'Rever Ltd.' is a manufacturing company dealing in Juice. It has been consistently earning good profits for...
Question:
'Rever Ltd.' is a manufacturing company dealing in Juice. It has been consistently earning good profits for many years. This year too, it has been able to generate enough profits. There is availability of enough cash in the company and good prospects for growth in future. This is partly due to the company's good investment and credit policy. It is a well-managed organization and believes in quality, equal employment opportunities and good remuneration practices. It has many shareholders who prefer to receive a regular income from their investments.
a) Identify any four aspects of financial management nature that are going right with this company (4 marks)
b) What sources of finance is this company employing at the moment? And what other financing alternatives does it have at its disposal? (9 marks)
c) What are the advantages and disadvantages of the payback period of investment appraisal? (12 marks)
a) Rever Company has been said to be profitable and highly liquid; explain the significance of these two factors to the survival of the firm. (10 marks)
Traditional approach to financial management had it that it was a responsibility of the Finance department, the modern view is that it's an organization-wide responsibility. With clear illustrations, explain why you would agree with the modern view (15 marks)
a) What is the capital structure of this company? Explain. (5 marks)
b) In your view, why do you think it would be good practice for such a profitable firm to acquire a loan? (10 marks)
c) Evaluate the likely impact of the loan acquired from UDB on the shareholders' preferences to receive a regular income (dividends) from their investments. (10 marks)
Managing Business Ethics Making Ethical Decisions
ISBN: 9781506388595
1st Edition
Authors: Alfred A. Marcus, Timothy J. Hargrave