Why is free trade beneficial for a country? What is the difference between the economic development strategies of Latin America and East Asia? Why was East Asia so successful in its economic development after WWII and what did Latin America do? (e.g. imports substitution, fiscal, monetary etc.)

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Magna Industries Ltd. is being set up to manufacture industrial gears. The expected outlays and proposed financing during the construction and the first two operating years are shown below. Outlays Construction Period Operating Year Land 1220 6110 Building Plant & machinery Miscellaneous fixed assets 24440 4720 860 Preliminary expenses Pre-operative experses Current assets (Other than cash) 4800 22804 2500 42140 2204 2500 Firuncing 16300 Equity capital Term loan 29000 5704 500 Short-term bank torrowing 17100 2000 45300 22804 2500 -|||| || Q Search The following information is available: (a) The construction period will last for one year, beginning on 1" April of year n and ending on 31* March of year n+1. (b) The first operating period will begin on 1* April of year n1 and end on 31* March of year n+2. This will be immediately followed by the second operating year which will end on 31* March of year n+3. (c) The term loan will carry an interest rate of 10 percent. Each amount disbursed is repayable in 16 equal semi-annual instalments, the first such repayment commencing from the end of the I operating year. The interest on term loan during the construction period is included in pre-operative expenses. Interest due in each subsequent half year is payable at the end of the same half year. The term loan disbursals in each operating year will at beginning. (d) Short-term bank borrowings in the two operating years will occur right in the beginning of those years and carry an interest rate of 8 percent which is payable at the end of the respective operating year. (e) Pre-operative expenses will be allocated to land, building, plant and machinery, and miscellaneous fixed assets in proportion of their values. Preliminary expenses will be written off in ten equal annual instalments. () For the first two operating years the expected revenues are 42000 and 60000 and the expected cost of sales (excluding depreciation, other amortisation, and interest) are 280000 and 40000 respectively. There is no tax liability in these years. (g) The depreciation rates for company law purposes will be as follows: buildings (3.34%); other assets (10.34%). The method of depreciation will be the straight line method. Required two operating years, (b) Projected cash flow statements for the construction period Prepare the following: (a) Projected income statements for the first and the first two operating years, and (c) Projected balance sheets as on 31/3/n+1, 31/3/n+2, and 31/3/n+3. Magna Industries Ltd. is being set up to manufacture industrial gears. The expected outlays and proposed financing during the construction and the first two operating years are shown below. Outlays Construction Period Operating Year Land 1220 6110 Building Plant & machinery Miscellaneous fixed assets 24440 4720 860 Preliminary expenses Pre-operative experses Current assets (Other than cash) 4800 22804 2500 42140 2204 2500 Firuncing 16300 Equity capital Term loan 29000 5704 500 Short-term bank torrowing 17100 2000 45300 22804 2500 -|||| || Q Search The following information is available: (a) The construction period will last for one year, beginning on 1" April of year n and ending on 31* March of year n+1. (b) The first operating period will begin on 1* April of year n1 and end on 31* March of year n+2. This will be immediately followed by the second operating year which will end on 31* March of year n+3. (c) The term loan will carry an interest rate of 10 percent. Each amount disbursed is repayable in 16 equal semi-annual instalments, the first such repayment commencing from the end of the I operating year. The interest on term loan during the construction period is included in pre-operative expenses. Interest due in each subsequent half year is payable at the end of the same half year. The term loan disbursals in each operating year will at beginning. (d) Short-term bank borrowings in the two operating years will occur right in the beginning of those years and carry an interest rate of 8 percent which is payable at the end of the respective operating year. (e) Pre-operative expenses will be allocated to land, building, plant and machinery, and miscellaneous fixed assets in proportion of their values. Preliminary expenses will be written off in ten equal annual instalments. () For the first two operating years the expected revenues are 42000 and 60000 and the expected cost of sales (excluding depreciation, other amortisation, and interest) are 280000 and 40000 respectively. There is no tax liability in these years. (g) The depreciation rates for company law purposes will be as follows: buildings (3.34%); other assets (10.34%). The method of depreciation will be the straight line method. Required two operating years, (b) Projected cash flow statements for the construction period Prepare the following: (a) Projected income statements for the first and the first two operating years, and (c) Projected balance sheets as on 31/3/n+1, 31/3/n+2, and 31/3/n+3.

Answer rating: 100% (QA)

Free trade is beneficial for a country because it allows for increased competition which can lead to ... View the full answer