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Financing(Entr 434) Question Paper

Financing(Entr 434)

Course:Business Administration

Institution: Kenya Methodist University question papers

Exam Year:2012

TIME: 2 HOURS
Question One
Identify various challenges that face lending to the micro-small enterprise sector in Kenya and propose solutions.
(10 marks)
Identify any three conflicting goals in a business and propose strategies to resolve the conflict.
(6 Marks)
What are the requirements a company must meet before it can raise debt finance.
(7 marks)
Explain the sources of finance of an entrepreneurial firm at the growth and maturity stage.
(7 Marks)

Question Two
Why do commercial banks prefer to lend to entrepreneurs.
(5 Marks)
Explain the concept of break-even analysis and highlight any five assumptions of the break-even analysis.
(7 marks)
Which lending approach is commonly used by most micro finance enterprises and why?
(8 marks)

Question Three
Diana is a credit officer charged with the responsibility of assessing the integrity of a proprietor intending to borrow funds from a financial institution. Prepare a check-list that she can use to guide her.
(7 marks)

Explain the advantages and disadvantages of ratio analysis.
(13 Marks)

Question Four
Discuss the policies the government of Kenya has formulated and implemented relating to small and medium enterprise financing in Kenya.
(10 marks)

What factors should an entrepreneur consider when sourcing for funds?
(10 Marks)

Question Five
Write short noted on the following concepts relating to small business financing:-
Group based minimalist credit approach.
Cash flow analysis.
Pay-back period.
Profitability index.
Private placement.
(15 Marks)
A company makes a single product with a sales price of Ksh.20 and a margin contribution of 12. Fixed costs are Kshs.120, 000 p.a.
Calculate:-
Number of units to breakeven.
(1 Mark)
Sales at breakeven point.
(2 Marks)
What number of units will need to be sold to achieve a profit of 40,000 p.a.
(2 marks)

Financing(Entr 434) Question Paper

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