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Business Studies Advanced Level Question and Answer

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MUBWANDARIKWA SHEPHERD
 BACHELOR OF BUSINESS STUDIES HONOURS
MAJORING IN FINANCE AND BANKING (UZ)

+263 733 839 491

November 2001 Paper 1

1. How can small businesses effectively compete with large businesses selling the same
goods? [4]
2. Explain the meaning of the following terms commonly found in the accounts of a
business
(a) Gross Profit [2]
(b) Retained Profit [2]
(c) Return on Capital Employed [3]
(d) Work In Progress [2]
3(a) Explain what is meant by contribution cost pricing [2]
(b) Explain the circumstances in which a business might want to use a contribution cost
pricing approach [5]
4. What evidence would you seek to determine whether motivation is low in a
workforce?[4]
5(a) Job production is one method of production. State two others [2]
(b) Under what circumstances do you think job production would be the best method [5]
6(a) What do you understand by customer service in retailing? [2]
(b) Why is customer service becoming increasingly important in retailing?[4]
7 State and explain two reasons why delegation might be considered essential in an
expanding firm [4]
8 A business is considering investment in a new factory
(a) State what is meant by the term payback period[2]
(b) Calculate the payback period from the following evidence
$000

Initial investment 2 000

Net return Year 1 400
Year 2 400
Year 3 400
Year 4 500
Year 5 600
Year 6 1 300
Year 7 1 700

(c) Explain why payback period may not be a good way of deciding whether to invest
in this factory
9.What is meant by?
(a) Quota sampling [2]
(b) Random sampling [2]
10. Explain why a fall in external value of the currency might
(a) Lead to inflation [3]
(b)Make exporting easier [3]
11Explain why a producer of televisions might be worried by the possibility of an increase
in the rate of interest [5]
12. The profits a company makes have been low for several years. Explain why
shareholders might be concerned at the decision to borrow more capital? [3]
 November 2002 Paper 1

1(a) What is meant by the term privatisation? [2]

1(b) Do you consider privatisation to be important in your country? Give reasons [4]
2(a) What other objectives other than profit maximisation are pursued by private
businesses?[2].
2(b) Why might the government intervene in the contract of employment between
workers and their employers?[4]
3. A Cinema hall has a sitting capacity of 150 people and contacts one session per day. The
daily costs of maintaining the hall amount to $600 and an extra $30 in costs is required for
each cinema goer. Given that the admission fee is $60 calculate
(a) The break-even number of cinema goers per day [3]
(b) The number of cinema goers required to make a 60% profit on cost [5]
4(a) State three reasons why communication may fail in a business [3]
4(b) Explain how McGregor’s Theory X and Theory Y might influence leadership style [5]
5. Explain the difference between the level of production and the productivity of a
manufacturing firm [2]
6(a) Define the term budgeting and explain its limitations [4]
6(b)”Profitability ensures enough cash for the business”. Do you agree with this
statement? Give reasons [5]
7(a) Describe the term critical path in network analysis [2]
7(b) Using examples, distinguish between the mode and the mean of any given statistical
data [4]
8. State and explain three ways in which the government could encourage investments in
their respective countries [6]
9. Evaluate the usefulness of ratio analysis in financial analysis and control [4]
10. Explain any two pricing methods which a manufacturer of school desks can use [4]
11(a) Draw a typical functional organisational chart with three level of activity [3]
11(b) Use you diagram to explain the difference between span of control and chain of
command [2]
12. A firm has a choice between two projects, A and B
The initial investments are as follows:
Project A $40 000, PROJECT B $60 000
The probability of success for project A is 0.5 with a cash inflow of $80 000. If it fails the
inflow will be $40 000
The probability of success for project B is 0.6 with a cash inflow of $100 000. If it fails the
inflow will be $40 000
(a) Represent the above information on a probability tree diagram[2]
(b) Which option is more acceptable?[4]
 November 2003 Paper 1

1. Explain what Maslow meant by self-actualisation and why he placed it at the top of his
pyramid of needs [3]
2. Why do businesses want to control quality of their products? [6]
3. Why are some managers reluctant to delegate? [3]

4(a) Distinguish between merger and takeover [2]

4(b) What possible reasons could be put forward to justify a merger [5]
5(a) What is market research? [2]
5(b) Why is market research of importance to a business organisation? [6]
6(a) State and explain any three barriers to communication [6]
6(b) Explain how these barriers affect a business organisation [6]
7. Explain the problems likely to be faced by a new farmer in coming up with a project
proposal [5]
8. The following information was extracted from the company’s accounts for the year
ended 31 December 2002
$000
Sales 1 000
Purchases 800
Opening Stock 100
The value of closing stock under three different methods of valuation was
$000
FIFO 140
LIFO 110
Weighted average 114
(a) Calculate the gross profit for the year using each of the following the methods of
stock valuation[3]
9. A business is investing in three alternative investment projects. Each has an initial
outlay of $5million. The following calculations have been made

NPV Pay Back Period ARR

Project A ($2m) 4 years 30%

Project B $1m 3 years 40%
Project C ($3m) 2 years 60%

Which project should the business choose, and why, when using the following appraisal
techniques
(a) Net present value[2]
(b) Payback period [2]
(c) Accounting rate of return[2]
10(b) Explain the importance of performance appraisal [3]
11. What is the difference between penetration pricing and price skimming? [4]

12. Explain any three effects an ageing population could have on a manufacturer of
consumer goods [5]
 June 2004 Paper
1

1(a) Explain the concept of legal personality as it relates to businesses [3]

1(b) What is the importance of this status in the growth of the business [3]
2. Outline the benefits of Just In Time technique of inventory management [4]
3. How might some knowledge of statistical probability enable managers to perform their
functions more effectively?
4(a) What do you understand by the term job evaluation? [2]
4(b) Explain the importance of job evaluation programme to a firm [3]
5. What are the advantages of listing a company on the stock exchange [5]
6. Discuss the contribution that informal groups might make towards the overall
performance of a business [5]
7. Should managers always use the payback period in appraising projects? Explain [5]
8(a) State any two pricing strategies which can be used for a new product [2]
8(b) What important issues should be considered when deciding on the price of a new
product [4]
9(a) Explain the term price elasticity of demand [3]
9(b) Why might the marketing manager try to influence the price elasticity of demand for
products?[3]
10(a) Give two reasons why firms use budgets [2]
10(b) Explain one situation in which a budget may need to be flexed [4]
11. A firm has the capacity to sell and produce 10 000 units of a certain product per
month. Current output is only 9 000units. The following data is available:
Selling price $500 per unit
Variable Costs $300 per unit
Fixed costs $1 000 000

Calculate
(a) Contribution per unit [2]
(b) Break even output [2]
(c) Margin of safety [2]
(d) Net profit at current output [2]

12(a) A carefully designed questionnaire should contain properly designed questions.

What are the characteristics of a good question in a questionnaire? [3]
12(b) A small contractor provides the following information about project x
Activity A is followed by B, C
Activity B is followed by D
Activity C is followed by E, F
Activity D is followed by G
A (5 days) B (4 days) C (6 days) D (3 days) E (3 days) F (2 days)
G (2 days)
(i) Represent this information on a network diagram [3]
(ii) Identify the critical path from the diagram you have drawn [3]
(iii) What is a dummy activity? [2]
 November 2004 Paper 1

1. Define the term lean production [2]

2. Explain any two possible sources of resistance to change in the organisation [4]
3. What are the merits and limitations of a functional organisational structure? [4]
4. Explain the importance of communication within an organisation [4]
5(a) What is job designing? [2]
5(b) Why is it important to have a well-designed job?[4]
6. From a survey a shoe manufacturer came up with the following data:
Mode size 6
Range size 3-8
(a)Comment on the meaning of these findings [2]
(b)Evaluate the usefulness of the mode in making stockholding decisions [4]
7(a) Why is conflict inevitable in the organisation?[3]
7(b) ‘Conflict is not always detrimental’. What might be the possible benefits of
workgroup conflict? [4]
8(a) What is market segmentation? [3]
8(b) Explain why the concept of segmentation may be of value to a marketing manager of
a large business [4]
9(a) What problems are likely to be faced by small firms in your country? [4]
9(b) Suggest possible solutions to the problems you have identified in 9(a) [4]
10(a) What is meant by a budget? [2]
10(b) Assess the usefulness of budgets to an organisation [5]
11. The following information was extracted from ABC Ltd.’s Balance sheet at as 31
December 2003

Stock 40 000
Overdraft 10 400
Cash 5 500
Mortgage Loan 110 000
Debtors 14 500
Furniture 60 000
Creditors 14 600

(a) From the above data calculate the firm’s

i) Current ratio [2]
ii) Acid test ratio [2]

(b) Comment on the liquidity position of ABC Ltd [4]

12(a) In capital budgeting, what is meant by the term leasing? [2]
12(b) Explain the benefits and drawbacks of leasing as a source of finance [5]
Benefits
Drawbacks
 June 2005 Paper
1

1(a) Define the term price elasticity of demand [2]

1(b) When bus fare went up by 10%, revenue collection by Bus Company fell by 5%.
Calculate the price elasticity of demand for buses [2]
2(a) Identify any three problems that can cause communication failure between two
people [3]
2(b) Suggest how the problems you have identified in (a) can be overcome [3]
3. Why do some businesses prefer to remain small? [3]
4(a) What is the tertiary sector of an economy [2]
4(b) Is the tertiary sector of any significance in your country? Give reasons for your answer
[5]
5(a) What is meant by legal personality in business? [2]
5(b) What is the importance of legal personality status in the growth of the business?[4]
6(a) Distinguish between a brand and a trademark [2]
6(b) Why do firms brand their products? [4]
7(a) Briefly explain what is meant by job production [3]
7(b) Justify the usage of job production in some firms [4]
8(a) State and explain any two reasons why shop floor workers might resist change [2]
8(b) How might managers increase the likelihood that workers will co-operate with a
proposed change?[4]
9. A public limited company needs to raise $40m to finance the takeover of another firm
(a) Explain how the knowledge of the gearing ratio could help the finance manager choose
between using equity capital or loan capital [4]
(b) Outline any two other factors which could influence the finance manager’s decision
[4]
10. Why would managers whose attitude to workers is explained by McGregor’s theory X
have difficulty in motivating workforce [5]
11. Explain why a company manufacturing television sets may attempt to segment the
market for its products [5]
12.’In stock management, the minimum or maximum stock levels will depend on number
of factors’. Comment on any three of these factors [6]
 November 2005 Paper 1

1. Giving examples, show what you understand by intangible assets [4]

2(a) State any two objectives of businesses in your country [2]
2(b) Giving examples distinguish between stakeholders and shareholders in an
organisation [4]
3(a) What is a decentralised organisational structure [2]
3(b) Explain 2 disadvantages of a decentralised organisational structure [4]
4(a) Many businesses use integration as a method of growth. Explain any other methods
of growth [4]
4(b) Explain any two disadvantages that a business enjoy by being large [4]
5. Define the term market share [2]
5(b) Explain any two factors that influence pricing decisions [4]
6. Explain any two methods used to monitor and ensure quality of products [4]
7(a) What is difference between the money market and capital market [2]
7(b) State any three functions of the stock exchange in your country [3]
8(a) Why does the government of your country intervene in the relationship between
employees and employers [4]
8(b) How is the employer expected to protect the lives of employees at the workplace [4]
9. Explain the term cooperate culture [4]
10(a) Define the term gearing [3]
10(b) What is the importance of gearing to any two stakeholders of the firm?[4]
11(a) Define the term investment appraisal [2]
11(b) What are the advantages of net present value over the payback period as a method
of investment appraisal? [4]
12. Explain non-financial factors managers can use to motivate employees [6]
 November 2006 Paper 1

1. What is meant by the following terms used in business?

(a) Efficiency [1]
(b) Effectiveness [1]
2. Comment on the role played by the primary sector in the economy of your country [5]
3(a) State three reasons why small firms are of great importance in an economy [3]
3(b) Discuss the difficulties which are common to most small business firms [5]
4. Comment on Herzberg’s ideas on motivation [6]
5. Distinguish between the democratic and autocratic forms of leadership in an
organisation [4]
6(a) State any three methods of production [3]
6(b) Explain why a firm might be prepared to sell its product at a price below the total cost
of producing it? [4]
7. Under what circumstances is it appropriate to use absorption costing technique? [3]
8(a) What are the advantages of delegation in a firm? [3]
8(b) Explain the reasons why managers sometimes find it difficult to effectively delegate
work to their subordinates [5]
9(a) State any three groups of people who might be interested in the accounts of a firm [3]
9(b) Explain why it is good for a business to make provisions for
(i) Bad debts
(ii)Depreciation
10(a) Why is it necessary for businesses to advertise their goods [3]
10(b) Show the importance of packaging in the successful marketing of a product [4]
11. What do you understand by the following terms used in network analysis?
(a) Dummy [2]
(b)Free float [2]
(c)Critical path [2]
12(a) What is inflation? [2]
12(b) Discuss the problems that are associated with a rise in inflation in an economy [5]
 June 2007 Paper
1

1(a) The free market enterprise is one of the three basic economic system. State the other
two [2]
1(b) Which economic structure best describes the economy of your country? Support your
answer [2]
2(a) Using examples, distinguish between vertical and lateral integration [4]
2(b) Justify the need for growth of firms in your country [4]
3. The following data shows incomes of nine employees in a food outlet.
Monthly Income in ‘000 dollars
120, 128, 122, 120, 135, 126,
128, 120, 130
(a)Calculate the arithmetic mean [2]
(b) Determine the mode and the value of the median [2]
4 ‘Workers are solely motivated by financial rewards.” Assess this statement [6]
5(a) What do you understand by the term gearing? [2]
5(b) Comment on how debtors can be managed by a firm [3]
6(a) Identify and explain two communication problems that lie with the receiver [4]
6(b) Comment on the ways management can use to overcome these problems [4]
7(a) Explain the meaning of market segmentation [2]
7(b) Why may businesses wish to segment markets for their products? [4]
8(a) How do fixed costs differ from variable costs? [2]
8(b) Comment on the limitations of contribution costing [4]
9(a) What do you understand by worker productivity?
9(b) How can management increase the productivity of the workforce? [4]
10(a) Distinguish between short-term and long term sources of finance for a business [4]
10(b) Explain any two factors considered when selecting appropriate source of finance [4]
11(a) What is meant by the term quota?
11(b) Why may the government of your country be worried about increased import
expenditure? [4]
12 Evaluate the usefulness of price elasticity of demand when making pricing decisions [4]
 November 2007 Paper 1

1. What do you understand by the following terms?

(i)Demerger [2]
(ii)Divestment [2]
2. How are businesses affected by an increase in taxation? [4]
3(a) Outline any three drawbacks of import controls [3]
3(b) Why may governments keen to promote exports? [4]
4(a) How might workers actively resist change? [3]
4(b) Explain any two consequences of a poor organisational structure [4]
5.The purchase price of an asset is $60 000 and annual depreciation using the straight line
method is $80 000
Calculate
(a) The net book value after four years[2]
(b) The expected life of the asset using residual value of $200 000
6(a) Why might a firm employ part-time workers? [3]
6(b) What practices may be used in job enrichment?[3]
7(a) Give any three reasons why informational communication channels are important in
the organisation [3]
7(b) Explain what you understand by the ‘exploitative authoritative system’ in leadership
study [3]
8(a) What is forecasting? [2]
8(b) State three situations in which forecasting can be used [3]
9. How useful is ratio analysis to a firm’s management? [5]
10(a) State any three factors a firm has to consider when choosing a supplier [3]
11(a) How might branding help in the successful marketing of a product?[3]
11(b) Assess the usefulness of desk research [4]
12(a) Explain two factors which influence the choice of finance [4]
12(b) What are the advantages and disadvantages of high gearing [4]
 June 2008 Paper
1

1. What are the reasons for public ownership of businesses?[4]

2(a) Distinguish between internal and external constraints [4]
2(b) Explain the effects of inflation on businesses [4]
3(a) Show how any two elements of the marketing mix might help in achieving the
marketing objectives of a firm [4]
3(b) List 4 ways in which the business may attempt to extend the maturity stage of the
product life cycle [4]
4. Explain any two advantages of sale of an equity [4]
5. Is a matrix structure always a good organisational structure? [6]
6(a) Explain the following terms
(i)Lead time [2]
(ii)Buffer stock [2]
(iii)Economic order quantity [2]
6(b) Why would a manufacturer move from job to batch production?[5]
7. Distinguish between pierce rate and time rate methods of payment [4]
8. How might a Theory x manager’s beliefs be portrayed in his style of leadership?[4]
9. State and explain any three groups of accounting ratios [6]
10. A firm has four departments whose profits/losses are shown

Dept. A Dept. B Dept. C Dept. D Total

$000 $000 $000 $000 $000
Sales 300 400 150 100 950
Total costs 250 450 110 80 890
Profit/(loss) 50 (50) 40 20 60

Fixed costs amounted to $300 000 and are distributed equally among the four
departments
(a) Show the difference between profit and contribution [2]
(b) Calculate the contribution for any of the two departments [4]

Dept. Dept.
A B
$000 $000
Sales 300 400
Less Variable Costs (175) (375)
Contribution 125 25

11. Should managers always use quantitative techniques only in decision making? [5]
12. How might management satisfy the esteem needs of a worker? [4]
 November 2008 Paper 1

1. The free market enterprise is one basic economic system. State any two others. [2]
2(a) What is a multinational company? [2]
2(b) Why may the government of your country limit the entry of multinational companies
in your country? [4]
3. Explain the influence of any two elements of the macro environment to a business of
your choice [4]
4. Why may fear lead to resistance to change in an organisation? [4]
5. Explain any three communication problems that lie with the receiver [6]
6(a) Distinguish between authority and responsibility [4]
6(b) Explain any two kinds of power which a manager may possess [4]
7(a) What do you understand by the following terms?
(i)Recruitment [2]
(ii)Selection [2]

7(b) Justify the need for induction training in an organisation [4]

8. Explain any two factors leading to the relocation of an industry [4]

9. Pardon Electronics Limited is a multinational company planning to introduce a new
brand of mobile phones in Zimbabwe. Advise the firm on any two possible pricing
strategies to adopt [6]
10. Comment on the usefulness of any two long term sources of finance [6]
11(a) Distinguish between fixed and variable costs [4]
11(b) Graphically illustrate the following
(i) Break-even point[3]
(ii) Margin of safety[3]
12. Discuss the value and limitations of the payback period [6]
 June 2009 Paper
1

1. What is meant by the term labour turnover? [2]

2(a) What are the disadvantages of a narrow span of control?[2]
2(b) Explain any two possible sources of conflict in an organisation [4]
3(a) State any two reasons why decision trees are useful tools to managers [2]
3(b) The following is an extract from the balance sheet of D and R Ltd

$ $

Intangible assets 3 200

Current assets
Inventory 28 000
Trade receivables 22 000
Cash 6 000 56 000
Less Current
Liabilities
Trade payables 8 000
Dividends 22 000 30 000

Comment on the liquidity position [4]

(i) Undercapitalisation [2]
(ii)Overtrading [2]
(iii)Working capital [2]
5. Explain the benefits to an organisation of having a motivated workforce [4]
6. Explain the importance of limited liability to shareholders [4]
7(a) State any three features of public limited companies [3]
7(b) Giving examples explain the reasons for public ownership of a company [4]
8. How may macroeconomic policies of government affect business objectives and
strategies? [4]
9. Describe any three different types of non-probability sampling techniques [6]
10(a) What is the difference between desk and field research? [2]
10(b) What can a firm do to extend the life cycle of a product? [6]
11(a) Stock normally takes three forms. Which are they? [3]
11(b) Explain the role of inventory control [4]
12. Show the purpose of the following forms of communication:
(a) downward communication [2]
(b) upward communication [2]
(c) horizontal communication [2]
 November 2009 Paper 1

1 What is de-industrialisation? [2]

2(a) list three stakeholders that might wish to compare the size of one business to another
[3]
2(b) State and explain any two factors that are taken into consideration when measuring
the size of the business [4]
3(a) What are the importance of small business operations in your country? [4]
3(b) Explain the difficulties faced by small firms in their operations [4]
4. Murape Pvt Ltd sells computers to small businesses around the country. It is suffering
cash flow problems at the moment. How might the firm improve its cash flow? [4]
5(a) Distinguish between marketing and selling [4]
5(b) Explain any two factors that influence the demand for a product [4]
6. Explain two ways in which a football club might reduce its break-even level [4]
7. Mr B. Banda is an old experienced tailor who uses job production in making suits for his
customers. Outline the possible advantages and disadvantages he is likely to encounter in
his business [6]
8(a) State two sources of internal and two sources of external finance for a firm [4]
8(b) Outline the factors considered by the firm when sourcing finance [4]
9. To what extent are published accounts useful to a potential investor [6]
10(a) What is a training programme? [2]
10(b) State and explain any two reasons for high labour turnover in the organisation [4]
11(a) What is an autocratic leadership style?[2]
11(b) Explain the circumstances in which an autocratic leadership style may be
appropriate [4]
 June 2010 Paper
1

1(a) What is meant by the term privatisation? [2]

1(b) Does privatisation necessarily benefit consumers in the economy of your country? [4]
2(a) State any two main features involved in the design of any new product [2]
2(b) Explain one method associated with work study [4]
3(a) What are the main features of a free market system? [3]
3(b) Explain any two advantages of this economic system?[4]
4(a) State two examples of direct taxes [4]
4(b) How might businesses be affected by taxation? [4]
5(a) Define the term delayering [2]
5(b) How might a firm benefit from the process of delayering? [3]
6(a) Show the importance of downward communication in an organisation [3]
6(b) How useful is oral communication within the business?[4]
7(a) What are the benefits of internal recruitment?[2]
7(b) Outline any three factors which determine the number of staff required in the future
by a firm[3]
8(a) Explain what you understand by a cash cow in product portfolio analysis? [3]
8(b) What strategy might be used to boost a problem child product?[3]
9(a) State any three methods of improving cash flows in a business [3]
9(b) Explain any two advantages of using debt finance [4]
10(a) Why might the government be interested in a firm’s accounting information? [2]
10(b) Distinguish between a shareholder and a debenture holder [4]
11(a) Define the following terms
(i)Mode [2]
(ii)Mean [2]
11(b) How useful is the mode in making stockholding decisions?[4]
12. Explain simultaneous engineering and explain its benefits [4]
 November 2010 Paper 1

1(a) State any three forms of de-integration [3]

1(b) Distinguish between public sector and the private sector of an economy [4]
2(a) What are the main causes of business failure?[3]
2(b) Explain any two features of an effective management by objectives programme [4]
3. Explain any three benefits of formal meetings in an organisation [6]
4(a) What is an organisation chart? [2]
4(b) Outline any three essential organisational elements that can be identified on the
organisation chart [3]
5. Comment on the importance of training to an organisation [5]
6(a) What are the physical attributes of a product? [3]
6(b) Evaluate the usefulness of desk research [4]
7(a) What is quality control?[2]
7(b) Explain any two benefits of quality control [4]
8(a) Define the term lean production [4]
8(b) Explain any two practices used in lean production [4]
9(a) What application does marginal costing have in decision making in an organisation [4]
9(b) Show the difference between debt and equity financing [4]
10(a) What is a budget?[2]
10(b) How useful is budgeting in the management of a business? [4]
11. Outline the benefits and drawbacks of mode as a measure of central tendency [4]
12. To what extent are probability tree diagrams useful in decision making?[4]
 June 2011 Paper
1

1(a) State any two factors of production [2]

1(b) What factors should be considered by an entrepreneur when choosing the location of
his business?[3]
2(a) Distinguish between direct and commercial services [4]
2(b) How can the government assist small businesses in your country [4]
3. To what extent is job evaluation useful to an organisation? [4]
4(a) What is the difference between span of control and chain of command [2]
4(b) Briefly explain why some people prefer to work for a business with a wide span of
control [4]
5(a) State any two communication methods [2]
5(b) Explain how McGregor’s Theory X and Theory Y might influence the leadership styles
of managers [4]
6(a) What is price?[3]
6(b) Explain the importance of price in business [4]
7(a) Distinguish between market share and market size [2]
7(b) The following information relates to a firm in a shoe manufacturing industry:

2004 2005
Units Value Units Value
$(000) $(000)
Total industry 36 000 48 000
sales
Firm’s sales 3 600 5 000
Total industry 5 000 6 500
Sales
Firm’s sales 500 600

(i) Calculate the growth rate of total industrial sales over the two years [4]
(ii) This firm’s market share dropped from 10% to 9.23% over the two years. Explain the
meaning of this decrease [2]
8(a) Define the term productivity [2]
8(b) How might a company improve its productivity? [4]
9. Explain why shareholders might be concerned about a decision to borrow more capital
if profits of the company have continued to fall several years [4]
10. Explain the problems that may arise from having a low level of working capital in the
business [4]
11(a) Name any two types of ratios that are used in business [2]
11(b) An analysis of a small firm’s accounts discloses an acid test ratio of 0.4:1 and a
current ratio of 1:1. Comment on the financial position of this firm [4]
12. Comment on the usefulness of the blending technique as a decision making tool [6]
 November 2011 Paper 1

1(a) State any two legal constraints that affect businesses [2]
1(b) Outline the ways in which the government might provide employee protection in
your country [4]
2. How do the following non-financial factors motivate staff?
(a) Team working
(b) Training
3(a) Explain the importance of effective communication in an organisation [4]
3(b) Show the advantages and disadvantages of oral communication [4]
4(a) What are the main causes of high labour turnover?[4]
4(b) How might management reduce high labour turnover? [4]
5. How might a marketing manager segment a market for shoes?[4]
6. Explain the benefits of competition to consumers [4]
7(a) Define batch production [2]
7(b) Explain one advantage and one disadvantage of batch production [4]
8. Explain the costs associated with
(a) Holding stocks
(b)Holding inadequate stocks
9. Explain any two advantages of debt finance [4]
10. Comment on any three limitations of ratio analysis [6]
11. Evaluate any two methods of improving cash flows in an organisation [6]
12 ABC Ltd accepts investments with a payback of three years

$000

Initial investment 4 000

Net return Year 1 800
Year 2 1 000
Year 3 1 500
Year 4 1 400
Year 5 1 650
Year 6 1 700
Year 7 1 750

(a) Using the payback method should ABC accept this project? [2]
(b) Explain why the payback method may not be a good way of deciding whether to
invest in this project [4]
 June 2012 Paper
1

1. Identify any two methods of privatisation [2]

2(a) List any three types of businesses found in the private sector [3]
2(b) Explain why government may be interested in controlling an organisation which
supplies electricity in your country [4]
3(a) Identify any two factors which may influence the location of a firm [2]
3(b) Explain the effect of import duty on foreign trade [4]
4(a) What is meant by the following terms?
(a) Grapevine [2]
(b) Leadership [2]
4(b) Outline the advantages of an ‘all channel network’ [3]
5. Explain the merits and demerits of a geographically based organisation structure [4]
6. Evaluate the significance of internal recruitment to a firm [4]
7(a) Show how the government might influence the demand of a product [2]
7(b) How might introduction of information technology affect an organisation [4]
8(a) Why may a company temporarily sell one of its products at a loss? [4]
8(b) A business has decided to increase the price of its product from $1 to $1.20. As a
result sales fell form 1 200 to 900 per week
9(a) Analyse the possible problems to a firm of introducing a ‘just in time’ manufacturing
[4]
9(b) How does work study affect the motivation of workers? [4]
10(a) Give any two examples of internal users of financial information [2]
10(b) A firm buys a machine worth $20 000. Its expected useful life is 5 years and has a
residual value of $1 000.
Calculate the charge for this machine in year four using
(i) Straight line method
(ii) Reducing balance [3]
11(a) Suggest any two appropriate sources of internal finance available to a firm [2]
11(b) How useful is the method of Average rate of return in appraising investments? [4]
12. The following are monthly quantities of chairs manufactured by Chille Private Limited
in 2008

Month Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec

Number 200 150 100 200 160 110 100 300 200 134 240 350
of
Chairs
Giving examples derived from the above information, identify and explain any two
measures of central tendency [6]
 November 2012 Paper 1

1(a) State any three different ways in which the size of a business might be measured [3]
1(b) Outline any three legal controls which might affect the way in which a business
operate [3]
2(a) Show the difference between public sector and private sector of an economy [2]
2(b) Why might some goods and services provided by the public sector of your country?[2]
3(a) What is an organisation chart? [2]
3(b) Explain one reason why an organisation chart will be useful to employees in a
business [2]
4(a) How useful is oral communication in an organisation? [4]
4(b) Comment on the importance of trade Unions in employer/employee relations [4]
5(a) Distinguish between Douglas McGregor’s theory X and Y [4]
5(b) How might the differences in the two theories be reflected in the leadership styles of
managers? [4]
6. State the reasons why the market for a product might decline in size [2]
7(a) Other than price, which factors will cause an increase in the demand for mobile
phones [2]
7(b) A business sells a product whose demand is relatively price inelastic. Explain the
effect on sales and revenue of a price increase [3]
8(a) Define the term product portfolio [2]
8(b) Explain the importance of product life cycle in planning a product portfolio [4]
9 A company manufactures product X and the following data is shown

Direct costs per unit $70

Overheads $50 000
Current output 120 000
Selling price $140
Full capacity output 150 000

(a) From the above information, calculate the company’s capacity utilisation [2]
9(b) State two ways in which a business may achieve added value [2]
10(a) Distinguish between assets and liabilities of a business [4]
10(b) Explain why businesses depreciate their fixed assets [3]
11. Briefly explain ways in which a manufacturer of toys might find break-even analysis
useful [4]
12. The following information is provided for project Venus

Activity Proceeding Duration (days)

activity
A - 5
B A 6
C A 3
D A 3
E B 2
F D 2
G B,C,F 9
H E 4

(a) Define the term critical path [2]

(b) Draw a network diagram for project Venus [3]
 June2013 Paper
1

1(a) What do you understand by the term free market enterprise? [2]
1(b) Give reasons why a free market enterprise might be the most appropriate system to
the economy of your country [4]
2(a) Define the term profit maximisation [2]
2(b) Why might profit maximisation be considered inappropriate by a firm’s stakeholders
other than shareholders? [4]
3. Suggest why a shoe manufacturing firm might expand through
(a)Vertical integration [2]
(b) Horizontal integration [2]
4(a) State two factors indicate falling morale in a firm [2]
4(b) Explain why management of a firm would wish to maintain high levels of morale
among its workers [4]
5(a) Give two components of job analysis [2]
5(b) Explain two factors which influence span of control within an organisation [4]
6(a) What is price elasticity of demand [2]
6(b) Why might a firm wish to reduce its price elasticity of demand [4]
7. Assess the contribution of market segmentation to the overall success of the
organisation [4]
8(a) The main feature of any production process is added value. Define the term added
value. [2]
8(b) Explain the term lean production [3]
9. You are provided with the following costs for a product:

Fixed Costs $50 000

Total variable costs $65 000
(output at 1 000
Units)
Selling price $90
(a) Calculate the contribution per unit for this product[3]
(b) The break-even level output[2]
10 What part might gearing ratio play in
(a) a company’s decision to seek further finance[3]
(b) a potential shareholder’s decision on whether to buy shares or not[3]
11. The financial director of a firm states that there is an urgent need to increase the
working capital
(a) Why might there be need to increase the firm’s working capital? [4]
(b)Evaluate two ways of increasing the working capital [4]
12(a)(i)Distinguish between mode and median[2]
12(a)(ii) Under what circumstances might a retail outlet find the mode a useful concept[2]
12(b) Comment on the usefulness of keeping right levels of stock [4]
 November 2013 Paper 1

1. Identify any two factors that may cause a firm to relocate [2]
2(a) Outline any three problems associated with joint ventures [3]
2(b) Explain two reasons for divestment [4]
3(a) Give three reasons why the owner of a small business might decide to remain small in
size [3]
3(b) Explain how the Government can intervene to assist businesses [4]
4. Analyse the possible impact of a rise in interest rates on a firm manufacturing technical
equipment [4]
5(a) Define a line relationship [2]
5(b) Evaluate the relationship between line managers and staff managers [4]
6. Does job rotation really motivate workers? [4]
7. What are the effects of poor communication of industrial relations? [4]
8(a) Identify the strategies that a firm can adopt given the following situations according
to the Ansoff Matrix:
(i) Selling the present product in the present market
(ii) Selling the existing product in a new market
(iii) Selling a new product in the existing market
(iv) Selling a new product to a new market
8(b) Distinguish between marginal pricing and perceived value pricing [4]
9(a) Define work study [2]
9(b) Comment upon the appropriateness of using a work study programme by a timber
manufacturing firm which is facing a high labour turnover problem [5]
10 What are the advantages of line production to a company that manufactures soft
drinks [4]
11(a) Name any two sources of short term external finance [2]
11(b) A local bakery is planning to purchase latest model of machinery which costs $48
000. It’s gearing stands at 60%
(i)To what extent is the payback period useful as an investment appraisal technique? [4]

(ii) Discuss the significance of the firm’s gearing [4]

12(a)

In the decision tree above, what is the significance of

(i) The square[1]
(ii) The circles[1]
12(b) To what extent can break even analysis be used to aid decision-making by a
manufacturing firm? [5]
 June 2014 Paper
1

1(a) List two drawbacks of secondary research[2]

1(b) State and explain any two Ansoff Matrix marketing strategies that a tractor
manufacturer can use[4]
2(a) What is meant by the public sector of the economy?[2]
2(b) What are the advantages of a company that might choose to go multinational?[4]
3(a) Define span of control[2]
3(b) Discuss the benefits of a wide span of control to a furniture manufaturing company[4]
4(a) Make a distinction between one-way and two way communication[2]
4(b) Give the advantages of circle network over chain network in communication[4]
5(a) What is meant by the term price elasticity of demand?[2]
5(b) To what extent is the knowledge of price elasticity of demand of use to a bakery?[4]
6. Why is packaging an important factor in successful marketing of soft drinks?[4]
7 Explain the following terms:
(a)job rotation[2]
(b)job enrichment[2]
8.Distinguish between :
(a)economies and diseconomies of scale[2]
(b) capital intensity and labour intensity[2]
9(a) What is meant by the term economic order quantity?[2]
9(b) Determine three factors a retail outlet will take into account when considering the
level of stock it can hold[6]
10(a) Contrast the terms liquidity and profitability [2]
10(b) Comment on the idea that a business declaring profits must have a positive cash
flow[4]
10(c) Evaluate the importance of marginal cost pricing[4]
11. Show how a firm can use the concept of cost benefit analysis when considering to buy
more machines for its operations[5]
12. To what extent are computers useful to a mobile network provider?[4]
 November 2014 Paper 1

1(a) Define the following terms

(i)Management buy out
(ii)Contracting out
1(b) Distinguish between a public limited and a public corporation?
2(a) List any two types of production methods [2]
2(b) How can a manufacturer of cell phones improve the productivity of his workers? [4]
3. Explain any two communication problems that are beyond the receiver’s control [4]
4(a) State and explain any two non-financial methods of motivation [4]
4(b) Comment on Herzberg’s ideas on motivation [5]
5. Is democratic leadership necessarily a good management style? [4]
6(a) What is niche marketing? [2]
6(b) Evaluate the usefulness of market skimming [4]
7. A firm has to decide between two alternative projects. The costs and expected
profitability of each of these is given below

PROJECT COST($) IF IF
SUCCESSFUL($) UNSUCCESSFUL($)
X 20 000 60 000 3 000
Y 35 000 85 000 (20 000)
7(a) Draw a decision tree of the options above [3]
7(b) Justifying your answer, which project should the firm choose? [4]
8(a) What is benchmarking? [2]
8(b) Assess the significance of maintaining quality in a business organisation [5]
9(a). Outline two advantages of the payback method? [3]
9(b) (i) What is investment appraisal? [2]
9(b) (ii) Analyse the importance of Net Present Value as a method of evaluating projects?
[4]
10. Show how a producer of flour can benefit from bulk buying economies of scale? [4]
11(a) Identify any two stakeholders who are interested in the accounts of a firm [2]
11(b) Define the following terms:
(i)Zero budgeting [1]
(ii)Cost centre [1]
12 Distinguish between money market and capital market [4]
 June 2015 Paper
1

1. What is meant by the term corporate culture? [2]

2. Discuss the role played by the primary sector in the economy of your country [4]
3(a) Distinguish between economic and political constraints [4]
3(b) To what extent should the government be concerned by the activities of
multinational companies [5]
4(a) State any two methods of stock control [2]
4(b) How might the production manager of a detergent company find benchmarking
useful? [4]
5. How might a saw milling firm benefit from training? [4]
6(a) What is the difference between leadership and management? [2]
6(b) Evaluate the effectiveness of autocratic leadership [4]
7(a) State any two communication barriers that lie with the sender [2]
7(b) Explain the limitations of vertical communication in a tall structure [4]
8(a) Explain how a manufacturer of soft drinks might find price elasticity of demand useful
[3]
8(b) The following information shows the effect of price change, from $10 to $15, to a
product produced by Nyakunika Ltd.
Calculate the promotional elasticity of demand for this product [2]
9(a) Explain the two classes under which products are grouped [4]
9(b) Why might a clothes manufacturing firm be prepared to sell its products at a price
below the total costs of producing it? [4]
10(a) List any two factors which might influence the location of a shoe manufacturer [2]
10(b) Evaluate the usefulness of flow production method [4]
11(a) What are the functions of the stock exchange [3]
11(b) For what reason might a business make provision for
(i) Bad debts[2]
(ii) Depreciation[2]

12(a) The following are marks obtained by business studies students in a given test:
60 50 70 60 80 40 30 10 60 90 20 40 60
80 90
From the given set of marks, distinguish between the mode and mean [4]
12(b) What are the benefits of linear programming?[3]
 November 2015 Paper 1

1(a) Identify any two forms of promotion [2]

1(b) What is
(i) a unique selling point [2]
(ii) a consumer profile [2]
2 Distinguish between competitive pricing and marginal cost pricing [4]
3(a) Why are human needs difficult to satisfy? [2]
3(b) Explain why some mergers may fail to realise long lasting gains [4]
4 Analyse the conflict between owners’ objectives and government’s objectives [4]
5 Give two examples of
(a) Direct costs of a manufacturing firm [2]
(b) Indirect costs of a supermarket [2]
6(a) What is the difference between capital and revenue expenditure? [4]
6(b) Express Motors (Pvt) Ltd, a firm which offers transport services, need to buy new
vehicle worth $30 000 to meet increasing demand for its services. Evaluate one
appropriate source of finance that Express Motors (Pvt) Ltd can use to raise the funding of
the new vehicle [3]
7 How useful is the internet in the distribution of the firm’s products? [4]
8(a) Explain the importance of contribution costing in decision making [4]
8(b) K. Flow Miners Ltd is bound to make an investment decision, choosing between two
projects: Project A and Project B
Under which circumstances would K Flow miners choose to invest in Project B whose
internal rate of return is 12%?[4]
9(a) Outline any two advantages of internal recruitment [2]
9(b) Identify any two human problems that may arise by using computers for business
communication [2]
9(c) Give two factors which influence the extent of decentralisation [2]
10(a) Explain any two ways of minimising conflict between management and the
workforce of a cement manufacturing firm [4]
10(b) Mr Tinokohwa is a large scale tobacco farmer. Advise Mr Tinokohwa on the
importance of workforce planning [5]
11(a) Outline
(i) Two benefits of quality assurance [2]
(ii) Two limitations of quality control [2]
11(b) Mouse ‘n’ Kit (Pvt) Ltd, a computer manufacturing firm, is struggling to match an
increasing demand for its product. How may the firm benefit from a work study
programme? [4]
12 Evaluate subcontracting as a means of solving capacity shortage [4]
 November 2016 Paper 1

1(a) State how economic activities are classified [3]

1(b) Explain how the state might intervene and constrain businesses in your country [4]
2(a) Distinguish between Fiscal Policy and Monetary Policy [2]
2(b) State any two examples of external stakeholders of a business [2]
3. How might management increase the willingness of employees to accept change in the
organisation? [4]
4. Evaluate the relationship between line and staff managers [4]
5. Distinguish between vertical and horizontal communication [4]
6. Assess the relevance of Elton Mayo’s ideas on motivating workers [5]
7(a) What is the difference between niche marketing and mass marketing? [4]
7(b) To what extent is the knowledge of price elasticity of demand useful to a
manufacturer of shoes?
8. Explain the limitations of value analysis to a car manufacturer[4]
9. Define the following terms:
(a) capacity utilisation[1]
(b) benchmarking[1]
10.(a) Discuss the usefulness of a work study programme to a large business[4]
10(b)(i) How do producers classify costs of production?[2]
10(b)(ii) Explain the importance of break-even analysis to a cement manufacturer[4]
11(a) Explain the role of merchant banks to exporting businesses [4]
11(b)(i) Define the term depreciation when applied to final accounts[2]
11(b)(ii) Why may a profitable business have liquidity problems?[4]
12(a) State two decision making tools [2]
12(b) Explain one measure of central tendency [2]
12(c) What is the importance of Information Technology to a marketing department [4]
 June 2017 Paper
1

1. Define the term ‘globalisation’ [2]

2(a) To what extent is the number of workers employed useful in measuring the size of
the business? [4]
2(b)(i) Explain why the government of your country may be concerned about the number
of manufacturing firms that are closing down [4]
2(b)(ii) Evaluate the benefits of exchange rate devaluation to businesses in your
country[4]
3(a) Analyse the importance of a functional structure to a business [4]
3(b) What is the difference between a leader and a manager? [4]
4(a) Give any three examples of financial motivators [3]
4(b) Outline the importance of induction training to a manufacturing firm [4]
5(a) What are the benefits of price discrimination to a marketing manager? [4]
5(b) How useful is niche marketing to a restaurant in your country? [4]
6. The demand for hotel accommodation has increased by 20% after a 10% increase in
income. Calculate the income elasticity of demand for hotel accommodation. Comment on
your answer. [5]
7(a) Assess the role played by the tertiary sector to the economy of your country [4]
7(b) Explain why increased labour productivity is important to a business [4]
8. What is the impact of introducing Just in Time method of production to a car
manufacturing firm? [4]
9. A bakery can produce 50 000 loaves of bread per week. Calculate the bakery’s capacity
utilisation if it is currently producing 35 000 loaves per week [2]
10. Briefly explain the objectives of the following organisations to governments:
(a) The World Bank [2]
(b) The International Monetary Fund [2]
11. The following information is for company A.

Year Dividend per share Market Share Price

2012 20c $2.00

2013 20c $4.00

(a) Calculate the dividend yield ratio for each year [2]

(b) Comment on your findings [2]

12. Outline the merits and demerits of using computers in business [6]
 November 2017 Paper 1

1(a) List any two stakeholders of a business [2]

1(b) Outline any three objectives of your country [3]
1(c) What is the difference between fiscal policy and monetary policy? [2]

2. Two large supermarkets are planning to merge. Explain how consumers might be
affected by this merger if it becomes successful [4]
3(a) Draw a functional organisational structure. Using your diagram explain ‘span of
control’ [4]

3(b) Explain any two disadvantages of reducing managerial levels [4]

4(a) Give any two leadership roles in a business [2]
4(b) Evaluate Frederick W. Taylor’s contribution on how motivation can be achieved in
today’s business [4]
5(a) Identify two stages of production [2]
5(b) (i) What is capital intensity? [2]
5(b) (ii) Explain one way in which a firm can raise its productivity levels [2]

6(a) Below is the financial information for a hotel that offers three products:
Product X; Product Y and Product Z

Product X Product Y Product Z Total

($m) ($m) ($m) ($m)

Sales 100 80 120 300

Variable costs 60 45 80 185

Total costs 88 85 90 263

Profit/Loss 12 (5) ? 37

(i) Calculate the profit/loss for product Z [1]

(ii) Calculate the contribution for product X and product Y [2]
(iii)Why should the firm not drop product Y? [2]
6(b) How appropriate is the Jus-In-Time stock control system to a furniture manufacturing
firm? [4]
7(a) Distinguish between Management Accounting and Financial Accounting [2]
7(b) State the main sections of a statement of Financial Position (Balance Sheet) [3]
8(a) What is the purpose of budgetary control? [3]
8(b) Mhofu enterprises is battling a liquidity crises. Evaluate any two ways which can
enable Mhofu Enterprises to reduce cash outflows [4]
9(a) Identify any two methods of information gathering that a firm can use when
conducting market research [2]
9(b) How can a firm extent the maturity stage of its product? [3]
10(a) With reference to the Boston Matrix, which product has
(i) high market growth and low market share?
(ii) low market growth and high market share?
10(b) To what extent is the Boston Matrix useful in managing a firm’s product portfolio?
[4]
11(a) State any two methods that can be used to visually present data [2]
11(b) Explain one advantage of internal rate of return (IRR) [2]
12. Assess the usefulness of computers to a construction company [4]
 June 2018 Paper
1

1(a) List any two methods of measuring size of a firm [2]

1(b) How might the state intervene to control the activities of monopolies in your
country? [3]
2(a) Define vertical integration [2]
2(b) Explain the impact of a merger between two bakeries [5]
3. What factors may be considered when introducing a new product in the market [4]
4. What are the advantages of niche marketing to a furniture firm? [4]
5(a) State any two determinants of demand for Japanese cars in a developing country [2]
5(b) How useful is price discrimination to a manufacturer of mobile handsets? [4]
6. Distinguish between training and development [4]
7. Explain why you would recommend a centralised organisational structure to a firm
involved in the mining of Diamonds in your country[4]
8. Evaluate the conflict which exists between staff and line managers [5]
9(a) Outline two advantages of absorption costing [2]
9(b)(i) Draw a well labelled break even chart [3]
9(b)(ii) Explain one advantage of break-even analysis[2]
10. Discuss the appropriateness of capital intensive production process to a
wheat farmer [4]
11(a) How may finance managers benefit from the knowledge of decision trees in decision
making? [4]
11(b) Discuss the usefulness of quantitative data in making investment decision [4]
12(a) (i) Contrast between financial accounting and management accounting [4]
12(a) (ii) How can the government of your country benefit from the International
Monetary Fund (IMF) as a source of finance? [4]
12(b) To what extent is budgetary control beneficial to business involved in the
production of flowers?
 November 2018 Paper 1

1(a) Name any two types of businesses found in the private sector [2]
1(b) Explain the effect of corporate culture to a business [4]
2. Two giant shoe manufacturing firms are considering a merger. Analyse the likely impact
of this decision to consumers [5]
(a) Draw a typical example of a matrix structure [3]
3(b) Explain one advantage and one disadvantage of a matrix organisational structure [4]
4 .Assess the effectiveness of induction training to a car manufacturing firm [4]
5(a) Give two advantages of desk research [2]
5(b) How important is research and development to an airline firm? [5]
6(a) Explain the importance of promotional budget [4]
6(b) Evaluate the usefulness of the Boston Matrix to a firm which offers a wide range of
products [4]
7(a) A firm bought a vehicle costing $20 000 with an estimated life span of five years and a
scrap value of $5 000. Calculate the net book value of the vehicle at the end of year two,
using the following methods:
(i) The straight line method [2]
(ii) The reducing balance method at 20% per annum [3]

7(b) Outline any two causes of depreciation [2]

8(a) What are the advantages of using average rate of return in making investment decision? [4]

8(b) How useful is sale and lease back to a carpentry firm that is struggling to improve cash flows?
[4]
9(a) Why is it important for a firm to benchmark its products against those of competitors? [3]

9(b) Explain one advantage and one disadvantage of quality assurance [4]

10. Comment on the effectiveness of just in time as a stock control method to a timber
manufacturing firm [4]

11 What is the importance of time series in sales forecasting, to a firm that manufactures
umbrellas? [4]

12 Assess the role of computers to a clothing manufacturing firm [4]