Honest Limited is an all equity financed food processing company that is planning to raise debt finance to alter its capital structure. The Managing Director has called on you to profess some financial advice on the matter.

You are required to: (a) Explain four (4) factors to be considered by the Managing Director for the proposal to choose debt finance as source of capital for Tasty Meals Limited. (4 marks)

(b) Explain five (5) advantages to the company for issuing preference share. (5 marks)

(c) Explain three advantages of keeping books of original entry. (3 marks)

(d) Explain three uses of sales invoice to a company.