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Entre 432:Business Planning Question Paper
Entre 432:Business Planning
Course:Business Administration
Institution: Kenya Methodist University question papers
Exam Year:2012
KENYA METHODIST UNIVERSITY
END OF 3''RD ''TRIMESTER 2012 (EVENING) EXAMINATIONS
SCHOOL : BUSINESS AND ECONOMICS
DEPARTMENT : BUSINESS ADMINISTRATION
UNIT CODE : ENTR 432
UNIT TITLE : BUSINESS PLANNING
TIME: 2 HOURS
Instructions:
Answer question one and any other two.
Question One
It’s just a matter of time
Sarah Wairimu has been a computer analyst for five years. In his spare time he has developed a word processing software program that is more comprehensive and powerful than any on the market. Since he does not have a great deal of money. Sarah Wairimu believes the first step in producing and marketing this product should be to get the necessary venture capital. The software program has been written and trial-tested by Sarah Wairimu and a handful of friends to whom he gave the material. Two of these friends are full-time typists who told him that the program is faster and easier to use than anything on the market. Sarah Wairimu believes that these kinds of testimonials point out the profit potential of the product. However, he still needs to get financial support.
One of Sarah Wairimu friends has suggested a meeting with a investors. "These guys have all sorts of money to lend for new ventures" the friend told Sarah Wairimu. All you have to do is explain your ideas, and yours is certain to be one of the best they have seen in a long time" Sarah Wairimu agrees with his friend but believes he should not discuss the matter with a investors until he has thought through answers to the various types of questions likely to be asked. In particular, Sarah Wairimu believes he should be able to provide the investors with projected sales for the first three years and be able to explain the types of expenses that would be incurred. Once he has done this, Sarah Wairimu feels he will be ready to talk to the individual. Right now, he told his fried," it’s just a matter of time. I will think that within seven to ten days. I will be ready to present my ideas and discuss financial needs.
Discuss how business plan would be of any value to Sarah and the investors.
(6mks)
What are the common prit-falls that Sarah is likely to encounter in the business?
(8mks)
In additional to financial questions, what other critical questions is Sarah expected to be asked by the investors.
(10mks)
How would you recommend Sarah to get ready for the meeting with investors?
(6mks)
Question Two
What are the environmental factors that any entrepreneur need to consider in business planning?
(13mks)
What are the functions of business plan to a entrepreneur.
(7mks)
Question Three
Why is the important for any enterprise to describe the industry in which it intends to complete? Discuss in details your points.
(10mks)
Do you think executive summary is important in the business plan? Support your argument.
(6mks)
How can one make the business plan reading easy.
(4mks)
Question Four
Write shorts notes on the following
Marketing segment
Organisation sector
Operations
Milestone schedule
Harvest strategy
(20mks)
Question Five
Joseph deals with motorcycle. The total fixed cost of operation is Ksh. 2000,000. The selling price for a motorcycle is Ksh. 65,000 and the variable cost for the same is in 37,000.
Calculate breakeven point in units Kenya shillings and demonstrate the same using a graph. Make sure you indicate the angle of incidence, profit zone, lost zone, margin of safety and BEP.
(15mks)
If Joseph decides that, he need a 18% return on fixed cost, what would the project be worth to be invested. Calculate how many limits he must sell to realize the profit level.
(5mks)
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