More capital

LMA can issue share to raise money that will help in

improving the Net Cash flow in October and
November
Limited Liability
So the personal asset of the partners is not at risk
thus more investors will buy shares

More legal formalities

This will take time away from other activities in the
restaurant

No privacy
As some sccounts must be available to investors,
thus other restaurant could have access for these
reports
A Business might stay small due to the lack of
finance or access to capital (K) which makes it
difficult to fund expansion and grow up in size (an)
Also, business stay small because they are operating
in a small market (k) thus there is no sufficient
demand (an)
In my opinion , Market size is the most important as
there might be insufficient customers who are the
main source of revenue (1) which is likely to reduce
finance anyway (1)
Entrepreneurs take financial risk by investing money
to start up a new business (K) which will lead to a
reward in terms of profit (An)
While being creative is when the owner invents a
new idea that will make the business different from
the competitor (K) leading higher sales.
In a market, I think that both are important as
creativity brings customers and builds brand loyalty
from having new products that require risky
decisions.

An incorporated business that has the right to sell

shares to the public.

1. Economies of scale
CTF could buy wood and raw material in bulk
which can help reducing average costs leading
to increase the safety margin
2. Motivated Staff
 As the business is producing variety of beds this
can reduce boredom and absenteeism at the
factory
3. Flexible
As the business can easily change to different
types of beds which lead to adaption to
customer change in demand

Method 1: Higher Wages

RWB can increase wages for workers in the
factory which increases their productivity.

Profit-Sharing:
By giving workers part of the profit but it is
difficult as RWB is making losses thus it will not
help in motivating staff

Piece rate
RWB can pay per piece to all 1200 workers
which according to Taylor will increase the
output as workers are more productive
A partnership allows owners to share workload
which could allow time for each partner to
specialize on certain activities to improve the
business.
The main problem in a partnership is unlimited
liability which mean the partners’ personal
assets are at risk if the business is unable to pay
debts.
I think partnership is better than a sole trader to
start up a new business as more capital will be
injected in the business for more equipment and
liquidity, especially that both have unlimited
liability

Increase taxes from the manufacture of bottles

Expects the business to stay within the law in

the production
Increase employment from creating jobs in the
factory to reduce unemployment benefits

The 130 employees want to receive higher pay

The 130 employees want safe working
environment when using flow production
Help Nancy get a bank loan for her book shop
as the bank manager can assess the business
ability to repay

Helps in setting budgets to calculate her margin

of safety thus evaluating the profitability of the
business
(P = TR – TC ,
Profit = Margin of safety * contribution/per unit

Yes as public limited companies have access to

large amounts of capital which does not need to
be repaid.
No, as private limited companies can control
who buys the shares and this will reduce the
risk of being taken over.
Becoming a public limited company is better
because as the business grows its has more
potential to increase the market share
compared to Private limited companies who
have less access to sufficient funds