Reference no: EM132421838

BUSS 1601 Financial Management Assignment - Middle East College, Oman

Answer all Questions.

Task 1 -

A store sells t-shirts. The average selling price is rial 15 and the average variable cost is 9 rial. Thus, every time the store sells a shirt it has rial 6 remaining after it pays the manufacturer. This rial 6 is referred to as the unit contribution. You are required to calculate following:

(a) Suppose the fixed costs of operating the store (its operating expenses) are rial 100,000 per year. Find Break-even in units?

(b) If the owner desired a profit of rial 25,000, what will be break-even point in rial?

(c) If fixed costs rose to rial 110,000, break-even in units volume would be?

(d) If the average selling price rose to rial 16, break even volume would fall?

Task 2 -

Atheer Manufacturing LLC, a leading manufacturer in plastics is planning to expand its operations in Muscat. The corporate financial adviser has submitted the financial requirement for the expansion to the board of directors. The report reveals that the company needs to raise a total of RO 50 million to sustain the new project. The company's last year profits were recorded as RO 25 million.

Assuming that you are the financial manager of the company, what will your proposal is for the sources of finance?

1. Identify five short term and five long term sources of finance.

2. Discuss the advantages and limitations of two short term and two long term sources of finance suitable for the given scenario.

Note - The report should have a table of contents, answers to the questions and appropriate references using Harvard style and in-text citations are mandatory.