QUESTION ONE A. Ms. Mbotwa wants to open an international school in Senanga. She knows that there is a lot she has yet to consider with regards to starting up a business. She needs to know her options with regards to ownership, inter-company relationships and financial decision making. Required: Advise Ms. Mukwena on the following areas: i. Briefly explain the difference between a Sole Proprietor vs a Limited Company type of ownership. [1 Marks] ii. Describe the differences between Investment, Financing and Dividend Decisions. [3 Marks] iii. Define the Agent and Principal relationship and how the Agency problem can arise. [4 Marks] iv. "Debt is cheaper than equity". Justify this phrase. (4 marks] V. vi. Internal vs. External methods of financing. [2 marks] Two types of capital budgeting investments. [2 marks] B. Ms. Mbotwa has been told that if she wants to borrow funds, she would have to borrow from households. Explain to Ms. Mbotwa the principal function of the financial market and why households are considered the principal lender within an economy. [4 Marks]