MAC2602 May/Jun 2018 exam paper — questions

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  1. Question 1.1 · Risk management · 2 marks

    Identify the term that describes the process of selecting and implementing measures to reduce or mitigate risk to an acceptable level.Show the full question

  2. Question 1.2 · Strategy and strategic management · 2 marks

    Choose the definition that best describes sustainability for businesses, from four alternatives: (a) that all products, processes and manufacturing activities meet customer needs while treating the environment so as not to decrease the ability of future generations to meet their own needs; (b) the potential for long-term maintenance of well-being, which has environmental and social dimensions; (c) a set of processes, customs, policies, laws and institutions affecting the way the business is managed; or (d) the growth of an investment in a business, where the investment can be sold after a few years for a profit.Show the full question

  3. Question 1.3 · Cost of capital, WACC and capital structure · 2 marks

    Determine which combination of the following statements about secondary market transactions in the capital markets is TRUE: (1) very few transactions in the capital market are secondary market transactions and they do not generate cash flow for the organisation; (2) the securities of an organisation are made more attractive to other investors in a secondary market, thereby increasing the price of the securities; (3) a secondary market transaction is created when a holder of an organisation's securities sells the debt securities to another investor; (4) the management of an organisation should be aware of the share price as their compensation is often linked to the share price of the organisation; (5) the level of the organisation's share price in secondary market transactions will determine how much can be raised by future issues of shares. Select the combination of true statements.Show the full question

  4. Question 1.4 · Risk management · 2 marks

    Consider the following six statements regarding factors that influence risk: (1) non-compliance with regulations or internal procedures; (2) research and development capacity with the ability to innovate; (3) business interruptions, such as those due to power failures and no back-up power generators; (4) the flexibility of production processes when product specifications alter; (5) actions of competitors; (6) significance of new technology. Indicate which combination of these statements are factors influencing strategic risk specifically.Show the full question

  5. Question 1.5 · Risk management · 2 marks

    The PESTEL analysis is a method used to identify risks. Choose the one alternative that correctly describes this analysis: (a) a group trying to find a solution for a specific problem or question by gathering a list of ideas spontaneously contributed by the group; (b) techniques involving data collection that could include surveying stakeholders by interview or questionnaire; (c) the process of breaking down a business process into its component parts to examine all the risks to that process; or (d) a breakdown of all the political, economic, legal, social, technological and ecological factors that could affect the organisation.Show the full question

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