Question 3 a- A company has 4 ongoing projects in the current year. A, B, C, and D. The company has decided to take up project C first as the project that does require a very high budget. What type of project is this? Explain. (3m) b- Define the term "synergistic effect in capital budgeting". (3m) C- The statement of financial position of Baba, a sole trader for two successive years are shown below: Statement of Financial Position as at 31 December 2019 2018 2019 S Fixed assets Land and premises 44,000 (cost $52,000) Plant and machinery (cost $19,000) 14,250 (cost $25,000) 58,250 Current asset Inventory Trade receivable Bank Current liabilities Trade payable Bank overdraft (11,250) 14,400 47,000 74,000 Loan (20,000) $4,000 47,000 Financed by: Capital account: 42,000 47,000 Balance at 1 January Add: net profit for the year 18,000 22,000 60,000 69,000 (15,000) Less: drawing 13,000 47,000 54,000 Draw up the cash flow for the year ended 2019. (18m) d- Financing forecasting is thinking in advance about the future. What are the characteristics of financial forecasting? (4m) 22,000 13,650 6,600 17,800 24,400 (35,650) 11,600 S 6,300 12,600 7,100 26,000 (11,600) 40,000 19,600 59,600 Question 3 a- A company has 4 ongoing projects in the current year. A, B, C, and D. The company has decided to take up project C first as the project that does require a very high budget. What type of project is this? Explain. (3m) b- Define the term "synergistic effect in capital budgeting". (3m) C- The statement of financial position of Baba, a sole trader for two successive years are shown below: Statement of Financial Position as at 31 December 2019 2018 2019 S Fixed assets Land and premises 44,000 (cost $52,000) Plant and machinery (cost $19,000) 14,250 (cost $25,000) 58,250 Current asset Inventory Trade receivable Bank Current liabilities Trade payable Bank overdraft (11,250) 14,400 47,000 74,000 Loan (20,000) $4,000 47,000 Financed by: Capital account: 42,000 47,000 Balance at 1 January Add: net profit for the year 18,000 22,000 60,000 69,000 (15,000) Less: drawing 13,000 47,000 54,000 Draw up the cash flow for the year ended 2019. (18m) d- Financing forecasting is thinking in advance about the future. What are the characteristics of financial forecasting? (4m) 22,000 13,650 6,600 17,800 24,400 (35,650) 11,600 S 6,300 12,600 7,100 26,000 (11,600) 40,000 19,600 59,600