BAHIR DAR UNIVERSITY

COLLEGE OF BUSINESS AND ECONOMICS

DEPARTMENT OF MANAGEMENT
CONTINUING AND DISTANCE EDUCATION PROGRAM
Assignment (40%)

Course: Strategic Financial Analysis Course code: Bmgt 402

Instruction
 Your answers should be submitted hand written. Computer written answer will not be marked
 Only readable and neat handwritings are marked
 You are expected to show all the necessary details & steps

1. Explain agency problem?

2. Explain sources of finance in detail?

3. Take and study any manufacturing business (small or micro) in your area. List the different
costs of the business as have learned in Unit 2 – Fig. 2.

A. Classify the cost items and provide at least three specific costs.

B. What are the fixed and variable costs?

C. What are the direct and indirect costs?

4. Ato X purchased a house for 100,000 promising to settle the debt during the next four years
with equal payments that will made at the end of each year. If interest is compounded
annually at 6%, how much money Ato X must pay at end of each year to amortize the debt?
5. Explain the difference between default risk and credit risk?

6. Explain porter’s five-forces of model Business’s competitive strategy?

7. Find the present value of an annuity that will pay you birr 10,000 each year for the next 5
year, if interest rate is 12%?

8. Suppose that you need 200,000 to send your daughter to college after six years. If you have
80,000 today at what interest rate you have to invest this money to achieve your goal?