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<=Craft Certificate in Human Resource Management Module II Business Finance Past paper July 2022
The following information relates to Waku Limited for the year ended 31 December 2021:
Net profit before interest and tax - Ksh 200,000
18% long term debt -Ksh 100,000
Calculate the interest coverage ratio
Net profit before interest and tax - Ksh 200,000
18% long term debt -Ksh 100,000
Calculate the interest coverage ratio
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Questions List:
1. State three sources of finance for a business organization
2. Outline four component costs of capital in a firm
3. . Teda Limited issued a Ksh. 1,000,000, 8% debenture at par. The corporation tax rate is 30%. Determine the cost of the debenture
4. Highlight four functions of the Central Bank of Kenya
5. Mary intends to invest Ksh. 2,000,000 in a project. The following are the expected net cash inflows from the project Determine the PayBack Period (PBP) of the project.
6. Distinguish between business finance and private finance
7. . Jane expects to receive Ksh. 600,000 from a pension fund at the end of 5 years. The discounting rate is 12%. Calculate the present value of this amount.
8. Differentiate between cash cycle and cash turnover, as used in working capital management
9. Outline four types of inventories in a manufacturing firm
10. The following information relates to Waku Limited for the year ended 31 December 2021: Net profit before interest and tax - Ksh 200,000 18% long term debt -Ksh 100,000 Calculate the interest coverage ratio
11. Explain four uses of finance in a business organization
12. Beta Limited intends to purchase either machine X or machine Y, each costing Ksh. 500,000. The following are the expected net profits before tax during the useful life of the machines: The corporation tax rate is 30% (i) Determine the Accounting Rate of Return (ARR) for each project; (ii) Based on the results in (i) above, advise the management on the machine to purchase.
13. Explain four features of preference shares as a source of business finance.
14. Explain four functions of investment banks in a country
15. Explain four objectives of ratio analysis in business decision making
1. State three sources of finance for a business organization
2. Outline four component costs of capital in a firm
3. . Teda Limited issued a Ksh. 1,000,000, 8% debenture at par. The corporation tax rate is 30%. Determine the cost of the debenture
4. Highlight four functions of the Central Bank of Kenya
5. Mary intends to invest Ksh. 2,000,000 in a project. The following are the expected net cash inflows from the project Determine the PayBack Period (PBP) of the project.
6. Distinguish between business finance and private finance
7. . Jane expects to receive Ksh. 600,000 from a pension fund at the end of 5 years. The discounting rate is 12%. Calculate the present value of this amount.
8. Differentiate between cash cycle and cash turnover, as used in working capital management
9. Outline four types of inventories in a manufacturing firm
10. The following information relates to Waku Limited for the year ended 31 December 2021: Net profit before interest and tax - Ksh 200,000 18% long term debt -Ksh 100,000 Calculate the interest coverage ratio
11. Explain four uses of finance in a business organization
12. Beta Limited intends to purchase either machine X or machine Y, each costing Ksh. 500,000. The following are the expected net profits before tax during the useful life of the machines: The corporation tax rate is 30% (i) Determine the Accounting Rate of Return (ARR) for each project; (ii) Based on the results in (i) above, advise the management on the machine to purchase.
13. Explain four features of preference shares as a source of business finance.
14. Explain four functions of investment banks in a country
15. Explain four objectives of ratio analysis in business decision making
