NUI Galway Summer 2008 Exams: Codes, Modules, Instructions, Exams of Business Management and Analysis

Download NUI Galway Summer 2008 Exams: Codes, Modules, Instructions and more Exams Business Management and Analysis in PDF only on Docsity! Ollscoil na hÉireann, Gaillimh National University of Ireland, Galway Summer Examinations 2008 Exam Code(s) 1DQ1; 2BN1; 4BE1; 4BG1; 4BI1; 4BI2; 4BJ1; 4BM1; 4BV1 Exam(s) 1 DQ1 Diploma in Quality Assurance 2BN1 B.E. Degree (Electronic) 4BE1 B.E. Degree (Civil) 4BG1 B.E. Degree (Biomedical Engineering) 4BI1 B.E. Degree (Industrial Eng. & Info. Systems) 4BI2 B.E. Degree (Industrial Eng. & Info. Systems)(Design Stream) 4BJ1 B.E. Degree (Management Engineering with Language) 4BM1 B.E. Degree (Mechanical) 4BV1 B.E. Degree (Environmental) Module Code(s) MG330 Module(s) BUSINESS MANAGEMENT AND FINANCE Paper No. - Repeat Paper Special Paper External Examiner(s) Professor Geoffrey Wood Internal Examiner(s) Professor S. Collins; Professor H. Scullion Dr. M. Quinn, Ms. P. Martyn; Dr. M. Giblin Instructions: In Section A: Answer any two questions. In Section B: Answer one question. In Section C: Answer Question 6. Use a separate answer book for each section. Duration 3 hours No. of Pages 8 (including cover page) Department(s) Management Course Co- ordinator(s) Ms. P. Martyn 1 Section A (Finance) 50 Marks In this section, answer any two questions Question 1 Darcy Ltd. is considering the introduction of a new product. The product is expected to have a market for six years. The Business Development manager has investigated the viability of the project: (1) The production of the new product will take place in a factory unit that can be purchased immediately for €225,000. The factory is expected to maintain its value and can be disposed of at the end of the product’s market life cycle for €225,000. (2) The company would have to purchase equipment immediately at a cost of €500,000. The equipment will have a scrap value of €50,000 at the end of the six years. (3) Net working capital for the new product in the amount of €10,000 will be required at the end of year one. (4) The product will initially have a selling price of €22 per unit for the first two years and thereafter the selling price per unit will be €20. Variable costs of production will amount to €13 per unit throughout the course of the project (5) The company have conducted some market research last year at a cost of €10,000 which estimates the following level of demand for the product: Demand in Units Year 1 20,000 Year 2 32,000 Year 3 28,000 Year 4 to 6 inclusive 20,000 (6) The relevant cost of capital for this project is 10% per annum. (7) Annual fixed costs would be €160,000, including €90,000 depreciation. (8) In order to proceed with the project Darcy Ltd. will require a specific software package to monitor the production process. This can be purchased immediately for €25,000. There will be an annual maintenance charge of 10% of the purchase price payable to the software supplier annually covering the use of helpdesk services and upgrades to the software. The maintenance charge only applies from year 1 onwards. 2 Balance Sheet as at 31 December 2007: Steelworks Ltd. Ironworks Ltd. €000 €000 Fixed Assets 1,620 1,721 Current Assets: • Stock 120 115 • Debtors 100 182 • Bank 210 2 430 299 Current Liabilities: 190 225 Working Capital 240 74 Total Net Assets 1,860 1,795 Financed by: Capital at 1 January 2006 1,150 1,060 Reserves 210 735 Long term loan 500 0 1,860 1,795 The following information is also available: 1. Steelworks Ltd. pays interest of 5% per annum on the long term loan. 2. All sales, in both companies, are made on credit. Required: (a) For each of the companies, calculate the following ratios and comment on the performance of the firms from the calculations: • Return on capital employed; • Net profit as a percentage of sales; • Asset turnover; • Debtors days; • Current ratio. (15 marks) (b) Select two other financial ratios which you consider to be particularly important in assessing the performance of a business. For your two selected ratios: • Explain why they are particularly important in assessing performance; • Calculate them for each of the firms; • Comment on the performance of each of the firms. (6 marks) (c) Explain what is meant by the ‘price earnings ratio’ of a public limited company, and explain why investors consider this ratio to be important. (4 marks) (Total: 25 marks) 5 Section B (Industrial Relations) 25 Marks Answer one question from this section Question 4 Identify and explain the most important features of the current Irish Unfair Dismissals legislation. (25 Marks) Question 5 Discuss the role, function and organisation of (a) trade unions and (b) employer organisations in contemporary Irish industrial relations. (25 Marks) 6 Section C (Management) 25 Marks Answer any two questions from this section Question 6 In this question, please answer TWO of the following: 1. Describe Michael Porter’s Five-Forces model as a technique for analysing the competitive environment of an organisation. 2. ‘Organisations typically use a wide variety of plans to assist their planning process’ (Tiernan et al. 2006). Discuss four types of plans and outline the typical stages in the corporate planning process. 3. Distinguish between programmed and non-programmed decisions and discuss the concept of ‘bounded rationality’ in the context of decision making. 4. Distinguish between a ‘manager’ and a ‘leader’ in an organisational setting and discuss the contingency leadership theory. 7