1a) Taxation is when the government takes a percentage of your income in order to pay for their

social needs.

1b) One reason is due to the introduction of GST in India in July 2017, therefore small sized
businesses in India who uses labor intensive finds the new procedure difficult as the refund
claim must be done online, however some small businesses in India might be not accessible to
IT, hence the small labor intensive businesses can not claim their refund on GST, finally this can
lead to fall in labor intensive industries, as capital intensive businesses in India have not
experienced the same.

1c) Competitive export market is a market where products from different countries compete to
cater to needs and wants of the consumer.

One way is by small businesses increasing the quality of products in the textile industry,
therefore small business can attract more potential customers, as a result small businesses can
increase sales and compete with the neighboring countries like Vietnam and Bangladesh,
however high quality products are more likely to be priced more than low quality products, as a
result small businesses may not be able to competitively price their products in the textile
industry.

One more way is by targeting the niche market, therefore small businesses in the textile industry
would have less competition, as a result small businesses will be able to increase their brand
awareness due to less competition, however it might not be easy as there might be other
competitors who offer better prices for the same quality of products in the textile industry.

1d) Labour intensive is when a business uses human capital/workers more than machinery for
production of products.

One advantage is that labor intensive can be cost effective as businesses will need to pay less
wage to laborers compared to the investment in machinery, therefore businesses can reduce
per unit costs this will lead to higher economies of scales, as a result businesses can increase
their profits, however employees might not have high levels of skills as their wage might not be
high, this can lead to low quality products due to lack of motivation, which can affect the sales of
the business.

One more advantage is that businesses using labor intensive can also be flexible to demand
changes, therefore businesses can adapt to change in customer demands faster. As laborers
can change design, handcraft and produce creative garments as per the customer
requirements. Such tailor made products would make the business have a competitive
advantage, this will also result in the business to increase their sales, however these types of
methods might be time consuming in comparison to capital intensive production methods.

1e) current ratio = current assets / current liabilities

Liquidity shows how easily assets can be turned into cash inorder to meet the liabilities.

Current ratio is 0.69:1, this means that Gem Spinners India Ltd are able to repay their liabilities
with their assets. The ideal ratio should be 1:1, however Gem Spinners India Ltd’s ratio is below
the ideal therefore the finance manager of Gem Spinners India Ltd should be worried as there is
not enough cash to pay for the short term liabilities.

Acid test ratio of Gem Spinners India Ltd is 0.48:1 which means that Gem Spinners India Ltd
has cash tied up in inventory, which indicates that Gem Spinners India Ltd has low level of cash
to pay its short term bills.

However, the liquidity ratio gives a estimate on the financial condition of Gem Spinners India
Ltd, therefore Gem Spinners India Ltd might not also be a problem as Gem Spinners India Ltd
would have high inventory turnover hence, such ratio needs to be considered as per the
industry level to determine the actual financial stability of Gem Spinners India Ltd, the finance
manager of Gem Spinners India Ltd can also compare such ratio over the period of past years
to understand better about Gem Spinners India Ltd.

2a) The level of work output done per hour.

2b) Sales revenue = price x quantity sold

154 x 2,750 = $423,500

2c)

One reason is that Zamtel can identify the revenue/profit that Zamtel can make, therefore
Zamtel can see if it is worth entering the mobile phone market, this will also help Zamtel to save
profits in case Zamtel does not have demand for their mobile phone. Finally Zamtel can save
their resources like profits and revenue into the future ventures.

2d)

One way is by decreasing the price of Lava’s z91 smartphone, therefore Lava’s z91 smartphone
would have increased demand, hence Lava’s z91 smartphone would be able to have more
sales as customers would be more attracted, this will also increase the revenue and profits of
Lava’s z91 smartphone, finally this can help Lava to cover the high R&D costs.

2e) Using kaizen is more likely to increase the success of Zamtel because, kaizen allows
Zamtel to be more productive as Zamtel would have better efficiency, hence Zamtel can save
costs, this will also result in Zamtel to have more profits, finally these profits can be used to help
fund the $280m for the 700 who are in staff training and the 1009 transmission towers, this will
also help speed up communication of Zamtel in Zambia.

One more way is that Zamtel would also be able to increase the output of units while improving
the quality of Zamtel, therefore Zamtel can attract more potential customers,as a result Zamtel
can have more sales due to the continuous improvement in quality each time when producing,
this will also result in Zamtel to have more loyal customers, finally Zamtel would have a better
brand image in Zambia, thus Zamtel can differentiate their cell services and smart phones to the
two other competitors in Zambia and this will make sure that Zamtel has a competitive
advantage.

3)

A loan would be a better option than leasing because the loan can be taken in large amounts
which is needed due to high expansion costs in Mexico, Tate & Lyle’s will need to set up lab
facilities in Mexico and also launch the low calorie sweetener which contains 70% of sweetness
of sugar . Tate & Lyle’s will also need to distribute the low calorie sweetener, As a result Tate &
Lyle’s can be able to satisfy Latin American demands, due to Tate & Lyle’s providing Latin
American manufacturers in the dairy, beverage, bakery, soup and sauce sectors, finally this will
help Tate & Lyle’s by being able to increase sales, hence Tate & Lyle’s would have increased
revenue.

One disadvantage is that a loan will need to be paid back with interest, therefore Tate & Lyle’s
would have increased costs, as a result Tate & Lyle’s will need to have high revenue in need of
the EMI on time . Failure of payment of EMI will affect the credibility of Tate & Lyle’s and it will
be hard for Tate & Lyle’s to raise finance in the future.

One more advantage is that loan is paid long term and Tate & Lyle’s might get a cheaper
interest rate due to prominent presence in the food market, therefore Tate & Lyle would pay in
installments per month until the full amount is paid with interest, as a result Tate & Lyle can
also maintain the level of liquidity. The banks in latin america might approve loans more easily
due to Tate & Lyle’s competing in a growing health and wellbeing food industry which has 32%
growth in 2017.

One more disadvantage is that Tate & Lyle’s fail to secure a loan at a lower rate of interest, the
cost of borrowing would be high, hence will affect the profitability of Tate & Lyle’s also the
process of getting a loan might take time, thus might delay the expansion plan, the possibility of
Tate & Lyle’s getting a loan also depends on expansion plan, projected revenue and cash flow
as this will indicate the time frame by which Tate & Lyle’s will be able to pay back the loan in full.

Leasing can also be a option where Tate & Lyle’s would have to pay for the usage for the assets
owned by the leaser, the equipment would be, UHT processing equipment for sterilization, food
analysis technology, which will make it easy for Tate & Lyle’s to start as it would be more time
effective as it would take less time to set up in Mexico. Leasing will also give access to high
level equipment and technology for Tate & Lyle’s. Leasing will also give flexibility to Tate &
Lyle’s as the food industry according to the demands of the consumer and hence the demand
for healthy food might fade. However the cost of leasing might be higher than actual capital in
the equipment and premises.

Overall, I think that Tate & Lyle should choose option 1, this is not only due to the fact that Tate
& Lyle has high customer demand for their new low-calorie sweetener called Dolcia Prima, but
also due to Tate & Lyle having a upgraded facility which has new technology, hence this would
help Tate & Lyle to meet the high customer demand while being efficient .