Grade 9 EMS Exam
June 2015
Time: 90 Minutes
Name: __________________________
Marks: 150
Teacher: _________
INSTRUCTIONS
1
Write your name on this question paper and on the ANSWER SHEET
2
Answer ALL questions:
3
For SECTION A:
Write all your answers on the ANSWER SHEET provided at the back of the question
paper
For SECTION B:
Write all your answers on the QUESTION PAPER.
4
Read each question carefully.
5
A neat and systematic presentation of facts is required.
6
Answer in full sentences where applicable.
7
Use only a black or blue pen.
8
Non – programmable pocket calculators may be used.
THIS QUESTION PAPER CONSISTS OF 12 PAGES AND ONE ANSWER SHEET.
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Bishops EMS Exam June 2015
SECTION A
QUESTION 1 (MULTIPLE CHOICE QUESTIONS)
30 marks
For each question there are four possible answers, A, B, C and D. Choose the one you
consider correct and record your choice on the ANSWER SHEET provided.
1.1
Which of these statements best describes delegation?
A.
B.
C.
D.
1.2
Which of these is a disadvantage of the democratic leadership style?
A.
B.
C.
D.
1.3
Profits are reinvested to reduce the bank overdraft
Holding more stock (inventory) to offer better customer service
Extending the time taken to pay suppliers
Financing losses through a higher bank overdraft
The current ratio is closely connected with which term/concept?
A.
B.
C.
D.
1.7
allows for no new ideas or suggestions
is highly inflexible
allows for change to be implemented quickly
causes low staff motivation
Which of the following actions would be likely to result in a lower current ratio?
A.
B.
C.
D.
1.6
Paternalistic
Democratic
Laissez-Faire
Autocratic
A possible advantage of using authoritarian leadership style is that it…
A.
B.
C.
D.
1.5
Decision making is likely to be slower
Employees are more likely to be loyal to the business
Employees get closer to customers
Staff are motivated through involvement
A system of piece rate pay might be used by what style of leader?
A.
B.
C.
D.
1.4
Staff and directors get to know each other
Management feedback to directors
A team is created to improve quality
Authority passed down the hierarchy
Capital structure
Working capital
Long-term liquidity
Profit
What conclusion can we make from a business with a current ratio of 1.5:1?
A.
B.
C.
D.
The firm has significant liquidity problems
Current liabilities are less than current assets
The business is making R1.50 profit for every item sold
The business has a low gearing
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Bishops EMS Exam June 2015
1.8
Which of these statements about balance sheets are FALSE?
A.
B.
C.
D.
1.9
A business has a bank loan of R500 000, of which R100 000 is due to be repaid in the next 12 months.
Interest of 10% per year is charged on the loan. How much would be shown as non-current liabilities in
the balance sheet?
A.
B.
C.
D.
1.10
Corporation tax
Insurance costs
Interest costs
Dividends
Which of these actions might improve gross profit but increase overheads?
A.
B.
C.
D.
1.15
The salaries of the Board of Directors
Amounts charged by raw material suppliers
Rent and Council Tax on the office buildings
Interest charges on a long-term loan
Operating profit would include which one of the following items?
A.
B.
C.
D.
1.14
operating profit
retained profit
net profit
gross profit
Which one of these would be included in the calculation of gross profit?
A.
B.
C.
D.
1.13
Non-current assets and current assets
Share capital & retained profits
Current assets & current liabilities
Long term liabilities
The formula sales less cost of sales enables you to calculate…
A.
B.
C.
D.
1.12
R450 000
R550 000
R150 000
R400 000
The two main parts of the total equity half of the balance sheet are…
A.
B.
C.
D.
1.11
It is drawn up at a specific point in time
It shows how much profit a business is making
It shows the assets and liabilities of the business
It shows the business’ working capital
Increase selling price by 5%
Increase the shareholders dividend by 10%
Negotiate better prices from a supplier
Higher advertising for a new product
A debtor is...
A.
B.
C.
D.
an amount owed that may or may not change daily as goods are bought on credit and accounts paid
someone the business owes money to
a person with specialized knowledge of commerce and finance
someone who owes money to the business
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Bishops EMS Exam June 2015
(15 x 2 = 30)
QUESTION 2 (TRUE OF FALSE?)
10 marks
Determine which of the following statements are TRUE or FALSE. Record your choice
with an X in the next to the number (2.1 – 2.10) on your ANSWER SHEET.
2.1
2.2
2.3
2.4
2.5
2.6
2.7
2.8
2.9
2.10
A general in the army is likely to adopt an autocratic leadership style.
FW Taylor focussed on people’s emotional wellbeing when he timed them with his stopwatch.
Maslow’s main theory was that individuals have to meet basic needs before they can move higher up the
hierarchy.
Money overcomes the problem of needing a double coincidence of wants.
Changeability is one of the characteristics of good money.
If you borrowed (loaned) R200 from the bank at an annual rate of interest of 5%, you would have to pay
the R205 back to the back at the end of 1 year.
The SARB’s inflation target is 6%
Higher interest rates makes borrowing less attractive and saving more attractive.
A reduction in interest rates is an example of expansionary monetary policy.
Trade unions exist to help employers ensure that their workers are productive.
(10 x 1 = 10)
QUESTION 3 (MATCHING COLUMNS)
20 marks
Choose a description from COLUMN B that matches an item in COLUMN A. Write only
the letter (A – N) next to the question number (3.1 – 3.10) on your ANSWER SHEET.
COLUMN A
COLUMN B
3.1
Ratio analysis
A
A customer who is allowed to buys goods or services on credit.
3.2
Trade creditor
B
Swapping of goods and services produced.
3.3
Opportunity cost
C
Items owned by the business.
3.4
Overtime ban
D
An examination of accounting data through the comparison of two figures.
3.5
Leadership
E
3.6
Assets
F
3.7
Motivators
G
The profit that a business earns.
When a business buys from a supplier and then pays for those goods and
services some time later.
A document to register a company with the government.
3.8
Trade debtor
H
When workers refuse to work more than their normal hours.
3.9
Hygiene factors
I
The cost of the next best alternative forgone.
3.10
Cost of sales
J
Payments that will decrease the owner’s equity.
K
Removes sources of unhappiness among workers.
A relationship through which one person influences the behaviour or
actions of other people.
M Owner does not have a liability.
L
N
Factors that lead to increased motivation.
(10 x 2 = 20)
SECTION A TOTAL: [60]
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Bishops EMS Exam June 2015
SECTION B
QUESTION 4 (FINANCIAL STATEMENT ANALYSIS & RATIO ANALYSIS)
20 marks
Study the information in the Income Statement below and answer the questions that follow.
(R)
REVENUE (TURNOVER)
88 000
A
- COST OF SALES
= GROSS PROFIT
48 000
(2500)
- EXPENSES
+/- ONE-OFF ITEMS
2000
= OPERATING PROFIT
B
+
FINANCE INCOME
500
(250)
- FINANCE COSTS
= PROFIT BEFORE TAX
47 750
C
- TAXATION
= PROFIT FOR THE YEAR
34 380
17 190
- DIVIDENDS TO SHAREHOLDERS
= RETAINED PROFIT
17 190
4.1
Calculate the following figures…
A: 40 000
(2)
B: 47 500
(2)
C: 13 370
(2)
4.2
What percentage of the profit for the year was paid out as dividends? 50%
(2)
4.3
To whom are the dividends paid to? shareholders
4.4
Assuming the company had 40 000 shareholders, calculate the dividend per share.
(2)
Formula:
Dividends/number of ordinary shares
(1)
Calculation:
17190/40000
= 42.98c/share (1 mark for correct units – c/share)
(2)
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Bishops EMS Exam June 2015
4.5
Assuming that the share price for 1 ordinary share of the company on the Stock Exchange is 1415c,
calculate the dividend yield.
Formula:
Dividend per share/market price of share * 100
(1)
Calculation:
42.98c/share x 100 (error carried forward accepted)
1415c/share
= 3.04%
4.6
(2)
Would you be happy with the dividend yield that you have calculated above? Explain why.
NO – low comparted to interest rates that could be gained by putting money almost risk free into
the bank.
Higher risk must attract a higher reward.
Below level of inflation.
(2)
4.7
Is it possible to say, with the information provided, what this company’s working capital position is
(YES/NO)? Explain why.
NO – current assets and current liabilities are contained in the Balance Sheet which is not given.
(2)
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Bishops EMS Exam June 2015
QUESTION 5 (TRADE UNIONS)
21 marks
Read the article below and answer the questions that follow.
Foreign Nationals in South Africa Launch Trade Union
Foreign nationals living in the republic of South Africa have formed a trade union. South African United Foreigner
Trade Union (SAUFTU) was launched in Randburg Johnnesburg. Its unveiling was necessitated in the wake of
recent dislike of foreigners and the growing tension between South Africans and foreign communities.
About 2 months ago at least seven foreign nationals were killed, scores injured and over 2000 displaced in a
widespread xenophobic attacks in Durban and Johannesburg. Foreign owned shops were also attacked and
looted by some black South Africans. According to the attackers, the high unemployment rate in South Africa is
caused by the influx of foreigners whom they accused of stealing their jobs.
Below is the unedited press release by SAUFTU:
In an unprecedented move on 22, April 2015, the formation of the South African United Foreigner Trade Union
(SAUFTU) came to being. It marks the beginning of what the foreign community in the republic of South Africa
has been waiting for – a united front that is aimed at fighting for the rights and privileges of foreign nationals
resident in South Africa, promoting a peaceful co-existence between local and foreign citizens, educating foreign
nationals to be law abiding and encouraging them to be industrious as well. Though the founding of SAUFTU
has been on our drawing board for quite some time now its structural formation was necessitated as urgency in
the wake of recent xenophobia and the growing tension between South Africans and foreign communities.
Victor Nyakey
5.1
Give three aims of SAUFTA as stated in the article.
fighting for the rights and privileges of foreign nationals resident in South Africa
promoting a peaceful co-existence between local and foreign citizens
educating foreign nationals to be law abiding
encouraging them to be industrious as well.
5.2
What is the benefit to foreign nationals of SAUFTU being formed?
Present a united front to tackle issues
More likely to be taken seriously when making demands
Better organisation
5.3
(3)
What type of trade union would you consider SAUFTU to be?
General union
5.4
(3 x 1 = 3)
(2)
Explain what is meant by collective bargaining.
Collective bargaining is the process of negotiating over pay and working conditions (1) between
trade unions (1) and employers (1).
(2)
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Bishops EMS Exam June 2015
5.5
If collective bargaining fails, arbitration is often necessary. What is meant by arbitration?
Arbitration involves employers and unions (1) agreeing to let an independent ‘referee’ (1) help
them reach an agreement (1).
(2)
5.6
State and explain 3 methods of industrial action that workers could resort to if their grievances
(complaints) weren’t resolved by their trade union.
Overtime ban - when workers refuse to work more than their normal hours.
Work-to-rule - when workers comply with every rule and regulation at work in order to slow down
production.
Go-slow - working deliberately slowly.
Sit-in - when workers refuse to leave their place of work, often in an attempt to stop a firm
installing new machinery or closing down.
Strike - when workers refuse to work and will often protest, or picket, outside their place of work
to stop deliveries and non-unionized workers entering the firm.
(3 x 3 = 9)
QUESTION 6 (MONEY & MONETARY POLICY)
33 marks
Read the article below and answer the questions that follow.
SARB Keeps Interest Rates Unchanged
The central bank has kept rates on hold since July 2014 but rising inflation could change this.
JOHANNESBURG – South African Reserve Bank (SARB) Governor Lesetja Kganyago has announced that
interest rates will remain unchanged. He made the revelation in Pretoria on Thursday following a two-day
meeting of the bank’s monetary policy committee (MPC).
This means that the repo rate, the rate at which the central bank borrows money to banks, will stay on hold at
5,75 percent. Kganyago says the South African economy is stable but electricity, wage settlements and a volatile
rand threaten the country’s inflation outlook.
The governor says the inflation rate is vulnerable and should breach the central bank’s target range ceiling of six
percent in 2016. The bank’s primary mandate is to keep inflation within the __A__ to __B__ percent band.
The MPC appears to be almost divided on the issue of rates, with two members voting in favour of a 25 basis
points hike, with four against.
The SARB has kept rates on hold since July 2014, when it upped the repo rate by 25 basis points.
Dennis Georgiannis & Ray White
6.1
Fill in the blanks represented by A and B in the article.
A: 3%
(2)
B: 6%
(2)
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Bishops EMS Exam June 2015
6.2
Explain TWO factors that might have been considered in the ‘two-day meeting of the bank’s
monetary policy committee (MPC)’ before they made the decision to leave interest rates unchanged.
Is the economy growing or shrinking?
Consumer confidence and business confidence
Growth of wages
Exchange rates
1 mark for each point and 2 marks for a brief explanation of the point
6.3
(2 x 3 = 6)
How many members are there on the SARB’s monetary policy committee?
6
6.4
(2)
Based on the evidence from this article, do you think that interest rates are likely to increase or
decrease on the near future. Explain your answer using evidence from the article.
INCREASE
 2 members of MPC voted for a rise in interest rates
 Rising inflation predicted
1 mark for increase, 2 marks for a valid reason MUST be from the article
6.5
(3)
Explain TWO ways in which a change in interest rates (increase or decrease) will affect the economy.
Housing market & house prices
Effective disposable incomes of mortgage payers
Disposable income of savers
Consumer demand for credit
Business capital investment
1 mark for identifying factor, 2 marks for explanation of the effect
(2 x 3 = 6)
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Bishops EMS Exam June 2015
Look at the cartoon below and answer the questions that follow.
6.6
State and explain TWO problems of using fish as a medium of exchange.
Fixing a rate of exchange
Finding someone to swap with
Trying to save
1 mark for identifying the problem, 2 marks for explaining why this is a problem
6.7
(2 x 3 = 6)
State and explain any TWO of the characteristics of good money that will solve the problems of fish
being used as a medium of exchange.
Acceptability
Durability
Portability
Divisibility
Scarcity
1 mark for identifying the characteristic, 2 marks for explaining it
(2 x 3 = 6)
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Bishops EMS Exam June 2015
QUESTION 7 (LEADERSHIP AND MOTIVATION)
16 marks
Howard Schultz – Starbucks “We Had to Own the Mistakes”
By the time Howard Schultz stepped down as chief executive of Starbucks, in 2000, the coffee chain was one of
the world’s most recognizable brands—and on a steady trajectory of growth. Eight years later Starbucks was
suffering from a rough economy and its own strategic missteps, and Schultz felt compelled to return to the CEO
seat. His previous tenure had seen promising growth, but now he faced a challenging mission: to lead a
turnaround of the company he had built.
In an interview, Schultz said the following:
“The past two years have been transformational for the company and, candidly, for me personally. When I
returned, in January 2008, things were actually worse than I’d thought. The decisions we had to make were very
difficult, but first there had to be a time when we stood up in front of the entire company as leaders and made
almost a confession—that the leadership had failed the 180,000 Starbucks people and their families. And even
though I wasn’t the CEO, I had been around as chairman; I should have known more. I am responsible. We had
to admit to ourselves and to the people of this company that we owned the mistakes that were made. Once we
did, it was a powerful turning point. It’s like when you have a secret and get it out: The burden is off your
shoulders.”
What has been your big leadership moment since you came back?
“I decided—against the advice of many people at the time, because it had a high cost attached to it—to take
10,000 store managers to New Orleans. I knew that if I could remind people of our character and values, we
could make a difference. The conference was about galvanizing the entire leadership of the company—being
vulnerable and transparent with our employees about how desperate the situation was, and how we had to
understand that everyone must be personally accountable and responsible for the outcome of every single
customer interaction. “
7.1
Which of the 4 motivational theorists do you think that Howard Schultz’s actions mirror most? Explain
why you think this using evidence from the article.
Maslow, Herzberg, or Mayo
He has taken care of the basic needs of his employees and then has concentrated on the higher
level needs of character and values.
He has paid a lot of attention to the social needs of his employees which all 3 of the
abovementioned theorists highlighted as important
(4)
7.2
What are TWO advantages for a business of having a motivated workforce?
Increased productivity
Less labour turnover
Less absenteeism
Increased customer satisfaction through better service
1 mark for identifying advantage, 1 mark for explaining why it is advantageous
(2 x 2 = 4)
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Bishops EMS Exam June 2015
7.3
Identify the 4 styles of leadership and give an example/situation of where each of them might be
effective.
Autocratic – army
Democratic – high skilled employees
Paternalistic – young, less skilled workers looking for advice
Laissez faire – creative industries (advertising)
(4 x 2 = 8)
TOTAL SECTION B: [90]
GRAND TOTAL: [150]
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Bishops EMS Exam June 2015
Grade 9 EMS Exam
June 2015
ANSWER SHEET
Name: MEMO
Teacher: ______________
1.1
A
B
C
D
3.1
D
1.2
A
B
C
D
3.2
F
1.3
A
B
C
D
3.3
I
1.4
A
B
C
D
3.4
H
1.5
A
B
C
D
3.5
L
1.6
A
B
C
D
3.6
C
1.7
A
B
C
D
3.7
N
1.8
A
B
C
D
3.8
A
1.9
A
B
C
D
3.9
K
1.10
A
B
C
D
3.10
J
1.11
A
B
C
D
1.12
A
B
C
D
1.13
A
B
C
D
1.14
A
B
C
D
1.15
A
B
C
D
2.1
TRUE
FALSE
2.2
TRUE
FALSE
2.3
TRUE
FALSE
2.4
TRUE
FALSE
2.5
TRUE
FALSE
2.6
TRUE
FALSE
2.7
TRUE
FALSE
2.8
TRUE
FALSE
2.9
TRUE
FALSE
2.10
TRUE
FALSE
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Bishops EMS Exam June 2015