UY is a manufacturer of motor vehicles. It has recently decided to start manufacturing motorbikes and scooters in an attempt to provide what UY’s Managing Director referred to as ‘a full range of transport solutions to our customers’.

Which ONE of the following types of diversification is UY undertaking?

The projected income statement of SD Co for the year to 30 June 20X1 shows the following figures.Operating profit $100,000

Interest payable $40,000

Profit before tax $60,000

Corporation tax (30%) $18,000

Profit after tax $42,000

The directors of SD Co estimate that the additional purchase of new equipment on

1 July 20X0 for $140,000 would increase the projected profit before interest and tax for the year by $18,000.

The machine would be financed by a new loan raised on 1 July 20X0 with a coupon rate of 5%.

The additional profit and interest are not reflected in the above projected income statement.

SD Co has a covenant on an existing loan stating that the interest cover must be at least 2.2.

What would be the outcome if the directors purchased the new machine?

There are four main ways in which an organisation can react to environmental situations. Where an organisation recognises an environmental problem but has decided it will be insignificant and have a short-term implication, its likely reaction would be:

Entry through internal development usually consists of creating a whole new business entity. In order to successfully compete, any newbusiness has to compete with existing entry barriers, and with the possibility of retaliation by existing firms. Some of the more common entrybarriers are:I. Economies of scale.

II. Customer loyalty.

III. Advertising.

IV. Research and Development.

Many companies implement Total Quality Management initiatives and subject the quality of their products and services to a review by an external organization. The outcome of the review, if successful, is a certification of their quality. One such certification is