DATABASE MANAGEMENT SYSTEMS IIBM EXAM ANSWER
CONTACT:
Database Management Systems
Section A: Objective Type & Short Questions (30 Marks)
This section consists of Multiple Choice and Short answer type questions.
Answer all the questions.
Part one carries 2 marks each & Part Two carries 5 marks each.
Part One:
Multiple choices:
1. A collection of related sets of data items along with necessary data/ information associated with
it.
a. Data
b. Information
c. Process
d. Database
2. ___________connects computers which are very remotely placed.
a. Local Area Network
b. Wide Area Network
c. Both (a) & (b)
d. None
3. A column in a table is called__________
a. Field
b. Record
c. Tuple
d. Link
4. DDL stands for ___________
a. Data Definition Language
b. Data Decision Language
c. Database Definition Language
d. None
5. SQL stands for ___________
a. Structured Query Language
b. Statement Query Language
c. Strict Query language
d. None
Examination Paper of Information Technology
7
IIBM Institute of Business Management
Part Two:
1. List the different types of DBMS.
2. Differentiate between „DBMS‟ and „RDBMS‟.
3. What do you mean by „Data Dictionary‟?
4. Differentiate between discretionary access control and mandatory access control.
Section B: Caselets (40 marks)
This section consists of Caselets.
Answer all the questions.
Each Caselet carries 20 marks.
Detailed information should form the part of your answer (Word limit 200 to 250 words).
Caselet 1
Database management system is the complex software which is aimed at the management of the
information stored in the database effectively. A high-quality management system helps organize,
manipulate, transform, store, retrieve and create data professionally. It is important that the whole
information kept in the database could be accessible, manageable, and easy for manipulation. A
successful DBMS should possess a strict logical structure, which enables everyone to find the required
data easily. The high-quality management system gives the opportunity for the user to change the
required information without any harm to the whole application. Database management systems are
extremely important today, because the humanity lives in the age of information and the whole
information is kept in databases which require professional skilful management and flexibility.
Every organization, private and public, connected with business or not possesses the necessary
information which is essential for its proper functioning. The information is supposed to be stored in
security and only the employees of an organization can have access to it. The idea of a good database
management system is to make the work of an organization easier, faster and of higher quality,
because the easier and the faster the access to the data is, the faster the work will be. Moreover, if the
information becomes out-of-date, the experts can modify it and introduce the necessary changes to
make it valid.
1. What are the roles of a database in present scenario?
Caselet 2
The most dramatic advance of the past decade in software technology has been the development of
database management systems (DBMS). There is little question about the potential of these systems
for enhancing system support to managers and users while reducing design, structuring, and
END OF SECTION A
Examination Paper of Information Technology
8
IIBM Institute of Business Management
maintenance problems. Database systems also provide a way of improving information system
flexibility by decoupling user-oriented data structures from physical storage methods. In spite of the
vast potential of database management systems, the information systems community has not reacted
with the total enthusiasm that might have been expected. Significant resistance has been encountered
in some organizations, both from users, systems managers, and programming staff members. Although
the literature on the features of database systems is substantial, there is little discussion of resistance
problems encountered during the actual implementation and use of these systems in organizations. The
purpose of this panel is to examine issues related to resistance toward DBMS in organizations. The
panel members, each of whom is experienced in this area, will examine a number of organizational,
technical, and application issues pertinent to the problem of resistance. The discussion will focus on
why this resistance has occurred and how, if at all possible, it could have been avoided. Both
behavioral and technical issues will be examined. This session should be of interest to both the
practitioner and theorist alike. Database management systems are collectively the most significant
software product advance in the last decade. There is little question about the potential of these
systems for improving data management in organizations. Yet not all persons show a level of
enthusiasm for these systems that their capabilities would merit. Users and systems persons alike have
been known to resist acquisition and/or introduction of database management systems, sometimes
strongly. In the discussion that follows, the problem of resistance as it applies to database management
systems is introduced. The intent is to raise issues for research and investigation rather than to provide
concrete answers to problems.
1. Discuss various anomalies in databases. How would you improve data management in
organizations?
Section C: Applied Theory (30 marks)
This section consists of Long Questions.
Answer all the questions.
Each question carries 15 marks.
Detailed information should form the part of your answer (Word limit 150 to 200 words).
1. What do you understand by relational data model? Explain relational constraints and relational
database schemas
2. What are the similarities and dissimilarities in the software development life cycle and database
development life cycle?
S-2-300813
END OF SECTION B
END OF SECTION C
Examination Paper of Enterprise Resource Planning
1
IIBM Institute of Business Management
IIBM Institute of Business Management
Examination Paper MM.100
Enterprise Resource Planning
Subject Code-C102
Section A: Objective Type & Short Questions (30 marks)
This section consists of Multiple Choice questions & Short Answer type questions.
Answer all the questions.
Part one questions carry 1 mark each & Part Two questions carry 5 marks each.
Part One:
Multiple Choices:
1. Enterprise Resource Planning is:
a. Computer System
b. Manufacturing organization
c. Method of effective planning of all the resources in an organization
d. None of the above
2. Enterprise Resource Planning vendors are those people:
a. Who are experts in administration and management of projects
b. Who have developed the ERP packages
c. Who uses the ERP system
d. None of the above
3. Interviewing and cost justification is tool and technique of:
a. Design step of ERP
b. Implementation step of ERP
c. Requirement analysis of ERP
d. Planning step of ERP
4. Support re-engineering processes to fit the software systems best practice is approach of:
a. Re-engineering approach
b. Customizing approach
c. Rational approach
d. None of the above
5. Process of tracking customer contacts and providing the customer with a price quote is:
a. Inventory sourcing
b. Sales order processing
c. Pre-sales
d. None of the above
Examination Paper of Enterprise Resource Planning
2
IIBM Institute of Business Management
6. The difficulty in creating an audit trial of transactions when multiple transactions use multiple
database is associated with:
a. Product profitability sub-system
b. Finished goods inventory sub-system
c. Management reporting sub-system
d. Creating an audit trial sub-system
7. Differences occur between standard costs and actual costs is problem associated with:
a. Accounting
b. Production
c. Purchasing / Materials Management
d. None of the above
8. MRP in Enterprise resource planning stands for:
a. Maximum retail price
b. Material requirement planning
c. Management requirement planning
d. None of the above
9. Process of providing status of purchase order comes in a category of:
a. Purchase order follow-up
b. Source determination
c. Determine requirement
d. Invoice verification
10. Resource failure occurs when:
a. People clashes
b. Inability to communicate with the system user
c. Poor specification of requirements
d. Conflicts of people, time and project scope due to insufficient personnel
Part Two:
1. What are the advantages of the re-engineering method of implementing ERP?
2. What are the benefits reported from implementing ERP?
3. Write a short note on “Credit Management”.
4. Define Material Requirements Planning.
END OF SECTION A
Examination Paper of Enterprise Resource Planning
3
IIBM Institute of Business Management
Section B: Caselets (40 marks)
This section consists of Caselets.
Answer all the questions.
Each Caselet carries 20 marks.
Detailed information should form the part of your answer (Word limit 150 to 200 words).
Caselet 1
Tech Knowledge is a start-up founded in 1997 by Robert Thyer. The company is a distributer of
presentation technologies, including computer based projection systems, video equipment, and
display technologies. The firm has 25 employees and does $5 million in sales. It is growing rapidly.
The owner, Robert Thyer, would like to net source the back-office functions of the firm because the
company does not have an internal IT capability. The applications to be net sourced would include
sales and distribution, financial accounting, and inventory management.
Tech Knowledge would like to source SAP or another ERP vendor via a hosting arrangement. It
does not expect to do much customization, and it does not have any legacy systems.
Questions:
1. What factors should it use to evaluate each of these potential hosts?
2. What controls should be in place to monitor the hosting arrangement?
Caselet 2
ITM is a company specializing in network implementation and management. It provides networking
services to mid-sized companies, which do not have an internal networking analyst or IT, manager.
These organizations include real estate companies, law offices, medical practices, architectural /
engineering firms, construction companies, business services providers, country clubs, community
organizations, and churches.
ITM uses a legacy accounting system to handle its financial accounting and financial management
functions. It has added on a billing package for client services. The next step is to obtain a CRM
capability to manage information about current and prospective customers more effectively.
You have been assigned to identify potential sources for a net-sourcing arrangement with an ERP
vendor, which provides CRM capabilities.
Questions:
1. Identify potential sources of software.
2. Determine five criteria you will recommend be used to evaluate each of alternative providers.
END OF SECTION B
Examination Paper of Enterprise Resource Planning
4
IIBM Institute of Business Management
Section C: Applied Theory (30 marks)
This section consists of Applied Theory Questions.
Answer all the questions.
Each question carries 15 marks.
Detailed information should form the part of your answer (Word limit 200 to 250 words).
1. Explain in brief Sales and Marketing Modules in ERP System.
2. What are the different development process in ERP systems and write a detailed note on it?
END OF SECTION C
S-2-250613
Examination Paper of Financial Management
IIBM Institute of Business Management 1
IIBM Institute of Business Management
Examination Paper MM.100
Financial Management
Subject Code-B-103
Section A: Objective Type & Short Questions (30 marks)
This section consists of multiple choice & Short Notes.
Answer all the questions.
Part One carries 1 mark each & Part two carries 5 marks each.
Part one:
Multiple choices:
1. The approach focused mainly on the financial problems of corporate enterprise.
a. Ignored non-corporate enterprise
b. Ignored working capital financing
c. External approach
d. Ignored routine problems
2. These are those shares, which can be redeemed or repaid to the holders after a lapse of the
stipulated period.
a. Cumulative preference shares
b. Non-cumulative preference shares
c. Redeemable preference shares
d. Perpetual shares
3. This type of risk arises from changes in environmental regulations, zoning requirements, fees,
licenses and most frequently taxes.
a. Political risk
b. Domestic risk
c. International risk
d. Industry risk
4. It is the cost of capital that is expected to raise funds to finance a capital budget or investment
proposal.
a. Future cost
b. Specific cost
c. Spot cost
d. Book cost
5. This concept is helpful in formulating a sound & economical capital structure for a firm.
a. Financial performance appraisal
b. Investment evaluation
c. Designing optimal corporate capital structure
d. None of the above
Examination Paper of Financial Management
IIBM Institute of Business Management 2
6. It is the minimum required rate of return needed to justify the use of capital.
a. From investors
b. Firms point
c. Capital expenditure point
d. Cost of capital
7. It arises when there is a conflict of interest among owners, debenture holders and the
management.
a. Seasonal variation
b. Degree of competition
c. Industry life cycle
d. Agency costs
8. Some guidelines on shares & debentures issued by the government that are very important for the
constitution of the capital structure are:
a. Legal requirement
b. Purpose of finance
c. Period of finance
d. Requirement of investors
9. It is that portion of an investments total risk that results from change in the financial integrity of
the investment.
a. Bull- bear market risk
b. Default risk
c. International risk
d. Liquidity risk
10. _____________ measure the systematic risk of a security that cannot be avoided through
diversification.
a. Beta
b. Gamma
c. Probability distribution
d. Alpha
Part Two:
1. What do you understand by wealth maximization?
2. Discuss the concept of factoring.
3. Define Annuity.
4. What is the Difference between NPV and IRR?
END OF SECTION A
Examination Paper of Financial Management
IIBM Institute of Business Management 3
Section B: Case lets (40 marks)
This section consists of Case lets.
Answer all the questions.
Each Case let carries 20 marks.
Detailed information should form the part of your answer (Word limit 150 to 200 words).
Caselet 1
Case1: Credit Decision - Agarwal Case
On August 30, 2006, Agarwal Cast Company Inc., applied for a $200,000 loan from the main office
of the National bank of New York. The application was forwarded to the bank's commercial loan
department. Gupta, the President and Principal Stockholder of Agarwal cast, applied for the loan in
person. He told the loan officer that he had been in business since February 1976, but that he had
considerable prior experience in flooring and carpets since he had worked as an individual contractor
for the past 20 year. Most of this time, he had worked in Frankfert and Michigan. He finally decided
to "work for himself" and he formed the company with Berry Hook, a former co-worker. This
information seemed to be consistent with the Dun and Bradstreet report obtained by the bank
According to Gupta, the purpose of the loan was to assist him in carrying his receivables until they
could be collected. He explained that the flooring business required him to spend considerable cash to
purchase materials but his customers would not pay until the job was done. Since he was relatively
new in the business, he did not feel that he could compete if he had to require a sizeable deposit or
payment in advance. Instead, he could quote for higher profits, if he were willing to wait until
completion of the job for payment. To show that his operation was sound, he included a list of
customers and projects with his loan application. He also included a list of current receivables.
Gupta told the loan officer that he had monitored his firm's financial status closely and that he had
financial reports prepared every six months. He said that the would send a copy to the bank. In
addition, he was willing to file a personal financial statement with the bank.
Question:
1. Prepare your recommendation on Agarwal Cast Company
Caselet 2
This case has been framed in order to test the skills in evaluating a credit request and reaching a
correct decision. Perluence International is large manufacturer of petroleum and rubber-based
products used in a variety of commercial applications in the fields of transportation, electronics, and
heavy manufacturing. In the northwestern United States, many of the Perluence products are
marketed by a wholly-owned subsidiary, Bajaj Electronics Company. Operating from a headquarters
and warehouse facility in San Antonio, Strand Electronics has 950 employees and handles a volume
of $85 million in sales annually. About $6 million of the sales represents items manufactured by
Perluence. Gupta is the credit manager at Bajaj electronics. He supervises five employees who handle
credit application and collections on 4,600 accounts. The accounts range in size from $120 to
$85,000. The firm sells on varied terms, with 2/10, net 30 mostly. Sales fluctuate seasonally and the
Examination Paper of Financial Management
IIBM Institute of Business Management 4
average collection period tends to run 40 days. Bad-debt losses are less than 0.6 per cent of sales.
Gupta is evaluating a credit application from Booth Plastics, Inc., a wholesale supply dealer serving
the oil industry. The company was founded in 1977 by Neck A. Booth and has grown steadily since
that time. Bajaj Electronics is not selling any products to Booth Plastics and had no previous contact
with Neck Booth. Bajaj Electronics purchased goods from Perluence International under the same
terms and conditions as Perluence used when it sold to independent customers. Although Bajaj
Electronics generally followed Perluence in setting its prices, the subsidiary operated independently
and could adjust price levels to meet its own marketing strategies. The Perluence's cost-accounting
department estimated a 24 per cent markup as the average for items sold to Pucca Electronics. Bajaj
Electronics, in turn, resold the items to yield a 17 per cent markup. It appeared that these percentages
would hold on any sales to Booth Plastics. Bajaj Electronics incurred out-of pocket expenses that
were not considered in calculating the 17 per cent markup on its items. For example, the contact with
Booth Plastics had been made by James, the salesman who handled the Glaveston area. James would
receive a 3 per cent commission on all sales made Booth Plastics, a commission that would be paid
whether or not the receivable was collected. James would, of course, be willing to assist in collecting
any accounts that he had sold. In addition to the sales commission, the company would incur variable
costs as a result of handling the merchandise for the new account. As a general guideline,
warehousing and other administrative variable costs would run 3 per cent sales. Gupta Holmstead
approached all credit decisions in basically the same manner. First of all, he considered the potential
profit from the account. James had estimated first-year sales to Booth Plastics of $65,000. Assuming
that Neck Booth took the, 3 per cent discount. Bajaj Electronics would realize a 17 per cent markup
on these sales since the average markup was calculated on the basis of the customer taking the
discount. If Neck Booth did not take the discount, the markup would be slightly higher, as would the
cost of financing the receivable for the additional period of time. In addition to the potential profit
from the account, Gupta was concerned about his company's exposure. He knew that weak customers
could become bad debts at any time and therefore, required a vigorous collection effort whenever
their accounts were overdue. His department probably spent three times as much money and effort
managing a marginal account as compared to a strong account. He also figured that overdue and
uncollected funds had to be financed by Bajaj Electronics at a rate of 18 per cent. All in all, slow -
paying or marginal accounts were very costly to Bajaj Electronics. With these considerations in mind,
Gupta began to review the credit application for Booth Plastics.
Questions:
1. How would you judge the potential profit of Bajaj Electronics on the first year of sales to Booth
Plastics and give your views to increase the profit?
2. Suggestion regarding Credit limit. Should it be approved or not, what should be the amount of
credit limit that electronics give to Booth Plastics.
END OF SECTION B
Examination Paper of Financial Management
IIBM Institute of Business Management 5
Section C: Applied Theory (30 marks)
This section consists of Applied Theory Questions.
Answer all the questions.
Each question carries 15 marks.
Detailed information should form the part of your answer (Word limit 200-250 words).
1. Define Capital Structure. Discuss the important factors that should be considered while
determining Capital Structure.
2. What is the concept of working capital? Discuss the dangers of inadequate as well as excessive
working capital.
END OF SECTION C
S-2-250613
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Database Management Systems
Section A: Objective Type & Short Questions (30 Marks)
This section consists of Multiple Choice and Short answer type questions.
Answer all the questions.
Part one carries 2 marks each & Part Two carries 5 marks each.
Part One:
Multiple choices:
1. A collection of related sets of data items along with necessary data/ information associated with
it.
a. Data
b. Information
c. Process
d. Database
2. ___________connects computers which are very remotely placed.
a. Local Area Network
b. Wide Area Network
c. Both (a) & (b)
d. None
3. A column in a table is called__________
a. Field
b. Record
c. Tuple
d. Link
4. DDL stands for ___________
a. Data Definition Language
b. Data Decision Language
c. Database Definition Language
d. None
5. SQL stands for ___________
a. Structured Query Language
b. Statement Query Language
c. Strict Query language
d. None
Examination Paper of Information Technology
7
IIBM Institute of Business Management
Part Two:
1. List the different types of DBMS.
2. Differentiate between „DBMS‟ and „RDBMS‟.
3. What do you mean by „Data Dictionary‟?
4. Differentiate between discretionary access control and mandatory access control.
Section B: Caselets (40 marks)
This section consists of Caselets.
Answer all the questions.
Each Caselet carries 20 marks.
Detailed information should form the part of your answer (Word limit 200 to 250 words).
Caselet 1
Database management system is the complex software which is aimed at the management of the
information stored in the database effectively. A high-quality management system helps organize,
manipulate, transform, store, retrieve and create data professionally. It is important that the whole
information kept in the database could be accessible, manageable, and easy for manipulation. A
successful DBMS should possess a strict logical structure, which enables everyone to find the required
data easily. The high-quality management system gives the opportunity for the user to change the
required information without any harm to the whole application. Database management systems are
extremely important today, because the humanity lives in the age of information and the whole
information is kept in databases which require professional skilful management and flexibility.
Every organization, private and public, connected with business or not possesses the necessary
information which is essential for its proper functioning. The information is supposed to be stored in
security and only the employees of an organization can have access to it. The idea of a good database
management system is to make the work of an organization easier, faster and of higher quality,
because the easier and the faster the access to the data is, the faster the work will be. Moreover, if the
information becomes out-of-date, the experts can modify it and introduce the necessary changes to
make it valid.
1. What are the roles of a database in present scenario?
Caselet 2
The most dramatic advance of the past decade in software technology has been the development of
database management systems (DBMS). There is little question about the potential of these systems
for enhancing system support to managers and users while reducing design, structuring, and
END OF SECTION A
Examination Paper of Information Technology
8
IIBM Institute of Business Management
maintenance problems. Database systems also provide a way of improving information system
flexibility by decoupling user-oriented data structures from physical storage methods. In spite of the
vast potential of database management systems, the information systems community has not reacted
with the total enthusiasm that might have been expected. Significant resistance has been encountered
in some organizations, both from users, systems managers, and programming staff members. Although
the literature on the features of database systems is substantial, there is little discussion of resistance
problems encountered during the actual implementation and use of these systems in organizations. The
purpose of this panel is to examine issues related to resistance toward DBMS in organizations. The
panel members, each of whom is experienced in this area, will examine a number of organizational,
technical, and application issues pertinent to the problem of resistance. The discussion will focus on
why this resistance has occurred and how, if at all possible, it could have been avoided. Both
behavioral and technical issues will be examined. This session should be of interest to both the
practitioner and theorist alike. Database management systems are collectively the most significant
software product advance in the last decade. There is little question about the potential of these
systems for improving data management in organizations. Yet not all persons show a level of
enthusiasm for these systems that their capabilities would merit. Users and systems persons alike have
been known to resist acquisition and/or introduction of database management systems, sometimes
strongly. In the discussion that follows, the problem of resistance as it applies to database management
systems is introduced. The intent is to raise issues for research and investigation rather than to provide
concrete answers to problems.
1. Discuss various anomalies in databases. How would you improve data management in
organizations?
Section C: Applied Theory (30 marks)
This section consists of Long Questions.
Answer all the questions.
Each question carries 15 marks.
Detailed information should form the part of your answer (Word limit 150 to 200 words).
1. What do you understand by relational data model? Explain relational constraints and relational
database schemas
2. What are the similarities and dissimilarities in the software development life cycle and database
development life cycle?
S-2-300813
END OF SECTION B
END OF SECTION C
Examination Paper of Enterprise Resource Planning
1
IIBM Institute of Business Management
IIBM Institute of Business Management
Examination Paper MM.100
Enterprise Resource Planning
Subject Code-C102
Section A: Objective Type & Short Questions (30 marks)
This section consists of Multiple Choice questions & Short Answer type questions.
Answer all the questions.
Part one questions carry 1 mark each & Part Two questions carry 5 marks each.
Part One:
Multiple Choices:
1. Enterprise Resource Planning is:
a. Computer System
b. Manufacturing organization
c. Method of effective planning of all the resources in an organization
d. None of the above
2. Enterprise Resource Planning vendors are those people:
a. Who are experts in administration and management of projects
b. Who have developed the ERP packages
c. Who uses the ERP system
d. None of the above
3. Interviewing and cost justification is tool and technique of:
a. Design step of ERP
b. Implementation step of ERP
c. Requirement analysis of ERP
d. Planning step of ERP
4. Support re-engineering processes to fit the software systems best practice is approach of:
a. Re-engineering approach
b. Customizing approach
c. Rational approach
d. None of the above
5. Process of tracking customer contacts and providing the customer with a price quote is:
a. Inventory sourcing
b. Sales order processing
c. Pre-sales
d. None of the above
Examination Paper of Enterprise Resource Planning
2
IIBM Institute of Business Management
6. The difficulty in creating an audit trial of transactions when multiple transactions use multiple
database is associated with:
a. Product profitability sub-system
b. Finished goods inventory sub-system
c. Management reporting sub-system
d. Creating an audit trial sub-system
7. Differences occur between standard costs and actual costs is problem associated with:
a. Accounting
b. Production
c. Purchasing / Materials Management
d. None of the above
8. MRP in Enterprise resource planning stands for:
a. Maximum retail price
b. Material requirement planning
c. Management requirement planning
d. None of the above
9. Process of providing status of purchase order comes in a category of:
a. Purchase order follow-up
b. Source determination
c. Determine requirement
d. Invoice verification
10. Resource failure occurs when:
a. People clashes
b. Inability to communicate with the system user
c. Poor specification of requirements
d. Conflicts of people, time and project scope due to insufficient personnel
Part Two:
1. What are the advantages of the re-engineering method of implementing ERP?
2. What are the benefits reported from implementing ERP?
3. Write a short note on “Credit Management”.
4. Define Material Requirements Planning.
END OF SECTION A
Examination Paper of Enterprise Resource Planning
3
IIBM Institute of Business Management
Section B: Caselets (40 marks)
This section consists of Caselets.
Answer all the questions.
Each Caselet carries 20 marks.
Detailed information should form the part of your answer (Word limit 150 to 200 words).
Caselet 1
Tech Knowledge is a start-up founded in 1997 by Robert Thyer. The company is a distributer of
presentation technologies, including computer based projection systems, video equipment, and
display technologies. The firm has 25 employees and does $5 million in sales. It is growing rapidly.
The owner, Robert Thyer, would like to net source the back-office functions of the firm because the
company does not have an internal IT capability. The applications to be net sourced would include
sales and distribution, financial accounting, and inventory management.
Tech Knowledge would like to source SAP or another ERP vendor via a hosting arrangement. It
does not expect to do much customization, and it does not have any legacy systems.
Questions:
1. What factors should it use to evaluate each of these potential hosts?
2. What controls should be in place to monitor the hosting arrangement?
Caselet 2
ITM is a company specializing in network implementation and management. It provides networking
services to mid-sized companies, which do not have an internal networking analyst or IT, manager.
These organizations include real estate companies, law offices, medical practices, architectural /
engineering firms, construction companies, business services providers, country clubs, community
organizations, and churches.
ITM uses a legacy accounting system to handle its financial accounting and financial management
functions. It has added on a billing package for client services. The next step is to obtain a CRM
capability to manage information about current and prospective customers more effectively.
You have been assigned to identify potential sources for a net-sourcing arrangement with an ERP
vendor, which provides CRM capabilities.
Questions:
1. Identify potential sources of software.
2. Determine five criteria you will recommend be used to evaluate each of alternative providers.
END OF SECTION B
Examination Paper of Enterprise Resource Planning
4
IIBM Institute of Business Management
Section C: Applied Theory (30 marks)
This section consists of Applied Theory Questions.
Answer all the questions.
Each question carries 15 marks.
Detailed information should form the part of your answer (Word limit 200 to 250 words).
1. Explain in brief Sales and Marketing Modules in ERP System.
2. What are the different development process in ERP systems and write a detailed note on it?
END OF SECTION C
S-2-250613
Examination Paper of Financial Management
IIBM Institute of Business Management 1
IIBM Institute of Business Management
Examination Paper MM.100
Financial Management
Subject Code-B-103
Section A: Objective Type & Short Questions (30 marks)
This section consists of multiple choice & Short Notes.
Answer all the questions.
Part One carries 1 mark each & Part two carries 5 marks each.
Part one:
Multiple choices:
1. The approach focused mainly on the financial problems of corporate enterprise.
a. Ignored non-corporate enterprise
b. Ignored working capital financing
c. External approach
d. Ignored routine problems
2. These are those shares, which can be redeemed or repaid to the holders after a lapse of the
stipulated period.
a. Cumulative preference shares
b. Non-cumulative preference shares
c. Redeemable preference shares
d. Perpetual shares
3. This type of risk arises from changes in environmental regulations, zoning requirements, fees,
licenses and most frequently taxes.
a. Political risk
b. Domestic risk
c. International risk
d. Industry risk
4. It is the cost of capital that is expected to raise funds to finance a capital budget or investment
proposal.
a. Future cost
b. Specific cost
c. Spot cost
d. Book cost
5. This concept is helpful in formulating a sound & economical capital structure for a firm.
a. Financial performance appraisal
b. Investment evaluation
c. Designing optimal corporate capital structure
d. None of the above
Examination Paper of Financial Management
IIBM Institute of Business Management 2
6. It is the minimum required rate of return needed to justify the use of capital.
a. From investors
b. Firms point
c. Capital expenditure point
d. Cost of capital
7. It arises when there is a conflict of interest among owners, debenture holders and the
management.
a. Seasonal variation
b. Degree of competition
c. Industry life cycle
d. Agency costs
8. Some guidelines on shares & debentures issued by the government that are very important for the
constitution of the capital structure are:
a. Legal requirement
b. Purpose of finance
c. Period of finance
d. Requirement of investors
9. It is that portion of an investments total risk that results from change in the financial integrity of
the investment.
a. Bull- bear market risk
b. Default risk
c. International risk
d. Liquidity risk
10. _____________ measure the systematic risk of a security that cannot be avoided through
diversification.
a. Beta
b. Gamma
c. Probability distribution
d. Alpha
Part Two:
1. What do you understand by wealth maximization?
2. Discuss the concept of factoring.
3. Define Annuity.
4. What is the Difference between NPV and IRR?
END OF SECTION A
Examination Paper of Financial Management
IIBM Institute of Business Management 3
Section B: Case lets (40 marks)
This section consists of Case lets.
Answer all the questions.
Each Case let carries 20 marks.
Detailed information should form the part of your answer (Word limit 150 to 200 words).
Caselet 1
Case1: Credit Decision - Agarwal Case
On August 30, 2006, Agarwal Cast Company Inc., applied for a $200,000 loan from the main office
of the National bank of New York. The application was forwarded to the bank's commercial loan
department. Gupta, the President and Principal Stockholder of Agarwal cast, applied for the loan in
person. He told the loan officer that he had been in business since February 1976, but that he had
considerable prior experience in flooring and carpets since he had worked as an individual contractor
for the past 20 year. Most of this time, he had worked in Frankfert and Michigan. He finally decided
to "work for himself" and he formed the company with Berry Hook, a former co-worker. This
information seemed to be consistent with the Dun and Bradstreet report obtained by the bank
According to Gupta, the purpose of the loan was to assist him in carrying his receivables until they
could be collected. He explained that the flooring business required him to spend considerable cash to
purchase materials but his customers would not pay until the job was done. Since he was relatively
new in the business, he did not feel that he could compete if he had to require a sizeable deposit or
payment in advance. Instead, he could quote for higher profits, if he were willing to wait until
completion of the job for payment. To show that his operation was sound, he included a list of
customers and projects with his loan application. He also included a list of current receivables.
Gupta told the loan officer that he had monitored his firm's financial status closely and that he had
financial reports prepared every six months. He said that the would send a copy to the bank. In
addition, he was willing to file a personal financial statement with the bank.
Question:
1. Prepare your recommendation on Agarwal Cast Company
Caselet 2
This case has been framed in order to test the skills in evaluating a credit request and reaching a
correct decision. Perluence International is large manufacturer of petroleum and rubber-based
products used in a variety of commercial applications in the fields of transportation, electronics, and
heavy manufacturing. In the northwestern United States, many of the Perluence products are
marketed by a wholly-owned subsidiary, Bajaj Electronics Company. Operating from a headquarters
and warehouse facility in San Antonio, Strand Electronics has 950 employees and handles a volume
of $85 million in sales annually. About $6 million of the sales represents items manufactured by
Perluence. Gupta is the credit manager at Bajaj electronics. He supervises five employees who handle
credit application and collections on 4,600 accounts. The accounts range in size from $120 to
$85,000. The firm sells on varied terms, with 2/10, net 30 mostly. Sales fluctuate seasonally and the
Examination Paper of Financial Management
IIBM Institute of Business Management 4
average collection period tends to run 40 days. Bad-debt losses are less than 0.6 per cent of sales.
Gupta is evaluating a credit application from Booth Plastics, Inc., a wholesale supply dealer serving
the oil industry. The company was founded in 1977 by Neck A. Booth and has grown steadily since
that time. Bajaj Electronics is not selling any products to Booth Plastics and had no previous contact
with Neck Booth. Bajaj Electronics purchased goods from Perluence International under the same
terms and conditions as Perluence used when it sold to independent customers. Although Bajaj
Electronics generally followed Perluence in setting its prices, the subsidiary operated independently
and could adjust price levels to meet its own marketing strategies. The Perluence's cost-accounting
department estimated a 24 per cent markup as the average for items sold to Pucca Electronics. Bajaj
Electronics, in turn, resold the items to yield a 17 per cent markup. It appeared that these percentages
would hold on any sales to Booth Plastics. Bajaj Electronics incurred out-of pocket expenses that
were not considered in calculating the 17 per cent markup on its items. For example, the contact with
Booth Plastics had been made by James, the salesman who handled the Glaveston area. James would
receive a 3 per cent commission on all sales made Booth Plastics, a commission that would be paid
whether or not the receivable was collected. James would, of course, be willing to assist in collecting
any accounts that he had sold. In addition to the sales commission, the company would incur variable
costs as a result of handling the merchandise for the new account. As a general guideline,
warehousing and other administrative variable costs would run 3 per cent sales. Gupta Holmstead
approached all credit decisions in basically the same manner. First of all, he considered the potential
profit from the account. James had estimated first-year sales to Booth Plastics of $65,000. Assuming
that Neck Booth took the, 3 per cent discount. Bajaj Electronics would realize a 17 per cent markup
on these sales since the average markup was calculated on the basis of the customer taking the
discount. If Neck Booth did not take the discount, the markup would be slightly higher, as would the
cost of financing the receivable for the additional period of time. In addition to the potential profit
from the account, Gupta was concerned about his company's exposure. He knew that weak customers
could become bad debts at any time and therefore, required a vigorous collection effort whenever
their accounts were overdue. His department probably spent three times as much money and effort
managing a marginal account as compared to a strong account. He also figured that overdue and
uncollected funds had to be financed by Bajaj Electronics at a rate of 18 per cent. All in all, slow -
paying or marginal accounts were very costly to Bajaj Electronics. With these considerations in mind,
Gupta began to review the credit application for Booth Plastics.
Questions:
1. How would you judge the potential profit of Bajaj Electronics on the first year of sales to Booth
Plastics and give your views to increase the profit?
2. Suggestion regarding Credit limit. Should it be approved or not, what should be the amount of
credit limit that electronics give to Booth Plastics.
END OF SECTION B
Examination Paper of Financial Management
IIBM Institute of Business Management 5
Section C: Applied Theory (30 marks)
This section consists of Applied Theory Questions.
Answer all the questions.
Each question carries 15 marks.
Detailed information should form the part of your answer (Word limit 200-250 words).
1. Define Capital Structure. Discuss the important factors that should be considered while
determining Capital Structure.
2. What is the concept of working capital? Discuss the dangers of inadequate as well as excessive
working capital.
END OF SECTION C
S-2-250613
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