- 20 Marks
BMF – Nov 2024 – L1 – Q2 – Documents in Sales Cycle
List six documents used in the sales cycle, discuss how they facilitate accounting and management of sales, and state two that impact double entry.
Question
a. A financial objective can be expressed in a number of different ways and there are advantages and weaknesses or limitations with each. List the THREE commonly used ways of expressing financial objectives and explain TWO problems identified with each.
b. Uhuru Limited wants to buy a new item of equipment which will be used to provide better services to its customers. The expected after-tax cash inflows are as stated below:
| Year | 1 | 2 | 3 | 4 |
|---|---|---|---|---|
| N | N | N | N | |
| Cash flow | 200,000 | 220,000 | 240,000 | 260,000 |
The cost of capital to the company is 8 percent (expressed in 4 significant figures). Assuming the NPV of the investment is N70,000, what was the initial investment?
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