Q.1. Kwetu Ltd is a business enterprise located in Kampala city. It is engaged in a highly
Question:
Q.1. Kwetu Ltd is a business enterprise located in Kampala city. It is engaged in a highly competitive business of producing and marketing of bottled-mineral water.
Required:
(a) Explain the primary objectives of Kwetu Ltd. (12 Marks)
(b) Describe the strategies that Kwetu should adopt to achieve the objectives in (a) above. (13 marks)
Q.2. Chilungamo had the following summarised balance sheet as at 31 December 2014:
Non-current assets: 300,000
Current assets: 78,000
Total assets 378,000
Current Liabilities 130,000
Net Assets 248,000
Financed by:
Ordinary Share capital 150,000
Retained earnings 28,000
15% Debentures 70,000
Total: 248,000
The Directors of Chilungamo would like to raise more capital for the company.
Required:
a) Explain any two aspects from the balance sheet that show that Chilungamo needs more capital. (5 marks)
b) Recommend to the Directors different ways of financing the entity and the criteria for selecting a particular source of finance. (20 marks)
Expert Answer:
1 a The primary objectives of Kwetu Ltd may include 1 Maximizing profits Kwetu Ltd is engaged in a highly competitive business of producing and marketing bottled mineral water One of the primary objec... View the full answer
