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Regulations for “On Campus” Postgraduate Students’ Exams You are advised to familiarize yourselves with the following regulations regarding the examination. All students are expected to comply without exception or excuse. 1. During Covid-19 pandemic: · Students are not allowed to group together for any form of discussion before and after the exam. Please adhere to the Covid-19 safety regulation and maintain 2 meters of distance at all time. · Students must directly come to the allocated exam hall 15 minutes before the start of the exam. · Students must leave immediately the EAU campus after the exams. 2. Have your EAU ID, Wear your Face mask in order to be permitted to enter the exam room. · Face Mask must be always worn during the exam. 3. You are only allowed to take in to the exam room a clear bottle of water; tissues; pens; pencils; ruler and a calculator if required for the exam. You will not be allowed to share anything with others during your exam. 4. During the open book exam, students are allowed to bring their notes to the exam hall, but are not allowed to bring any form of solution manuals. 5. All Electronics devices (Tablets, Mobile Phones, Smart Watches, Airpods etc.) must be kept outside the exam hall. 6. Toilet breaks are not permitted during the exam – so be sure to go before you enter the exam room. 7. Should you be late for any acceptable reason, you will be permitted to enter the exam room up until 30 minutes after the scheduled start time of the exam. 8. You must leave your question paper and your answer booklet(s) on your desk after completion of exam. (if exam is submitted as hard copy) 9. Once seated in the exam room you are expected to remain silent and follow the instructions of examination invigilators. 10. You will be given an oral warning of time during the exam one hour after the start and at thirty minutes and five minutes before the end of the exam. 11. Once question papers are distributed in the exam rooms do not expect to be allowed to leave and re-enter the room. 12. Avoid any form of cheating during the exams. Cheating during an exam is viewed extremely seriously and will be referred to the Academic Disciplinary Committee. Postgraduate Centre – Exam Cover Page To be filled by EAU admin 1 Programme Name : MBA / MSC 2 Module Code : EAM05EFA 3 Module Name : Financial Analysis for Managers 4 Module Delivery Date : 21st – 25th July 2022 5 Lecture’s Name : Catherine Kennedy 6 Exam Date: 15 Sept 2022 7 Exam Start time: 8.00am till 11.00am 8 Time allowed for exam: 3 hours 9 Exam Email address:
[email protected] Questions Q1 Q2 Q3 Total Marks 25 25 25 75 Learning Outcomes 2 2 3 Exam Questions ANSWER ALL 3 QUESTIONS Question 1: A factory that manufactures components for the Aviation industry has 3 production departments (Forming, Machines and Assembly) and 2 service departments (Maintenance and General). The following is an analysis of budgeted overhead costs for a 12 month period:- Total (£) Rent & rates 8,000 Power 750 Light & heat 5,000 Repairs, maintenance:- Forming 800 Machines1,800 Assembly 300 Maintenance 200 General 100 3,200 Departmental Expenses Forming1,500 Machines2,300 Assembly1,100 Maintenance 900 General1,500 7,300 Depreciation: Machinery10,000 Fixtures and fittings 250 Insurance: Machinery2,000 Buildings 500 Indirect Labour: Forming3,000 Machines5,000 Assembly1,500 Maintenance 4,000 General2,000 15,500 Total 52,500 The following information is available about each department Forming Machines Assembly Maintenance General Floor space (sq.m) 2,000 4,000 3,000 500 500 Value of machinery (£) 25,000 60,000 7,500 7,500 - Value of fixtures & fittings 1,000 500 2,000 1,000 500 Kwt.hours of power (000s) 40 90 15 5 - Direct costs for year (£) 20,500 30,300 24,200 - - Labour hours worked 14,400 20,500 20,200 - - Machine hours worked 12,000 21,600 2,000 - - Budgeted direct labor hrs per year 5,55 6 790 5,240 Budgeted machine hrs per year 1,350 5,626 147 Additional Information relates to the apportionment of service department costs MaintenanceGeneral % % Forming 20 30 Machines 50 60 Assembly 30 10 Required: (a) Apportion overhead costs to the 5 departments (10 marks) (b) Apportion the service department costs to the 3 production departments (5 marks) (c) Calculate suitable overhead absorption rates for the 3 production departments (5 marks) (d) The company has the opportunity to fill its spare capacity over the next 3 months but at a much reduced rate from their normal orders. How should the company cost this order and what are the financial and non-financial consequences of them accepting this order? (5 marks) Question 2: CK is a restaurant that caters to the needs of a small niche market. There are only 25 tables and dinner is priced at £32 per person. The restaurant is open 7 nights a week The following are typical costs:- ££ weekly costscosts per guest for restaurant Heat & light 40 Average food cost 6 Cleaning staff – basic200 Complementary appetizer2 Administration20 Table laundry4 Breakfast staff140 Other overheads160 Required: (a) Calculate the fixed cost per week and the contribution. (4 marks) (b) Calculate the average number of dinners it would take to break even. (4 marks) (c) Calculate the weekly profit or loss if there were 42 dinners. (4 marks) (d) What would the profit / loss be if there were:- 50 dinners sold 20 dinners sold (4 marks) (e) What would be the implication if the price was increased to £40 and an extra £4 was spent on food if there were 50 dinners sold 20 dinners sold (4marks) (f) What are the main advantages and drawbacks of break-even analysis? (5 marks) Question 3 A company is considering an investment of £100,000 in Machine C or £110,000 in Machine K Both machines would have a life of 6 years. Machine C will have a residual value of £30,000 and Machine K will have a residual value of £20,000 at the end of the 6 year period. The company uses the straight line method of depreciation. The company’s cost of capital is 10% and the criteria for new projects is that they must pay back period of not more than 4 years. It is expected that the machines will earn the following cash flows for the company during their expected life: Cash Flows YearsMachine C Machine K 120,00030,000 230,00030,000 340,00030,000 4 50,00030,000 5 10,00030,000 6 5,00030,000 Required: (a) Calculate the payback period for both machines (2 marks) (b) Calculate the accounting rate of return for both machines (4 marks) (c) Calculate the net present values for both machines (8 marks) (d) Advise management whether either machine is worth investing in and propose other alternatives (3 marks) (e) Evaluate the 4 different methods of Capital Investment Appraisal and make your recommendations to a company on the best method(s) to use justifying your recommendations. (8 marks) Page 5 | 5BUSINESS DOCUMENT This document is intended for business use and should be distributed to intended recipients only. Exam Answers Name : ID : BUSINESS DOCUMENT This document is intended for business use and should be distributed to intended recipients only.