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CMA DECEMBER, 2020 EXAMINATION KNOWLEDGE LEVEL
SUBJECT: IE 02. PRINCIPLES OF BUSINESS AND ECONOMICS
Time Allocated: Three hours Total Marks: 100
Instructions to Candidates
You are required to answer ALL questions.
Answers should be properly structured, relevant and computations need to be shown.
You are strongly advised to carefully read ALL the question requirements before attempting the question concerned (that is all parts and/or sub-questions).
ALL answers must be written in the answer book. Answers written on the question paper will not be submitted for marking.
Start answering each question from a fresh sheet. Your answers should be clearly numbered with the sub-question number then ruled off, so that the markers know which sub-question you are answering.
No of questions No of sub-questions Marks allocation
10 Maximum 03 10 per each question
TURN OVER
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You are advised to spend no longer than 18 minutes on each question. Each question will carry 10 marks.
QUESTION 1
(a) Define opportunity cost with a suitable example.
(b) Consider the following productivities:
Sector China Korea
Services 6 Units/hr. 3 Units/hr.
Manufacturing 2 Units/hr. 6 Units/hr.
(1) Calculate the opportunity cost of services in the China and Korea
(2) Calculate the opportunity cost of manufacturing in the China and Korea.
(3) Who has the comparative advantage in services and Manufacturing?
[Marks: (5+5) = 10]
QUESTION 2
(a) Describe Economic factors and Cultural factors affecting entrepreneurship development in Bangladesh.
(b) Discuss Platform strategy and Network strategy as International business strategies.
[Marks: (5+5) = 10]
QUESTION 3
(a) “A good management policy can be the basic tool for achieving an organization’s goal”– Discuss.
(b) What do you mean by Human Resources Accounting (HRA)? Explain how to measure HRA.
[Marks: (5+5) = 10]
QUESTION 4
(a) Discuss the ‘line’ and ‘staff’ concept in an organization. How conflict between these two groups can be avoided?
(b) How Job Description and Job Analysis are linked to Management Performance?
Discuss.
[Marks: (6+4) = 10]
QUESTION 5
Describe the marketing strategy process with a diagram giving special reference to the importance of marketing research.
[Marks: 10]
TURN OVER
Page 3 of 3 QUESTION 6
(a) How a nonbanking financial institution is different from banking institution?
(b) Sheuley is a shareholder in Sun Co. Ltd, who run a chain of supermarkets, and she has been looking at their most recent financial statements. She has some business knowledge but cannot understand some of the financial statements and some of the terminology used. Her following requirements are to be answered by you:
(1) Explain the significance of the operating profit figure and how it differs from the profit for the year.
(2) What does the statement of financial position reveal about a company?
(3) Explain why the company is able to pay preference dividends and yet not pay any ordinary dividend for the last two years.
[Marks: (4+6) = 10]
QUESTION 7
(a) Discuss the Significance of Working Capital Management.
(b) What would be your Future Value (FV) if you invest Tk.10,000 for 3 years at 8%, compounded quarterly and what would be your Present Value (PV) If you invest now at 8% compounded quarterly to earn Tk.10,000 in 3 years?
[Marks: (5+5) = 10]
QUESTION 8
(a) What are the differences between consumer products and industrial products?
(b) Why a firm is a price taker and not a price maker under perfect market conditions?
Explain.
[Marks: (5+5) = 10]
QUESTION 9
(a) Discus the law of Demand and Law of Supply with exceptions if any?
(b) Why demand curve stops downward to the right?
[Marks: (5+5) = 10]
QUESTION 10
(a) Economics as a discipline believes that the firms will be operated in a way that leads to profit maximization. Although this seems to be reasonable, it is open to question.
Economists and specialists in organizational management have derived other hypotheses about the behavior of firms and have done a great deal of research aimed at testing these hypotheses. The hypotheses are: Market share maximization, Growth maximization, and Maximization of managerial returns.
The results of empirical testing of these hypotheses, as well as tests of the profit- maximization hypothesis, have been mixed. Pick up any industry of your choice and elaborate upon the objectives of different players that are adhering to the above- mentioned hypotheses.
(b) Why SMEs are important to the economy of Bangladesh?
[Marks: (6+4) = 10]
*END OF QUESTION PAPER*
