4 (a) Explain the meaning of the term ‘working capital cycle’ for a trading company. (4 marks)
(c) State one advantage to a business of keeping its working capital cycle as short as possible.
(2 Marks)
(b) Explain the major benefits of pursuing a policy of internal development. (4 marks)
(b) Explain how the adoption of residual income (RI) using the annuity method of depreciation might prove to
be a superior basis for the management incentive plan operated by NCL plc.
(N.B. No illustrative calculations should be incorporated into your explanation). (4 marks)
(b) (i) Advise the directors of GWCC on specific actions which may be considered in order to improve the
estimated return on their investment of ￡1,900,000. (8 marks)
(ii) Briefly discuss FOUR non-financial factors which might influence the above decision. (4 marks)
