Explanation

(c) Factors to be considered by a bank manager before granting a loan.

(i) The volume of the customer's turnover with the bank must be large enough in relation to the loan sought.

(ii) The viability of the project for which the loan is sought must be ascertained.

(iii) The character: The reliability of the customer, his personal integrity, how honest and sincere he had been in paying past loans granted will be considered.

(v) The type of security provided, its nature and marketability are important consideration to make. (Collateral).

(vi) The human capital: The worth of the business and its financial position will be considered. If the business is greatly indebted, the bank may be reluctant to grant further loan.

(vii) Government policy: The existing government policy concerning bank lending is to be considered.

(viii) The purpose for which the loan is to be granted must be legal and agreed with the bank policy.

(ix) The amount required from the bank vis-a-vis the total cost of the project must be considered.

Correct Answer: D. it has not yet been issued

Correct Answer: C. counter trade

Explanation

a). Benefits of the Partnership are:

(i) Sufficient capital: This kind of organisation allows the polling together of funds for instance, through borrowing from banks.

(ii) Specialization in management: The work of the firm is shared according to the area of specialization of each partner.

(iii) .Special skills can be pooled together by the partners.

(vi) Privacy: In partnership, there is high degree of privacy as partnerships are not required to lodge their books with the Registrar of companies.

(v) Continuity: Partnerships have greater continuity because the death of one partner may not end the existence of the business.

(vi)The burden of managing and controlling the establishment is shared by the partners and this reduces the strain which business life entails on individuals.

(vii) Joint and better decisions: Decisions taken by two people will be better than when it is taken by one person.

(b) Reasons why Sule might be reluctant to accept the proposal are:

(i) The misconduct of an unscrupulous partner can ruin the whole business.

(ii)The death of a general partner which could be natural, will end the existence of the firm and bring hardship to the other partners.

(iii) Members may disagree on a number of issues which can affect the smooth running of the firm.

(iv) The business is not a legal entity. If the business is declared bankrupt, the partners will suffer and not the business.

(v) Partnership does not enjoy limited liability. The risk inherent in unlimited liability is high because all partners are liable for the firm's debts irrespective of the amount of capital contributed by each individual.

(vi) Decision making will be slow as many people must be consulted before any decision or policy is taken or made.

Correct Answer: D. nominal price

Explanation

Nominal value of a security, often referred to as face or par value, is its redemption price and is normally stated on the front of that security.

Correct Answer: D. a collateral society

Explanation

(a) Merits of Co-operative Societies

(i) They encourage saving habits among their members

(ii) They are democratic in nature. Each member has equal say or right with others irrespective of shares held.

(iii) They improve the standard of living of their members by providing goods which they cannot buy on their own e.g electronics, lands,vehicles etc.

(iv) They assist their members in marketing their products by ensuring fair prices.

(v) The death of any of its members cannot bring it to an end since they are duly registered under the Law.

(vi) They render financial assistance to members by way of extending loans to them for business expansion at low interest rates

(vii) Settlement of disputes among members

(viii) They educate their members

(ix) They link their members with government, research and financial institutions.

(x) They eliminate middlemen in the channel of distribution

(xi) Protection against sharp practices of distributors and manufacturers.

b. Procedures in formation of a Private Limited Company

(i) Application for Name search and reservation.

(ii) Preparation of Articles and Memorandum of Association.

(iii) Preparation of declaration documents.

(iv) Filing of documents with the registrar of companies.

(v) Assessment of documents filed for the purpose of fee payment.

(vi) Payment of the fee charged on the documents for registration.

(vii) Collection of certificates of incorporation.

Correct Answer: A. there is a disagreement among the directors

Correct Answer: D. banking, insurance and transportation

Correct Answer: A. current account, capital account and monetary movement account