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Bbm 206: Principles Of Finance Question Paper

Bbm 206: Principles Of Finance

Course:Bachelor Of Business Management

Institution: University Of Kabianga question papers

Exam Year:2016

SCHOOL OF BUSINESS AND ECONOMICS

2015/2016 MAIN EXAMINATION PAPER
SECOND YEAR SECOND SEMESTER

BBM 206: PRINCIPLES OF FINANCE

Answer Question ONE and ANY OTHER THREE QUESTIONS

QUESTION ONE

a) Describe the overlapping and conflicting objectives of a business organization. (6 Marks)

b) Discuss the salient features of a partnership form of business organization. (5 Marks)

c) Explain what is meant by "Ploughing back of profits." Citing one advantage and disadvantage. (3 Marks)

d) Distinguish between money market and capital market. (4 Marks)

e) Discuss the main functions of commercial banks in Kenya.(3 Marks)

f) Explain the reason why the use of trade credit is popular in Kenya.(4 Marks)

QUESTION TWO

a) Assuming that you and your friend wish to start a partnership business. What do you think would be the contents of partnership deed?(6 Marks)

b) Assuming the cost of long term debt is more expensive than short term debt.Explain why business organizations use long term debt financing. (4 Marks)

c) Discuss the advantages of a partnership business over a sole proprietorship. (5 Marks)

QUESTION THREE

a) There is a large and continuing demand for finance in commerce and industry fields.Explain any five factors that affect the type of finance sought by a business. (10 Marks)

b) Explain how the Central Bank can restrict the money supply in the economy. (5 Marks)

QUESTION FOUR

a) Discuss the main functions of the Central Bank of Kenya. (10 Marks)

b) Distinguish hire purchase financing from lease-hire financing. (4 Marks)

c) Define a debenture. (1 Mark)

QUESTION FIVE

a) Discuss the differences between private and public limited companies. (10 Marks)

b) In what way does preference share capital resemble loan capital? (2 Marks)

c) Explain the role of financial institutions in investments. (3 Marks)

Bbm 206: Principles Of Finance Question Paper

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