Business Law Mock Exam - Desklib

This mock exam for Business Law covers topics such as contracts of employment, discrimination at the workplace, and funding options for business expansion. The first question discusses the entitlement of employees to contracts of employment and the rights of workers to receive salary and leave. The second question covers measures to assess the return on investment and funding options for business expansion. References are provided at the end of the exam.

BUSINESS LAW

Table of Contents
Question 1....................................................................................................................................3
Question 2....................................................................................................................................5
REFERENCES................................................................................................................................1

Question 1
1. In the given case study, Albert Green is entitled for the contract of employment under the
Employment Act UK. The contract of employment is the contract between the employer
and employee and contains the stipulated terms and conditions of the employment. The
contract of requirement is important when any party breaches the terms of the contract
then the party has right to take action against that party. Albert did not receive any
contract of employment by the employer till the end of the month. Even if there was non
contract of employment between the employer and employee still the parties are under
the obligation and terms should be in implied way or done orally.
2. In the given case study, Albert applied for the job as general salesperson and later found
out that the job was not as per the person and was not as per the specification mentioned
in the advertisement. Moreover, the job also included those activities which was not
specified and also involved activities of heavy lifting which requires proper training by
the store management((Fahy and et.al., 2019)). The store manager did not clearly specify
the work and not provided necessary training. It was also observed that Albert was not
provided salary at the right time which is his right to receive on time and also seen that
the other employees was working beyond the working hours and was not given leaves by
the management. It is right of the every employee to receive salary at right time and if
any worker is working beyond their working hours should be paid apart from its salary.
Under the contract of employment, the workers are also entitles of leave and sick leave
which should be mentioned in the terms of the contract of the employment. If the
employer breaches any terms of the contract of employment then the employee has right
to take legal action against the management of the company.
3. Various laws have been made regarding the discrimination at workplace and under the
employment act, it is the duty of the employer as well as employee not discriminate and
treat every employee equal on the basis of age, caste, religion, disability, gender etc. The
person should treat equally and should provide equal opportunity((Fagan and Rubery,
2018) ). Equality act protects the individual form discrimination and ill-treatment in the
workplace on the basis of age, gender, disability such as paying equal wages to the
employees and right of the employees to receive salary for the work they have done

under the contract of employment. As per the case study, The management discriminated
on the basis of the age of the Albert saying that Albert is not fit and is old for the type of
job. Albert can take action against the management for the discrimination done at the
workplace and the company did not fulfil the legal requirements of the employment act.
The company did not follow the provisions of the act and there was no prior notice given
to the employee before dismissing Albert from the job. The management also did not
follow the terms and conditions of the contract of employment.
4. Under the Employment Act, various rights have been given to the employees as well as
the employer of the company and all the rights are mentioned under contract of
employment. It is duty of the employer to pay national minimum wages to the employee
and the salary related terms and conditions are all mentioned at the times of contract of
employment. The contract of employment contains the various details such as job title,
pay, hours of work and additional work benefits to the employee. It is the right of
employee to take action against the discrimination and unfair dismissal by the employer
as it constitutes breach of the terms and conditions of the employment act((Kountouris,
2018)). The act also has given various rights such as right receive pay for the extra
working hours or the employee has worked beyond the working hours specifies in the
contract of employment. The management breached the contract of employment and did
not give any prior notice to Albert before dismissing from the employment and apart
from this did not specify the clear requirements of the job profile and along with this the
management did not provide the required training to the employees. Before dismissing
the company did not give any relevant reason for ending the contract of employment and
also did not give any prior notice to the employee. The management also failed to provide
the contract of employment to employer which is the right of the employee to receive in
order to know the rights and responsibilities of the employee.

Question 2
(1)
The Brown McGregor and its director must consider the following standards to measure
the return. Every investment company make is influenced with the level of expected return
company will aim to generate against initiating the whole project. Following are the measures
director may take into consideration while analysing the entire project.
Return on investment
Return on investment is a term use in financial management that indicate and
demonstrate about the total expected rerun company will generate against making an investment
in a certain project. The return on investment in simple term is a concept which reflect the total
expected return organisation might consider against making an investment in the project. This is
like a net profit from the project divided by the total investment and multiplied by hundred. This
is an expected level of rerun company may generate or bring against making an investment in the
project (Dobrovolskienė, Tvaronavičienė and Jurėnaitė, 2021). Directors at the Brown McGregor
must consider this as a measure to identify the total expected level of return company may
generate against making an investment in the project. Business expansion in the form of new
business division is a very progressive part of delivering business function. The director can
identify the fruitfulness of the decision with the use of the return on investment concept which
will reflect the overall expected return against the investment is made in the project.
Net present value
The net present value is another key concept that may implement in order to assess about
the feasibility of the chosen project. This is like a net value company might generate in the end
of the project life cycle. The proposed production division will last for 25 years hence, the net
p[resent value will be the net profits or advantages company will gain at the end of the life cycle
of the project (Garrison and Beverage, 2018). This technique is effective enough as it also
consider the time value of money while identifying the net present value company will generate
against making an investment decision. This method will comprehensively guide the Brown
McGregor to know the profitability of the new proposed division.
(2)
Funding is a very significant part of any investment proposal company obtain. Funding
play role in financing every proposal to implement the same. Brown McGregor is planning to

open its new production division (Pinto and Rastogi, 2019). The proposed division will also
require the sufficient amount of funds to initiate the production. The organisation can approach
to bank loan in order to fund the project. Bank provides a very easy and convenient loan option
where organisation will get to finance its project at a very affordable rate of interest. Further
government provide tax relief over the interest paid against the bank loan is taken by the
businesses. Further, bank provide a very easy and convenient repayment facility that will further
reduce the burden of repayment of loan. Along with the bank loan company may also obtain the
debt funding. In this Brown McGregor will get to issue debenture to generate the funds
(Schückes and Gutmann, 2021). The debenture will get an interest at a certain rate in against to
provide funds to the organisation. Debt is a suitable option company might access in against to
meet its funding requirement in the business. Issuing equity capital is another suitable funding
option Brown McGregor hold. Company will get to issue an equity shares. The equity
shareholder will also not get any interest rather they will gain a certain amount of shares in the
profits company will make against the project is launched. Issuing equity share is a suitable
option company may adopt in against to raise funds in the business. Retained earning can also be
a potential funding option organisation might access in against to generate funds in business.
Retained earning is a secured capital company collect to utilise in the emergency situation.
Business expansion will further be a good option to capitalise the capital.
Advantages of debt and equity funding:
 Equity financing does not allow the organisation to bring funds out of the business.
 Effective long term funding sources.
 These methods provide freedom to channel more finances in the business.
 Reduce the monthly repayment burden at a large level.
 Liquidity also get secured against arranging fund in business.
Disadvantage of debt and equity funding:
 Payback of debt become a massive burden over the organisation.
 The methods are risky to generate funds.
 These channels can be more expensive than the other funding choices company obtain.
(3)
Payment of dividend to shareholders of company is not mandatory in the face of law.
Company act do not oppose the businesses to pay dividend to the shareholders of the company.

This decision take by the directors of company based on the performance business achieve in the
respective financial year. The director of Brown McGregor have decided to not to pay any
dividend this year rather to invest the capital into the new production division proposed by the
organisation (Yacus, Esposit and Yang, 2019). The company can obtain the option where
dividend is not paid in cash form rather in the form of issuing new shares on the name of existing
shareholders in order to secure the interest of the respective holders. This decision will certainly
affect the value of company as in against to issue the shares company will not get any cash or
value in return. Further, this will be a long term obligation over the company. This decision will
restrict the value of company in the market as well. This decision will further not create any long
term impact as director have the option to communicate with the shareholders of company over
the same issue. Rather, the shareholder will be happy to get the shares in against to the dividend
as this will only improve the value of the holding in respect to the future earning possibilities in
business. Henceforth, this decision will not create any long term impact over the financing
transaction company will get involve. There might be short term issues which company might
face.

REFERENCES
Books and journals
Dobrovolskienė, N., Tvaronavičienė, M. and Jurėnaitė, K., 2021. Selection of a transport
investment project based on sustainability index, return on investment and risk. Arctic
journal. 74(6). pp.117-140.
Fagan, C. and Rubery, J., 2018. Advancing gender equality through European employment
policy: the impact of the UK's EU membership and the risks of Brexit. Social Policy
and Society. 17(2). pp.297-317.
Fahy, N. and et.al., 2019. How will Brexit affect health services in the UK? An updated
evaluation. The Lancet. 393(10174). pp.949-958.
Garrison, E. and Beverage, J., 2018. Implementing a process to measure return on investment for
nursing professional development. Journal for nurses in professional
development. 34(1). pp.8-11.
Kountouris, N., 2018. The concept of ‘worker’in European labour law: fragmentation, autonomy
and scope. Industrial Law Journal. 47(2). pp.192-225.
Pinto, G. and Rastogi, S., 2019. Sectoral analysis of factors influencing dividend policy: Case of
an emerging financial market. Journal of risk and financial management. 12(3). p.110.
Schückes, M. and Gutmann, T., 2021. Why do startups pursue initial coin offerings (ICOs)? The
role of economic drivers and social identity on funding choice. Small Business
Economics. 57(2). pp.1027-1052.
Yacus, A. M., Esposito, S. E. and Yang, Y., 2019. The Influence of Funding Approaches,
Growth Expectations, and Industry Gender Distribution on High‐Growth Women
Entrepreneurs. Journal of Small Business Management. 57(1). pp.59-80.
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