Banking Diploma Tutorial | JAIBB | DAIBB | Diploma in Islamic Banking

What does a bank's treasury do? Treasury Management tutorial. Banking Professional Examination online.ibb.org.bd

2023-05-29T10:09:00.001-07:00

What does a bank's treasury do?

The function of Treasury is to optimize liquidity as well as capital of the Bank while administering the financial assets. Treasury is also responsible for making sound financial investments with the available fund while reducing financial risks by being responsible for measuring and monitoring all risks associated with the Bank’s domestic and Foreign Exchange exposure, local and foreign currency liquidity, asset liability management and overall management of the Balance Sheet. Through its Asset Liability Management (ALM) and efficient trading operations, treasury strives to increase profitability of the bank by making proper assessment of the market and deploying its assets and liability in line with that market trend.

IBB New syllabus for JAIBB & AIBB examination with exemption and waiver 2023 online.ibb.org.bd

2023-03-08T08:29:00.001-08:00

New syllabus for JAIBB & AIBB examination with exemption and waiver was published recently by IBB The Institutes of Bankers, Bangladesh.

THE INSTITUTE OF BANKERS, BANGLADESH (IBB)

DR Tower (12th Floor) 65/2/2 Bir Protik Gazi Golam Dostogir Road

Purana Paltan, Dhaka-1000.

NEW BANKING PROFESSIONAL EXAMINATION SYLLABUS

(EFFECTIVE FROM 96TH EXAM.)

ALL SUBJECTS FULL MARKS- 100 PASS MARKS- 45

List of Subject & Waiver

Subjects of

Junior Associate of the Institute of Bankers, Bangladesh (JAIBB)

A. Basic/Core Subjects:

1. Monetary and Financial System (MAFS)
2. Governance in Financial Institutions (GFI)
3. Principles of Economics (POE)
4. Laws and Practice of General Banking(LPGB)
5. Business Communication in Financial Institutions (BCFI )
6. Organization and Management (OM)

Associate of the Institute of Bankers, Bangladesh (AIBB)

B. Advanced/Applied Subjects:

1. Risk Management in Financial Institutions (RMFI)
2. Credit Operations and Management (COM)
3. Trade Finance and Foreign Exchange (TFFE)
4. Information and Communication Technology in Financial Institutions (ICTFI)
5. Treasury Management in Financial Institutions (TMFI)

Optional Subjects:

In addition to the aforesaid advanced/applied subjects, any 01 (one) of the following optional subjects

shall be chosen by a candidate for passing AIBB :

1. Accounting for Financial Institutions (AFI)

2. Financial Crime and Compliance (FCC)

3. Agriculture & Microfinance (AM)

4. Management Accounting (MA)

5. Marketing and Branding in Financial Services (MBFS)

6. Sustainable Finance (SF)

7. Shariah-Based Banking (SBB)

8. Investment Banking (IB)

New Syllabus (details)

Exemption/Waiver

No exemption/waiver shall be granted to any candidate for any subject of JAIBB or AIBB in consideration of his/her higher academic degree in the relevant subject. However, candidates who passed various subjects in former JAIBB and DAIBB Examination will be entitled for a waiver of respective subject(s) as outlined below:

Corresponding subject(s) under old (JAIBB and DAIBB) and new (JAIBB and AIBB) syllabus and waivers thereof:

Download syllabus

CDCS Text Book The Guide to Documentary Credit By Gary Collyer

2022-01-22T09:54:00.002-08:00

Preparation of CDCS examination and Text Book

You have to study by yourself to CDCS examination. Once registered a textbook is sent to every candidate by post. This text book is "The Guide to Documentary Credits" written by Gary Collyer.

BUY NOW - Latest version (5th Edition)

This book will be your main textbook. Also you can enter ifschool's website with your password to reach online materials. Preparation for the examination usually takes six months with comprehensive learning materials provided. To get this eBook, Read full story.

Study Techniques

Using your experience, think about study techniques that have helped you in the past and any others you may have come across.

Some ideas you may want to consider include:

• Summarize the main ideas in the text.

• Write study questions for self-testing based on materials in the text.

• Use the key terms to identify not only definitions but use them for review.

• Identify/flag key words, terms and concepts you do not understand or that are new to you.

• Prepare ‘flash cards’ to capture key terms, definitions, exhibits and other material that you have identified for additional study.

• Work with a partner or study group to teach and test each other

• Test yourself frequently. Do not spend time studying what you know. Use what you know for review at the end of the study process.

• What is troublesome? Identify someone to help you understand sections you do not know and find difficult.

• Use the resources available through ifs School of Finance and IFSA: Check the web site (http://cdcs.libf.ac.uk) for the CDCS Forum, a listing of review/revision courses and other examination-related information.

• Note questions to ask others with more experience or members of your study group.

Develop a Study Plan

Once you have considered the different study options available to you, it is still important to draft a study schedule/timeframe based on your objectives and a realistic view of your time for study and preparation. Your study plan should reflect your individual preferences and methods of working. It is important to remember that a study plan is a flexible document and is both an indicator of where you are and where you want to be.

The first step you should take is to determine your personal study objectives based on the Content Outline and Study Text.

• You may find it helpful to write out your objectives and post them in a visible location.

• Advance planning will provide multiple benefits as you prepare for the CDCS examination. It will not require much time to develop a study plan, but doing so will establish your priorities. The most important part of a study plan is to identify how, when and where you want to study.

• By reviewing the CDCS Content Outline and Examination Specifications (Sections 2 and 3), you will be able to identify the areas with which you are familiar; those you wish to review in detail; and those that are new to you and need in-depth study.

• You will now be in a position to develop an overall study plan with specific timelines. In drawing up your plan, you may find the following useful:

− Prepare a study schedule — be realistic. Space your studying and allow ample time for review.

− Keep a copy of the CDCS Content Outline in a prominent place as you will refer to it often.

− Make the best of your environment. Some individuals prefer to study in a quiet place, while others prefer working with the radio or television on in the background. Whatever your preference, you can usually create the environment you want for your study session.

− Be prepared to study in free moments, whenever you can. This means identifying times that are available to you for study, such as travel time, standing in lines and queues, waiting for a meeting to start, etc.

Relax while studying

The CDCS examination is an opportunity for you to learn and to demonstrate your knowledge and ability. Maintain a positive attitude that you will be successful on the examination and will allocate the resources required to ensure success.

Do not worry about how much time is left before the examination. You have planned adequately to allow for the maximum use of your time.

Take breaks, exercise. Keep your body and mind relaxed.

CDCS Text Book by Garry Collyer

Define Management Accounting. [ DAIBB Exam July 2019 ]

2019-10-25T01:45:00.000-07:00

Define Management Accounting. [ DAIBB Exam July 2019 ]

Management accounting, also called managerial accounting or cost accounting, is the process of analyzing business costs and operations to prepare internal financial report, records, and account to aid managers’ decision making process in achieving business goals.

In other words, it is the act of making sense of financial and costing data and translating that data into useful information for management and officers within an organization.

The main macroeconomic problems in Bangladesh

2019-10-18T14:23:00.000-07:00

The main macroeconomic problems in Bangladesh

1. Employment and Unemployment:

Unemployment refers to involuntary idleness of resources including manpower. If this problem exists, society’s actual output (or GNP) will be less than its potential output. So one of the objectives of Government policy is to ensure full employment which implies absence of involuntary unemployment of any type.

2. Inflation:

It refers to a situation of constantly rising prices of commodities and factors of production. The opposite situation is known as deflation. During inflation some people gain and most people lose. So there is a change in the pattern of income distribution. Therefore, one of the objectives of government policy is to ensure price level stability which implies the absence of inflation and deflation.

3. The Trade Cycle:

It refers to periodic fluctuations in the levels of economic or business activities, i.e., the tendency for output (GNP) and employment to fluctuate over time in a recurring sequence of ups and downs. The periods of good trade alternate with periods of bad trade, or, boom periods of high output and high employment alternate with slump periods of low output and low employment.

4. Stagflation:

Most modern mixed economics suffer from the disease of stagflation which implies the co-existence of inflation and unemployment in a stagnant economy. The trade-off between inflation and unemployment is perhaps the most complex macroeconomic issue of the day. Every country in the world is now struggling hard to fight the disease of stagflation.

5. Economic Growth:

In spite of short-term fluctuations of output that are associated with the trade cycle, the long-term trend of total output has been upward in most industrially advanced country. The trend in the nation’s total output over the long period is known as economic growth.

It refers to an expansion of society’s production capacity such as bringing new land under cultivation or setting up new factories. Growth is measured by the annual rate of increase of per capita income and is illustrated by a rightward shift of the production possibility curve.

6. The Exchange Rate and the Balance of Payments:

The balance of payments is a systematic record of all economic transactions between the members of the home country and the rest of the world in an accounting year. These transactions are largely, if not entirely, influenced by the exchange rate. It is the rate at which a country’s economy is exchanged for another currency (or gold).

Differences between micro and macro economics

2019-10-18T14:09:00.002-07:00

The main differences between micro and macro economics

Microeconomics is the study of particular markets, and segments of the economy. It looks at issues such as consumer behaviour, individual labour markets, and the theory of firms.
Macro economics is the study of the whole economy. It looks at ‘aggregate’ variables, such as aggregate demand, national output and inflation.

Micro economics is concerned with:

Supply and demand in individual markets
Individual consumer behaviour. e.g. Consumer choice theory
Individual labour markets – e.g. demand for labour, wage determination
Externalities arising from production and consumption. e.g. Externalities

Macro economics is concerned with

Monetary / fiscal policy. e.g. what effect does interest rates have on the whole economy?
Reasons for inflation and unemployment.
Economic growth
International trade and globalisation
Reasons for differences in living standards and economic growth between countries.
Government borrowing

Other differences are:

Small segment of economy vs whole aggregate economy.
Microeconomics works on the principle that markets soon create equilibrium. In macro economics, the economy may be in a state of disequilibrium (boom or recession) for a longer period.
There is little debate about the basic principles of micro-economics. Macro economics is more contentious. There are different schools of macro economics offering different explanations (e.g. Keynesian, Monetarist, Austrian, Real Business cycle e.t.c).
Macro economics places greater emphasis on empirical data and trying to explain it. Micro economics tends to work from theory first.

Examine Marshall’s definition of economics? Alfred Marshall’s Definition (welfare Definition)

2019-10-18T13:54:00.000-07:00

Examine Marshall’s definition of economics? Alfred Marshall’s Definition (welfare Definition)

[Note: answer given broadly. Short this answer as per your time management. ]

Alfred Marshall (1842-1924) wrote a book Principles of Economics in 1890. In it, he defined economics as “a study of mankind in the ordinary business of life”. An altered form of this definition is: “Economics is a study of man’s actions in the ordinary business of life”.

Marshall agrees that economics studies about wealth. But he does not accept the view that economics studies about wealth alone. In the words of Marshall, “Economics is on the one side a study of wealth, and on the other and more important side, a part of the study of man. In economics, we do not study about all aspects of humankind. As cairn cross puts it, economics studies about man as “buyer and seller, producer and consumer, saver and investor, employer and worker”. Marshall’s definition is known as material welfare definition of economics because of its emphasis on welfare.

Criticism

There is no doubt that Marshall’s definition is a great improvement over the definition of Adam Smith. For its emphasis is on social problems. And economics is a social science. Moreover, it tells us about the link between wealth and welfare.

First, if we go by the definition of Marshall, in economics we should consider only those activities which promote material welfare. But many activities do not promote welfare but are rightly considered as economic activity.

Second, some activities promote welfare but not material welfare. For example, the activities‟ of doctors, lawyers, actors, musicians promote our welfare. But their lab our does not result in the production of material goods. If we follow the material welfare definition of economics, we cannot consider the activities of the above categories of labor as economic activity as they do not promote material welfare.

Third, Marshall’s definition is classificatory. It is not analytical. It considers the production of material goods (e.g. Charis, tables, cycles and cars, bread) alone as economic activity.

Lastly, by introducing ethical concepts like welfare, economics will become an inexact science. For it is rather difficult to measure welfare. In spite of the above criticism against Marshall’s definition, we should not forget Marshall has widened the scope of economics by establishing a link between wealth and man and his welfare. Modern definitions of economics are based on a theory of scarcity and choice

Discuss the nature and scope of economics?

2019-10-18T13:43:00.000-07:00

Discuss the nature and scope of economics?

or, Economics is the study of art as well as science. -Explain the statement.

or, “Economics is the science of wealth”-Discuss.

or, ” Economics is the study of mankind in the ordinary business of life”- Discuss the statement.

or, “Economics is a science which studies behavior as a relationship between ends and scarce means which have alternative uses.” Explain the statement

or, What do you mean by Positive Economics and Normative Economics? Indicate their differences.

or, Compare the definitions of Economics offered by Adam Smith and Lionel Robbins.

or, Discuss the subject-matter of Economics.

[NB: It may be answered the above all questions are studying the content bellow. You just need to be a tricky one ]

[Note: answer is written broadly. Please summerise according to time managemen. ]

Introduction

The nature and scope of economics are related to the study of wealth or human behavior or of scarce resources. The scope is very wide and includes the subject matter of economics whether economics is a science or an art or whether it is positive or normative science.

Wealth and Welfare Connotations

Wealth and Welfare connotations are segregated into the classical view of Adam Smith and Neo Classical View of Marshall. First, Let us discuss Classical view and the relating contemporaries.

The Classical View and Contemporaries –

The Classical Economist Adam Smith defines Economics as the science of Wealth. He defines as “nature and cause of wealth of nations” whereby it “proposes to enrich people and sovereign”. The classical view is misleading and has serious defects. This view of conception of economics as a science of wealth which laid exclusive stress on material wealth. Material wealth is the object of desires of man. Wealth was considered to be the stop in itself.

Neo-Classical View and Contemporaries –

Alfred Marshall led neo-classical school which placed all the economists a reputable position among social science. He emphasized on a man’s welfare. Wealth was observed as the basis of human welfare, not stop in itself but a means to a stop. According to Marshall “Political Economy or Economics is a study of mankind in the ordinary business of life.

Scarcity Definition of Robbins

According to Robbins, “Economics is the science which studies human behavior as a relationship between ends and scarce means which have alternative uses.” It was Lord Robbins, who exposed the rational discrepancy and insufficiency of other economists’ definitions.

Growth Oriented Definition

Modern Age is the age of economic development. Its key purpose is to enhance social well-being and progress the standard of living of the people by getting rid of poverty, redundancy, disparity of income and wealth, malnutrition etc. of the realm. Hence the financial development is the essential point of all economic policies.

Scope of Economics

The continuous growth in the subject matter of economics has led to divergent views about a scope of economics. It includes Subject matter of Economics, Economics is a science or an Art, or is it a Positive or Normative science.

Subject Matter of Economics

The subject matter of economics is the study of grounds of material interests or as the science of wealth. Men who are sensible beings and take action under the active social, legal and institutional group. It eliminates the performance, manners of socially objectionable and uncharacteristic persons like misers, thieves etc. It consists of the study of the exertion of consumption, production, exchange and distribution of wealth, as well as the fortitude of the values of goods and services the amount of employment and the determinants of fiscal development. Further it comprises the study of grounds of poverty, unemployment, under employment, inflation etc. and actions for their elimination.

Economics as a Science
Economics is a science since its laws have widespread soundness such as the law of diminishing returns, the law of diminishing marginal utility, the law of demand etc. It is called as a science since its self-remedial nature. It goes on amendments in the dawn of new specifics based on interpretations. Hence Economics is a science like any other science that has its own generalizations, theories or laws of economics which traces out a causal relationship between two or more phenomena.

Economics as an Art
The practical application of scientific techniques is the Art of Economics. Some economists consider economics as a science and art while few others as science and applied science. It is considered as newest of science and oldest of arts and the queen of all the social sciences.

Economics as a Positive Science

As per the nineteenth century experts, economics is a positive science. Since it seeks to explain what has actually happened but not what is ought to happen. According to J.N.Keynes, Positive science is defined as “A body of systematized knowledge concerning what ought to be and concerned with the ideal as distinguished from the actual.”

Normative Economics

With contrast to the Positive Science, Normative Science deals with the “what is ought to happen” cases. That is predictions of future economic development with regards to the present conditions are discussed in this. The postulations on which economic laws, theories or principles are based relate to man and his problems. If we attempt to test and forecast fiscal actions on their basis the subjectivity elements always penetrates. Therefore, the laws of economics are at best propensities.

Conclusion
Economics is concerned with human well-being as well as ethical values. It is science and an art, since the scientific principles are applied practically. It is both positive and normative science since the actual happening and the future happenings are dealt.

-----x-----

Thanks to bankerguide.

Lending operation tutorial : Different type credit facilities those a banker/financer extends to clients. June 2015

2019-07-12T08:50:00.000-07:00

Different type credit facilities those a banker/financer extends to clients. June 2015

Ans: Credit Facility is an agreement with bank that enables a person or organization to be taken
credit or borrow money when it is needed. All types of credit facilities may broadly be classified into two groups on the basis of Funding – 1. Fund Base Credit 2. Non Fund Base Credit
1. Fund Base Credit is the any credit facility which involves direct outflow of Bank’s fund to the
borrower. Various types of it are as follows:-
(i) Loan: – It refers to credit facility that is repayable in a definite period. (e.g. Term Loan ,
Demand Loan)
(ii) Cash Credit: – It refers to credit facility in which borrower can borrow any time with in the
agreed limit for certain period for their working capital need. It secured by way of Hypothecation of
Stock(goods) and Debtors and all other current Assets of the business generated during the course
of business. Cash credit can also be secured by way of mortgage of immovable properties (as
collateral security).
(iii) Over Draft: – An overdraft allows a current account holder to withdraw in excess of their credit
balance up to a sanctioned limit. It secured by way of Mortgage of immovable properties and pledge
of F.D., Bonds, Shares, securities, Gold & silver and any physical asset and Hypothecation of Stock
and Debtors and all other current Assets of the business generated during the course of business.
(iv) Packing Credit: – It is a credit facility which sanctioned to an exporter in the Pre-Shipment
stage. Such credit facilitates the exporter to purchase raw materials at competitive rates and
manufacture or produce goods according to the requirement of the buyer and organize to have it
packed for onward export. It secured by way of Hypothecation of Stock of goods and Debtors and all
other current Assets of the business generated during the course of business.
(v) Some other fund based credit facilities are Bill Discounted , Bill Purchased , Advance against
hypothecation of Vehicles ( Transport Loan) , House Building Loan , Consumer Loan , Agriculture
Loan -Farming -Non Farming , Consortium Loan , Lease Financing , Hire Purchase , Import Financing
– Loan Against Imported Merchandise (LIM) – Payment Against Document (PAD) .

DAIBB International Trade and Foreign Exchange eBook (pdf) - 4th Edition 2019 released

2019-06-02T03:18:00.000-07:00

Last 05 years question (2013 - 2018) with latest November 2018 questions and answers (Maximum questions are included)
Math solution (with November 2018)
44+ short notes
DAIBB syllabus
Last years questions

Compiled by : Md Murad Hossain
Edition: 4th Edition
Format : PDF
Total page: 206

Download

DAIBB Management of Financial Institutions (MFI) question July 2018

2018-11-20T10:34:00.000-08:00

Ka Set

THE INSTITUTE OF BANKERS, BANGLADESH (IBB)

Banking Diploma Examination, July, 2016

DAIBB

Management of Financial Institutions (MFl)

Time-3 hours

Full marks-100

Pass marks- 50

[N.B. The figures in the right margin indicate full marks. Answer any five questions.]

Marks

1 (a) Give an overview of the present situation of Banking sector of Bangladesh.

b) Discuss on 'the role of Central Bank is perfect' as a regulatory body.

c) Does Bangladesh need more banks? Justify your arguments. 5

2. (a) What do you mean by AD ratio? 5

(b) How its changes impact bank's Liquidity and assets management portfolios

3 (a) Explain components of CAMELS Rating. 8

(b) How CAMELS Rating helps to measure financial soundness of a bank?

4(a) What are the causes of nonperforming loans? l0

(b/ What are the impacts of bad loan. on banks profitability? 5

and financial institutions.

5 (a) What do you mean by Islamic Banking? 5

(b) What are the deposits and loan components of islamic Banking? . l0

(6 (a) State the main services provided by Agent Banking. 6

(b) What do you mean by e-commerce? 6

[Please turn over]

7 (a) what are the credit risk mitigation techniques of a Financial Institution?

(b) How profitability irnpacts banks' capital account

8 (a) Discuss the main features of BASEL III.

(b) Write the importance of loan securitization.

9 (a) what are the major financial statements prepared by a commercial bank? Describe the purposes of preparing each statement.

(b) Define money laundering and its steps.

(i) IP and PEPS;

(ii) KYC and KYE;

(iii) EDDI

(iv) Beneficiary Owners.

10. Write short notes (any eight):- 20

(a) Crypto currency;

(b) NPSB;

(d) SMS Banking;

(e) Trade Base Money Laundering

(f) Insurable interest;

(g) Market Risk;

(h) Shell Bank

(i)Collateral Security:

(j) Core Capital;

(k) BFIU;

(l) Option.

[ibb-diploma.blogspot.com]

Some printing mistakes in DAIBB Management Accounting Math solution by Orchid Publication

2018-11-17T09:56:00.000-08:00

Dear DAIBB exam candidates,

Hope you all are fine.
This post is for the candidates who are taking preparation for Management Accounting exam.
I found some printing mistakes in DAIBB Management accounting math review book. I share these findings with you.

Some printing mistakes in DAIBB Management Accounting Math solution (october 2018 edition) by Orchid Publication

Page number

Incorrect

Correct

Page 273

Breakeven point (in Tk.) = BEP in units x Sells per unit = 25.50 X 34,000

Breakeven point (in Tk.) = BEP in units x Sells per unit = 28.50 X 34,000

Page 273

Break even point (in Tk.) = 10,33,043

Break even point (in Tk.) = 10,33,032

Page 274

Initial Cost 4,29,44,000

Initial Cost 4,49,44,000

Page 274

Annual incremental benefit 64,00,000

Annual incremental benefit 1,44,00,000

Page 277

Add: Closing merchandise inventory 95,999 7,500

Add: Closing merchandise inventory 95,000 7,500

Page 277

Less: proceeds from sale of plant & equipment (17,000)

Less: proceeds from sale of plant & equipment (17,500)

ibb-diploma.blogspot.com

Why are these graphics important for effective business communication

2018-11-16T11:36:00.000-08:00

Graphics is important for effective business communication

What are the different types of graphics

2018-11-16T11:25:00.002-08:00

GRAPHIC FORMATS
Many different graphic formats can be used to support the text's main ideas. However, the ideal graphic format depends on the type of data being presented.

Tables
The table presents large amounts of data in a simple, brief, and clear linear format. The same data in prose would be bulky, confusing, and inaccessible. Tables help the reader grasp relationships that might be invisible in prose. Also, tables allow the writer to focus attention on specific pieces of data while retaining a clear presentation of the whole.

Graphs and Charts
Graphs and charts present numerical data pictorially, helping readers visualize relationships among those data.

Graphs
Basically, the graph is a two-dimensional field used to plot the relationships among two interrelated sets of data. The most common sort of graph has the familiar X and Y axes, with data of one sort on the X axis and data of another related sort set on the Y axis. Such a representation allows the reader to see at a glance not just the data, but more important, the relationship between the two sets of data. For any value on either axis, the reader can quickly derive the related value or values on the other axis.

In creating graphs, the writer must select an appropriate scale for both axes. One too small distorts overall patterns, with even small variations appearing to cause large changes on the graph. One too large has the opposite effect, as even large variations in data will appear to have little impact on the basic shape of the graph.

Charts
While the graph illustrates relationships, the chart illustrates comparisons, usually among several sets of information.

Many other sorts of charts are possible, including the pie chart, the pictorial chart, which uses drawings to represent numerical information, and the map chart, a schematic representation of a geographical area, on which various pictures, drawings, or other devices are superimposed.

Photographs, Drawings, and Diagrams
When supporting material is pictorial rather than numerical, writers choose photographs, drawings, and diagrams as their graphic aids. All three use the same key principles:

1. All pictorial representations should conform to the general principles for any graphic aid:
Provide a detailed view of something difficult or impossible to convey in prose
Clearly support the text
Be visible simultaneously with the text they support

2. The details of the pictorial aid should be clear, especially those most relevant to the point being made. In a photograph,
clarity is achieved through good lighting, wisely chosen camera angle, and an absence of irrelevant background detail.
Drawings and diagrams use the same basic elements to achieve clarity: focus on relevant details and intelligent selection of
presentation angle.

3. Many pictorial graphic aids can be further clarified by superimposing explanatory labels to identify key parts. As always,
the writer's goal is to direct the reader's attention.

Photographs, drawings, and diagrams each have unique features. The writer considers these features when selecting which one of the three graphic aids to use.

All these graphic aids have the common purpose of illustrating and supporting conclusions, recommendations, and interpretations the writer places in the text. The writer selects the exact graphic aid by considering the situation behind the writing-especially the purpose, audience, and author's role

Why is a suitable location for a bank very important for business?

2018-11-16T11:02:00.000-08:00

A good location for bank business is vital, but choosing the right one can be something of a balancing act. Ideally, the location should be convenient for the customers, employees and suppliers - without being too expensive. We should weigh up the advantages and disadvantages of location when deciding on a business property.

Location. Location. Location. Everyone who has ever worked in real estate knows this concept. Your location and site selection have a big impact on your sales volumes. Not only do you want to locate in heavily trafficked retail areas, you want to make sure that you select sites that are highly visible and accessible. Hard corner stand-alone sites tend to out-perform mid-block or in-line sites. Both of those types tend to out-perform in-store or supermarket sites.

Don’t shortchange marketing. Spend some money marketing the new site, whether through a grand opening celebration with a contribution to a local charity or some other type of event. You need to make sure people know you are open for business. I’ve always been amazed at banks that spend $2-3 million building a new branch and $0 dollars marketing it.

Bridge to where you already have customers. About half a typical branch’s sales are from existing customers… so half must be from new customers. Opening a new branch as an infill point within your current footprint will likely outperform a new branch in a new market that expands your bank’s footprint. Building a convenient new location in an existing market where you already operate, the number of existing customers will influence sales performance.

New customers are critical, but not the only reason for expansion. Conversely, opening a branch in a new market where you don’t have an existing customer base will lessen initial sales and extend the payback time for the capital investment. In these cases, increase marketing efforts to promote the new location. Even spending $25,000 in marketing can have a big boost in sales and it’s a small incremental price to pay for a $2-3MM investment.

Will an ATM substitute for a branch? Consider deploying stand-alone deposit taking ATMs as infill points in markets where you have a decent branch network. They cost about 5-10% of a branch’s operating costs and can help boost local sales by as much as 15% in their trade area. Make sure you use the same site characteristics you would for a branch (e.g. highly visible, high traffic area, easy to access site, etc.). Also make sure the machines is available 24-hours. Avoid placing inside a retailer.

Be wary of supermarket branches. While they cost less to build they cost about 60-70% the cost of a traditional branch to operate, and will only generate 30% of the revenue of a traditional. Additionally you have limited control over the grocery story. If they close you close, often with little customer notice, which could lead to regulatory issues.

Heavy up on sales staff. A corollary to the supermarket note is make sure you have plenty of sales staff from day one. Never open a branch with only one seller, even if you have limited initial transaction traffic. Your sales volume in the early months have a big impact on the ultimate size of the branch.

Go big on signage. Wherever you build bank sure your signage is as big and bright as you can get it. Customers need to find you location. Some municipalities and landlords limits the square footage of signage so plan carefully and consider in-branch signage through the windows as a complement to your external signage.

Add drive up lanes, but not drive up tellers. Find a site that offers a drive-up lane if possible, especially in the colder northeast markets but place a drive-up ATM instead of a traditional teller. The long-term benefits of lower operating costs and increased transaction migration outweigh any potential customer complaints. It’s easier if you don’t offer manned drive up lane from the beginning than taking it away later by swapping in a drive up machine. Depending upon where you operate consider wider than normal drive up lanes if big pick-up trucks are common to your markets.

Get staff on board early. Hire the new branch’s staff early and get them into the market talking to local businesses to “pre-sell” accounts. First, it shows the firm is committed to the local neighborhood but it also helps ensure a good opening month.

Fundamental functions of a bank normally performs

2018-11-16T10:54:00.001-08:00

A. Primary Functions of Banks

The primary functions of a bank are also known as banking functions. They are the main functions of a bank.

These primary functions of banks are explained below.:
1. Accepting Deposits 2. Granting of Loans and Advances

1. Accepting Deposits

The bank collects deposits from the public. These deposits can be of different types, such as :-

Saving Deposits
Fixed Deposits
Current Deposits
Recurring Deposits

a. Saving Deposits

This type of deposits encourages saving habit among the public. The rate of interest is low. At present it is about 4% p.a. Withdrawals of deposits are allowed subject to certain restrictions. This account is suitable to salary and wage earners. This account can be opened in single name or in joint names.

b. Fixed Deposits

Lump sum amount is deposited at one time for a specific period. Higher rate of interest is paid, which varies with the period of deposit. Withdrawals are not allowed before the expiry of the period. Those who have surplus funds go for fixed deposit.

c. Current Deposits

This type of account is operated by businessmen. Withdrawals are freely allowed. No interest is paid. In fact, there are service charges. The account holders can get the benefit of overdraft facility.

d. Recurring Deposits

This type of account is operated by salaried persons and petty traders. A certain sum of money is periodically deposited into the bank. Withdrawals are permitted only after the expiry of certain period. A higher rate of interest is paid.

2. Granting of Loans and Advances

The bank advances loans to the business community and other members of the public. The rate charged is higher than what it pays on deposits. The difference in the interest rates (lending rate and the deposit rate) is its profit.

The types of bank loans and advances are :-

Overdraft
Cash Credits
Loans
Discounting of Bill of Exchange

a. Overdraft

This type of advances are given to current account holders. No separate account is maintained. All entries are made in the current account. A certain amount is sanctioned as overdraft which can be withdrawn within a certain period of time say three months or so. Interest is charged on actual amount withdrawn. An overdraft facility is granted against a collateral security. It is sanctioned to businessman and firms.

b. Cash Credits

The client is allowed cash credit upto a specific limit fixed in advance. It can be given to current account holders as well as to others who do not have an account with bank. Separate cash credit account is maintained. Interest is charged on the amount withdrawn in excess of limit. The cash credit is given against the security of tangible assets and / or guarantees. The advance is given for a longer period and a larger amount of loan is sanctioned than that of overdraft.

c. Loans

It is normally for short term say a period of one year or medium term say a period of five years. Now-a-days, banks do lend money for long term. Repayment of money can be in the form of installments spread over a period of time or in a lumpsum amount. Interest is charged on the actual amount sanctioned, whether withdrawn or not. The rate of interest may be slightly lower than what is charged on overdrafts and cash credits. Loans are normally secured against tangible assets of the company.

d. Discounting of Bill of Exchange

The bank can advance money by discounting or by purchasing bills of exchange both domestic and foreign bills. The bank pays the bill amount to the drawer or the beneficiary of the bill by deducting usual discount charges. On maturity, the bill is presented to the drawee or acceptor of the bill and the amount is collected.

Secondary functions

Besides the primary functions of accepting deposits and lending money,
banks perform a number of other functions which are called secondary
functions. These are as follows -
a) Issuing letters of credit, travellers cheques, circular notes etc.
b) Undertaking safe custody of valuables, important documents, and
securities by providing safe deposit vaults or lockers;
c) Providing customers with facilities of foreign exchange.
d) Transferring money from one place to another; and from one
branch to another branch of the bank.
e) Standing guarantee on behalf of its customers, for making
payments for purchase of goods, machinery, vehicles etc.
f) Collecting and supplying business information;
g) Issuing demand drafts and pay orders; and,
h) Providing reports on the credit worthiness of customers.

What is AGM? Importance, purpose and merit and demerit of AGM

2018-11-15T10:53:00.002-08:00

What is AGM?

Ans:

An Annual General Meeting or AGM in business is a gathering of a company’s interested shareholders. At the AGM, which is usually mandatory, the company’s directors present an annual report. The report informs the stockholders (shareholders) about the company’s profits or losses.

At the AGM, senior management also tells shareholders how well or badly the company performed, why, and what its strategy is. Rather than Annual General Meeting, some people simply say General Meeting.

Importance, purpose and merit of AGM

Importance of AGM: It is only the AGM of the company that the shareholders may exercise any control over the affairs of the company. They may confront their directors, their elected representatives at least once a year. They also get an opportunity to discuss the affairs and review of the working of the company. They may also take necessary steps for the protection of their interest. They may for instance refuse to re-elect a director whose action and policy they disapprove. They may also take up any other business relating to the affairs of the company for discussion. Annual accounts are also presented for consideration of the shareholders and dividends are declared at the AGM.

The purpose of the AGM is to enable the company to report on its affairs during the past year to its shareholders and to deal with the following matters:

To place before the meeting the approved annual financial statements together with the directors’ report and an audit committee report.
To elect or re-elect directors who may retire by rotation.
To approve, in advance the directors’ fees for the year ahead, if not already approved at a shareholders meeting.
To appoint the audit committee.
To appoint auditors to the company for the new financial year and to determine the auditors’ remuneration
To deal with any other business required by the memorandum.

Merit of meetings

People can air their views or grievances
People avoid inconveniences caused by individual decisions.
People get solutions to their problems.
People can ask for assistance in tasks that are difficult to perform.
Relationship and unity in an organization is promoted through interaction.
Encourages sharing of ideas.
People’s ideas are respected.
Solves conflicts and reduces tension.
Improvement in performance of an organization is at tainted through ideas shared in meetings.

Demerit of meetings

Costly in cases where one has to travel to different places to attend meetings.
Wastage of time in case the agenda of the meeting is not met or people fail to contribute to the meeting effectively.
Slow implementation of activities or task since it has to be approved by members in the meeting. It has to follow certain procedure.
Demands personal appearance for the meeting to take place.
Slow decision making because members have to raise opinions and serious points to be noted down. The members have to decide on which to follow and what to forego. This is not an easy task since members will want their opinions considered.

Financial Instruments and Financial Markets - DAIBB Management of Financial Institutions (MFI) Tutorials

2018-10-27T10:45:00.001-07:00

Financial Instruments:

1.Money Market Instruments :

* Loan & advance.

q Treasury bills

q Commercial Papers

q Letter of Credit

q Banker Acceptance

q Certificate of Deposit

q Re-purchase agreement(REPO)

q DD,MT, PO, Cheque etc.

2. Capital Market Instruments:

qBonds

qStocks

qGovt. Securities

qDebenture

qMortgage

Financial Markets:

qPrimary Markets

qSecondary markets

qMoney Markets

qCapital Markets

qSecurity & non-security markets

Regulators of Financial System:

1.MOF (APA)-Ministry of Finance-BB,PCBs & PNBFIs .

2. BB(MOU,CAMELS)-Central bank: BFIs & NBFIs

3. SEC.: Security Exchange commission: Capital market

Financial Statement Analysis:

qFinancial Spread Sheet Analysis

qFund Flow and Cash Flow Analysis

qLiquidity Analysis

qMinimum/ Adequate Capital

qCore Risk Analysis

qCapital Budgeting

qCapital Rationing

qAssets Portfolio

qFinancial Ratio Analysis

Insurance System in Bangladesh:

1. General Insurance-

a. Marine, Air, Rail, Road, Multimodal.

b. Fire insurance

2. Life Insurance.

Course Teacher: MD. NURUL HOQUE MBA,DAIBB(IBB),,BCS(EDU) Deputy General Manager Sonali Bank Limited

Financial System in Bangladesh - DAIBB Management For Financial Institutions Tutorial

2018-10-27T10:40:00.001-07:00

What is financial system?

It is a set of institutional arrangement through which financial surplus in the economy are mobilized from surplus units and transferred to deficit units.

What are the constituents of Financial System?

Financial In our financial system there are three constituents, they are as follows:

1.Financial Institution

2.Financial Instruments

3.Financial Market

Structure of Financial System of Bangladesh:

qFinancial Institutions/ Intermediaries

qFinancial Instruments

qFinancial Markets

Regulators of Financial System:

1. MOF(APA)-Ministry of Finance

2. BB(MOU,CAMELS)-Central bank.

3. SEC-Security Exchange commission.

4. Acts-NI Act, AML Act, Artho Rin Act, Stamp Act etc.

5. Company Act- banking company act, sec act, Joint Stock co. and Insurance co.

Banking Financial Institution:

qCentral Bank-Bangladesh bank.

qPrivate Commercial Banks

qPublic Commercial Banks

qPrivate Foreign Banks

qSpecialized Financial Institutions

Non-Bank Financial Institution:

qInsurance Companies

qInvestments Banks

qFinancial Companies

qICB.

qMerchant banks.

qInvestment company.

Next tutorial: Financial Instruments and Financial Markets - DAIBB Management of Financial Institutions (MFI) Tutorials

Course Teacher: MD. NURUL HOQUE MBA,DAIBB(IBB),,BCS(EDU) Deputy General Manager Sonali Bank Limited

Distinguish between Management Accounting and Financial Accounting

2018-10-16T10:53:00.000-07:00

In general, financial accounting refers to the aggregation of accounting information into financial statements, while managerial accounting refers to the internal processes used to account for business transactions. There are a number of differences between financial and managerial accounting, which fall into the following categories:

Aggregation: Financial accounting reports on the results of an entire business. Managerial accounting almost always reports at a more detailed level, such as profits by product, product line, customer, and geographic region.
Efficiency: Financial accounting reports on the profitability (and therefore the efficiency) of a business, whereas managerial accounting reports on specifically what is causing problems and how to fix them.
Proven information. Financial accounting requires that records be kept with considerable precision, which is needed to prove that the financial statements are correct. Managerial accounting frequently deals with estimates, rather than proven and verifiable facts.
Reporting focus. Financial accounting is oriented toward the creation of financial statements, which are distributed both within and outside of a company. Managerial accounting is more concerned with operational reports, which are only distributed within a company.
Standards. Financial accounting must comply with various accounting standards, whereas managerial accounting does not have to comply with any standards when information is compiled for internal consumption.
Systems. Financial accounting pays no attention to the overall system that a company has for generating a profit, only its outcome. Conversely, managerial accounting is interested in the location of bottleneck operations, and the various ways to enhance profits by resolving bottleneck issues.
Time period. Financial accounting is concerned with the financial results that a business has already achieved, so it has a historical orientation. Managerial accounting may address budgets and forecasts, and so can have a future orientation.
Timing. Financial accounting requires that financial statements be issued following the end of an accounting period. Managerial accounting may issue reports much more frequently, since the information it provides is of most relevance if managers can see it right away.
Valuation. Financial accounting addresses the proper valuation of assets and liabilities, and so is involved with impairments, revaluations, and so forth. Managerial accounting is not concerned with the value of these items, only their productivity.

Describe briefly the uses and limitations of financial statement analysis

2018-10-16T10:48:00.000-07:00

Uses of financial statement analysis

From the financial statements, users want to comprehend key facts about the business's performance and disposition and thereafter make decisions about the business based on facts from the statements.

For large organizations, the financial statements are complex and often include an extensive set of notes explaining financial policies and management analysis. Typically, the notes give an explanation to each and every item in the balance sheet cash flow and income statement in further detail.

Financial statements are used in a number of ways:

Make decisions about the future of the business, whether to continue or stop it.
Decide whether to lease some equipment in the goods production.
Perform financial analysis, a key component in investment decision making in the case of prospective investors.
Examine the financial strength of a person or company so as to arrive at a decision as to whether to lend to the company or person.
The government uses the financial statements to ascertain the accuracy of taxes paid by the organization.
Those who may want to extend credit to the business will use these statements to ascertain the credit worthiness of the company.
Financial statements are used by employees of the business to make collective bargaining agreements.

Limitations of financial statement analysis

In spite of financial statement analysis being a highly useful tool, it also features some limitations, including comparability of financial data and the need to look beyond ratios. Although comparisons between two companies can provide valuable clues about a company’s financial health, alas, the differences between companies’ accounting methods make it, sometimes, difficult to compare the data of the two.

Besides, many a times, sufficient data are on hand in the form of foot notes to the financial statements so as to restate data to a comparable basis. Or else, the analyst should remember the lack of data comparability before reaching any clear-cut conclusion. However, even with this limitation, comparisons between the key ratios of two companies along with industry averages often propose avenues for further investigation.

What is perfect competition and what are its basic characteristics - JAIBB Economics

2018-10-04T12:54:00.000-07:00

JAIBB Tutorial

Principles of Economics and Bangladesh Economy (PBE)

Perfect Competition

A Perfect Competition market is that type of market in which the number of buyers and sellers is very large, all are engaged in buying and selling a homogeneous product without any artificial restrictions and possessing perfect knowledge of the market at a time.

Mrs. Joan Robinson has said—”Perfect Competition prevails when the demand for the output of each producer is perfectly elastic.”

Characteristics of Perfect Competition

The following characteristics are essential for the existence of Perfect Competition:

1. Large Number of Buyers and Sellers:

The first condition is that the number of buyers and sellers must be so large that none of them individually is in a position to influence the price and output of the industry as a whole. In the market the position of a purchaser or a seller is just like a drop of water in an ocean.

2. Homogeneity of the Product:

Each firm should produce and sell a homogeneous product so that no buyer has any preference for the product of any individual seller over others. If goods will be homogeneous then price will also be uniform everywhere.

3. Free Entry and Exit of Firms:

The firm should be free to enter or leave the firm. If there is hope of profit the firm will enter in business and if there is profitability of loss, the firm will leave the business.

4. Perfect Knowledge of the Market:

Buyers and sellers must possess complete knowledge about the prices at which goods are being bought and sold and of the prices at which others are prepared to buy and sell. This will help in having uniformity in prices.

5. Perfect Mobility of the Factors of Production and Goods:

There should be perfect mobility of goods and factors between industries. Goods should be free to move to those places where they can fetch the highest price.

6. Absence of Price Control:

There should be complete openness in buying and selling of goods. Here prices are liable to change freely in response to demand and supply conditions.

7. Perfect Competition among Buyers and Sellers:

In this purchasers and sellers have got complete freedom for bargaining, no restrictions in charging more or demanding less, competition feeling must be present there.

8. Absence of Transport Cost:

There must be absence of transport cost. In having less or negligible transport cost will help complete market in maintaining uniformity in price.

9. One Price of the Commodity:

There is always one price of the commodity available in the market.

10. Independent Relationship between Buyers and Sellers:

There should not be any attachment between sellers and purchasers in the market. Here, the seller should not show prick and choose method in accepting the price of the commodity. If we will see from the close we will find that in real life “Perfect Competition is a pure myth.”

State and discuss the main macroeconomic problems of Bangladesh

2018-08-08T12:43:00.000-07:00

Main macroeconomic Challenges to Improve

Macroeconomic stability, Revenue mobilization, Energy and infrastructure deficit, Financial sector and trade reform, Urban management, Labor skill development, Service sector development, Higher education management and quality assurance etc. In spite, the political stability, reducing distortion in environment with regional human rights and violence stability is another challenge for Bangladesh to achieve steady state economic growth for regional and local perspective.

What we can do now?

Macroeconomic management and balance sheet adjustment is not only the possible efficient measures for sustainable economic development. Growth maximized deficit financing is more efficient rather than so called balance sheet adjustment. Achieving mission and vision is more important rather than steady state growth management.

To achieve regional convergence, we have to face challenges for increasing labor income and income distribution. Quality improvement of products of export earnings and band management is also a challenge for us to support global demand.

Reform of banking sector is an acute challenge for Bangladesh at present moment. IT development and efficient digitalization can improve the banking sector management. Low energy consuming real estate growth, tourism and service sector development is an alternative opportunity for us to maintain in an average 8-10 percent GDP growth since we are struggling for energy and electricity deficiency.

The major differences between Microeconomics and Macroeconomics - IBB Banking Diploma Tutorial

2018-08-08T12:34:00.000-07:00

The major differences between Microeconomics and Macroeconomics are as follows:

Microeconomics:

1. It is the study of individual economic units of an economy.

2. It deals with Individual Income, Individual prices, Individual output, etc.

3. Its central problem is price determination and allocation of resources.

4. Its main tools are demand and supply of a particular commodity/factor.

5. It helps to solve the central problem of ‘what, how and for whom’ to produce. In the economy

6. It discusses how equilibrium of a consumer, a producer or an Industry Is attained.

7. Price is the main determinant of micro- economic problems.

8. Examples are: Individual Income, Individual savings, price determination of a commodity, individual firm’s output, consumer’s equilibrium.

Macroeconomics:

1. It is the study of economy as a whole and its aggregates.

2. It deals with aggregates like national Income, general price level, national output, etc.

3. Its central problem is determination of level of Income and employment.

4. Its main tools are aggregate demand and aggregate supply of the economy as a whole.

5. It helps to solve the central problem of full employment of resources in the economy.

6. It is concerned with the determination of equilibrium level of Income and employment of the economy.

7. Income is the major determinant of macroeconomic problems.

8. Examples are: National Income, national savings, general price level, aggregate demand, aggregate supply, poverty, unemployment, etc.

DAIBB Management Accounting question July 2018

2018-08-01T00:08:00.003-07:00

Ka Set

THE INSTITUTE OF BANKERS, BANGLADESH (IBB)

Banking Diploma Examination, July, 2018

DAIBB

Management Accounting (MA)

Time-3 hours and 30 minutes

Fun marks---100

Pass marks-50

[N. B.-The figures in the right margin indicate full marks. Answer any five questions. Different parts of a question should be answered in a same place. Use of calculator is permissible. ]

Mark

1. (a) Discuss briefly the role of Management Accounting in planning, control and decision making a in bank with examples relevant to your answer. 7

(b) Describe briefly the uses and limitations of financial statement analysis. 7
(c) Distinguish between Management Accounting and Financial Accounting. 6

2. (a) Discuss the difference between Product Cost and Period Cost. 5

(b) Cost department of the ABC Company made the following data and cost available for the year 201 7 :-

Inventories	January-l	Deccmbcr-31
Finished goods	350 units	450 units
Work in process	Tk. 90,000	Tk. 45,000
Raw material’s	Tk. 35,000	Tk. 50,000
Finished goods unit cost	162	?
Depreciation :
Office equipment		2800
Factory plant and Machinery		21500
Vehicle engaged for marketing		3200
Maintains : Generation machine		9500
Factory building		5200
Internal roads and drain		10000
Sales @ Tk. 220 per unit		8,53,600
Income Tax paid		5000
Miscellaneous expenses and cost :
Fuel (gas bill)		4500
Telephone factory		6000
Power for light (90% for factory, 10% for administration)		3000
Water		4000
Land, rates and taxes (80% factory, 20% office)		4300
Indirect materials		2645
Raw materials purchase		3,64,000
Direct labour		1,62,500
Wages paid to worker which there was no production due to power failure.		17000
Leave and bonus		40000

Factory office expenses :
Factory foreman salary ‘ .		6000
Factory manager salary		16000
Truck, hire cost to carry purchased materials		8000
Purchase discount		5200
Marketing expenses		20000
Administration expenses		15000
Interest earned (aher tax deduction) .		6000

Required :
(i) Statement of cost of goods sold. 8
(ii) Income statement showing gross and net profit in total and per unit. 7

3 (a) What is meant by working capital cycle?

(b) Discuss the influence of factors in determining the working capital requirement of a manufacturing company.
(c) Following is the cost statement of ABC Company :10

Raw materials	T k. 50 per unit
Direct labour cost	Tk. 20 per unit
Overheads cost	Tk. 40 per unit
Total cost	Tk. 10 per unit
Profit	Tk. 30 per unit
Selling price	Tk. 140 er unit

You are also given the following additional information :
(i) Average Raw material, in stock . One month
(ii) Average Raw materials in process Half a month
(iii) Stock of finished goods 30 days
(iv) 20% sales are cash sales . .
(v) Expected cash balance Tk. 1,00,000
(vi) Credit allowed to debtors Two months
(vii) Credit allowed by creditors 45 days
(viii) Time lag in payment of wages 15 days
(ix) Time lag in payment of overhead 1 month
(Note: 360 days in a year)
You are required to prepare statement showing the working capital requirement if level of activity of the company is 70,000 units. Assume 360 days In a year.

4 (a) Discuss the compensation strengths and weakness of the techniques of capital budgeting.4

(b) The Commitment company is considering the purchases of new machine costing Tk. 20.00.000. The estimated cash benefits are : .

Year	Cash benefits (in taka)
1	500000
2	10,00,000
3	8,00,000
4	10,00,000
5	5,00,000
6	6,00,000

The machine is to be depreciated on a straight line basis over a period of six years. The salvage value of the machine is expected to be Tk. 2,00,000. Assume a 35% tax rate and a cost of capital is 10%.
Required :
(i) Payback period.
(ii) Average Annual Rate of Return (ARR).
(iii) Net Present Value (NPV).
(iv) Present value of payback period.
(v) Profitability Index (131)
(vi) Comment on financial viability of buying the machine.
(The present values of Tk. 1 for six years at 10% are : 0.909, 0.826, 0.751, 0.683, 0.621, 0.564)

5 (a) The Bay Shoe Company sells five different styles of shoes with identical costs and selling12 prices. The company is trying to find out the profitability of opening another store, which have the following expenses and revenues :-

Per pair	Taka
Selling price	30.00
Variable cost	19.50
Salesmen’s commission	1.50
Total variable cost	21.00
Annual fixed expenses are :-
Rent	60,000
Salaries	2,00,000
Advertising	80,000
Other fixed expenses	20,000
Total	3,60,000

Required :
(i) Calculate the annual break-even point in units and in taka sales. Also determine the profit or loss if 45,000 pairs of shoes are sold.
(ii) The sales commissions are proposed to be discontinued, but instead a fixed amount of Tk. 54.000 is to be incurred in fixed salaries. A reduction in selling price of 5% is also proposed. What will be the Break-even point in unit and in taka sales?
(iii) It is proposed to pay the store manager 50 paisa per pair as additional commission. The selling price is also proposed to be increased by l0%. What would be the Break-even point in units and in sales taka?
(iv) Refer to the original data. If the store manager were to be paid 30 paisa (Tk. 0-30) commission on each pair of shoes sold in excess of the Break-even point. What would be store‘s net profit, if 50,000 pairs were sold?
(v) Determine the point of indifference between commission plan and salary plan.
(Note: Consider each part of the question separately.)
(b) What are the assumptions underlying in construction of a Break-even chart? 4
(c) “The effect of a price rise is always to increase the p/v ratio and to get reduced the Break-even point.” Explain the statement with example.

6. XYZ Airport‘s Board of Representative is considering the construction of a longer runway at the airport. Currently, the airport can handle only private aircraft and small commuter jets. A new, long runway would enable the airport to handle the mid size jets used on many domestic flights.~ Data pertinent to the Board’s decision appear below :

	Taka
Cost of acquiring additional land for runway	7,000,000
Cost of runway construction	20,000,000
Cost of extending perimeter fence	2,984,000
Cost of runway lights	3,960,000
Annual cost of maintenance of new runway	2,800,000
Annual incremental revenue from landing fees	4,000,000

In addition to the preceding data, two other facts are relevant to the decision. First, a longer runway will require a new showplow, which will cost Tk. 10,000,000. The old showplow could be sold now for Tk. 1,000,000. The new, longer plow will cost Tk. 1,200,000 more in annual operating costs. Second, the Board of representatives believes that the proposed long runway and the major jet service it will bring to the airport will increase economic activity in the community. The Board projects that the increased economic activity will result in Tk. 6,400,000 per year in additional tax revenue for the airport. In analyzing the runway proposal, the Board has decided to use a 10 year life. The airport’s hurdle rate for capital projects is 12%.
Required:
(a) Compute the initial cost of the investment in the long runway.
(b) Compute the annual cost or benefit from the runway.
(c) Prepare a net present value analysis of the proposed long runway.
(d) Should the Board representatives approve the runway?

The financial statements of LLM Company are presented below :

LLM Company

Income Statement

for the year ended December 31, 2017

Particulars	Amount	Amount
	Taka	Taka
Net Sales (All on account)		6.00.000
Less : Cost of goods sold		4.50.000
Gross profit		1,50,000
Less : Operating expenses : Selling expenses	60,000
Administrative expenses	25,000
Total operating expenses		85,000
Net operating income		65,000
Less: Interest expenses		5000
Income before tax		60,000
Less: Income Tax expenses		17,500
Net Income		42,500

LLM Company
Comparative Balance Sheet
on 31^st December

Assets :	2014	2016
	Taka	Taka
Cash	60.000	32,500
Accounts Receivable(Net)	50,000	35,000
Merchandise Inventories	95,000	87,500
Land	75.000	-
Property, Plant and Equipment	1,75,000	1,95,000
Accumulated Depreciation	75,000	60,000
Total Assets	3,80,000	2,90,000
Liabilities and Stockholder’s Equity :		-
Accounts Payable	65,000	82,500
Income Taxes Payable	37,500	50,000
Notes Payable	50,000	25,000
Bond ‘ 75,000 Common Share	62,500	62,500
Retained camings	90,000	70,000
Total Liabilities and Stockholder’s Equity	3,805,000	290,000

Additional Information:
(a) During the year Plant and Equipment was sold for Tk. 25,000 cash.
(b) The original costs of the assets were Tk. 37,500 and has a book value of Tk. 25,000 at time of sale.
(c) Dividend of Tk. 25,000 were declared and paid.
(d) Depreciation expenses altogether Tk. 27,500.
(e) Additional equipment was purchased for Tk. 17,500.
(f) In the year of 2017 LLM Company issued Bond to purchase land. These Bonds were exchanged with the land owner.

Required:
(i) Prepare a statement of Cash Flow for 2017, under the direct method.
(ii) Prepare a statement of Cash 1" low for 2017, under the indirect method.

(a) What is profitability? How can a firm improve the profitability of a project? 5

(b) Apex Company Ltd. operating at 80% level of activity produces and sells two products A and B. The cost sheet of these two products are as follows :

	Product (A)	Product (B)
Units products and sold	600 units	500 units
	Taka	Taka
Direct Materials (per unit)	2.00	4.00
Direct Labour (per unit)	4.00	4.00
Factory overhead per unit (40% iixcd)	5.00	3.00
Selling and administrative overhead (60% fixed)	8.00	5.00
Total cost per unit	19.00	16.00
Selling price per unit	23.00	19.00

Factory overheads are absorbed on the basis of machine hours which is the limiting (key) factor. The machine hour rate is Tk. 2 per hour. The company receives an offer from China for the purchase of product ‘A‘ at a price of Tk. 17-50 per unit. Alternatively, the company has another offer from Iran for purchase of product B at a price of Tk. 15-50 per unit. In both case a special packing charge 0f Tk. 0.50 per unit has to be borne by the company. The company can accept either of the two export orders and in both the case the company can supply such quantities as may be possible by utilizing the balance 0f 25% 0f its capacity.

You are required to prepare:--
(i) A statement showing the economics of the two export proposals giving your recommendations as to which proposal should be accepted.
(ii) A statement showing the overall profitability of the company after incorporating the export proposal recommended by you.

9. MML Company needs to expand its facilities. To do so, the firm must acquire a machine costing Tk. 80.000. The machine can be leased or purchased. The firm is in the 40% tax” bracket, and its after-tax cost of debt is 9%. The terms of the lease and purchase plans are as follows:

Less: The leasing arrangement requires end of year payments of Tk. 19,800 over 5 years. All maintenance costs will be paid by the loser, insurance and other costs will be borne by the lessee. The lessee will exercise its option to purchase the asset for Tk. 24,000 at termination of the lease.

Purchase: If the firm purchases the machine, its cost of Tk. 80.000 will be financed with a 5 year. 14% loan requiring equal end-of-year payments of Tk. 23,302. The machine will be depreciated under straight line method, assuming zero salvage value. The firm will pay Tk. 2.000 per year for a service contract that covers all maintenance costs; insurance and other costs will be borne by the firm. The firm plans to keep the equipment and use it beyond its 5 year recovery period.

Required:
(a) Determine the after-tax cash outflows of MML under each alternative. 8
(b) Find the present value of each after-tax cash outflow stream, using the after-tax cost of debt. 8
(c) Which alternative lease or purchase--would you recommend? Why? 4

10. Write short notes on any five of the following:-- 4x5=20

(a) Credit analysis and its shortcomings;
(b) Cost of capital and financial leverage;
(c) Budgetary control systems;
(d) Management report;
(e) Variance analysis;
(f) Inventory management;
(g) Hire purchase finance;
(h) Receivables management.

Page number	Incorrect	Correct
Page 273	Breakeven point (in Tk.) = BEP in units x Sells per unit = 25.50 X 34,000	Breakeven point (in Tk.) = BEP in units x Sells per unit = 28.50 X 34,000
Page 273	Break even point (in Tk.) = 10,33,043	Break even point (in Tk.) = 10,33,032
Page 274	Initial Cost 4,29,44,000	Initial Cost 4,49,44,000
Page 274	Annual incremental benefit 64,00,000	Annual incremental benefit 1,44,00,000
Page 277	Add: Closing merchandise inventory 95,999 7,500	Add: Closing merchandise inventory 95,000 7,500
Page 277	Less: proceeds from sale of plant & equipment (17,000)	Less: proceeds from sale of plant & equipment (17,500)

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Dear DAIBB exam candidates,

Hope you all are fine.
This post is for the candidates who are taking preparation for Management Accounting exam.
I found some printing mistakes in DAIBB Management accounting math review book. I share these findings with you.