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BEM711S - SME Management - 2nd OPP - june 2023 |
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n Am I BIA u n IVE Rs ITY
OF SCI En CE
TECH n OLOGY
FACULTYOF COMMERCE, HUMAN SCIENCESAND EDUCATION
DEPARTMENTOF GOVERNANCEAND MANAGEMENT SCIENCES
QUALIFICATION:BACHELOR OF BUSINESSADMINISTRATION
QUALIFICATION CODE: 07BMAR
LEVEL:7
COURSECODE: BEM 711S
COURSENAME: SMALL AND MEDIUM
ENTERPRISEMANAGEMENT
SESSION:JULY 2023
DURATION: 3 HOURS
PAPER:THEORY (PAPER 2)
MARKS: 100
SECONDOPPORTUNITYEXAMINATION QUESTION PAPER
EXAMINER(S) Ms. ANNA SHIMPANDA- PARTTIME
Dr MOSES WAIGANJO - FULLTIME & DISTANCE
MODERATOR: Mr. ERNESTMBANGA
INSTRUCTIONS
1. Answer ALL the questions.
2. Read all the questions carefully before answering.
3. Number the answers clearly
THIS QUESTION PAPERCONSISTSOF _8_ PAGES(Including this front page)
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SECTIONA
[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?
ii
iii
iv
A i, ii, iii
A proven system
Ongoing assistance
Rapid expansion possible
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 assessa franchise opportunity in Namibia:
ii
iii
iv
Ai, ii, iii
Is it possible to obtain trade or bank references?
On what criteria are franchises selected?
What do you look for in a prospective franchisee and why?
What are your obligations as a franchisee?
B ii, iii, iv
C i, ii, iv
Di, iii, iv
E i-iv
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1.3 Which of the following are correct?
ii
iii
iv
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.
The franchisee must ensure that the franchised business conforms
with other franchised businesses operated in accordance with the
business system.
The franchisor may require the franchisee to redecorate or
refurbish the premises.
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.
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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.
D
a and c
E
band c
1.6 The entrepreneur must know that growth carries a degree of
A strategy.
B finance.
Ctime.
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.
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D A, 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 jewellery
D Movie tickets
E Hair products
1.9 ntrapreneurship 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
Ethe practice of entrepreneurship within the small business
{10 X 2 =20)
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SECTIONB
[80 MARKS]
QUESTION 2
Franchising is one of the forms of internal growth business can opt for.
2.1 Explain the advantages from the Franchiseesview. Use practical examples to support
your answer.
(10)
2.2 Give three types of franchising and examples thereof in Namibia.
(6)
[16]
QUESTION 3
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 Businessfor Buy-out purposes]:
Capital
560 000
Accumulated profits 350 500
Long term loan
100 000
Additional information
1 The salary foregone is N$90 000
2 Risky investment of 30%
3 Growth wanted is 45%
rear:
Net Profits
'2oi~ l018
200 900 180 200
2017
1
2016
150 500 90400
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)
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(3.1.5) Extra Earning Power
(3)
(3.1.6) Goodwill
(3)
(3.1.7) Value of the Business
(3)
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.
Besidesall the other small projects, Leroy currently hastwo full CDsthat 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 becausethe 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).
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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]
QUESTION 5
"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.
(10)
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 acrossthe world. List7 benefits of e-commerce for small and medium
Namibian businesses.
[7]
END OF EXAM
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