NATIONAL OPEN UNIVERSITY OF NIGERIA

UNIVERSITY VILLAGE, PLOT 91, CASDASTRAL ZONE, NNAMDI AZIKIWE EXPRESS WAY, JABI, ABUJA.
FACULTY OF MANAGEMENT SCIENCES
JANUARY 2021 EXAMINATION

COURSE CODE: BFN 728

CREDIT UNIT: 2

COURSE TITLE: QUANTITATIVE TECHNIQUE FOR FINANCIAL DECISIONS

TIME ALLOWED: TWO HOURS INSTRUCTIONS: 1. Attempt Question One (1) and any other two (2) questions

2. Question 1 carries 30 marks, while the other questions carry 20 marks each.

3. Present all points in coherent and orderly manner

1a. The following table presents the values of the average daily wages (N) and Relative Price Index for eight months. You are required to compute the monthly real wage indices.

b. Discuss the following Non-Probabilistic Sampling;

i. Judgement sampling or purposive sampling 2.5 marks

ii. Quota sampling technique 2.5 marks

iii. Chunk /convenience sampling 2.5 marks

iv. Volunteer sampling technique 2.5 marks

c. Describe data collection processes. 10 marks

2a. Construct the network for the following activity list: 5 marks

Activity                        Precedence Activity

A, B                                       C

D                                           A

E                                           B

F                                           C

G                                        D, E

b. What do you understand by Net Present Value (NPV) and Internal Rate of Return (IRR)? How are they used? 15 marks

3a. By recording the daily demand for a perishable commodity over a period of time, a retailer was able to construct the following probability distribution for the daily demand levels: Probability Distribution for the Daily Demand

Si                                     P(sj)

1                                      0.5

2                                      0.3

3                                      0.2

4 or more                        0.0

The opportunity loss table for this demand-inventory situation is as follows:

The Opportunity Loss Table

                                                                                          State of Nature, Demand

Action            Inventory                   s1(1)           s2(2)            s3(3)

a1                      (1)                            0                 3                   6

a2                      (2)                            2                 0                   3

a3                      (3)                            4                 2                   0

You are required to find the inventory level that minimises the expected opportunity loss. 10 marks

3b. Enumerate different types of forecasting and basic forecasting techniques. 10 marks

4a. A commodity has a steady rate of demand of 3,000 units per year. Placing an order costs N300 and it costs N50 to hold a unit for a year:

(i) Evaluation the Economic Order Quantity (EOQ) 4 marks

(ii) What is the number of orders placed per year 3 marks

(iii) Find the length of the inventory circle? 3 marks

b. Enumerate various steps involved in conducting a sample survey. 10 marks