Question 1

JHG manufactures inexpensive cars that compete largely on price Its cars have very basic equipment and small but economical engines JHG's Board is considering launching a luxury brand of cars that will be far better equipped, more comfortable and have much better performanceWhich THREE of the following would be relevant factors to incorporate into the stress testing of this new strategy to create a luxury brand?

Options :

A : Reductions m motorway speed limits

B : The need for consumer research

C : Increased tax on vehicle emissions

D : The cost of designing new cars.

E : Potential changes in interest rates.

F : Sales of JHG-s existing range of cars

Answer: A,C,D

Question 2

Which of the following statements are correct?

Options :

A : It is always possible to remove all risks when undertaking large projects.

B : If a project has high risks it should always be accepted as the rewards will always be high.

C : If a project has low risks it will usually have relatively low returns.

D : Risk can always be transferred to someone else.

E : Risk should be carefully considered when evaluating possible future projects.

Answer: A,C

Question 3

M plc is an IT company thatbids for large contracts to sell computer systems and also to serviceexisting systems. M plc's senior management hasalwayssetbudgets which are hard to achieve andhavemade no allowances for the recession.The economy has improved andM plc's senior managershave made the budget even more optimistic. The budgetedsalestargethas been increased by 40%.In the past,sales staffhave not tried to achievethe budgetsales because itwas generallybelieved that the targets wereimpossible to reach.M plc has recently appointed a new Sales Directorwhohas decided that sales staff will bedismissedif they fail to meet sales targets for three successive months. He is also looking forhighersalesmargins than wereachievedbefore.What are the likely consequences ofthe new Sales Director'spolicy?

Options :

A : Sales staff will be happier in their jobs.

B : Sales staff will tender for riskier contracts.

C : Sales staff will encroach on other sales staff territories to get more work.

D : Sales staff will look for new jobs.

E : Sales staff will feel more settled and secure in their jobs.

Answer: B,C,D

Question 4

Which of the following statements are correct?

Options :

A : It is always possible to remove all risks when undertaking large projects.

B : If a project has high risks it should always be accepted as the rewards will always be high.

C : If a project has low risks it will usually have relatively low returns.

D : Risk can always be transferred to someone else.

E : Risk should be carefully considered when evaluating possible future projects.

Answer: A,C

Question 5

Company M has lost 25% of its revenue in the last three months due to bad debts. One of thereceivables written offwasfroma long standing customer and the other three werefromnew customers. The management accountant has warned the sales team that the company cannot survive any more substantial bad debts.Which of the following internal controls should be put in place to try and prevent further bad debts?

Options :

A : A credit check should be carried out on each new customer.

B : Credit limits should be set for all customers. However, if the credit limit will cost a sale then sales staff can override this limit.

C : Two sales staff must authorise new customers and sign a form stating that they have done so.

D : An aged analysis of customer balances must be reviewed every month.

E : As soon as a customer payment is overdue they should not be allowed to purchase more until their balance has been reduced

Answer: A,D

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