True or False Questions. (1 point each, 25 points total)1. Organization can be categorized by activity, namely, based on turnover, assets, number of employees. 2. The aim of organizations is to generate outputs which have a greater value than the labor used up.F3. Objectives must be quantifiable and specific.4. Crisis management describes how the managers prepare for and react to a sudden change.5. Sole trader is an individual who owns the business. 6. Worker co-operative set up to benefit consumers.7. Public sector organizations are owned or directed by the Government.8. Theory Y managers seem to believe that employees are lazy, do not want to work, have to be controlled and monitored.9. Private limited companies must state the extent to which they comply with the Cadbury Codes of Best Practice in their annual report.10. The issued share capital can not be greater than the authorized. 11. B is an associate company of A if A has between 20 and 50% of the shares of B. 12. A franchisor buys the right to use/sell a product or service to a franchisee in return for a fixed fee and /or percentage of the turnover.13. Merger occurs when two or more firms join together, it might be through a merger or a take-over.14. Synergy is the idea that when two companies join together, overall performance will be worse than the sum of the two firms individually.15. Microenvironment are factors beyond the immediate environment of the firm.16. Niche market is a small part of the market which major producers are concerned with.17. Stages of the product life cycle include development, introduction, growth, maturity and decline. 18. Market penetration attempts to gain a greater share of a new market. 19. Focus of pull strategy is on consumers, by appealing to consumers directly. 20. The less the value of the advertising elasticity, the greater the relationship between advertising and demand.F21. Accounts provide numerate information to help decision making.22. Day to day finance of the organization=current assets + current liabilities 23. GDP shows how much has been earned within a country. 24. The Multiplier is based on the idea that one persons spending is anothers income.25. Contribution=revenue variable costs TAnswer the Following Questions (5 points each, 30 points total)26. What are the main elements of business plan?27. What is a merger? And why merge?28. What are the reasons for becoming multinational?29. How do small firms survive?30. How to improve cashflow?31. Use a diagram to illustrate Break Even Output and Margin of Safety. Calculations (8 points for 32nd, 16 points for the 33rd, 24 points total)32. Methods of investment appraisalPlease calculate Payback and ARR according to the following table.Note: Payback: this is the length of time it takes for the firm to recoup its initial investment.Average rate of return (ARR) : this is the average profit per year as a percentage of the initial investment. YearDiscount factorsCalculationPresent value0(200)1.000(200)1.000(200)1500.909500.90945.452500.826500.82641.3031000.7511000.75175.1041600.6831600.683109.2833. RatiosRatios analysis compares one figure with another to place it in context and assess its relative importance. It helps analyse data and aids decision making. Please calculate Asset Turnover, Profit Margin, Acid Test and Gearing according to the following accounts.Profit and loss for the year ending 17th June 2008Turnover (or sales) Cost of sales Gross profit Expenses Operating profit Non operating income Profit before interest and tax Interest payable Tax Profit attributable to ordinary shareholders Dividends Retained profit 40030010080200204 115 105Balance sheetAs at 17th June 2008Fixed assets Current assets Stocks Debtors Cash Less Current liabilities Assets employed (or net assets) Issued share capital of 1 shares Reserves Long term liabilities Capital employed 1901064 20102001005050200Answers:True or False Questions1.T 2.T 3. F 4.F 5.T6.T 7.T 8.F 9.T 10. F11.T 12.F 13.T 14.F 15.F16.F 17.T 18.F 19.T 20.F21.T 22.F 23.F 24.F 25. TQuestions26. To employers: channel of communication; can highlight human resource implications of any action; provide ideas/information.To employees: provide power; provide advice; provide services; provide protection.27. Factors a firm can control, but which