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BBF612S - BUSINESS FINANCE - 2ND OPP - NOV 2024 |
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nAm I BI A un IVERS ITY
OF SCIEnCE Ano TECHnOLOGY
FACULTY OF COMMERCE, HUMAN SCIENCES AND EDUCATION
DEPARTMENT OF GOVERNANCE AND MANAGEMENT SCIENCES
QUALIFICATION: BACHELOR OF BUSINESS MANAGEMENT
QUALIFICATION CODE: 07BBMN
LEVEL: 7
COURSE CODE: BBF612S
COURSE NAME: BUSINESSFINANCE
SESSION: JANUARY 2025
DURATION: 2 HOURS
PAPER: PAPER1/1
MARKS: 100
SECOND OPPORTUNITY EXAMINATION QUESTION PAPER
EXAMINER(S)
MSCKAUAMI
MS B NDUNGAUA
MODERATOR: MR ERNEST MBANGA
INSTRUCTIONS
1. Answer ALL the questions.!
2. Show all formulae and calculations as marks will be awarded for them.
3. Write clearly and neatly.
4. Number the answers clearly.
PERMISSIBLE MATERIALS
1. Calculator.
THIS QUESTION PAPER CONSISTS OF 4 PAGES (Including this front page)
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SECTIONA: SHORT QUESTIONS
[67 Marks]
Question 1: The Agency Problem
(10 marks)
Discuss management and/or other issues that can lead to the agency problem.
Question 2: Financial Statements
{12 marks)
(1 mark per principle and 1 mark for relevant explanation)
Name and briefly explain any 6 generally accepted accounting principles that have to
be adhered to when compiling financial statements.
Question 3: Analysis of Financial Statement
(15 marks)
(1 mark per ratio type and 2 marks for relevant explanation)
Identify the basic types/groups of financial ratios that can be used in financial
statement analysis, explain what they measure and give an example of each
type/group.
Question 4: Capital Budgeting
{14 marks)
Among key decisions that a financial manager makes are decisions pertaining to
capital budgeting.
1. Briefly explain capital budgeting
(4)
2. Discuss the two approaches to making capital budgeting decisions (10}
Question 5: Financing
{16 marks)
(2 marks per correct answer)
Briefly outline the characteristics that distinguish debt from equity as a source of
finance.
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SECTION B: CALCULATIONS
[33 Marks]
Question 6: Profit Planning: Break-even analysis
(11 marks)
Make use of the relevant information listed below to determine the break-even point
in:
a) Units (volume)
(3)
b) Monetary terms (value)
(2)
c) The margin of safety ratio
(3)
d) If a selling commission of N$ 10.00 per unit is paid, what will the break-even
point in units be?
(3)
Mbate Garments cc:
Expected turnover/sales
Selling price per unit
Tota I fixed costs
Total variable costs
in units
20 000
N$100
N$500 000
N$1000 000
Question 7: Time value of money
(13 marks)
Solve the following time value of money scenarios:
a) Determine the Future Value of an amount of N$ 88 000, invested for eight (8)
years, which is earning 14% interest
(3)
b) Determine the Present Value of an amount of N$ 15 000, which is receivable in
six (6) years from now, when the discount rate is 14%.
(3)
c) Determine the following:
(7)
i) annual payments to Amortise a loan of N$ 700 000, repayable over ten (10)
years, where the interest rate is 14%.
(3)
ii) using the annual payment, distinguish between the interest payable and
principal amount payable in year 1 only.
(4)
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Additional Information
Interest factors @ 14% years 1 to 10
FVIF
1. 1.140
2. 1.300
3. 1.482
4. 1.689
5. 1.925
6. 2.195
7. 2.502
8. 2.853
9. 3.252
10. 3.707
FVIFA
1.000
2.140
3.440
4.921
6.610
8.536
10.730
13.23
16.09
19.34
PVIF
0.877
0.769
0.675
0.592
0.519
0.456
0.400
0.351
0.308
0.295
PVIFA
0.877
1.647
2.322
2.914
3.433
3.889
4.288
4.639
4.946
5.216
Question 8: Working Capital Management
(9 marks)
Managing the cash conversion cycle (CCC)
1. Discuss the importance of the cash conversion cycle for the management of
working capital in a business.
(2)
2. Calculate the CCCfor a business where the AAI = 60 days, the ACP = 90 days and
the APP= 60 days
(3)
3. What can or should be done to improve this CCC?
(4)
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