(i) The cost
(ii) The target audience
(iii)Nature of the goods
(i)It increase profit
(ii) It provides information about features
(iii)It also stimulate demands
(iv)It helps I’m creating job opportunities
(i)improving the profitability of the firm.
(ii)Carrying out restriction of output ,
(iii)control of price,
(iv)allocation of market shares.
(i)They base their decisions on the full costs and benefits
(ii)They can be used to influence economic activity. To boost the country’s output, public corporations can be directly encouraged to increase their output.
(iii)In cases where it is practical to have only one firm in the industry, such as rail infrastructure, a public corporation would not abuse its market power.
(i)They can be difficult to manage and control. The large size of theorganisations may mean that time has to be spent on meetings and communicating with staff, slowing down decision making.
(ii)They may become inefficient, produce low quality products and charge relatively high prices, due to a lack of competition and the knowledge that they cannot go bankrupt.
(iii)They will need to be subsidized if they are loss making. The use of tax revenue to support them has an opportunity cost it could be used to spend on, say, training more teachers and nurses.
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(5a) Functions of Stock exchange
[PICK ANY FOUR]
1. Continuous market for securities
The Investors are able to invest in good securities and in case of any risk, it enables people to switch over from one security to another. So stock markets provides a ready and continuous opportunities for securities.
2. Evaluation of securities
It the stock exchange, the prices of securities clearly indicate the performance of the companies. It integrates the demand and supply of securities in an effective manner. It also clearly indicates the stability of companies. Thus, investors are in a better position to take stock of the position and invest according to their requirements.
3. Mobilizes savings
The savings of the public are mobilized through mutual funds, investments trusts and by various other securities. Even those who cannot afford to invest in huge amount of securities are provided opportunities by mutual funds and investment trusts.
4. Healthy speculation
The stock exchange encourages healthy speculation and provides opportunities to shrewd businessmen to speculate and reap rich profits from fluctuations in security prices. The price of security is based on supply and demand position. It creates a healthy trend in the market. Any artificial scarcity is prevented due to the rules and regulations of the market.
5. Mobility of funds
The stock exchange enables both the investors and the companies to sell or buy securities and thereby enable the availability of funds. By this, the money market also is strengthened as even short-term funds are available. The banks also provide funds for dealing in the stock exchanges.
5b) i) Debentures: A debenture is a document which acknowledges a loan generally under the company’s seal, bearing a fixed rate of interest. It usually gives security for repayment of loan as well as the interest. It can be described as a document setting out. the terms of a loan to a company, i.e., certificate of indebtedness. Holders of debenture certificates have no voting rights.
ii). Bond: A bond is a security issued by a government or its agency or private institution as a means of raising fund.
iii)Shares: Shares can be defined as individual portion of the company’s capital owned by shareholders. It is the interest which a shareholder has in a company. In other words, a share is a unit of capital measured by a sum of money. A share also epresents the mechanism by which the shareholders of a company can have limited liability. They have single indivisible units, e.g. N250, N50 etc.
iv). Stock: Stock can be defined as the bundle of share or mass of capital which can be transferred in fractional amount. They are always fully paid, e.g. it can be quoted per N100 nominal value.
(i)Provides Technical Support To Exporters
(ii)Simplifies Export Procedures
(iii)Provides Grants And Incentives
(iv)Simplifies Export Procedures
(v)Provides Exportable Products’ List
(i)Collect and revenue for the government by charging customs excise duties.
(ii)keep and analyze records of imported and exported goods and services.
(iii)Control bonded warehouses to ensure that duty is collected for imported dutiable goods before releasing them.
(iv)Supervise public health by arranging quarantine for animals, pets coming into the country thus controlling infectious disease.
(v)Supervise entrepots (re-export) trade to ensure that no duty is charged and collected on goods destined to another country.
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Trading profit and loss account
Opening stock 20,000
Carriage inward 4000
Less closing stock 35,000
Cost of goods sold 139,000
Gross profit 91,000
Net profit 62,00
cost of goods sold = Le 139,000
Gross profit = Le 91,000
Net profit = Le 62,000
Percentage of Gross profit Gross profit/sales * 100/1
91,000/230,000 * 100/1
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