Reference no: EM133113679

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.

(b) Describe the strategies that Kwetu should adopt to achieve the objectives in (a) above.

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.

b) Recommend to the Directors different ways of financing the entity and the criteria for selecting a particular source of finance.