BUSINESS & FINANCE

Time allowed – 1½ hours

Total marks – 100

[N.B. – The figures in the margin indicate full marks. Questions must be answered in English. Examiner will take
account of the quality of language and of the manner in which the answers are presented. Different
parts, if any, of the same question must be answered in one place in order of sequence.]

Marks
1. (a) What are the various costs associated with holding inventory? 4
(b) Ganges Ltd. consumes 50,000 units of a component per year. The ordering, receiving and handling cost is
Tk.3.00 per order while the trucking cost is Tk.12.00 per order. Further details are as follows: 6
– deterioration and obsolescence cost Tk.0.004 per unit
– Interest cost Tk.0.06 per unit
– Storage cost Tk.1,000.00 per year for 50,000 units.
You are required to calculate the economic order quantity.

2. (a) What is Corporate Governance and why is Corporate Governance system required? 5
(b) Describe the following as per provisions of Corporate Governance guidelines as issued by the
Securities & Exchange Commission of Bangladesh:
i) Constitution of Board Audit Committee and its roles and responsibilities; 7
ii) Services restricted in the company for its statutory auditors. 3

3. Write short notes on Risk management, Corporate social responsibility and Controllable cost. 9

4. (a) What is Human Resource Management? 3

(b) Describe the different approaches of Human Resource Management. 7
(c) Describe different leadership styles. 6

5. (a) What is strategic management? 3

(b) Describe the benefits and drawbacks of strategic management planning. 5
(c) Describe the different approaches of crisis management. 7

6. Meghna Ltd’s Balance Sheet at 31 December, 2011 shows as follows:

Current assets Taka
Cash 4,000
Investment 8,000
Accounts receivable 100,000
Inventories 120,000
Prepaid expenses 1,000
233,000
Current liabilities
Accounts payable 155,000
Accrued expenses 20,000
Income tax payable 1,000
176,000
Long-term liabilities 340,000

(a) From the above information you are required to calculate: 6

(i) Net working capital
(ii) Current ratio
(iii) Quick ratio
(b) Based on your answers to the above questions give your comments whether Meghna Ltd. has
sufficient liquidity if industry average for current ratio is 1.29 and quick ratio is 1.07? 4

[Please turn over]

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7. Discuss the economic advantages of international free trade. 5

8. What is cash operating cycle and what should be the ideal level of trade receivables? Discuss in brief. 6

9. S Ltd. is evaluating a relaxation of its credit policy. At present, about 80 percent of sales are on credit
and there is a gross margin of 20 percent. Additional data are:
Current Anticipated
Total sales Tk.500,000 Tk.640,000
Credit sales Tk.410,000 Tk.520,000
Collection expenses 3% of credit sales 4% of credit sales
Collection period 72 days 90 days

Using 360 days in a year, answer the following questions:

(a) What is the change in gross profit associated with the proposal? 3
(b) What is the incremental change in collection expenses? 3
(c) What is the change in average accounts receivable? 3

10. Explain why SWOT analysis is important for corporate appraisal process. 5

– The End –