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Enterprise Pillar
E3 Enterprise Strategy
Instructions to candidates
You are allowed three hours to answer this question paper.
You are allowed 20 minutes reading time before the examination begins
during which you should read the question paper and, if you wish, highlight
and/or make notes on the question paper. However, you will not be allowed,
under any circumstances, to open the answer book and start writing or use
your calculator during this reading time.
You are strongly advised to carefully read ALL the question requirements
before attempting the question concerned (that is all parts and/or subquestions).
ALL answers must be written in the answer book. Answers written on the
question paper will not be submitted for marking.
You should show all workings as marks are available for the method you use.
The pre-seen case study material is included in this question paper on pages
2 to 7. The unseen case study material, specific to this examination, is
provided on pages 8 and 9.
Answer the compulsory questions in Section A on page 11. This page is
detachable for ease of reference.
Answer TWO of the three questions in Section B on pages 14 to 19.
Maths tables and formulae are provided on pages 21 and 22.
The list of verbs as published in the syllabus is given for reference on
page 23.
Write your candidate number, the paper number and examination subject title
in the spaces provided on the front of the answer book. Also write your
contact ID and name in the space provided in the right hand margin and seal
to close.
Tick the appropriate boxes on the front of the answer book to indicate the
questions you have answered.
E3 Enterprise Strategy
TURN OVER
The Chartered Institute of Management Accountants 2014
P plc was founded in the early 20 Century as a plumbing and buildings materials
manufacturing business and enjoyed very rapid growth in the 1970s and 1980s. In 1985, P
was listed on the UK stock exchange and at this time first ventured into the USA by acquiring
a building materials distribution company based in New Jersey. In 1990, P plc acquired a
building supplies business in the UK and, later in that decade, made acquisitions of other
European based plumbing and heating and building materials distribution companies. In the
st
early years of the 21 Century, P plc sold off all its manufacturing business units and
concentrated solely on being a distributor and retailer of plumbing, heating and building
materials.
Corporate values
P plc is proud of its history and traditions of distributing and retailing good quality products in
locations which are convenient to its customers. It has developed a series of core values
which are:
Trading fairly and honestly;
Being responsive to customer needs and market changes and not being satisfied with
standing still, but seeking to continuously improve;
Employing committed people and providing training opportunities to develop their skills;
Having respect for cultural diversity across all the companys stakeholders.
Business operations
P plcs head office is in the UK which also contains its centralised treasury. It has two
operating divisions which are:
Plumbing and heating
Products:
Baths, showers, toilets, sinks, heating systems, general plumbing
parts such as water taps, pipes and drainage systems.
Building materials
Products:
Concrete building blocks, bricks, tiles, flooring products, roofing
materials and wooden roof beams and other timber, as well as
upvc products, such as doors and window frames.
Each divisions operating arrangements are similar. Each division has two distribution
warehouses, one each in Europe and the USA. Each division uses these warehouses to fulfil
sales orders placed by its external direct sales units and retail outlets.
The external direct sales units sell to building contractors, plumbing contractors and
merchants who supply small building and plumbing companies with materials and parts.
P plcs retail outlets sell directly to the public and to the building and plumbing trades. Some
of these retail sales outlets were set up or acquired as chains of retail outlets each with a
common trading name and these have been retained as separate business units. The retail
outlets that have been acquired continue to operate under their own trading names so that P
plc can retain the benefit of the goodwill the retail outlets developed. Each has a specific line
of business, such as the sale of complete bathrooms and kitchens through chains of
showrooms.
May 2014
Enterprise Strategy
The plumbing and heating division carries out its retail operations through established chains
of showrooms. These showrooms sell products to local tradesmen and also directly to the
public. The building materials divisions retail activities are carried out through small-scale
retail outlets which are usually located on industrial estates and those that have been
acquired retain their local building supply trading names.
Overall, P plc has well over 90,000 suppliers and sells to over 1.2 million customers across
the world. Each of the two divisions operates its own large logistics and distribution network.
They operate their own fleet of road transport vehicles to distribute products in Europe and
the USA and use rail, sea and air networks for distribution to their external direct sales units
and retail outlets in other parts of the world.
Board of Directors and Executive Board composition
The Board of Directors comprises a Non-executive Chair, a Chief Executive, the five directors
covering the functions of Finance, Logistics, Procurement, Marketing and Information
Systems, the Managing Directors of the two divisions, the Company Secretary and six nonexecutive directors.
In addition, P plc has an Executive Board comprising the Chief Executive, the five functional
executive directors, the Managing Directors of the two divisions and also the Chief Human
Resources Officer, who is not a main board member. The Executive Board reports to the
Board of Directors.
Divisional Management Structure
Each of the two divisions operates with a Divisional Executive Management Team (DEMT),
based in the UK. These comprise chief divisional officers for the functions of finance, human
resources, information systems, logistics, marketing and procurement. Each DEMT is led by
the relevant Divisional Managing Director. In the USA, there is also a Senior Executive Team
for each division which comprises chief officers covering the same functions as are
represented on the DEMT and chaired by the companys divisional Vice President (Plumbing
and Heating or Building Materials as appropriate) for US sales. The senior executive teams in
the USA report to their appropriate DEMT in the UK. An organisational structure chart is
presented at Appendix 1.
Financial structure
There are 500 million GBP 0.10 shares in issue. The ownership of the company is split in the
following proportions:
Financial institutions:
90%
Individual investors:
9.5%
Board members and employees: 0.5%
The share price has ranged between GBP 9 and GBP 6 over the last year. The dividend in
the last financial year was GBP 0.25 per share and represented an increase of 20% over the
previous year. The Chairman commented on this improved dividend stating that the Board
had strong confidence that the company would continue to grow.
Enterprise Strategy
May 2014
Revenue
Operating profit
Building materials
GBP million
6,837
213
Building materials
GBP million
781
597
65
967
729
70
930
1,075
854
1,052
Assets employed:
Non-current assets:
Intangible assets
Property, plant and equipment
Trade and other receivables
Current assets:
Inventories
Trade and other receivables
Non-current assets employed by P plc at its head office were GBP 40 million at book value.
Source of products
P plc prides itself on operating an efficient supply chain and developing strong relationships
with a wide range of suppliers across the world which offer quality products. It grants
preferred supplier status to most of its suppliers and enters into long-term supply contracts.
All P plcs external direct sales units and retail outlets are supplied from its warehouses in
Europe or the USA. This means that some of its products which are sourced from Asia and
Africa are shipped to the companys warehouses in Europe and the USA. External direct
sales units and retail outlets in Asia and Africa then receive shipments from the companys
warehouses. This means that some products, which P plc sources from suppliers located in
Asia and Africa, cross the world, are stored in warehouses and then cross the world again to
be delivered to their destinations in Asia and Africa.
May 2014
Enterprise Strategy
Enterprise Strategy
May 2014
Appendix 1
P plc ORGANISATION STRUCTURE
May 2014
P plc
Board of Directors
Executive Board
USA
Plumbing and Heating Division
Senior Executive Team
USA Warehouses
External
Sales
Retail
Outlets
USA
Building Materials Division
Senior Executive Team
Europe Warehouses
External
Sales
Retail
Outlets
Europe Warehouses
External
Sales
Retail
Outlets
USA Warehouses
External
Sales
Retail
Outlets
Enterprise Strategy
Note: Some of the retail outlets were established, or were acquired as chains of retail outlets, operating as business units with a common trading name.
The remaining retail outlets are individual business units in their own right comprising a single outlet.
Appendix 2
Extracts from P plc's statement of profit or loss and statement of financial position
Statement of profit or loss for the year ended 31 December 2013
GBP million
13,877
10,128
3,749
3,302
447
68
379
116
263
Revenue
Cost of sales
Gross profit
Operating costs
Operating profit
Net finance costs
Profit before tax
Tax
PROFIT FOR THE YEAR
1,748
1,366
135
3,249
1,784
2,127
418
4,329
7,578
50
25
3,396
3,471
Non-current liabilities
Bank loans
Current liabilities
Trade and other payables
Bank loans and overdrafts
Total current liabilities
Total liabilities
Total equity and liabilities
1,000
2,905
202
3,107
4,107
7,578
Enterprise Strategy
May 2014
SECTION A 50 MARKS
[You are advised to spend no longer than 90 minutes on this question]
May 2014
Enterprise Strategy
GBP million
2.40 per year
3.40 per year
Option 2
There is an opportunity to acquire several retail outlets in Country Q, a northern European
country within which BM already operates several retail outlets. The retail outlets which BM is
considering acquiring in Country Q specialise in the supply of specialist building materials for
use in environmentally sustainable building projects. Profit margins for such building materials
tend to be high and currently there are few other suppliers of this type of product. Sustainable
building development is a growing area of business in northern Europe. BMs retail outlets
currently operating in Country Q do not stock these specialist building material products and
BMs staff therefore are not familiar with them. BM could acquire these retail outlets for an
initial payment of GBP 14.5 million (Time 0) followed by a further investment of GBP 4.25
million to upgrade the facilities at the end of the first year of operations (Time 1). Research
has provided the following projected probabilities of pre-tax net cash flows, converted into
GBP at the expected exchange rate:
Year
1 - 10
Probability
GBP million
3.00 per year
0.5
GBP million
4.35 per year
0.3
GBP million
2.65 per year
0.2
These net cash flows will only be achieved if the investment to upgrade the facility is carried
out and do not reflect the level of expected performance of the target acquisition under its
current ownership.
BMs divisional strategy
The DEMT of BM constantly reviews the divisions activities in order to ensure that it offers
value for money to its customers and that it remains one of the most efficient building
materials suppliers in the industry. The DEMT also considers that a focus upon customer
service, linked closely to P plcs corporate responsibility aims (Pre-seen page 5), has a high
correlation with the achievement of strong financial performance. Therefore, operational
efficiency and excellence in customer service are the key aims of BMs divisional strategy.
TURN OVER
Enterprise Strategy
May 2014
May 2014
10
Enterprise Strategy
Required
(a)
(i)
Evaluate the primary activities undertaken by the Building Materials Division (BM).
Your answer should clearly explain how each of these activities should be organised
to add value to BM's customers.
Note: You should use Porter's Value Chain to structure your answer, but you are
NOT required to draw the value chain as part of your answer.
(12 marks)
(ii)
(b)
Calculate.
a.
b.
c.
(ii)
The Net Present Value and the Profitability Index for Option 1
The Net Present Value and the Profitability Index for the Expected Value for
Option 2
The Net Present Value for the worst case outcome for Option 2
(10 marks)
Discuss the potential benefits and difficulties for BM of undertaking each of the
strategic development options. Your answer should include an evaluation of the
calculations provided in part (b)(i) of your answer.
(10 marks)
(iii) Recommend, with reasons, which of the two strategic development options should
be undertaken by BM to achieve P plc's strategic objective 1. You should use your
answers to parts (b)(i) and (ii) to support your answer.
(4 marks)
(c)
Discuss how the effective implementation by BM of any TWO of the key areas identified
in P plc's Corporate Responsibility aims (Pre-seen material page 5) can impact on the
successful achievement of BM's divisional strategy.
(8 marks)
(Total marks for Question One = 50 marks)
End of Section A
Section B starts on page 14
TURN OVER
Enterprise Strategy
11
May 2014
May 2014
12
Enterprise Strategy
TURN OVER
Enterprise Strategy
13
May 2014
SECTION B 50 MARKS
[You are advised to spend no longer than 45 minutes on each question in this
section]
May 2014
14
Enterprise Strategy
Required
(a)
Evaluate, using the PESTLE framework, the factors which have contributed to D's
strategic approach in meeting its business ethical challenges and corporate
responsibilities.
(12 marks)
(b)
(c)
Discuss the benefits for D and the barriers it will need to overcome in becoming a
learning organisation.
(7 marks)
(Total for Question Two = 25 marks)
TURN OVER
Enterprise Strategy
15
May 2014
Question Three
J is a global fashion design and retail business, best known for its fast-fashion clothing. Fast
fashion provides around 10 design seasons* each year rather than the traditional 4 design
seasons offered by many fashion retailers. J operates over 4,000 stores in 20 countries
located throughout Europe, Asia and the USA.
J does not have any factories. Instead J outsources all of the manufacture of its own designs
to approximately 400 manufacturers throughout Europe and Asia. These outsourced
manufacturers are long-term partners of J.
J employs its own in-house design team which is based in Js northern European Head
Office. Js design team controls the stages of design from merchandise planning through to
establishing the design specifications of each item of clothing. J also has a number of
production liaison offices which are located close to many of its outsourced manufacturers in
Europe and Asia. Location of these production liaison offices, close to J's key outsourced
manufacturers, helps to optimise efficiency and minimise costs.
The production liaison teams are responsible for managing the sourcing and procurement of
the raw materials and the outsourced manufacturers' final output. They are also responsible
for ensuring that these outsourced manufacturers are adhering to Js Code of Conduct, which
is mandatory for all of Js outsourced manufacturers. Js Code of Conduct includes policies on
the following areas:
1.
2.
3.
Communication between the design team at Head Office, the production liaison teams and
the outsourced manufacturers is managed through an integrated information system.
J aims to reduce costs in all parts of its organisation. It optimises raw material prices through
large volume purchasing and manages its logistics through a just-intime delivery system.
The majority of Js stores are leased. This enables it to have total flexibility by being able to
switch its stores relatively easily to the best locations to attract customers and leasing also
helps to improve Js cost efficiency.
J has encountered increasing demand for online ordering of its products, as have many of its
competitors in the retail fashion industry. This rapid development of online sales, in particular
shopping via smart phones and tablets, has encouraged J to undertake significant long-term
investment in e-business. This has enabled it to manage much larger volumes of online
transactions. In 2013, Js online shop became available and is proving to be very popular
with customers.
Within each production liaison office, J employs an audit team whose role is to ensure that the
activities at outsourced manufacturers factories meet and comply with Js Code of Conduct.
All Js outsourced manufacturers must sign the Code of Conduct before undertaking any work
for J. As many of Js outsourced manufacturers are based in under-developed economies, J
helps them to develop and improve their management and information systems on an ongoing basis to ensure that they meet the required compliance regulations of its Code of
Conduct.
*Note: A design season is the period of time that a particular design or range of clothing is on
offer to customers within the stores or online.
16
Enterprise Strategy
Required
(a)
(i)
(ii)
Explain the extent to which this generic strategy has influenced the way the business
is structured and operates.
(4 marks)
(b)
Recommend, with reasons, THREE types of activity which should be undertaken by J's
audit teams to ensure its outsourced manufacturers comply with the policies which form
the basis of J's Code of Conduct.
(9 marks)
(c)
Evaluate the benefits for J and the barriers it will need to overcome when undertaking
long term investment in e-business to meet the needs of its customers in all the countries
in which it trades.
(10 marks)
(Total for Question Three = 25 marks)
TURN OVER
Enterprise Strategy
17
May 2014
Question Four
C is a private hospital which provides a range of surgical and medical services. The hospital
has 60 patient beds, two operating theatres and a day care unit. C employs doctors and
nurses covering 20 specialties. There are many other private hospitals which compete with C.
Cs good reputation has been built upon its high levels of clinical excellence and the quality of
care it provides to its patients. Most of Cs patients choose to use Cs services following
consultation with their local doctor. As C is a private hospital, it charges patients for the
treatments they receive. The price of each treatment varies according to its type.
To date, Cs performance has largely been evaluated based upon its financial results. The
Hospital Board recently met to review Cs current corporate strategy. The Hospital Board
includes senior medical consultants, some of whom are the original founders of C. During the
meeting, members of the Hospital Board agreed the following objectives for C:
To motivate, recognise and retain highly trained staff
To provide high quality services
To increase demand for services provided
To increase revenues and generate higher levels of profit
From these strategic objectives, the Finance Director (FD) presented the hospital Board with
a strategy map:
Cs Mission Statement
C is committed to providing the highest quality of health care through the provision of service
excellence and compassionate care
4. Financial Processes (To increase revenues and generate higher levels of profit)
Our financial processes and management reporting must support the rest of the organisation
in delivering efficient and effective patient services and support
3. Community and Patient Engagement Processes (To increase demand for services
provided)
Our patients must be able to give feedback on our performance and their levels of satisfaction
with our processes and local doctors and the wider community must be made aware of what
we do
2. Clinical and Business Processes (To provide high quality services)
Our healthcare delivery processes must be efficient and effective in order to continuously
improve the quality of patient care
1. Staff Development Processes (To motivate, recognise and retain highly trained staff)
Our staff must be motivated and suitably rewarded so that they remain working for C and are
provided with the skills to be able to operate at the highest levels of clinical excellence
The FD stated that this strategy map should help C to understand the key link between its
mission statement and the actions it must carry out to achieve its objectives. He also
recommended that this strategy map should be used as a basis for the development of a
Balanced Scorecard for C.
However, the FD recognises that encouraging Cs key stakeholders to engage with the
process may be difficult. Other members of the Hospital Board are concerned that this will be
a radical departure from its present focus upon largely financial performance measures and
that key stakeholders are unlikely to be interested in the measures which are used to evaluate
the hospitals performance other than those relating to profit.
18
Enterprise Strategy
Required
(a)
(b)
Recommend ONE action, with justification, and ONE performance measure for each of
the four processes identified in C's strategy map, which would assist the Hospital Board in
developing and implementing a Balanced Scorecard for C.
(12 marks)
(Total for Question Four = 25 marks)
Enterprise Strategy
19
May 2014
May 2014
20
Enterprise Strategy
1%
0.990
0.980
0.971
0.961
0.951
0.942
0.933
0.923
0.914
0.905
0.896
0.887
0.879
0.870
0.861
0.853
0.844
0.836
0.828
0.820
2%
0.980
0.961
0.942
0.924
0.906
0.888
0.871
0.853
0.837
0.820
0.804
0.788
0.773
0.758
0.743
0.728
0.714
0.700
0.686
0.673
3%
0.971
0.943
0.915
0.888
0.863
0.837
0.813
0.789
0.766
0.744
0.722
0.701
0.681
0.661
0.642
0.623
0.605
0.587
0.570
0.554
Periods
(n)
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
11%
0.901
0.812
0.731
0.659
0.593
0.535
0.482
0.434
0.391
0.352
0.317
0.286
0.258
0.232
0.209
0.188
0.170
0.153
0.138
0.124
12%
0.893
0.797
0.712
0.636
0.567
0.507
0.452
0.404
0.361
0.322
0.287
0.257
0.229
0.205
0.183
0.163
0.146
0.130
0.116
0.104
13%
0.885
0.783
0.693
0.613
0.543
0.480
0.425
0.376
0.333
0.295
0.261
0.231
0.204
0.181
0.160
0.141
0.125
0.111
0.098
0.087
Enterprise Strategy
14%
0.877
0.769
0.675
0.592
0.519
0.456
0.400
0.351
0.308
0.270
0.237
0.208
0.182
0.160
0.140
0.123
0.108
0.095
0.083
0.073
6%
0.943
0.890
0.840
0.792
0.747
0.705
0.665
0.627
0.592
0.558
0.527
0.497
0.469
0.442
0.417
0.394
0.371
0.350
0.331
0.312
7%
0.935
0.873
0.816
0.763
0.713
0.666
0.623
0.582
0.544
0.508
0.475
0.444
0.415
0.388
0.362
0.339
0.317
0.296
0.277
0.258
8%
0.926
0.857
0.794
0.735
0.681
0.630
0.583
0.540
0.500
0.463
0.429
0.397
0.368
0.340
0.315
0.292
0.270
0.250
0.232
0.215
9%
0.917
0.842
0.772
0.708
0.650
0.596
0.547
0.502
0.460
0.422
0.388
0.356
0.326
0.299
0.275
0.252
0.231
0.212
0.194
0.178
10%
0.909
0.826
0.751
0.683
0.621
0.564
0.513
0.467
0.424
0.386
0.350
0.319
0.290
0.263
0.239
0.218
0.198
0.180
0.164
0.149
17%
0.855
0.731
0.624
0.534
0.456
0.390
0.333
0.285
0.243
0.208
0.178
0.152
0.130
0.111
0.095
0.081
0.069
0.059
0.051
0.043
18%
0.847
0.718
0.609
0.516
0.437
0.370
0.314
0.266
0.225
0.191
0.162
0.137
0.116
0.099
0.084
0.071
0.060
0.051
0.043
0.037
19%
0.840
0.706
0.593
0.499
0.419
0.352
0.296
0.249
0.209
0.176
0.148
0.124
0.104
0.088
0.079
0.062
0.052
0.044
0.037
0.031
20%
0.833
0.694
0.579
0.482
0.402
0.335
0.279
0.233
0.194
0.162
0.135
0.112
0.093
0.078
0.065
0.054
0.045
0.038
0.031
0.026
21
May 2014
Cumulative present value of $1 per annum, Receivable or Payable at the end of each year for n years
1 (1 r )
r
Periods
(n)
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
2%
0.980
1.942
2.884
3.808
4.713
5.601
6.472
7.325
8.162
8.983
9.787
10.575
11.348
12.106
12.849
13.578
14.292
14.992
15.679
16.351
3%
0.971
1.913
2.829
3.717
4.580
5.417
6.230
7.020
7.786
8.530
9.253
9.954
10.635
11.296
11.938
12.561
13.166
13.754
14.324
14.878
4%
0.962
1.886
2.775
3.630
4.452
5.242
6.002
6.733
7.435
8.111
8.760
9.385
9.986
10.563
11.118
11.652
12.166
12.659
13.134
13.590
Periods
(n)
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
5%
0.952
1.859
2.723
3.546
4.329
5.076
5.786
6.463
7.108
7.722
8.306
8.863
9.394
9.899
10.380
10.838
11.274
11.690
12.085
12.462
6%
0.943
1.833
2.673
3.465
4.212
4.917
5.582
6.210
6.802
7.360
7.887
8.384
8.853
9.295
9.712
10.106
10.477
10.828
11.158
11.470
7%
0.935
1.808
2.624
3.387
4.100
4.767
5.389
5.971
6.515
7.024
7.499
7.943
8.358
8.745
9.108
9.447
9.763
10.059
10.336
10.594
8%
0.926
1.783
2.577
3.312
3.993
4.623
5.206
5.747
6.247
6.710
7.139
7.536
7.904
8.244
8.559
8.851
9.122
9.372
9.604
9.818
9%
0.917
1.759
2.531
3.240
3.890
4.486
5.033
5.535
5.995
6.418
6.805
7.161
7.487
7.786
8.061
8.313
8.544
8.756
8.950
9.129
10%
0.909
1.736
2.487
3.170
3.791
4.355
4.868
5.335
5.759
6.145
6.495
6.814
7.103
7.367
7.606
7.824
8.022
8.201
8.365
8.514
17%
0.855
1.585
2.210
2.743
3.199
3.589
3.922
4.207
4.451
4.659
4.836
4.988
5.118
5.229
5.324
5.405
5.475
5.534
5.584
5.628
18%
0.847
1.566
2.174
2.690
3.127
3.498
3.812
4.078
4.303
4.494
4.656
4.793
4.910
5.008
5.092
5.162
5.222
5.273
5.316
5.353
19%
0.840
1.547
2.140
2.639
3.058
3.410
3.706
3.954
4.163
4.339
4.486
4.611
4.715
4.802
4.876
4.938
4.990
5.033
5.070
5.101
20%
0.833
1.528
2.106
2.589
2.991
3.326
3.605
3.837
4.031
4.192
4.327
4.439
4.533
4.611
4.675
4.730
4.775
4.812
4.843
4.870
12%
0.893
1.690
2.402
3.037
3.605
4.111
4.564
4.968
5.328
5.650
5.938
6.194
6.424
6.628
6.811
6.974
7.120
7.250
7.366
7.469
13%
0.885
1.668
2.361
2.974
3.517
3.998
4.423
4.799
5.132
5.426
5.687
5.918
6.122
6.302
6.462
6.604
6.729
6.840
6.938
7.025
14%
0.877
1.647
2.322
2.914
3.433
3.889
4.288
4.639
4.946
5.216
5.453
5.660
5.842
6.002
6.142
6.265
6.373
6.467
6.550
6.623
15%
0.870
1.626
2.283
2.855
3.352
3.784
4.160
4.487
4.772
5.019
5.234
5.421
5.583
5.724
5.847
5.954
6.047
6.128
6.198
6.259
16%
0.862
1.605
2.246
2.798
3.274
3.685
4.039
4.344
4.607
4.833
5.029
5.197
5.342
5.468
5.575
5.668
5.749
5.818
5.877
5.929
FORMULAE
Annuity
Present value of an annuity of $1 per annum, receivable or payable for n years, commencing in one year, discounted
at r% per annum:
PV =
[1
r]
Perpetuity
Present value of $1 per annum, payable or receivable in perpetuity, commencing in one year, discounted at r% per
annum:
PV
1
r
May 2014
22
Enterprise Strategy
Level 2 - COMPREHENSION
What you are expected to understand.
VERBS USED
DEFINITION
List
State
Define
Make a list of
Express, fully or clearly, the details/facts of
Give the exact meaning of
Describe
Distinguish
Explain
Identify
Illustrate
Level 3 - APPLICATION
How you are expected to apply your knowledge.
Apply
Calculate
Demonstrate
Prepare
Reconcile
Solve
Tabulate
Level 4 - ANALYSIS
How are you expected to analyse the detail of
what you have learned.
Level 5 - EVALUATION
How are you expected to use your learning to
evaluate, make decisions or recommendations.
Enterprise Strategy
Analyse
Categorise
Compare and contrast
Construct
Discuss
Interpret
Prioritise
Produce
Advise
Evaluate
Recommend
23
May 2014
Enterprise Pillar
E3 Enterprise Strategy
May 2014
May 2014
24
Enterprise Strategy