Cyril Engineering entered into a contract with Dojo Ltd for electrical engineering services to a power station.
The contract was successful for two years, but Cyril Engineering failed to fulfill obligations recently.
Q: What is this situation known as?
Answer Options:
Failure to meet contractual obligations is classified as Default (p.123).
Consequential Loss (A) refers to indirect financial loss due to contract failure.
Damages (B) are legal remedies for breaches.
Direct Loss (D) relates to immediate financial impact, but default is the correct term for a failure to meet obligations. [P.123]
Glitter Kitten Ltd CEO applies the Payback Analysis for expansion.
Investment: 50m
Annual returns: 10m
Q: What is the payback period?
Answer Options:
Payback period formula:
Investment (50m) Annual inflow (10m) = 5 years. [P.1.4]
What is the primary disadvantage of the Payback Analysis method?
Answer Options:
The Payback Method ignores the time value of money (TVM) (p.1.4).
Option A is incorrect---Payback is simple.
Option B is incorrect---it accounts for investment amounts.
Option D is incorrect---Payback can compare options, but lacks long-term financial accuracy. [P.1.4]
Foxglove Ltd has a rigid hierarchy, standardized work, and strict procedures. Employees know their roles and work quality is high.
Q: What type of culture does Foxglove Ltd have?
Answer Options:
This describes a Role Culture (p.170-175):
Clear job roles, structured hierarchy, and predictable work patterns.
Task Culture (A) focuses on project-based teams.
Power Culture (C) is centralized authority.
Person Culture (D) emphasizes individual autonomy. [P.170-175]
Under which style of contract is the client, rather than the construction company, responsible for the design of a building?
In Management Contracting, the client retains responsibility for the design.
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