1. A community group living near a Gazipur dyeing plant has strong interest in the plant's expansion but little formal power. It then persuades the environmental regulator, which has high power and shares its concern, to review the expansion. Using Mendelow's power/interest grid, what is the most likely effect and the plant owner's best response?

A) The group's effective influence rises towards 'key player' status, so the owner should engage it actively and manage the regulator relationship
B) The group moves to 'keep satisfied' because the regulator's power replaces its interest, so the owner can ignore its concerns
C) The group moves to 'minimal effort' because regulators decide the outcome, so the owner should deal only with the regulator
D) The group stays in 'keep informed' because its own formal power is unchanged, so periodic newsletters remain sufficient

Correct: A complex Stakeholder mapping

Mendelow's grid classifies stakeholders by power and interest. A high-interest, low-power group is 'keep informed', but power can be borrowed through coalitions: the regulator's backing gives the group real influence over the expansion decision. The sensible response is active engagement with both the group and the regulator. If you kept the group in 'keep informed' you ignored the coalition. If you chose 'keep satisfied' you confused interest with power. If you chose 'minimal effort' you dropped a stakeholder whose interest is high and whose influence has just increased.

2. Compared with a profit-maximising firm facing the same demand and costs (marginal cost above zero), a firm that maximises sales revenue (Baumol) will typically:

A) produce a lower output and charge a higher price
B) produce a higher output and charge a lower price
C) produce the same output but charge a lower price
D) produce a higher output and charge a higher price

Correct: B difficult Objectives: sales revenue maximisation

Profit is maximised where marginal revenue equals marginal cost. Sales revenue is maximised where marginal revenue is zero, which occurs at a higher output. Along a downward-sloping demand curve, higher output means a lower price. If you chose lower output you reversed the comparison. If you chose the same output you ignored that MR = 0 differs from MR = MC. If you chose a higher price you forgot that selling more requires a lower price.

3. A Bangladeshi ready-made garment exporter has many stakeholders. Which THREE are external (not internal or connected) stakeholders? (Select THREE.)

Multiple response
A) Residents of the area around the factory
B) The bank providing working-capital finance
C) The national garment manufacturers' trade association
D) The main fabric supplier
E) The Department of Environment
F) The factory's machine operators

Correct: A, C, E difficult Stakeholder classification

External stakeholders have an interest in or influence over the business but no direct contractual link with it: the local community, a trade association and an environmental regulator. The bank (lender) and fabric supplier are connected stakeholders, and the operators are internal stakeholders. If you selected the bank or supplier you treated a contractual relationship as external. If you selected the operators you ignored that employees are internal.

4. Which TWO of the following objectives are SMART? (Select TWO.)

Multiple response
A) Improve customer service across the group
B) Raise knitwear export sales to the EU by 12% within 24 months, measured by shipped invoice value, using the approved marketing budget
C) Become the most respected garment brand in Asia
D) Cut average order-to-delivery time from 21 days to 16 days by 30 June, owned by the logistics director
E) Increase profitability substantially in the near future

Correct: B, D difficult SMART objectives

A SMART objective is specific, measurable, achievable, relevant and time-bound. Options B and D state a quantified target, a deadline and a measure or owner. 'Improve', 'most respected' and 'substantially' have no measure or deadline. If you picked A, C or E you accepted aspirations that cannot be tested.

5. Consider objectives of organisations. For each statement, select Yes if it is correct and No if it is not.

Yes/No grid

1. The surplus is the primary measure of success of a not-for-profit entity.   No

2. Value for money considers economy, efficiency and effectiveness.   Yes

3. Satisficing means seeking an acceptable level of performance rather than the maximum.   Yes

4. Stakeholder theory says shareholder wealth maximisation is the only legitimate objective.   No

Correct: N, Y, Y, N difficult Objectives and value for money

(1) No: not-for-profit entities are judged mainly by how well they meet their mission; a surplus is a constraint, not the goal. (2) Yes: the three Es are the core of value-for-money assessment. (3) Yes: satisficing (Simon) is a behavioural alternative to maximising. (4) No: stakeholder theory holds that the firm owes duties to several groups, not only shareholders.

6. A board paper says: 'Our ESG report and our sustainability report serve different purposes.' Which statement best captures the usual distinction?

A) ESG reporting measures the financial return from green projects only, whereas sustainability reporting measures the organisation's compliance with tax and company law
B) ESG reporting is aimed at employees and communities because it is voluntary, whereas sustainability reporting is aimed at investors because it is always set by law
C) ESG reporting focuses on environmental, social and governance matters that affect enterprise value and risk, whereas sustainability reporting looks more broadly at the organisation's impacts on people and the planet
D) ESG reporting covers only environmental impacts on the planet, whereas sustainability reporting looks mainly at governance structures and the way the board makes decisions

Correct: C difficult ESG and sustainability

ESG information is largely about the factors that are financially material to investors and lenders (risk and enterprise value), while sustainability reporting has a wider stakeholder perspective on the organisation's own impact on society and the environment. If you chose the environmental-only answer you dropped the social and governance pillars. If you linked ESG to employees and voluntary reporting you confused the audience. If you chose the financial-return answer you reduced ESG to green finance.

7. A Narayanganj dyeing company burns gas in its own boilers, buys electricity from the national grid and hires a shipping line to carry finished fabric to customers. Under the GHG Protocol, which classification is correct?

A) Boiler gas is Scope 1, purchased electricity is Scope 3 and the hired shipping is Scope 2, because the company controls the contracts it signs
B) All three are Scope 1 because the company decides to buy the energy and to hire the carrier, so it is responsible for every resulting emission
C) Boiler gas is Scope 1, purchased electricity is Scope 2 and the hired shipping is Scope 3
D) Boiler gas is Scope 2, purchased electricity is Scope 1 and the hired shipping is Scope 3, because electricity is generated outside the company

Correct: C complex Greenhouse gas emissions scopes

Scope 1 covers direct emissions from sources the entity owns or controls (the boilers). Scope 2 covers indirect emissions from purchased energy (grid electricity). Scope 3 covers all other indirect emissions in the value chain, including contracted transport. If you swapped Scopes 1 and 2 you misread what 'direct' means. If you put electricity in Scope 3 you overlooked the specific Scope 2 category. If you chose all Scope 1 you treated control over a purchase as ownership of the source.

8. Which THREE of the following are among the 'five rights' of procurement? (Select THREE.)

Multiple response
A) Right currency
B) Right quantity
C) Right brand
D) Right place
E) Right time
F) Right colour

Correct: B, D, E difficult Five rights of procurement

The five rights are the right quality, quantity, price, time and place. Quantity, place and time are therefore correct. Currency, brand and colour are not general procurement rights, although they might be part of a particular specification. If you chose brand you mistook one specification choice for a general principle.

9. A bank is considering a five-year term loan to a Chattogram steel re-roller. Which TWO matters would be of greatest interest to the bank as a stakeholder? (Select TWO.)

Multiple response
A) Growth in the dividend paid to shareholders
B) The company's ability to meet interest and capital repayments
C) A new bonus scheme for production staff
D) Movement in the company's share price
E) The value and priority of the security offered over assets

Correct: B, E difficult Stakeholder interests

A lender's primary concerns are being repaid on time and what recourse it has if the borrower defaults, so cash flow cover and security matter most. Dividend growth, a bonus scheme and the share price matter to shareholders and employees. If you chose the dividend you applied a shareholder's interest to a lender, whose return is fixed.

10. Consider ESG matters and greenhouse gas emissions. For each statement, select Yes if it is correct and No if it is not.

Yes/No grid

1. Scope 1 emissions are indirect emissions arising from purchased electricity.   No

2. Scope 3 emissions include emissions in the value chain that arise from sources the entity does not own or control.   Yes

3. ESG information is typically concerned with how environmental, social and governance factors affect enterprise value and risk.   Yes

4. Greenwashing means understating an organisation's environmental impact in order to cut costs.   No

Correct: N, Y, Y, N difficult ESG and greenhouse gas emissions

(1) No: Scope 1 is direct emissions from owned or controlled sources; purchased electricity is Scope 2. (2) Yes. (3) Yes. (4) No: greenwashing is overstating or misleadingly presenting green credentials.

11. The managers of a listed Bangladeshi company are paid a bonus on reported annual profit. They approve a high-risk expansion that boosts this year's profit but could threaten long-term solvency, and shareholders only learn of the risk later. Which analysis and remedy is most appropriate?

A) An agency problem arising from separation of ownership and control, reduced by aligning rewards with long-term value and by stronger board oversight
B) A failure of the marketing mix, resolved by repricing products and changing the distribution channels used for the new expansion
C) A stakeholder conflict between customers and suppliers, resolved by giving suppliers a seat on the board and cancelling all management bonuses
D) A satisficing decision by managers, resolved by setting a single annual profit target and removing the audit committee from the process

Correct: A complex Agency problem

Managers (agents) act in their own interest because their reward is tied to short-term profit, while shareholders (principals) bear the long-term risk and lack information. Remedies align incentives with long-term value (for example long-term share-based pay and clawback) and strengthen oversight through the board and audit committee. The other options misidentify the issue or would worsen it.

12. A company can choose between two projects. Project P raises next year's profit by 12% but has a negative NPV. Project Q lowers next year's profit by 3% but has a positive NPV at the company's cost of capital. Which objective explains why a board focused on shareholder wealth would choose Q?

A) Maximising sales revenue, because Q is likely to generate the larger volume of sales over the life of the project
B) Satisficing, because the board is content with any project that produces a profit in the current accounting year
C) Maximising profit, because profit in every period should be reduced slightly to keep the dividend growing
D) Maximising shareholder wealth, which depends on the present value of future cash flows and not on one year's profit

Correct: D complex Shareholder wealth maximisation

Shareholder wealth is increased by projects with positive NPV, which add value after considering timing and risk. A single year's profit is a poor guide. Q adds value and P destroys it. The other options ignore the discounted cash flow basis.

13. A garment exporter's annual report shows three sets of results: net profit, tonnes of CO2 emissions avoided and the number of workers who received safety training. Which reporting approach is the exporter following?

A) Value chain analysis, which separates primary activities from support activities
B) Triple bottom line reporting (profit, planet and people)
C) Balanced scorecard reporting, which groups measures by financial, customer, internal process and learning perspectives
D) Mendelow stakeholder mapping, which plots stakeholders by power and interest

Correct: B complex Triple bottom line

The triple bottom line reports economic, environmental and social performance. The balanced scorecard uses four different perspectives, the value chain analyses activities, and Mendelow's grid classifies stakeholders.

14. A Gazipur textile company reports: gas boilers 1,200 tonnes CO2e; purchased grid electricity 800 tonnes; staff air travel 150 tonnes; and emissions from producing the yarn it buys 2,400 tonnes. Under the GHG Protocol, what are the Scope 1 and 2 total and the Scope 3 total?

A) Scope 1 and 2: 1,200 tonnes; Scope 3: 3,350 tonnes
B) Scope 1 and 2: 2,150 tonnes; Scope 3: 2,400 tonnes
C) Scope 1 and 2: 2,000 tonnes; Scope 3: 2,550 tonnes
D) Scope 1 and 2: 4,550 tonnes; Scope 3: nil

Correct: C complex Greenhouse gas emissions scopes

Scope 1 is the boilers (1,200). Scope 2 is purchased electricity (800), so the combined figure is 2,000. Scope 3 covers other indirect value-chain emissions: air travel (150) and purchased yarn (2,400), 2,550 in total. Counting travel as Scope 1 or 2, electricity as Scope 3, or ignoring the value chain misapplies the definitions.

15. A listed company wants to explain to investors how resilient its strategy would be under a 2-degree warming scenario and a high-carbon-price scenario. Under the TCFD recommendations, which disclosure area covers this?

A) Strategy
B) Risk management
C) Metrics and targets
D) Governance

Correct: A complex Climate-related disclosure

The TCFD 'strategy' pillar covers climate-related risks and opportunities, their impact on the business and the resilience of the strategy under different scenarios. Governance covers board oversight, risk management covers processes to identify and manage risks, and metrics and targets cover the measures used.

16. A buyer orders 10,000 zips at the agreed price for delivery to the Gazipur factory. The correct quantity arrives six days late at the Chattogram factory. Which of the five rights of procurement have been breached?

A) Quantity and price
B) Price and time
C) Time and place
D) Quality and quantity

Correct: C complex Five rights of procurement

The goods arrived after the required date (time) and at the wrong location (place). The quantity and price were correct, and nothing suggests a quality fault.

17. Which THREE measures would help to reduce the agency problem in a listed company? (Select THREE.)

Multiple response
A) Long-term share-based incentives for executives
B) An audit committee with independent directors
C) Clawback provisions on bonuses paid on restated results
D) Allowing the chief executive to chair the board
E) Paying executives a bonus solely on current-year revenue
F) Removing all disclosure of directors' pay

Correct: A, B, C complex Agency problem controls

Long-term incentives align management with shareholders, independent audit oversight reduces information asymmetry and clawback discourages manipulation. A short-term revenue bonus, a combined chair and CEO and reduced disclosure all increase agency risk.

18. Which THREE are social (S) factors in an ESG assessment? (Select THREE.)

Multiple response
A) Human rights in the communities where the firm operates
B) Workplace health and safety
C) Executive pay structure
D) Independence of the board
E) Greenhouse gas emissions from boilers
F) Labour standards in the supply chain

Correct: A, B, F difficult Social factors in ESG

Social factors include labour standards, health and safety, human rights, diversity and relations with communities. Emissions are environmental. Board independence and executive pay are governance factors.

19. A Dhaka manufacturer has the stakeholders listed below. Which TWO are connected (not internal and not external) stakeholders? (Select TWO.)

Multiple response
A) The bank providing an overdraft
B) The employees' welfare committee
C) Residents near the factory
D) A consumer rights organisation
E) The finance director
F) A major customer under a supply contract

Correct: A, F difficult Connected stakeholders

Connected stakeholders have a direct transactional relationship with the entity: customers, suppliers and lenders. The finance director and welfare committee are internal, while neighbours and a campaign body are external.

20. Which TWO activities belong to the operations function of a manufacturing business? (Select TWO.)

Multiple response
A) Preparing the cash flow forecast
B) Scheduling production runs and maintaining machines
C) Setting the advertising budget
D) Quality control inspection of finished goods
E) Recruiting trainee accountants

Correct: B, D difficult Operations function

Operations covers converting inputs into outputs: scheduling, maintenance and quality control. Advertising belongs to marketing, cash forecasting to finance and recruitment to human resources.

21. Which TWO are valid criticisms of profit maximisation as the sole objective of a company? (Select TWO.)

Multiple response
A) It cannot be calculated from financial statements
B) It ignores the timing and risk of returns
C) It considers the interests of all stakeholders equally
D) It is easy to measure so it is always the best measure
E) It can encourage short-term decisions at the expense of long-term value

Correct: B, E difficult Limitations of profit maximisation

Profit says nothing about timing or risk and may encourage short-termism. It is measured from the financial statements, though accounting policies can affect it, and it does not weigh all stakeholders equally.

22. Which TWO are typical features of the objectives of a not-for-profit entity such as a charity school? (Select TWO.)

Multiple response
A) Success is judged mainly by how well the mission is delivered
B) Maximising share price is the main measure of success
C) Distributing surplus to owners is the main aim
D) Value for money (economy, efficiency and effectiveness) is important
E) Satisfying only the largest shareholder

Correct: A, D difficult Not-for-profit entities

Not-for-profit organisations are judged on mission delivery and value for money. They have no shareholders to receive surplus or a share price to maximise.

23. Consider the hierarchy of objectives. For each statement, select Yes if it is correct and No if it is not.

Yes/No grid

1. A mission statement describes the organisation's fundamental purpose.   Yes

2. Operational objectives are normally broader than the mission.   No

3. Objectives should be specific, measurable and time-bound.   Yes

4. A target such as 97% on-time delivery by December is a mission statement.   No

Correct: Y, N, Y, N difficult Mission and objectives

(1) Yes. (2) No: operational objectives are narrower and shorter-term. (3) Yes. (4) No: it is a quantified operational objective or target.

24. Consider sustainability and climate reporting. For each statement, select Yes if it is correct and No if it is not.

Yes/No grid

1. Scope 2 emissions are direct emissions from sources owned by the entity.   No

2. Under the TCFD, scenario analysis relates mainly to the strategy pillar.   Yes

3. Greenwashing means understating environmental performance to avoid scrutiny.   No

4. Sustainability reporting looks wider than financially material matters to the organisation's impacts.   Yes

Correct: N, Y, N, Y difficult Sustainability reporting

(1) No: Scope 2 emissions are indirect emissions from purchased energy. (2) Yes. (3) No: greenwashing is giving a misleadingly favourable impression of environmental performance. (4) Yes.

25. A company is deciding whether to close a loss-making plant. Consider the stakeholders. For each statement, select Yes if it is correct and No if it is not.

Yes/No grid

1. Stakeholder interests never conflict with each other.   No

2. Employees are likely to oppose closure because their jobs are directly affected.   Yes

3. Shareholders may favour closure if it increases the value of the firm.   Yes

4. Local community interests are irrelevant because they are not contractually linked to the company.   No

Correct: N, Y, Y, N complex Stakeholder conflicts

(1) No: conflict between stakeholders is common. (2) Yes. (3) Yes. (4) No: external stakeholders can still influence reputation and regulation.