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Q3
In addition to traditional deposits taking and lending activities, banks are involved in financial intermediation , business banking and trading in financial markets, stockbroking, insurance and funds management.

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Hello everyone, please answer to the tutorial questions here
Question one: What are the three types of financial management decisions?

For each type of decision, give an example of a business transaction that would be relevant.
Question two:
Sole Proprietorships and Partnerships. What are the four primary disadvantages to the sole proprietorship and partnership forms of business organisation? What benefits are there to these types of business organisation as opposed to the corporate form?  (Ross, 11/2020, p. 19)

Question 3:
Corporations. What is the primary disadvantage of the corporate form of organisation? Name at least two of the advantages of corporate organisation. LO 1.3 (Ross, 11/2020, p. 19)

Question 4:

Agency Problems. Who owns a corporation? Describe the process whereby the owners control the firm’s management. What is the main reason that an agency relationship exists in the corporate form of organisation? In this context, what kinds of problems can arise? LO 1.4 (Ross, 11/2020, p. 19)

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Q1
Capital budgeting
Capital structure
Working capital management

Sole proprietorship
Partnership
Company
Trust
Q2
Primary disadvantages of sole  trader and
Unlimited liability
Jack of all master of none
limited capacity for growth
tax liability increases
Primary disadvantages of partnership firm
Non transferable shares
Unlimited liability
risk of disagreements.
Limited capital

Q3 Two advantages of company
transferable shares
limited liability
Two disadvantages of company
Financial affairs are public
expensive to establish, maintain and wind up

Q4
Shareholders own the  company

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q1. -Capital budgeting
-Capital structure
-working capital management

q2. Sole proprietorship:
A. East to start
Least regulated
one owner keeps profit
D. Limited to life owner
unlimited liability
difficult to sell ownership

Partnership:
A. two or more owners
Easy to start
Income taxed once as personal income
D. Unlimited liability
General partnership
Difficult to transfer ownership

q3. A. Limited liability
Unlimited life
Easier to raise capital

D. Complicated
Requires a constitution

q4. Owned by a distinct legal entity from owners.

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Q1
capital budgeting, capital structure, working capital

Q2
sole trader, partnership, company

Q3
Disadvantage: double taxation to shareholders of distributed earnings and dividends.
Independent management.

Advantages: limited liability, ability to raise capital.

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Q1.
1. Capital budgeting
2. Capital structure
3. Working capital management
Q2.
1. Sole trader
2. Private company
3. Public company
4. Partnership
Q3.
Disadvantages
More complicated • Requires a constitution • Taxation of company profits can be an issue

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Q1:
- Capital Budgeting:
-Capital Structure
- Working capital management
Q2:
Sole Trader:
Partnership
Corporation
Q3: Corporation
Advantages:
- Limited liability
- Unlimited life
- Separation of ownership   and management
Disadvantages
- More complicated
- Requires a constitution

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Q1
Capital budgeting: Stock

Capital structure: Property investments

Working capital management: Office equipment

Sole trader
Partnership
Public Company
Private company

Q2
Disadvantages

Equity capital limited to owner’s personal wealth

Unlimited liability

Difficult to transfer ownership

Partnership dissolves when one partner dies or wishes to sell

Advantages compared to a corporate form

Easy to start

Taxed once as personal income

Q3
More complicated

Requires a constitution

Taxation of company profits can be an issue

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Q1.
Capital Budgeting
Capital Structure
Working Capital Management

Q2.
Sole Trader
Proprietary Limited
Public Company
Partnership

Q3.
Advantages:
Unlimited life
Limited Liability
Protection

Disadvantages:
More complicated
Expensive

Q4.

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Q1

Capital Budgeting

Capital Structure

Working Capital Management

Q2

Four types of Businesses

Sole Trader

Proprietary Limited

Public Company

Partnership

Disadvantages: Sole Proprietorship

Unlimited Liability

Capital equity is limited to the owner's personal wealth

Limited to the lifespan of the owner

Disadvantages: Partnership

Unlimited Liability

Difficult to transfer ownership

Limited to lifespan of either one of the partners.

Advantages over Corporate Form:

They are easier to form as opposed to a corporation.

Business owners are  only taxed once as personal tax as opposed to the business tax on top of the income tax.

They have more control over the business than a company has.

Q3
Primary Disadvantages of Corporate Business Structure

More difficult to create & set up

Subject to double taxation

Primary Advantages of Corporate Business Structure

Limited liability

Simple & easy capital raising

Q4
Who owns a company?
Shareholders own a corporation

What is the process in which the owners control the firm's management?
The owners control management because the elect the board of directors, who, in turn, choose the business' management.
What is the main reason for this 'Agency Relationship'
An agency relationship, where a principle (in this case the board of directors) hires an agent (the managers) to represent their interest. In a corporate environment, this occurs when the shareholders hire managers to run the company.
What kinds of Agency Problems can arise in this kind of environment?
An agency problem, in this case, would be when the shareholders want one thing, but the managers want something else. This prompts shareholders to offer enormous payment packages to CEOs & other high management so that they are more likely to represent their best interest appropriately.

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Q.No1 Ans
Capital Budgeting
Capital structure
Working Capital Management

Q.No 2 Ans
Sole trader
Partnership
Company
Trust
Disadvantages of sole trader

Limited to life of owner

Difficult to sell ownership interest

Limited resources.

Owner will be responsible for damages or any loss.

Disadvantages of partnerships

Partnership dissolve when one partner dies or wishes.

Difficult to transfer ownership.

Risk of disagreement

Each partners will be liable for actions by other partners.

Benefits of these business organizations are

Easy to setup

Short application process

The money business earns belongs to you.

Inexpensive

Advantages of corporate

Unlimited life

Transfer of ownership is easy

Personal liability protection.

Disadvantages of corporate

Lengthy application process

Expensive and more complicated.