I need help with the following please:
If inflation is running at 5% per annum, what would you expect a business to do in a budgeting context? [4 Marks]
- (a) Increase the price of products and services by 5% across the board
- (b) Make provision for a 5% increase in the interest cost of loans from banks and other financial institutions
- (c) Make a provision for bad debts in the order of 5%
- (d) Change?the??rate?of?superannuation?payments?to?5%?of?gross?salaries?and?wages
If a business is overtrading, do you think the following rations would be higher or lower than normally expected? [4 Marks]
(a) Current ratio.
- (b)?Average inventories turnover period.
- (c) Average settlement period for trade receivables.
Can you think of an example of how the financial system enables: [2 Marks]
(a) an individual investor to reduce investment risk??
Explain how a large seasonal demand complicates inventory management and production scheduling. [3 Marks]