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Partnership
Definition -Partnership may be defined as a relationship between persons carrying on a business in common with a view of profits. In partnership business, two or more persons jointly run a business. The liability of the individual partner is unlimited unless the partnership agreement provides for any limitations. A partnership consists of not more than twenty persons except in certain cases e.g. practicing lawyers, professional accountants, and members of the stock exchange where this figure can be exceeded. Normally, the number of partners in a partnership business varies from two to five partners. In a case of banking business the number of banking partners is limited to ten.
In Kenya all partnerships are formed in accordance with Partnership Act of 1934 (Chap 29). The name of the partnership must be registered first under the Registration of Business Act. The formation of partnership is not very complicated.
Earning method - Bases of Valuation The business is valued according to the net stream of income it is expected to create over its lifetime. Determination of maintaina
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Opportunity Cost or Residual Loss It is the cost due to the failure of both parties to act optimally like as in example of A. Lost opportunities because of incapability to
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various stages in inancial distress and bankruptcy
a. In the accompanying diagram (which represents the market for chocolate candy bars), the initial equilibrium is at the intersection of S1 and D1. Circle the new equilibrium if t
Determine how much of a total loan payment applies towards principal and how much applies towards interest for a home mortgage of $177,219 with a fixed APR of 7.5% of 20 years
Example of Net Present Value Method Cost of investment = 100,000/=, Interest rate = 10percent, Inflows year 1 = 80,000/= Year 2 = 50,000/= NPV = 80,000 / 1.1 + 5
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