ENGINEERING MANAGEMENT

MMB 414

LECTURER:
Dr L. SEBONI
OFFICE: 247/475
sebonils@ub.ac.bw
 TUTORIAL - ECONOMICS
You have just managed to convince an investor to provide capital for your start-up
company selling electrical fuses. Your company sells each unit for P2.50. The variable
cost per unit is P1.50. The company’s total fixed costs is P210,000.
The data in the Table 1 apply to a local car dealership called Capital Motors (CM).
The figures are presented in millions of Pula, except ratio figures.

Table 1 CM Cash and marketable securities P140

Fixed Assets P400
Sales P1 800
Net Income P360
Inventory P190
Current Ratio 3.2
Average Collection Period 30 days
Average Common Equity P500

Determine CM’s accounts receivables, using the data in Table 1.

Let A be Accounts receivable, A= 30 x (1800/365)

Calculate the amount of current assets.

Current Assets = Accounts Receivables + Cash and marketable securities + Inventories

Calculate the amount of current liabilities.

Current Ratio = current assets / current liabilities

Determine the amount of total assets.

Total assets = Accounts receivable +Cash & marketable securities + Inventory