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FMH420S - FINANCIAL MGT FOR HOSP AND TOURISM - 2ND OPP - JAN 2020 |
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NAMIBIA UNIVERSITY
OF SCIENCE AND TECHNOLOGY
FACULTY OF MANAGEMENT SCIENCES
DEPARTMENT OF HOSPITALITY AND TOURISM
QUALIFICATION: BACHELOR OF HOSPITALITY MANAGEMENT
QUALIFICATION CODE: 27BHMN
LEVEL: 7
COURSE CODE: FIMH4205
COURSE NAME: FINANCIAL MANAGEMENT FOR
HOSPITALITY AND TOURISM
SESSION: JANUARY 2020
DURATION: 3 HOURS
PAPER: THEORY AND CALCULATIONS
MARKS: 100
SECOND OPPORTUNITY EXAMINATION QUESTION PAPER
EXAMINER
L. Odada
MODERATOR | : Mushonga
INSTRUCTIONS
Answer ALL the questions in either blue or black ink only. NO pencil allowed.
Start each question on a new page
Write clearly, neatly and number the answers clearly.
Round off your answers to the nearest whole number
Questions relating to this examination may be raised in the initial 30 minutes after the start
of the paper. Thereafter, candidates must use their initiative to deal with any perceived
error or ambiguities & any assumptions made by the candidate should be clearly stated.
PERMISSIBLE MATERIALS
1. Scientific calculators
THIS QUESTION PAPER CONSISTS OF _5_ PAGES (Including this front page)
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QUESTION 1
[24 MARKS]
a) Ndapuka bus services is the official transport company for the NUST hotel school and
maintenance costs of its buses are paid by NUST. Below are the maintenance costs over the
past eight months, along with its total distance travelled in kilometres, are as follows:
Months
Total distance travelled in km
Total cost (NS)
February
110 000
5 565 500
March
85 000
4 315 500
April
96 000
4 865 500
May
100 000
5 065 500
June
70 000
3 565 500
July
120 000
6 065 500
August
105 000
5 315 500
September
115 000
5 815 500
The total number of kilometres travelled in October is estimated at 97 500
Required:
Calculate the total cost for October using the high low method
(16)
b) Write concise explanatory notes on the following cost concepts/terms:
i) Opportunity cost
(2)
ii) Sunk cost
(2)
iii) Direct costs
(2)
iv) Indirect costs
(2)
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QUESTION 2
[26 MARKS]
Bauenstube family restaurant is considering two projects which are similar in nature and both are
expected to operate for four years. Only one project can be accepted due to lack of funds to undertake
both projects. The cost of capital is 12%.
The following information is provided:
Year 0
Year 1
Year 2
Year 3
Year 4
Estimated scrap value at the end of year 4
Profit after depreciation
Project A
Project B
NSOO0O
NSOO0O
46 000
46 000
6 500
4500
3 500
2 500
13 500
4500
(1 500)
14 500
4 000
4000
Depreciation is charged on the straight line basis.
Required:
a) Calculate the payback period for both projects
(5)
b) Calculate the net present value (NPV).for both projects
(12)
c) Assume the two projects are mutually exclusive. Which project should be chosen?
(2)
d) Identify any three conditions under which the Internal Rate of Return (IRR) and the NPV
techniques may produce different results
(3)
e) List any 2 advantages and 2 disadvantages of IRR
(4)
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QUESTION 3
[25 Marks]
The following information relates to Okapuka lodge. The cash balance as at the beginning of March
2017 was NS$27 000. The lodge has the following budgeted incomes and expenses:
Month
Cash Sales
Credit Sales Purchases Salaries
Fixed Overheads
NS
January
NS
74 000
NS
55 200
NS
9 000
NS
30 000
February
82 000
61 200
9 000
25 000
March
April
May
20 000
22 000
25 000
80 000
90 000
100 000
60 000
69 000
75 000
9 500
9 500
10 000
25 000
27 000
32 000
The following information also relates to the business
e Creditors give one-month credit
e Salaries are paid in the current month
e Fixed costs are paid one month in arrears
e Credit sales are settled as follows:
> 40% in month of sale
> 45% in next month
> 12% in two months following the sale
> The balance represents bad debts.
Required:
a) What isa budget?
(2)
b) Describe any three purposes of budgeting
(6)
c) Prepare a cash budget for March, April and May 2017
(17)
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QUESTION 4
[25 Marks]
Country club resort has won a tender to supply food for the Windhoek Swapo rally. Below is the
marginal costing statement of the company for November:
N$
Sales (1 650 plates of food)
825 000
Less: Variable costs
495 000
Contribution
330 000
Less: Fixed costs
130 000
Net profit
200 000
Required: Calculate the following:
a) Contribution per unit and as a percentage
(7)
b) Breakeven point in units and Namibian dollars
(6)
c) Sales in units and Namibian dollars assuming that the company would like to make a target
profit of NS250 000 before tax
(6)
d) Margin of safety in units and Namibian dollars
(6)
END OF EXAMINATION QUESTION PAPER
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