Questions from Financial Management

Q: Thermia Ltd is a family-owned business that produces packaged foods

Thermia Ltd is a family-owned business that produces packaged foods for supermarkets. The family has recently lost interest in the business and has indicated a willingness to sell.­The seni...

Q: Bradbury Ltd is a family-owned clothes manufacturer. For a

Bradbury Ltd is a family-owned clothes manufacturer. For a number of years, the chair and managing director was David Bradbury. During his period of office, sales revenue had grown steadily at a rate...

Q: Threads Limited manufactures nuts and bolts, which are sold to industrial

Threads Limited manufactures nuts and bolts, which are sold to industrial users. The abbreviated financial statements for 2018 and 2019 are as follows: Dividends were paid on ordinary shares of &Acir...

Q: Bernese plc develops and manufactures drills for businesses operating in the oil

Bernese plc develops and manufactures drills for businesses operating in the oil and gas industry. Although it is committed to maximising the wealth of its shareholders, the business has incurred heav...

Q: Bellona Ltd is a small business that produces a single product –

Bellona Ltd is a small business that produces a single product – a thermostat that is used in a range of kitchen appliances. Information relating to the thermostat is as follows: Al...

Q: Ndovu plc is considering investing in a new project and, in

Ndovu plc is considering investing in a new project and, in the past, it would have used a cost of capital of 10 per cent as the discount rate to assess new projects. This rate had been calculated by...

Q: Planters plc manufactures agricultural implements, components for which are acquired from

Planters plc manufactures agricultural implements, components for which are acquired from a number of sources, including some overseas ones. The implements are marketed in the UK and, increasingly, ov...

Q: A French business is due to pay $3 million in six

A French business is due to pay $3 million in six months’ time to a US supplier. In order to hedge against currency risk, the French business decides to sell euro futures immediately at €1 = $1.1306 a...

Q: Mithras plc is a UK business that is due to receive €

Mithras plc is a UK business that is due to receive €200,000 from a German customer in three months’ time. A money market hedge will be used to manage currency risk and the following borrowing rates a...

Q: Larunda plc operates a shipyard in the UK and has recently completed

Larunda plc operates a shipyard in the UK and has recently completed the building of a passenger ferry for a French business. The ferry has successfully completed its sea trials and final payment of €...