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BEM711S - Small and Medium Enterprise Managamenr - 1st Opp - June 2022 |
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nAmlBIA unlVERSITY
OF SCIEnCE Ano TECHnOLOGY
FACULTY OF COMMERCE, HUMAN SCIENCESAND EDUCATION
DEPARTMENT MANAGEMENT
QUALIFICATION : BACHELOR OF BUSINESSS ADMINISTRATION
QUALIFICATION CODE: 07BMAR
LEVEL: 7
COURSE CODE: BEM 7115
COURSE NAME: SMALL AND MEDIUM ENTERPRISE
MANAGEMENT
SESSION: MAY 2022
DURATION: 3 HOURS
PAPER: THEORY
MARKS: 100
FIRST OPPORTUNITY EXAMINATION QUESTION PAPER
EXAMINER(S) Dr MOSESWAIGANJO(Full time)
Ms ANNA SHIMPANDA (Part-time)
Mr F VANWYK (Distance)
MODERATOR: Mr ERNESTMBANGA
INSTRUCTIONS
1. Answer ALL the questions in the answer book provided.
2. Write clearly and neatly.
3. Number the answers clearly.
4. Indicate your lecturers name on your answer sheet.
THIS QUESTION PAPER CONSISTS OF 8 PAGES (Including this front page)
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SECTION A
[20 MARKS]
Choose the correct option and indicate your choice (a-e) next to the appropriate number in
the examination book provided. For example, 1.1. b.
1.1. Which of the following are advantages of franchising from the franchisee's viewpoint?
Ai,ii,iii
A proven system
ii
Ongoing assistance
111 Rapid expansion possible
1v Easier to obtain finance
B ii, iii, iv
Ci, ii, iv
Di, iii, iv
E i-iv
1.2. According to the Department of Trade and Industry, the following questions should be
asked to assess a franchise opportunity in Namibia:
Ai,ii,iii
Is it possible to obtain trade or bank references?
ii
On what criteria are franchises selected?
111 What do you look for in a prospective franchisee and why?
1v What are your obligations as a franchisee?
B ii, iii, iv
Ci, ii, iv
Di, iii, iv
E i-iv
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1.3 Which of the following are correct?
Ai,ii,iii
One of the duties of the franchisee is to assist the franchisor in the
buying of stock and to acquire services and equipment necessary for
the operation of the franchise.
ii
The franchisee must ensure that the franchised business conforms with
other franchised businesses operated in accordance with the business
system.
111 The franchisor may require the franchisee to redecorate or refurbish the
premises.
1v The franchisee is required to observe minimum business hours.
B ii, iii, iv
Ci, iii, iv
Di, ii, iv
E i-iv
1.4 Some important questions to ask and answer before buying an existing business
include:
A Why is the business for sale?
B Where did I hear about the business?
C What is the degree and scope of competition?
D What does the business cost?
E
a and c
F
band d
1.5 An advantage of doing a business valuation is
A the securing of a business loan is much easier.
B it helps to determine whether there is a fit between the entrepreneur and the
business.
C costs that you have to incur later in terms of rectifying situations may be
prohibited.
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D a and c.
E band c.
1.6 The entrepreneur must know that growth carries a degree of
A strategy.
B finance.
C time.
D achievement.
E risk.
1.7 Growth is dependent on the venture's ability to attract new ......... .
A customers.
B resources.
C people.
D markets.
E attention.
1.8 A key factor of growth is
A strategy.
Brisk.
C desire, direction, and potential.
DA, Band C.
E none of the above.
1.9 Which one of the following products/services has the lowest probability to sell
online?
A Books.
B Clothes.
C Expensive jewelry.
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D Movie tickets.
E Hair products.
1.10 1ntrapreneurship refers to
A the creation of new products.
B the creation of new ventures.
C the practice of entrepreneurship within the large business.
D the practice of innovation within the large business.
E the practice of entrepreneurship within the small business
(10 X 2 =20)
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SECTIONB
[80 MARKS]
QUESTION2
Franchising is one of the forms of internal growth business can opt for.
2.1 Explain the advantages from the Franchisees view. Use practical examples to support your
answer.
( I0)
2.2 Give three types of franchising and examples thereof in Namibia.
(6)
[16]
QUESTION3
Consider the following figures from the Adjusted Balance Sheet and Condensed Income
Statement of Denis Freezers, a SME from Rehoboth, in order to answer questions (a) to (g)
below [Determine the Value of the Business for Buy-out purposes]:
Capital
Accumulated profits
Long term loan
560 000
350 500
100 000
Additional information
I The salary foregone is N$90 000
2 Risky investment of 30%
3 Growth wanted is 45%
Yeari
Net Profits
2019,
200 900
io18
180 200
:2017
150 500
2016
90 400
3.1 Calculate the following:
(3.1.1) Adjustable Tangible Net Worth
(3)
(3.1.2) Opportunity Cost
(3)
(3.1.3) Growth Rate% of Net Profit
(3)
(3.1.4) Estimated Net Earnings for the next year
(3)
(3.1.5) Extra Earning Power
(3)
(3.1.6) Goodwill
(3)
(3.1.7) Value of the Business
(3)
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3.2. List four non-monetary factors that may impact the final business purchase price.
(4)
[25]
QUESTION 4
Leroy's Predicament
Leroy operates a home-based recording studio. Although his facility is adjacent to the house, it is
private and looks professional. His customers have private parking space and enter the studio via
a private entrance. Currently Leroy is doing everything himself. From reception to marketing,
quotes, and the actual work, lessons, recording, mastering and editing, as well as the graphic
design on CD covers and posters. He even does his own printing and packaging as the small
quantities do not justifying sub-contracting the work. The students who take Leroy's song and
music classes are school pupils and they normally come during the afternoons. On the recording
side, most of Leroy's customers are aspiring artists hoping to be heard and needing to earn a
living. This means that they follow their dreams after hours and can only come for recording and
backtracks after 6pm in the evenings. So far, Leroy has been able to handle the work as his
mornings are relatively quiet. He has been able to attend to his administration, update his
website, do his marketing, and so on.
Now that business is picking up, the song and music students provide a relatively steady monthly
income, but Leroy's main income comes from the recording and making of CDs. Besides all the
other small projects, Leroy currently has two full CDs that he is busy with, with set delivery
dates. Leroy struggles because he is only one person and he finds himself juggling everything
that needs to be done. He does not want to take in a partner, nor does he want to subcontract any
work as this would impact on the price he had quoted. Because he spent so much time one
project, he cannot take on other projects and he is losing clients and potential income because the
clients cannot wait for him. He is considering letting his students go to concentrate only on the
production of CDs. However, this might be risky as he is afraid that he will lose his monthly
song and music student income and many of the students are potential future recording clients.
"To turn around an ailing venture and put it back on the road of good performance and growth is
not a small task" (Nieman & Niewenhuizen, 2014).
4.1. Identify and elaborate the causes of trouble.
(8)
4.2 A lack of cash flow is one of the key signs when a business slide down the level of failure.
List any 4 factors that contribute to cash flow problems.
(4)
[12]
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QUESTIONS
"Harvesting is the achievement of some or other end goal that will repay the entrepreneur for the
hard work and inputs" (Nieman and Nieuwenhuizen, 2000).
5.1 Elaborate the reasons why an entrepreneur may decide to harvest his/ her business. ( I 0)
5.2 Mention and explain any 5 principles that an entrepreneur/owner, can adhere to, to ensure
that s/he reaps the fruits of his/her hard work.
(10)
[20]
QUESTION 6
E- Commerce ensure that businesses can market their products and services to untapped markets
across the world. List 7 benefits of e-commerce for small and medium Namibian businesses.
f7]
END OF EXAM
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