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    (Original post by splashywill)
    Anyone else write in the last question that the work force could potentially go on strike which would occur at peak trading season and cause massive losses in revenue which would put the business at risk of liquidity as the current ratio was very low?

    I also wrote about the risk of entering the new market was high due to fierce competition potentially having systems in place to eliminate the threat of new entrants.(porters 5 forces)

    and my last point was that the proposal would satisfy the corporate long term goal of increasing profitability set by the new shareholders.
    Correct and also that Thea was experienced in low budget airlines which is a different market to what she plans on doing so she is inexperienced.
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    overall that was a hard exam
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    (Original post by adamupton123)
    workout current gearing which was 41.something% and then workout gearing after borrowing the £300 million which was 50%. therefore gearing is at the maximum where a business would be comfortable. this is a point for borrowing. a point against borrowing is that you would have to pay back the £300 million with interest. you could also argue that an alternative to borrowing could be to issue shares. you can workout that you need to sell 171,500,000 (rounded) shares at £1.75 share price to raise the £300 million.
    Arguments for I said interest would be lower due to lower payback time.
    Arguments against I said gearing was relatively high and current ratio was poor so bringing more debt into the business could have detrimental effects
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    Anyone put for Q1 that the decrease in demand for package holidays was causing Kings product to become more price elastic?
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    (Original post by JoshFlySon)
    Did anyone else use Porter's generic strategies?
    Yes, I said that they are currently competing on differentiation and the new proposal involved competing on cost leadership.
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    (Original post by hello12332101)
    Correct and also that Thea was experienced in low budget airlines which is a different market to what she plans on doing so she is inexperienced.
    Nice reckon i might have put together a decent paper there... left Q2 until the end and rushed it though
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    (Original post by splashywill)
    Nice reckon i might have put together a decent paper there... left Q2 until the end and rushed it though
    Question 1 and 2 were so confusing. I was expecting a calculation for the first question.
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    (Original post by adamupton123)
    you couldn't as the current ratio was 0.3:1 which is very weak so you don't have any spare cash in your assets
    If i was right about gearing and talked about added interest as well as how it would be easily accessible would i lose marks if i recommended them to use 150m from assets
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    (Original post by splashywill)
    Anyone put for Q1 that the decrease in demand for package holidays was causing Kings product to become more price elastic?
    Think kings product were becoming more price Inelastic, fell from -0.9 to -0.7
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    (Original post by Crozzer24)
    Arguments for I said interest would be lower due to lower payback time.
    Arguments against I said gearing was relatively high and current ratio was poor so bringing more debt into the business could have detrimental effects
    i think the question was mainly getting at the gearing ratio. is it low enough to be able to borrow the money and will it be too high after borrowing the money.
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    (Original post by Crozzer24)
    Think kings product were becoming more price Inelastic, fell from -0.9 to -0.7
    oh ****...
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    I've just realised I had the current ratio as 1:3.22 is this classes as wrong even though the ratio is correct
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    (Original post by hello12332101)
    Question 1 and 2 were so confusing. I was expecting a calculation for the first question.
    my teacher predicted an 18 mark calculation where you'd have to calculate payback, arr and npv haha... would have been a lot nicer tbh
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    Anyone agree with the proposal due to the fact the current market was declining and a new growth strategy was needed in order for the business to achieve its aim of increasing profit margin???
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    (Original post by Jt18976)
    If i was right about gearing and talked about added interest as well as how it would be easily accessible would i lose marks if i recommended them to use 150m from assets
    i think the question was mainly getting at the gearing ratio. is it low enough to be able to borrow the money and will it be too high after borrowing the money. so if worked out the gearing of 41.18% and stated that it was low enough for at least some money to be borrowed then you get L3/L4 more towards L4
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    (Original post by JoshFlySon)
    add up all the cash flow stuff, then minus the 300m investment, divide by number of years (4) then divide by 300m then times by 100, I think that's it, it was around 15%
    I did that but got 9% or something??
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    (Original post by Crozzer24)
    I've just realised I had the current ratio as 1:3.22 is this classes as wrong even though the ratio is correct
    Crap I did the same
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    Yes was my point for it - also short-haul market was growing
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    (Original post by adamupton123)
    you didn't need to workout the investment appraisal calcs for q3
    You did
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    (Original post by adamupton123)
    i think the question was mainly getting at the gearing ratio. is it low enough to be able to borrow the money and will it be too high after borrowing the money. so if worked out the gearing of 41.18% and stated that it was low enough for at least some money to be borrowed then you get L3/L4 more towards L4
    Gearing ratio was only 50% after which is an acceptable level and isn't too high
 
 
 
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