purpose of capital in an enterprise.

will 68 NX2:34 { RSK4803+Assig... Gews Espoo Bang 115 TANSIT CHAND CARRYPTY) LTO TAROT Tubertet. Det The Torre del domy and buyin gende genelgroepe won the the grade of the then and buchen which the stand 180. The way he can be compared with com a Chedid Plokay. Cours and current The ordinica g pais | porce The Center den francia, che 1 war. The VPL o aporte odbor nomy ried francament below. Show your holio. TOTAL:S MANS TARGET GASH AND CAIRYPTY) LTD STATEMENT OF FINANCIAL POSTONAS 2015/12 IM R1540944 R2195277 R 1772 H4 1300 The the R31166 R1082 RR 2072322 R40 HL R20272 Teles Equity web Shows R100 180 o will d6 N2:35 RSK 4803+Assig... TOTAL: TARGET CASH AND CARRY POLTO STATEMENT OF FRANCE POST 1 RI R2102 HLAZE Current RS3 872 34 R2116786 Groove | 40 RIDER RT! Boty web ras Noterede H1 1 BAVA 1: R17 R47 81 RS R41 B2 154 FEEST LESECI KURIERI STATEMENT OF COMPREHENSIVE INCOME O will d6 O N 12:38 RSK4803+1 Send file... Download STATEMENT OF COMPRENDE Print Au Report a bug R13 HITID R R R0 RT RO R02 R RT R. R1 RM10 RS RE R R G. R2 cm R RS A132330 R41 R12 R R H11 RE R RT RE R3 R3 R1 R$150 RM RE RE wy R RM R 21 H 2 HMIATT RO R16535 proper Cel carrer Tehsi 27067 STATEMENTS OF CHHOES NOT Ravne RO 30 Tuy R011110 HE Town TOP HI HEY To 100 STO! H HAT HE will d6 N2:38 RSK4803+Assig... . More 100 9110 STATEMENTS OF CHANGES IN COUNTY 24010 Other como Toal.com BO Oh come Tal como RI 2 STATEMENT OF CASHFLOW Choosing 12 MONTIS ENDED 2011 R17 RS2 -R70125 +90 224 420 R27 9752 H10 Store Not cash trong 79200 HD ALTY www.am R 2011 NIE R$200 RM1 R2131 340040 Chingya Today -R 2003 REN Hea 1. PROPERTY RANTANDEMONT COET PV ACOUSULATED DEREC Pantandrade 3017 249329 HT HOTO 77212 v o a Explain the purpose of capital in the enterprise. (3 Marks) b. Distinguish between real capital, financial capital and risk capital 19 Marks). c. Discuss the interrelationship of firm capital and firm risk (8 Marks) Question 2 [15 Marks] a. Evaluate the objectives of minimising the cost of risk. (3 Marks) b. Explain the components of the cost of risk. (12 Marks) Question (15 Marks] TARGET CASH AND CARRY (PTY) LTD (TARGET) Target is a food, general and household goods retailer located in Eldoraigne, Centurion and has been in operation for 15 years. The business Target sells food, general and household goods and also operates a bakery and butchery in the shop. A small section of the premises is sub-let to a lock and key business. The financial manager indicated that Target is expecting annual growth of 8% per annum from 2017 after the upgrade of the kitchen and butchery. Target has a long-term lease agreement for the premises, which will expire at the end of 2030. The outlay of the shop can be compared with its competitors i.e. Spar, Checkers and Pick n Pay. Concerns and current insurance policy The store experienced significant business interruption events recently and approached the insurance broker to advice on updating the business interruption section of an existing policy. The CRO insisted on having the policy updated early in the new financial year, which will be on 1 January 2017. The MPL (Maximum Potential Loss) is assessed as the total loss resulting from a potential fire that destroys the entire premises/business. The renewal date of the insurance policy coincides with the financial year. The Plant, Machinery, Stock and Contents are insured under a Fire Section, and the Business Interruption Section follows the Fire section. Reinstatement can take up to 12 months, with business normalisation potentially another 6 months, so one should consider at least an 18-month indemnity period. Calculate the total estimated business interruption coverage amount based on the financial statements below. Show all your calculations. Audited financial statements The financial statements are presented below [TOTAL: 50 MARKS] will 68 NX2:34 { RSK4803+Assig... Gews Espoo Bang 115 TANSIT CHAND CARRYPTY) LTO TAROT Tubertet. Det The Torre del domy and buyin gende genelgroepe won the the grade of the then and buchen which the stand 180. The way he can be compared with com a Chedid Plokay. Cours and current The ordinica g pais | porce The Center den francia, che 1 war. The VPL o aporte odbor nomy ried francament below. Show your holio. TOTAL:S MANS TARGET GASH AND CAIRYPTY) LTD STATEMENT OF FINANCIAL POSTONAS 2015/12 IM R1540944 R2195277 R 1772 H4 1300 The the R31166 R1082 RR 2072322 R40 HL R20272 Teles Equity web Shows R100 180 o will d6 N2:35 RSK 4803+Assig... TOTAL: TARGET CASH AND CARRY POLTO STATEMENT OF FRANCE POST 1 RI R2102 HLAZE Current RS3 872 34 R2116786 Groove | 40 RIDER RT! Boty web ras Noterede H1 1 BAVA 1: R17 R47 81 RS R41 B2 154 FEEST LESECI KURIERI STATEMENT OF COMPREHENSIVE INCOME O will d6 O N 12:38 RSK4803+1 Send file... Download STATEMENT OF COMPRENDE Print Au Report a bug R13 HITID R R R0 RT RO R02 R RT R. R1 RM10 RS RE R R G. R2 cm R RS A132330 R41 R12 R R H11 RE R RT RE R3 R3 R1 R$150 RM RE RE wy R RM R 21 H 2 HMIATT RO R16535 proper Cel carrer Tehsi 27067 STATEMENTS OF CHHOES NOT Ravne RO 30 Tuy R011110 HE Town TOP HI HEY To 100 STO! H HAT HE will d6 N2:38 RSK4803+Assig... . More 100 9110 STATEMENTS OF CHANGES IN COUNTY 24010 Other como Toal.com BO Oh come Tal como RI 2 STATEMENT OF CASHFLOW Choosing 12 MONTIS ENDED 2011 R17 RS2 -R70125 +90 224 420 R27 9752 H10 Store Not cash trong 79200 HD ALTY www.am R 2011 NIE R$200 RM1 R2131 340040 Chingya Today -R 2003 REN Hea 1. PROPERTY RANTANDEMONT COET PV ACOUSULATED DEREC Pantandrade 3017 249329 HT HOTO 77212 v o a Explain the purpose of capital in the enterprise. (3 Marks) b. Distinguish between real capital, financial capital and risk capital 19 Marks). c. Discuss the interrelationship of firm capital and firm risk (8 Marks) Question 2 [15 Marks] a. Evaluate the objectives of minimising the cost of risk. (3 Marks) b. Explain the components of the cost of risk. (12 Marks) Question (15 Marks] TARGET CASH AND CARRY (PTY) LTD (TARGET) Target is a food, general and household goods retailer located in Eldoraigne, Centurion and has been in operation for 15 years. The business Target sells food, general and household goods and also operates a bakery and butchery in the shop. A small section of the premises is sub-let to a lock and key business. The financial manager indicated that Target is expecting annual growth of 8% per annum from 2017 after the upgrade of the kitchen and butchery. Target has a long-term lease agreement for the premises, which will expire at the end of 2030. The outlay of the shop can be compared with its competitors i.e. Spar, Checkers and Pick n Pay. Concerns and current insurance policy The store experienced significant business interruption events recently and approached the insurance broker to advice on updating the business interruption section of an existing policy. The CRO insisted on having the policy updated early in the new financial year, which will be on 1 January 2017. The MPL (Maximum Potential Loss) is assessed as the total loss resulting from a potential fire that destroys the entire premises/business. The renewal date of the insurance policy coincides with the financial year. The Plant, Machinery, Stock and Contents are insured under a Fire Section, and the Business Interruption Section follows the Fire section. Reinstatement can take up to 12 months, with business normalisation potentially another 6 months, so one should consider at least an 18-month indemnity period. Calculate the total estimated business interruption coverage amount based on the financial statements below. Show all your calculations. Audited financial statements The financial statements are presented below [TOTAL: 50 MARKS]