CS3 Dumps with Practice Exam Questions Answers

A month later, you receive the following email:

Reference Material:

From: Hesham El-Sayed. Independent Non-executive

Director

To: Romuald Marek. Chief Finance Officer

Subject: Collapse of fuel supplier

Hi Romuald

I am writing to give you some advance notice of an internal audit investigation that has been commissioned by the Audit Committee

Just over a year ago. Planejoos, a newly formed company, approached the management team at Airfield's Capital City International (CCI) airport and offered to take over refueling operations at Starport Planejoos offered a higher percentage of revenue than the existing supplier was paying CCI's management team agreed and appointed Planejoos rather than renew the existing supplier's contract.

CCI was unable to conduct the usual background and credit checks on Planejoos for two reasons. Firstly, Planejoos was a new company and so did not have an extensive credit history that could be checked Secondly CCI was under time pressure to reach a decision on whether to renew the existing supplier's contract or allow it to expire

CCI's management team claimed that it had acted quickly in order to benefit from the additional revenue that could be earned from dealing with Planejoos The management team was acting on the basis that it had an ethical duty to maximise the wealth of Airfield's shareholders and that maximising revenues from fuel sales through this agreement with Planejoos was consistent with that ethical duty.

Unfortunately, as a new company. Planejoos struggled to obtain trade credit and the high demand for fuel put the company's cash flows under extreme pressure Receipts from sales lagged behind payments for inventory Planejoos has now collapsed, leaving a large trade receivable that CCI will have to write off as uncollectable CCI had permitted this receivable to accumulate rather

than pressing for payment and so putting Planejoos under further pressure.

Fortunately, the previous fuel supplier was prepared to return to CCI.

Kind regards

Hello

I have attached a news article

Arrfield does not set the price for aviation fuel sold at our airports, but we do receive a percentage of the revenues earned by the fuel companies.

I need your help to prepare for a Board meeting to discuss this matter Please write a paper covering the following

* Firstly, explain the impact that the criticisms voiced by the environmental campaigners will have on the frequent PESTEL analysis that Arrfield's Board conducts.

[sub-task (a) = 34%

* Secondly, evaluate the commercial logic of Arrfield's strategy of basing charges for non-aeronautical services (such as fuel sales and retail activities) on percentages of the revenues generated by the companies that operate at its airports

[sub-task (b) = 33%)

* Thirdly, recommend with reasons whether Arrfield should attempt to justify strategic decisions to its shareholders when the commercial logic of those decisions is not immediately obvious

[sub-task (c) = 33%}

Thanks

Romuald Marek

Chief Finance Officer

Three months has passed since the discussion concerning Fouce Oil’s proposal.

You have received the following email from William Seaton, Director of Finance:

From: William Seaton, Director of Finance

To: Finance Manager

Subject: Fouce Oil’s proposal to collaborate on exploration

Hi,

After deliberating at length on the various discussions that we have had with Fouce Oil since its initial approach, we have decided to proceed.

We need to work out some important details, otherwise this venture will be a disaster.

Please draft a report that covers the following matters:

Should we create a formal coaching and mentoring scheme, whereby members of Fouce Oil’s exploration staff will receive guidance from their counterparts at Slide? Please explain the advantages and disadvantages of doing so very clearly.

Please explain how best to organise a formal coaching and mentoring scheme, if we decide that we should create one.

How should we manage the business relationship between the two companies’ exploration staff for the duration of this arrangement?

What are the difficulties associated with decision-making on exploration issues and how should we address those?

The collaboration goes live in a few weeks and so I need your input urgently so that I can get things moving.

William

You have just received the following email:

From: William Seaton, Director of Finance

To: Finance Manager

Subject: Oil reserves

Hi,

This email arrived from the Head Geologist earlier today. I am concerned that many of our colleagues understand very little other than rock formations and drilling reports. They certainly misunderstand accounting issues. I have already had some very confused discussions with the other members of the Board.

I need a very clear report from you that I can circulate to the other Board members. I am not particularly interested in the technical accounting rules. I do not think that you necessarily require an accounting standard to tell you that a particular disclosure is misleading.

I need your report to cover the following:

Should we make a public announcement of this information? I would like a clear indication of the implications for our

relationship with our various stakeholders AND the ethical issues that you feel are relevant.

What are the implications for our share price? I would like your analysis to consider the factors that will indicate how

our share price will change upon the announcement.

Thanks

William

The email referred to above can be found by clicking on the Reference Materials button.

You are sitting in your office when you hear Marcus Svenson, the Finance Director, speaking on the telephone. You can hear only Marcus’ side of the conversation:

"Hello, I would like to speak to Sally Walker please. It is Marcus Svenson here. (pause)

Hi Sally, you contacted me six months ago to discuss a job opportunity that you thought I’d be suitable for. I said that I didn’t wish to pursue it at that time because I was committed to Wodd. Things have changed since then and I would like to be considered for a finance directorship in another company. (pause)

Yes, I’m still with Wodd. (pause)

Yes, I realise that there was an unfortunate story in the business press about the problems that the weak USD is causing us, but there was very little that I could do to prevent that. (pause)

I am sorry to hear that. I had hoped to move on." (sound of telephone hanging up and door opening)

Marcus discovers that you are sitting at your desk and realises that you would have heard his side of the call.

"Please don’t tell anybody what you heard. Would you regard it as unethical to respect my privacy?

I suspect that the CEO knows that I am thinking of leaving. He commented on the need for Board members to be loyal to Wodd at the last Board meeting. But don’t you agree that the shareholders can better protect themselves against currency fluctuations than the directors?

The crazy thing is that I suspect that the Chairman will dismiss me next month. If that happens, I get a year’s salary as a severance package. That will really annoy the shareholders. How can I justify accepting the severance package if I am effectively being dismissed for failing to manage Wodd’s finances properly?

I need to explain at the next Board meeting why it would have been difficult to evaluate the risk of the USD weakening. According to an article I read, it has been picked up as a serious problem for us. How would you advise me to explain that?"

Reference Material: