Company A has Ksh 60 million in market cap, Ksh 20 million in cash, and carries no debt. Company B, on the other hand, also has Ksh 60 million in market cap, but has no cash, and carries Ksh 30 million of debt.

(a)Using Equivalent Value method of marketable securities, which company is cheaper to purchase and why? (7 Marks)

(b)Describe five importance of inventories in an organization and outline various controls that organization undertake on them? (8 Marks)