C03-Fundamentals of business mathematics

Sa

Sample Exam Paper

Question 1
A retailer buys a box of a product, which nominally contains Q units. The planned selling price of each unit is P. If both P and Q have been rounded to 10%, then the maximum rounding error in total revenue is: A. B. C. D. 10% 20% 21% 0.1Q x 0.1P

Question 2
The telephone costs of a company last year were 10,000, including Value Added Tax (VAT) at 17.5%. It has been decided to allocate 60% of these telephone costs, excluding VAT, to Central Administration and to allocate 30% of the remainder, excluding VAT, to Finance. The telephone costs (to the nearest ) to be allocated to Finance will be closest to:

Question 3
The following formula is used in the financial analysis of dividends: R= (V/P)+G When the formula is rearranged, with P in terms of the other variables, P is equal to: A. B. C. D. (R/V)-G (R-G)/V (V/R)-G V/R-G

Question 4
A companys market value has fallen from 32 billion to 2 billion in four years. The average annual percentage decline in market value is closet to: A. B. C. D. 20% 40% 50% 100%

1 Updated: Jan 2013

C03-Fundamentals of business mathematics

Sa

Question 5
If 3x + 2y = 6 and x 2y = 2. The solution in the form (x,y), to the above simultaneous equations is

Question 6
The estimated total cost of each unit of a product is 12 ( 1), and the estimated selling price of each unit is 20 ( 3). The estimate profit per unit will be: A. B. C. D. 8 ( 4) 8 ( 3) 8 ( 2) 8 ( 1)

Question 7
A traders weekly costs, TC, are less than or equal to $100. Weekly revenue, R, is a minimum of $120. Which one of the following statements is true? A. B. C. D. TC < $100 and R > $120 and R > TC TC $100 and R $120 and TC > R TC $100 and R > $120 and R < TC TC $100 and R $120 and R > TC

Question 8
In a group of 100 players, 30 are male, 55 are a pro level, and 6 of the males are at beginner level. A player chosen at random is female. What is the probability that she is not a pro level? A. B. C. D. .80 .56 .44 .20

2 Updated: Jan 2013

C03-Fundamentals of business mathematics

Sa

Question 9
Three people are carrying out independent functions during an internal audit. It is known that in each of the three separate areas being investigated there is a serious error. From past experience, it is estimated that the (independent) chances of the individuals finding the serious error in their area are 0.8, 0.7 and 0.6 The probability that at least one of the serious errors will be found is:

A. B. C. D.

(0.8 x 0.3 x 0.4) + (0.2 x 0.7 x 0.4) + (0.2 x 0.3 x 0.6) 1- (0.2 x 0.3 x 0.4) 1- (0.8 x 0.7 x 0.6) None of the above

Question 10
Mail order buyers of Brand X, classified by area and age (years) Area/Age North South East West Total Under 25 400 600 200 400 1,600 25-44 350 550 150 350 1,400 45-64 300 500 100 300 1,200 65+ 250 450 50 250 1,000

The probability that a randomly-selected Brand X buyer is from the North and under 25 years of age is (to 2 decimal places) A. B. C. D. 0.08 0.25 0.31 0.56

3 Updated: Jan 2013

C03-Fundamentals of business mathematics

Sa

Question 11
Mail order buyers of Brand X, classified by area and age (years)

Area/Age North South East West Total

Under 25 400 600 200 400 1,600

25-44 350 550 150 350 1,400

45-64 300 500 100 300 1,200

65+ 250 450 50 250 1,000

The probability that a randomly-selected Brand X buyer is from the West or under 25 years of age is (to 2 decimal places).

A. B. C. D.

0.08 0.48 0.56 None of these

Question 12
In an internal audit of 200 invoices, the following numbers of errors were discovered: Number of Errors 0 1 2 3 4 5 6 or more Number of Invoices 60 30 40 40 20 10 0

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C03-Fundamentals of business mathematics

Sa The expected value of the number of errors per invoice is: A. B. C. D. 1.8 2 2.1 3

Question 13
The following information shows the daily sales revenue (000) of a company producing a particular item of clothing, over a period of two years: Sales 000 0 to under 10 10 to under 20 20 to under 30 30 to under 40 40 to under 50 Frequency % 5 20 60 10 5

The expected daily sales in (000) is

Question 14
A broker has estimated the profits or losses for a particular investment and their respective probabilities as follows:

Profit (000) -1 1 3 5

Probability .1 .3 .4 .2

The expected profit (000) on this investment will be

5 Updated: Jan 2013

C03-Fundamentals of business mathematics

Sa

Question 15
A cumulative frequency distribution of weekly spending is as follows: Weekly spending Less than $75 Less than $100 Less than $150 Less than $200 Less than $300 Cumulative frequency 50 140 180 200 220

A. How many spent between $150 to $200 B. How many spent less than $300 and more then $200

Question 16
In a particular country, a tax at 40% is payable on any gains on house sales not due to inflation. A house was purchased there for $75,000 and sold for $250,000. Over the same period, the countrys house price (inflation) index rose from 120 to 240. The tax (to the nearest $) payable on the house sale is?

6 Updated: Jan 2013

C03-Fundamentals of business mathematics

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Question 17
The number of rejects from 50 samples of the same size is as follows: Number of rejects in each sample 0 1 2 3 4 5 Number of samples (frequency of reject) 5 10 10 20 5 0

The arithmetic mean number of rejects per sample is: A. B. C. D. 2.2 2.4 3 20

Question 18
For the following set of ten numbers, the median is 15: 10 11 12 13 14 16 17 18 19 20+X This statement is false of X equals: A. B. C. D. -5 -4 -3 -2

7 Updated: Jan 2013

C03-Fundamentals of business mathematics

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Question 19
Details of an index number are given below: Group Food & Drink Travel & Leisure Housing All items Base 100 100 100 100 Weight 50 30 20 100 Index 140 130 120 ?

The All items index number is closest to: A. B. C. D. 130 133 135 146

Question 20
1998 100 1999 105 2000 110 2001 115

Weekly money wages index 1998 = 100 Index of inflation 1990 = 100

180

190

200

210

Read the following statements about the period 1998 to 2001: (i) Inflation has increased by more than money wages (ii) Money wages have increased by 5% each year, year on year Which one of the following is true? A. B. C. D. (i) only (ii) only Both (i) and (ii) Neither (i) or (ii)

8 Updated: Jan 2013

C03-Fundamentals of business mathematics

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Question 21
An index number is made up of two items, food and non-food. Sub-group Non-food Food All items Weight 7 3 10 Index 130 ? 127

The index number for the sub-group Food is closest to:

Question 22

On the basis of the scatter diagram above, which of the following equations would best represent the regression line of Y on X? A. B. C. D. Y = -X + 8 Y=X+8 Y = X-8 Y = -X -8

9 Updated: Jan 2013

C03-Fundamentals of business mathematics

Sa

Question 23
For a certain group of students, the coefficient of rank correlation between their performance in Accounting and their performance is Law is -1. The coefficient of rank correlation between their performances in Law and FBSM is also -1. Therefore, the coefficient of rank correlation between their performance in Accounting and their performance in FBSM is A. B. C. D. -2 Zero +1 Impossible to determine from the information given

Question 24
The number of daily complaints to a railway company has an average (arithmetic mean) of 12 and a standard deviation of 3 complaints. The coefficient of variation, measured as a percentage, is therefore; A. B. C. D. 0.25% 4% 25% 400%

Question 25
For a set of six pairs of observations for the variables X (number of employees in hundreds) and Y (product sales in thousands of units), the following results were obtained: X = 1 Y = 15 X2 = 15 Y2 = 65 XY = 7 The correlation coefficient is nearest to: A. B. C. D. 0.22 0.47 0.90 -0.32

Question 26
The Personnel department of a large manufacturing company wishes to measure the correlation between the performance of its employees on an aptitude test, and their ability to catty out a specific work-related task.

10 Updated: Jan 2013

C03-Fundamentals of business mathematics

Sa The following table shows the rankings of 7 employees at both the test and the task: Employee A Test Rank Test Rank 2 2 B 5 6 C 7 7 D 4 4 E 1 3 F 6 5 G 3 1

Spearmans rank correlation coefficient for this data is:

Question 27
On one particular checkout in a supermarket, the service times in minutes of five customers were: 3, 2, 1, 5, 4 The standard deviation of these service times, correct to 1 decimal place, is closest to:

Question 28
At a second checkout in the same supermarket as in question 27, the service time has an arithmetic mean of 5 minutes and a standard deviation of 1 minute. The coefficient of variation will be: A. B. C. D. 50% 20% 5% 2%

Question 29
The sales of a product are recorded monthly for 24 months. The four-point (centred) moving averages are calculated and plotted on a graph. How many moving average points are plotted? A. B. C. D. 20 21 22 24

Question 30
If a company has sales value of $1,800 at a certain point and the seasonal factor is 1.13, using the multiplicative model the adjusted figure to the nearest $00 will be?

11 Updated: Jan 2013

C03-Fundamentals of business mathematics

Sa

Question 31
The underlying trend in the demand for a particular product is constant (flat), and is subject to quarterly seasonal variations as follows: Quarter Seasonality Q1 +50% Q2 +50% Q3 -50% Q4 -50%

Assume a multiplicative model is appropriate. If the demand for the last quarter, Q2, was 240 units, then the forecasted demand for the next quarter, Q3 is: A. B. C. D. 80 units 100 units 120 units 140 units

Question 32
A product has a constant trend in its sales and is subject to the following periodical seasonal variations. Period Seasonality P1 +45% P2 +65% P3 -50% P4 -35%

Assuming a multiplicative model for the time series, what should be the sale for the Period 3, if the sales in the last period, P2 were 350?

Question 33
A multiplicative time series model should be assumed. Quarterly sales (units) of Brand X, 2001 Q1 Q2 Sales (units) Seasonal variation 1,600 -20% 4,400 +100%

Q3 1,680 -30%

The trend value for Q1 sales (units) is: A. B. C. D. 1,280 1,920 2,000 None of these

12 Updated: Jan 2013

C03-Fundamentals of business mathematics

Sa

Question 34
A multiplicative time series model should be assumed. Quarterly sales (units) of Brand X, 2001 Q1 1,600 -20% Q2 4,400 +100% Q3 1,680 -30%

Sales (units) Seasonal variation

The seasonal variation for Q4 is: A. B. C. D. -50% 0% +50% None of these

Question 35
A multiplicative time series model should be assumed. Quarterly sales (units) of Brand X, 2001 Q1 1,600 -20% Q2 4,400 +100% Q3 1,680 -30%

Sales (units) Seasonal variation

The forecast for the fourth quarters sales (units), Q4, in 2001, assuming the trend pattern continues, is closet to: A. 1,300 B. 2,300 C. 3,800 D. 5,200

Question 36
An annual (year-end) income of 10,000 is required in perpetuity. If there is a fixed interest rate of 8% each year and administrative charges are ignored, the lump sum investment necessary now is closest to: A. B. C. D. 9,260 80,000 100,000 125,000

13 Updated: Jan 2013

C03-Fundamentals of business mathematics

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Question 37
An annual (year-end) income of 15,000 is required in perpetuity. Assuming a fixed rate of interest of 9% each year, and ignoring administrative charges, the sum required now to purchase the annuity is closest to: A. B. C. D. 13,650 135,000 150,000 167,000

Question 38
2,000 is invested in a bank account. The account earns compound interest at 5% per year. The cash value of the account, to the nearest , at the end of five years will be: A. B. C. D. 2,680 2,553 2,431 2,335

Question 39
2,000 is invested in a bank account. The account earns compound interest at 5% per year. The investment will have almost doubled in value after: A. B. C. D. 11 years 12 years 13 years 14 years

Question 40
A 100,000 mortgage, with interest compounded at 11% each year, is to be repaid by 10 equal year-end payments of X, the first being due one year after the mortgage was contracted X is closest to?

14 Updated: Jan 2013

C03-Fundamentals of business mathematics

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Question 41
A fixed-interest $200,000 mortgage, with annual interest compounded at 6% each year, is to be repaid by 15 equal year-end repayments of $R. The annual repayment $R will be closest to: A. B. C. D. $14,133 $20,593 $31,954 $83,400

Question 42
You borrow 3,000 and pay 10% each year interest. Ignoring capital, if you pay this interest at the end of each year, what is the present value of the interest payable at the end of the third year? A. B. C. D. (3/10) x 300 x 3 (7/10) x 300 (10/11)^3 x 300 3,000 x (11/10)^3

Question 43
A group of 10 people share the cost of a new years eve for 40 friends. The price of the meal per person is 20 plus 4 for wine and 2 for coffee. Calculate the amount each of the 10 will need to pay. Write down a formula which could be input into one cell in Excel to calculate the amount that the 10 will need to pay.

Question 44
Enter the formula required in Excel to perform the following calculation to the specified decimal places in each case: 37/9 x 4.34 (to two decimal places)

15 Updated: Jan 2013

C03-Fundamentals of business mathematics

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Question 45
Below is an extract from an Excel spreadsheet

For the given data, give the Excel formulae that would be required in Excel to calculate the ROI and NPV in cells B10 and B11 respectively.

16 Updated: Jan 2013

C03-Fundamentals of business mathematics

Sa

C03-Answers
Question Answer
1 2 3 4 5 6 C 1,021 D 50% X=2, Y=0 A

Question Answer
24 25 26 27 28 29 30 C25% A .82 1.4 B B 1600

7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23

D B B A B A 24 (000) 2.4 A20 B20 40,000 A A B A 120 A C

31 32 33 34 35 36 37 38 39 40 41 42 43 44 45

A 106 C A A D D B D 16,981 B C =40* (20+4+2)/10 =ROUND(37/9*4.34,2) ROI= Average(B2:B5)/B1 NPV = NPV(B7,B2:B5)-B1

17 Updated: Jan 2013