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Page 1

Relationship between risk and return (graph)

Risk free rate (risk free interest rate)

Risk premium ( risk prem. interest rate)

Organisation of business

limitation

transfer ownership

limited liability company (don't have to show annual documentation)

stoke listed companies (managed my directors)

Corporate Governance (rules of running of company)

Exercise 2.1

Selling price 250,000

Cost so far 200,000

GO = material cost 40,000(already bought)

NO GO = disposal cost 8,000

labour cost 25,000 units p cost

alt. use of labour 2000 * (25 - 12)

ProjectManager 10,000(salary) or 8,000(compensation)

Total cost:

Go No GO Relevant costs:

40.000 48.000 8.000

25.000 25.000 -26.000

-26.000 2.000

10.000 8.000

200.000 200.000

-250.000

Loss:

25.000 255.000

Chapter 3

Income statement - summarises operating performance