collecting data (iii) Developing alternatives (iv) Analyzing the alternatives (v) Selecting and implementing the alternatives (vi) Evaluating results [12 marks] (b) Mr. (a) Define EACH of the following functions of management: (i) Planning (ii) Organizing (iii) Leading (iv) Controlling [ 8 marks] (b) Explain how the application of EACH function of management would help Miss GoodCook to operate her restaurant business more efficiently. Explain how Mr.

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[ 3 marks] (iv) Construct the Trading and Profit and Loss Account. Vehicles are depreciated at ISVo on a straight line basis. Rent owing is $200. 4. 3. [lL marks] Total25 marks GO ON TO THE NEXT PAGE o2t33020tcAPE 2008 . Equipment is depreciated at lOTo on a reducing balance basis. Instructions (i) Compute the depreciation expense for equipment. [ 2 marks] (iii) Compute the Provision for Doubtful Debts for the year. for the-y ear ending 30 June 2005. 5. in vertical format. Bad debts totalling $625 are to be written off. 2. (a) Define the following accounting concepts giving ONE example of EACH: (i) Prepayments (ii) Accrued expenses [ 6 marks] (b) Following is aTrial Balance of The Corner Shop as at 30 June 2005 which is the e nd of its financial period. Equipment at cost 20 240 Accumulated Provision for Depreciation: Equipment 8 400 Vehicles at cost ll 500 Accumulated Provision for Depreciation: Vehicles 4 600 Debtors 15 500 Less Provision for Doubtful Debts I 240 Sales 2t 200 Cost of Goods Sold 4 350 Capital 18 640 Rent 2 490 NOTES l.-3 SECTION C MODULE 3: BUSINESS FINANCE AND ACCOUNTING Answer ONE question from this section. 5. The Provision for Doubtful Debts is to remain at the same proportion to Debtors as in the previous year. [ 3 marks] (ii) Compute the depreciation expense for vehicles for the year.

57o) (based on average capital) (b) Explain what EACH ratio indicates about the performance of the company for the TWO years. Following is the condensed Balance Sheet of Carib Enterprises. Cost of Sales is $24 800 and Opening Sto ck is $4 600. The ratio for the previous year ending 30 September 2004.5 times) (v) Return on Capital Employed (13. (a) Compute the following ratios: 2004 (i) Net profit margin (7Vo) (ii) Mark up (827o) (iii) Current Ratio (3.4 6. is shown in brackets.8:1) (iv) Stock turnover (4. [25 marks] Total25 marks I END OF TEST I -* IN . a sole proprietor ship for the year ending 30 September 2005. Fixed Assets 20 200 Stock 3 680 Debtors 8 940 Bank 2 480 15 100 35 300 : Capital 26 000 Net Profit 4 330 30 330 Drawings I 730 28 600 Loans 2 300 Creditors 4 400 _il__iqq Sales for the year amounted to $47 900.

IOO -oo 02t33020/cAPE 2008 .

-2 SBCTION A MODULE 1 BUSINESS AND ITS ENVIRONMENT Answer ONE question from this section. (a) Explain to Kevin TWO advantages and TWO disadvantages that a private limited company has over a sole trader. Kevin James. is contemplating whether to remain as a sole trader or to form a private limited company. a tailor. [13 marks] Total25 marks . 1. [12 marks] (b) Discuss THREE'ways in which a change in the economic system of the country from a mixed economy to a planned economy could affect Kevin's decision to form a priva te limited company. Discuss THREE benefis and THREE drawbacks that Caribbean countries could experie nce with multinationals operating in thefu territories. [25 marks] Total25 marks GO ON TO THE NEXT PAGE 02r33020tcAPE 2009 ..

[13 marks] Ibtaf 25 marks GO ON TO THE NEXT PAGE o2r33020tcAPE 2009 . (a) Outline FOUR characteristics of a bureaucracy as specified by Weber. 3. ratio nal basis.-3 SECTION B MODULE 2 MANAGEMENT OF PEOPLE Answer ONE question from this section. [12 marks] (b) Discuss THREE methods that can be used to address resistance to change. [17 marks] Ibtal25 marks 4. Weber conceptualized that organizations would be managed on an impersonal. Weber called this form of organization a bureaucracy. (a) Explain FOUR reasons why employees resist change. I I marks] (b) Discuss FOUR implications of "Weber's bweaucracy" on today's business orgarizati ons. Change is a crucial element in an organization's ability to survive and grow.

l -4-4I SECTION C MODULE 3 BUSINESS FINANCE AND ACCOUNTING Answer ONE question from this section. explain why it is the MOST suitable. [ 2 marks] (ii) Identify THREE components of working capital. [20 marks] Total25 marks GO ON TO THE NEXT PAGE o2t33020tcAPE 2009 . [ 3 marks] (b) Buddy is setting up a new gas station and convenience store and requires financi ng for the following areas: Land and building Machinery and equipment Stock of petrol Stock for convenience store Wages for employees (for the frst week) Identify the MOST suitable source of finance for EACH of the above areas of the business. 5. (a) (i) Define the term 'working capital'. For EACH source identified.

The following is the Balance Sheet of Eastwood Hardware Ltd. 2008 . Balance Sheet as at December 31. Money owed to business from suppliers An item of stock in a warehouse A piece of equipment used to make products .-5 6. as at December 3 I . Study the Balance Sheet and answer the questions that follow.2008 Fixed Assets $ Cost Less $ depreciation $ Buildings 500 000 50 000 450 000 Plant and machinery 100 000 40 000 60 000 Furniture and fittings 50 000 20 000 30 000 Motor vehicles 70 000 20 000 50 000 720 000 130 000 590 000 Current Assets Stocks 140 000 Debtors 30 000 Prepayments 5 000 Cash I 000 176 0m Less current liabilities Bank overdraft 13 000 Creditors 12 000 Accrued costs 1 000 Taxation payable 10 000 36 000 Net current assets (working capital) 140 000 Assets less current liabilities 730 000 Less lonp-term liabilities Bank loan 180 000 550 0m Net assets Financed by Share capital 200 000 Ordinary shares 200 000 Preference shares 400 000 Reserves 150 000 550 000 The following items have been omitted from the Balance Sheet of Eastwood Hardwar e Ltd. Eastwood Hardware Ltd.

Electricity consumed Rent pdid in advance for the next three months (a) Identify the appropriate sub-heading under which EACH of the omitted items would appear in the Balance Sheet of Eastwood Hardware Ltd. [ 5 marks] GO ON TO THE NEXT PAGE o2t33020tcAPE 2009 .

[ 3 marks] (ii) Identify ONE stakeholder who will be interested in EACH type of ratio.-6. I i I I (b) (c) (i) Outline the MAIN difference between performance ratio and liquidity ratio. and explain the implica tion of EACH ratio. [ 2 marks] Calculate the following ratios forEastwood Hardware Ltd. (i) (iD (iii) Current Ratio Acid Test Ratio Gearing Ratio [15 marks] Totat 25 marks EI\{D OF TEST 1 1 1 02133020/CAPE 2009 .

[16marks] (c) Outline THREE situations in which the participative style of leadership would be useful to KPJ Co. has been described by his workers as a partici pative leader. A firm is contemplating whether to include social responsibility as one of its m ain objectives. [ 6 marks] (c) Outline THREE reasons why it is important for a firm to practise '. 1. [ 6 marks] Total25 marks SECTION B MODULE 2: MANAGEMENT OF PEOPLE Answer ONE question from this section. the manager of KPJ Co. [ 6 marks] Total25 marks GO ON TO THE NEXT PAGE 02t33020lcAPE 2010 . [ 8 marks] (b) (D Identify FOUR criteria that can be used to measure the size of a business . [ 3 marks] (b) Discuss TWO advantages and TWO disadvantages of the participative style of leadership. [13 marks] (b) Define the term 'social responsibility'. John. (a) Discuss THREE main objectives of a typical business organization. Ltd. giving TWO examples of how a firm can d isplay social responsibility. [ 4 marks] (ii) Evaluate the effectiveness of THREE of the criteria identified in (b) (i) a bove [13 marks] Total25 marks 2. (a) Define the term 'mission statement'and outline THREE reasons why a missio n statement is important to a business. (a) Define the term 'participative leadership'. 3.social respon sibility'.SECTION A MODULB 1: BUSINESS AI\D ITS ENVIRONMENT Answer ONE question from this section. Ltd.

giving a reason. for EACH project. which project the company should accept. indicate. [ 3 marks] (d) Assume the IRR (Internal Rate of Return) of the projects are as follows: A ll. [ 2 marks] (ii) State THREE reasons why training is important to an organization. [ 6 marks] (b) Evaluate TWO conditions under which EACH of the following types of training programmes is BEST suited: (i) Internally based (ii) Extemally based [17 marks] Total25 marks SECTION C MODT]LE 3: BUSINESS FTNAI\CE AI\D ACCOUNTING Answer ONE question from this section. Ltd is considering investing in one of three projects. in years. [ 6 marks] (c) Indicate. A. XYZ Co. t 3 marksl Total25 marks GO ON TO THE NEXT PAGE . The in itial cost and cash flows of each project are shown below. 5. (a) (D Define the term'training'. Cash Flow Project A Project B Project C Initial Cost $40 000 $28 000 $30 400 Year L 12 000 10 000 '8loo Year 2 12200 10 100 8 600 Year 3 11 800 9 600 12 fi)O Year 4 14 200 9 900 13 100 Year 5 14 380 10 100 15 000 (a) Compute the cumulative cash flow for EACH project. to two decimal places. which project the company should ac cept. The company has the option of borrowing the amount to cover the cost of either p roject at IIVo interest per annum.S%o B 8Vo C I5Vo Based on the IRR. [13 marks] (b) Compute the payback period. B or C.3 4. giving a reason.

o2r33020tcAPE 2010 .

-4 6. 2008. that are used by firms. t 2marksl (b) Analyse the cash flow situation of Nigel Enterprises under EACH of the following headings: (D Net cash inflow or outflow from operating activities (ii) Returns on investment and servicing of finance (iii) Net cash outflow from investing activities (iv) Increase or decrease in cash equivalents . other than the cash flow statement. The following is the cash flow statement for Nigel Enterprises for the year e nded December 21. Study the statement and answer the questions that follow. Nigel Enterprises Cash Flow Statement For the year ended December 2lr2OO8 (US $ millions) (US $ millions) Net cash inflow from operatinq activities 6 Returns on investment and servicing of finance Interest received 2 Interest paid (4) Dividends paid (4) Net cash outflow from returns on investments and servicing of finance (6) Taxation Inland Revenue tax paid (4) Investing activities Purchases of tangible fixed assets (4) Purchases of subsidiary undertakings (18) (net ofcash and cash equivalents acquired) Sale of plant and machinery 4 Net cash outflow from investing activities (18) Net cash outflow before financing (22) Financing New secured loan repayable in 2009 t7 Repayment of amount borrowed (2) Net cash inflow from financing 15 Decrease in cash and cash equivalents 7 (a) (i) Explain what is meant by the term 'cash flow statement' [ 3marks] (ii) Identify TV/O financial statements.

(v) Financing [20 marksl Total25 marks END OF TEST 02r33020/cAPE 2010 .

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