Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

QUESTION 3 ( 15 marks ) FGV sugar business have been in a lot of debate lately. The group have taken over the business from

image text in transcribed
QUESTION 3 ( 15 marks ) FGV sugar business have been in a lot of debate lately. The group have taken over the business from the sugar king and carry on the business of processing sugar cane into refined sugar for Malaysian market. The business is quite substantial accounting for over 11% of the group revenue. Nevertheless, the segment only contributed about 5% of the group's profit before zakat and tax. The profit margin is rather low - at less than 10% compared to the palm oil and the operating overheads is rather high. Finance costs at RM 47,348,000 and Depreciation and amortization at RM 81,716,000 are the two major operating costs component. Required: a) There was a suggestion by a turnaround manager to just sell the sugar business and concentrate on the palm oil business. Evaluate the proposal and justify your opinion.? (10 Marks) b) What are the qualitative considerations that must be taken into account in the decision? (5 Marks) ( 15 marks )

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access with AI-Powered Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Managerial Accounting

Authors: Karen W. Braun, Wendy M. Tietz

7th Edition

0137858515, 9780137858514

Students also viewed these Accounting questions