CIMAPRO19-CS3-1 Exam Dumps

The Director of Finance, William Seaton, has stopped you in the corridor:

''Your report was really helpful, but the Board is still considering the implications of that email from Jan Archibald at Fouce Oil. I need to make a more detailed report to the Board and I would like you to draft it for me.

I know that we have owned and operated oil wells in the past, but that has always been with the intention of finding a buyer who is prepared to pay a realistic price. We have chosen never to think about the implications of keeping wells.

I need a report from you that covers the following issues:

The key political risks of retaining our interest in these oil wells, with particular emphasis on high consequence, high likelihood risks.

A suitable response to each of your political risks.

An overview of how changes in the global economy and the demand for oil could affect the decision to proceed.

The challenges associated with putting together a management team to take charge of the production side of this proposed new

strategy.

I realise that this is a lot to ask of you, but I need you to move quickly because of the interest from our biggest shareholder.''

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Four weeks have passed since your encounter with the Chairman. The directors of both companies were informed of the proposal to merge two weeks ago and the public was informed two days ago.

You have received the following email from Marcus Svenson, Finance Director:

From: Marcus Svenson, Finance Director

To: Senior Finance Manager

Subject: Merger negotiations

Hi,

Please see the attached table and also a comment that I downloaded from a Wodd shareholder's blog, showing the market capitalisations for Wodd and Darrell both before and after the merger announcement.

If I am reading this correctly, it would appear that we are suffering at the hands of Darrell because the market believes that it is getting more of the benefit from the merger. This is before the terms of the merger have even been announced.

I need you to do two things:

Please draft a formal response to Market Blogger's post. We will insert this into his blog as a formal response from Wodd's Board and we will also email it to all shareholders.

Please draft an outline strategy for negotiating with Darrell's Board. Clearly, I want Wodd's shareholders to get the best possible deal out of this merger.

Marcus

Reference Material:

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It is now three days since the start of the oil spillage crisis.

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

From: William Seaton, Director of Finance

To: Finance Manager

Subject: Crisis management issues

Hi,

A quick update on the latest developments.

We have brought Block Associates in to lead the operations on dealing with the oil spill. It has assigned one of its leading consultants to take charge of this for us. We have paid Block Associates an annual retainer for many years, but we have never actually had to call on its services because we have been able to contain any environmental problems using our own resources.

Using Block Associates is going to be expensive. It insists on being free to bring in whatever equipment and personnel are required to resolve matters and to charge that on the basis of cost plus 25%. Our annual retainer is simply the cost of ensuring that it will respond on this basis if required.

We have had some murmurings of discontent already because our own engineers and geologists have made significant progress in identifying the cause of the spillage and they believe that they are capable of bringing it to a successful conclusion. They have suggested that it would be both quicker and cheaper to leave them in charge, while retaining the option to bring in Block Associates at a later date if they fail.

Firstly, what factors should we take into account in deciding whether to leave our own experts in charge of this operation rather than using Block Associates?

Secondly, how should we manage our relationship with Block Associates if we decide that it should be used?

Thirdly, two things: The Board is concerned that Slide's engineers and geologists have already become disillusioned by the decision to consider calling in Block Associates. We cannot afford to lose their commitment or to see them decide to leave Slide in the longer term. I need you to provide me with some ideas as to how we can motivate them to give their best performance for the duration of this crisis AND to inspire them to remain in Slide's employment after the crisis has been resolved.

William

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Reference Material:

You have received the following email from Marcus Svenson, Finance Director:

From: Marcus Svenson, Finance Director

To: Senior Finance Manager

FW: Pricing

Hi,

I am forwarding an email from Sarah Johns.

Sarah has not been with us for very long and this is her first experience of dealing with a currency price movement.

I am really busy, so I need you to respond to her requests. Please email her as soon as possible.

Marcus

From: Sarah Johns, Marketing Director

To: Marcus Svenson, Finance Director

Subject: USD movement

Hi Marcus,

A lot of our biggest customers are threatening to cancel orders unless we reduce our selling prices. Timber and associated products are commodity items that are priced in USD, so I thought that our prices would automatically remain competitive regardless of what happened to the USD. I am particularly confused over domestic sales, because many of the customers who have threatened to cancel are based in this country and we invoice them in M$.

Please help me to understand why the M$/USD exchange rate can affect our competitive position in this way.

I also wish to know why you have chosen to do nothing to hedge against this risk. If you look at the attached article you will see that the USD is an issue in the business news.

Sarah

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A month has passed since you submitted the report requested by William Seaton, Director of Finance on the Board's proposals.

You have received the following email:

From: William Seaton, Director of Finance

To: Finance Manager

Subject: Shale oil

Hi,

One of the geologists made a presentation to the Board, proposing that we investigate the extraction of shale oil deposits. I have attached the slides that were used as the basis for this presentation.

I need you to work on a response to this document:

Firstly, what risks do you envisage in our entry to the shale oil business?

Secondly, what do you regard as the key factors that we should consider when deciding on proceeding with this

proposal? Please justify your selection.

Thirdly, what factors should we take into account when deciding on which country or countries to commence this

side of the business?

Finally, what are the challenges in creating a team of technical staff to lead our efforts in this area?

William

The presentation slides can be found by clicking on the Reference Materials button.

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