BUS 001: BUSINESS AND ITS ENVIRONMENT
(a) Following Nigeria’s recent economic meltdown, mention any FOUR (4) roles that a business enterprise can play to help to keep Nigeria out of another recession. (8 Marks) (b) Identify and explain any ONE (1) form of business ownership. (3 Marks) (c) Mention any TWO (2) factors that can be used to classify a business according to size. (4 Marks)
(a) Describe Family Business? (2 Marks) (b) Define ‘Local Business’ (3 Marks) (c) Differentiate between External and Internal business growth. (10 Marks)
BUS 002: FINANCE AND ACCOUNTING 3. (a) Explain why it is important for a business to be able to identify and calculate its costs. (4 marks) (b) Define the following types of costs: direct cost, fixed cost, indirect cost and variable cost. (4 marks) (c) State four differences between primary and secondary market. (7 marks)
(a) Outline three (3) effective means of debt collection. (7 marks) (b) Write short notes on debt financing and equity financing. (8 marks) BUS 003: MANAGEMENT I 5. (a) Distinguish between intrinsic and extrinsic motivation. (6 marks) (b) Write short illustrative notes on; i. Need for Power ii. Need for Achievement iii. Need for Affiliation (9 marks)
(a) What is a brand? (2 marks) (b) Explain TWO (2) characteristics of a good brand? (3 marks) (c) Differentiate between the terms ‘Marketing’ and ‘Sales’. (10 marks) BUS 004: MANAGEMENT II 7. (a) Define inventory and state any three (3) reasons for holding inventory. (6 Marks) (b) Explain the following terms in inventory management with appropriate examples: i. Carrying/holding costs (3 Marks) ii. Ordering costs (3 Marks) iii. Shortage costs (3 Marks)
Write short notes on the following: (a) Productivity (b) Added Value (c) Capital Intensity (d) Level of Production (e) Scale of Operation. (15 Marks)
Answers.
# BUS 001 – BUSINESS AND ITS ENVIRONMENT
## Question 1
**(a) Four roles a business enterprise can play to help keep Nigeria out of recession:**
1. **Employment generation** – Businesses create jobs, putting income in people's hands and boosting consumer spending, which drives economic activity.
2. **Tax revenue contribution** – Profitable businesses pay taxes that fund government infrastructure and social services, stabilising the economy.
3. **Export and foreign exchange earnings** – Businesses that export goods bring in foreign currency, strengthening the naira and reducing trade deficits.
4. **Innovation and import substitution** – Producing locally what was previously imported reduces capital flight and builds domestic industrial capacity.
**(b) One form of business ownership – Sole Proprietorship:**
This is a business owned and managed by a single individual. The owner bears all risks, keeps all profits, and has unlimited liability. It is the simplest and most common form, e.g., a roadside trader or freelance consultant.
**(c) Two factors used to classify a business by size:**
1. **Number of employees** – Small businesses typically have fewer workers than medium or large ones.
2. **Annual turnover/revenue** – The volume of sales or income generated is a standard size indicator.
## Question 2
**(a) Family Business:**
A family business is one owned, controlled, and usually managed by members of the same family, with the intention of passing it down across generations.
**(b) Local Business:**
A local business is one that operates within a specific community or geographic area, serving customers in that immediate locality. Its market, workforce, and operations are confined to a town, district, or neighbourhood. Example: a neighborhood bakery or local pharmacy.
**(c) External vs. Internal Business Growth:**
| Basis | Internal Growth | External Growth |
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| Meaning | Growth from within, using the firm's own resources | Growth through linking with or acquiring other firms |
| Method | Reinvesting profits, expanding output, opening new branches | Mergers, acquisitions, takeovers, joint ventures |
| Speed | Gradual and slow | Faster |
| Risk | Lower risk | Higher risk due to integration challenges |
| Control | Owner retains full control | May dilute ownership and control |
| Example | A company opening a new product line | A bank acquiring a smaller bank |
# BUS 002 – FINANCE AND ACCOUNTING
## Question 3
**(a) Why it is important to identify and calculate costs:**
Knowing costs helps a business set the right prices to ensure profitability, avoid underpricing or overpricing, plan budgets effectively, identify areas of waste, and make informed decisions about production levels and expansion. Without cost knowledge, a firm cannot determine whether it is making a profit or loss.
**(b) Definitions:**
- **Direct cost:** A cost that can be traced directly to a specific product or activity, e.g., raw materials used in manufacturing.
- **Fixed cost:** A cost that remains constant regardless of the level of output, e.g., rent or salaries.
- **Indirect cost (overhead):** A cost that cannot be attributed to a single product; it supports overall operations, e.g., electricity bills, administrative expenses.
- **Variable cost:** A cost that changes in direct proportion to the level of production, e.g., packaging materials or direct labour on piecework.
**(c) Four differences between Primary and Secondary Market:**
| Basis | Primary Market | Secondary Market |
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| Definition | Where new securities are issued for the first time | Where previously issued securities are traded among investors |
| Purpose | Raises fresh capital for companies/government | Provides liquidity to existing investors |
| Participants | Issuer and investors directly | Investors trading among themselves |
| Price | Fixed by the issuer | Determined by supply and demand |
## Question 4
**(a) Three effective means of debt collection:**
1. **Reminder letters/calls** – Sending polite but firm written or phone reminders as soon as a debt is overdue.
2. **Debt collection agencies** – Engaging third-party agencies specialised in recovering outstanding debts on behalf of the business.
3. **Legal action** – Filing a court claim to recover debts when other methods fail; the threat alone often prompts payment.
**(b) Debt financing vs. Equity financing:**
- **Debt financing** refers to raising capital by borrowing money, usually through bank loans or bonds, which must be repaid with interest. The business retains full ownership but carries a repayment obligation regardless of profitability. Example: taking a bank loan to buy equipment.
- **Equity financing** involves raising capital by selling shares of ownership in the business to investors. No repayment is required, but the owner dilutes control and must share profits (dividends) with shareholders. Example: issuing shares on a stock exchange or bringing in an angel investor.
# BUS 003 – MANAGEMENT I
## Question 5
**(a) Intrinsic vs. Extrinsic Motivation:**
- **Intrinsic motivation** comes from within the individual — the personal satisfaction, enjoyment, or sense of achievement derived from the work itself. E.g., a teacher who loves imparting knowledge.
- **Extrinsic motivation** comes from external rewards given by others, such as salary, bonuses, promotions, or praise. E.g., an employee working harder to earn a year-end bonus.
The key difference is the **source**: internal (self-driven) vs. external (reward-driven).
**(b) Short notes:**
**i. Need for Power:**
This refers to the desire to influence, control, or have authority over others. People with a high need for power seek leadership positions and enjoy directing others. According to McClelland, this can be expressed positively (institutional power — leading teams toward organisational goals) or negatively (personal dominance).
**ii. Need for Achievement:**
This is the drive to accomplish challenging tasks, meet standards of excellence, and succeed. High achievers prefer tasks of moderate difficulty, take personal responsibility for outcomes, and seek feedback. They are often entrepreneurs and self-starters.
**iii. Need for Affiliation:**
This is the desire to form warm, friendly relationships and belong to groups. People high in affiliation motivation prefer cooperative environments, avoid conflict, and value team harmony over competition. They are best suited to roles requiring teamwork and customer relations.
## Question 6
**(a) What is a brand?**
A brand is a name, symbol, design, or combination thereof that identifies a seller's product or service and distinguishes it from competitors.
**(b) Two characteristics of a good brand:**
1. **Memorability** – A good brand is easy to remember and recall, making it stick in the minds of consumers.
2. **Distinctiveness** – It must stand out clearly from competitors, giving consumers a reason to choose it over alternatives.
**(c) Marketing vs. Sales:**
| Basis | Marketing | Sales |
||||
| Definition | The process of identifying customer needs and creating strategies to satisfy them profitably | The process of directly persuading customers to purchase a product or service |
| Focus | Long-term customer relationships and market positioning | Short-term transaction and closing deals |
| Approach | Pull strategy — attracting customers through branding, research, advertising | Push strategy — pushing products to customers through direct contact |
| Scope | Broader; includes research, pricing, promotion, distribution | Narrower; focused on converting leads into buyers |
| Timeframe | Long-term | Short-term |
| Start point | Begins with understanding the customer | Begins with the existing product |
In summary, marketing creates the conditions for a sale; sales is the execution of converting those conditions into revenue.
# BUS 004 – MANAGEMENT II
## Question 7
**(a) Inventory:**
Inventory refers to the stock of goods, raw materials, or finished products held by a business at any point in time.
**Three reasons for holding inventory:**
1. To meet unexpected increases in customer demand without delays.
2. To avoid production stoppages caused by supply shortages.
3. To take advantage of bulk purchasing discounts from suppliers.
**(b) Inventory cost terms:**
**i. Carrying/Holding costs:**
These are the costs of storing inventory over time. They include warehouse rent, insurance, spoilage, and the opportunity cost of capital tied up in stock. *Example:* A supermarket storing large quantities of perishable goods incurs refrigeration and spoilage costs.
**ii. Ordering costs:**
These are costs incurred each time an order is placed for new stock. They include administrative costs, shipping fees, and inspection costs. *Example:* A manufacturer paying courier charges and processing fees each time it orders raw materials.
**iii. Shortage costs:**
These arise when inventory runs out and demand cannot be met. They include lost sales, customer dissatisfaction, and emergency procurement costs. *Example:* A pharmacy losing customers and revenue because a popular drug is out of stock.
## Question 8 – Short Notes
**(a) Productivity:**
Productivity measures the efficiency with which inputs (labour, capital, materials) are converted into outputs. Higher productivity means more output per unit of input. It is expressed as: *Output ÷ Input*. Improving productivity reduces cost per unit and increases competitiveness.
**(b) Added Value:**
Added value is the difference between the selling price of a product and the cost of the inputs used to produce it. It represents what the business contributes through production, design, or branding. *Formula: Selling price − Cost of bought-in materials/components.*
**(c) Capital Intensity:**
This refers to the degree to which a business relies on machinery, equipment, and technology relative to labour in its production process. A capital-intensive business (e.g., oil refinery) uses more machines than people; a labour-intensive one (e.g., farming) uses more workers.
**(d) Level of Production:**
This refers to the quantity of goods or services a business produces within a given period. It can operate at below capacity (underproduction), full capacity, or above normal capacity (overproduction). The optimal level minimises cost and satisfies demand.
**(e) Scale of Operation:**
This refers to the size at which a business operates, determined by the volume of inputs used and output produced. Businesses can operate on a small, medium, or large scale. Larger scale often brings **economies of scale** — reductions in cost per unit as output increases — giving a competitive pricing advantage.