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- The following information was obtained from the financial statements of Alusa Ltd. A retail company, for the year ended 30 September 2009.(Solved)
The following information was obtained from the financial statements of Alusa Ltd. A retail company, for the year ended 30 September 2009.
Date posted: April 28, 2022.
- Name and explain three approaches that could be used by a company to finance its working capital requirements.(Solved)
Name and explain three approaches that could be used by a company to finance its working capital requirements.
Date posted: April 28, 2022.
- Mapema Ltd. manufactures and sells a product called “Rugs”. The company sells the product to its customers on credit terms. The company is considering easing...(Solved)
Mapema Ltd. manufactures and sells a product called “Rugs”. The company sells the product to its customers on credit terms. The company is considering easing the debtors collection efforts so as to increase its profitability.
The following information relates to the company:
• Average number of units sold per year 72,000,000
• Selling price per unit sh. 32.
• Variable cost per unit is sh. 28.
• Annual fixed collection expenses sh. 60,000,000.
• Average collection period is 40 day.
By easing the collection efforts. Mapema Ltd. expects to save sh. 40,000,000 per annum in collection expenses. However, this will lead to an increase in bad debts from 1% to 2% od sales and the average collection period from 40 days to 58 days. Sales will also increase by 1,000,000 units per annum. The company’s required rate of return is 24%
Assume a 360 day year.
Required:
Advice Mapema Ltd. on whether it is worthwhile to ease the collection efforts.
Date posted: April 28, 2022.
- Chogoria Ltd., a manufacturing company, has applied for working capital finance from Zed Commercial Bank Ltd. The bank's manager has requested for a working capital...(Solved)
Chogoria Ltd., a manufacturing company, has applied for working capital finance from Zed Commercial Bank Ltd. The bank's manager has requested for a working capital estimate from the company. The company has provided you with the following data for the next financial year.
Required
(i) A statement showing the working capital estimate.
(ii) Assume that production is carried on evenly throughout the year and wages and overheads also accrue evenly.
Date posted: April 28, 2022.
- The working capital policy of any business entity must address the twin issues of the level of current assets and the manner in which these...(Solved)
The working capital policy of any business entity must address the twin issues of the level of current assets and the manner in which these current assets are financed.
Required:
In relation to the above statement, explain how business entities can adopt aggressive, moderate and conservative working capital policies.
Date posted: April 28, 2022.
- The following data relate to Store ltd, a manufacturing company.(Solved)
The following data relate to Store ltd, a manufacturing company.
Date posted: April 28, 2022.
- You are given the following financial statement information for Moto Ltd. for the year ended 31 December 2010:
Required;
The operating and cash conversion cycles assuming that...(Solved)
You are given the following financial statement information for Moto Ltd. for the year ended 31 December 2010:
Required;
The operating and cash conversion cycles assuming that the year has 360 days.
Date posted: April 28, 2022.
- Baren Ltd projects that cash outlays of Sh.45 million will occur uniformly throughout the year.
The company plans to meet its cash requirements by selling marketable...(Solved)
Baren Ltd projects that cash outlays of Sh.45 million will occur uniformly throughout the year.
The company plans to meet its cash requirements by selling marketable securities from its
portfolio. The expected return from the company's marketable securities is 8 per cent per annum,
and the cost per transaction of converting securities into cash is Sh.30.
Required
(i) The optimal cash balance
(ii) The average cash balance
(iii) The number of transfers between cash and marketable securities per year.
Date posted: April 28, 2022.
- The projected monthly working capital requirements for Chasimba Ltd. for the year ending 31 December 2012 is as follows:(Solved)
The projected monthly working capital requirements for Chasimba Ltd. for the year ending 31 December 2012 is as follows:
Date posted: April 28, 2022.
- The finance manager of Charisma Enterprises Ltd. has given the following financial estimates for the year ending 31 December 2012:
Raw materials are 80% of cost...(Solved)
The finance manager of Charisma Enterprises Ltd. has given the following financial estimates for the year ending 31 December 2012:
Raw materials are 80% of cost of sales which are all on credit.
Required:
The cash operating cycle.
Date posted: April 28, 2022.
- Bahari Ltd. has the standard deviation of its daily net cash flow estimated at Sh.68, 250. The company
maintains minimum cash balance Sh.500, 000. The company's...(Solved)
Bahari Ltd. has the standard deviation of its daily net cash flow estimated at Sh.68, 250. The company
maintains minimum cash balance Sh.500, 000. The company's transaction cost is Sh.360 from the
money marker. The rate interest for the marketable securities is 9.865% per annum. The company
uses the Miller-Oir model to set its target cash balance.
Assume 365 days a year.
Required:
(i) The company's return point.
(ii) Upper cash limit.
(iii) The average cash balance.
Date posted: April 28, 2022.
- The following information relates to the current trading operations of Dindiri Ltd.(Solved)
The following information relates to the current trading operations of Dindiri Ltd.
In an effort to improve the liquidity position of the company, the management proposed the following
strategies aimed at reducing its operating cycle.
Strategy A
To offer a 2% cash discount to customers who pay their accounts within 10 days. This will have the
following effects:
1. 50% of the cred it customers and all cash customer, will take advantage of the discount.
2. Annual sales the percentage of credit sales and the contribution to sales ratio will not change.
3. There will be savings in debt collection expenses of Sh 4,125,000 per month.
4. Bad debts will decrease to 20% of total credit sales.
5. The average collection period will be reduced to 32 days.
Strategy B
Contract the services of a factor at a cost of 2% of total credit sales while advancing Dindiri Ltd. 90%
of total credit sales invoiced at the end of each month at an interest rate of 1.5% per month.
The effects of this strategy will be:
1. No change in the level of annual sales proportion of cred it sales and contribution margin ratio.
2. Savings on debt administration expenses of Sh.2, 100,000 per month will result.
3. All bad debt losses will be eliminated.
4. The average collection period will drop to 20 days.
Required:
(i) Evaluate the financial benefits and Costs of each strategy (assume a 60 day year)
(ii) Advise the management of Dindiri Ltd. on the viable strategy to implement.
Date posted: April 28, 2022.
- Magas Ltd. is coThe relaxation in the debt collection effort is expected to increase sales by sh. 5. million, increase the
average collection period to 40...(Solved)
Magas Ltd. is considering relaxing its debt collection effort. The following data is provided for Magas Ltd.
The relaxation in the debt collection effort is expected to increase sales by sh. 5. million, increase the
average collection period to 40 days and raise the bad debt ratio to 0.06.
The company’s tax rate is 30%.
Assume 360 days in a year.
Required:
Assess the effect of relaxing the debt collection effort on the net profit of Magas Ltd.
Date posted: April 28, 2022.
- The current credit terms of Fredcom Ltd. are 2/15- net 45 days. The company's total annual sales are Sh.200 million with an average collection period...(Solved)
The current credit terms of Fredcom Ltd. are 2/15- net 45 days. The company's total annual sales are Sh.200 million with an average collection period of 30 days. Variable cost is 80% of the annual sales. 50% of customers take advantage of the current discount. The company is considering relaxing its discount terms to 3/15 net 45 days. This relaxation of discount terms is expected to increase annual sales by Sh.10 million, reduce average collection period to 27 days and increase the proportion of customers who will take advantage of the discount to 60%. The company's cost of capital is 12%.
Corporate tax rate is 30%.
Assume 360 days in a year.
Required:
Advise the management of Fredcom Ltd. on whether to relax its discount terms.
Date posted: April 28, 2022.
- A policy is a particular useful cover for advances made to sole traders or
professional men where otherwise on death difficulty might occur in respect of
repayment....(Solved)
A policy is a particular useful cover for advances made to sole traders or
professional men where otherwise on death difficulty might occur in respect of
repayment. Highlight the advantages and disadvantages of using life policy as security
Date posted: April 27, 2022.
- What is an EDF scheduler? What is its advantage over a rate monotic scheduler?(Solved)
What is an EDF scheduler? What is its advantage over a rate monotic scheduler?
Date posted: April 26, 2022.
- In a real-time system with a periodic task set,, how are priorities assigned to each of the
periodic tasks?(Solved)
In a real-time system with a periodic task set,, how are priorities assigned to each of the
periodic tasks?
Date posted: April 26, 2022.
- The traditional UNIX scheduler is a priority-based round robin scheduler (also called a
multi-level round robin scheduler). How does the scheduler go about favouring I/O bound...(Solved)
The traditional UNIX scheduler is a priority-based round robin scheduler (also called a
multi-level round robin scheduler). How does the scheduler go about favouring I/O bound jobs
over long-running CPU-bound jobs?
Date posted: April 26, 2022.
- Describe round robin scheduling. What is the parameter associated with the scheduler? What is the issue in choosing the parameter?(Solved)
Describe round robin scheduling. What is the parameter associated with the scheduler? What is the issue in choosing the parameter?
Date posted: April 26, 2022.
- What is the difference between preemptive scheduling and non-preemptive scheduling?
What is the issue with the latter?(Solved)
What is the difference between preemptive scheduling and non-preemptive scheduling?
What is the issue with the latter?
Date posted: April 26, 2022.
- Why is it generally correct to favour I/O bound processes over CPU-bound processes?(Solved)
Why is it generally correct to favour I/O bound processes over CPU-bound processes?
Date posted: April 26, 2022.
- Name four disk-arm scheduling algorithms. Outline the basic algorithm for each(Solved)
Name four disk-arm scheduling algorithms. Outline the basic algorithm for each
Date posted: April 26, 2022.
- What is disk interleaving? What problem is it trying to solve?(Solved)
What is disk interleaving? What problem is it trying to solve?
Date posted: April 26, 2022.
- Explain how the producer-consumer problem is relevant to operating system I/O(Solved)
Explain how the producer-consumer problem is relevant to operating system I/O
Date posted: April 26, 2022.
- Compare I/O based on polling with interrupt-driven I/O. In what situation would you favour one technique over the other? (Solved)
Compare I/O based on polling with interrupt-driven I/O. In what situation would you favour one technique over the other?
Date posted: April 26, 2022.
- Device controllers are generally becoming more complex in the functionality they provide
(e.g. think about the difference between implementing a serial port with a flip-flop controlled
by...(Solved)
Device controllers are generally becoming more complex in the functionality they provide
(e.g. think about the difference between implementing a serial port with a flip-flop controlled
by the CPU and a multi-gigabit network adapter with the TCP/IP stack on the card itself).
What effect might this have on the operating system and system performance?
Date posted: April 26, 2022.
- Describe buffering in the I/O subsystem of an operating system. Give reasons why it is
required, and give a case where it is an advantage, and...(Solved)
Describe buffering in the I/O subsystem of an operating system. Give reasons why it is
required, and give a case where it is an advantage, and a case where it is a disadvantage
Date posted: April 26, 2022.
- Name and describe four page replacement algorithms. Critically compare them with each other(Solved)
Name and describe four page replacement algorithms. Critically compare them with each other
Date posted: April 26, 2022.
- Describe two virtual memory page fetch policies. Which is less common in practice? Why?(Solved)
Describe two virtual memory page fetch policies. Which is less common in practice? Why?
Date posted: April 26, 2022.
- Enumerate some pros and cons for increasing the page size(Solved)
Enumerate some pros and cons for increasing the page size
Date posted: April 26, 2022.