Código: GP-

SA-14 GESTIÓN PEDAGÓGICA

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1 STUDY 25/08/2023

B
BT
BBT is a well-established small private limited company specializing in online
education, based in the United States. The owner and founder, Mark Davis,
currently owns 100% of the shares and enjoys complete freedom in the running
of the company. The business employs three full- time staff who have been with
the business for over six years.
BBT has enjoyed many years of expansion in the provision of online education.
Mark owns the copyright for his patented software, which provides him with a
unique selling point (USP). However, the copyright will expire in the near
future. Moreover, several rival companies have recently established a presence
in the online education market.
Mark has to raise finance to develop new educational software to maintain or
improve his market position. His bank manager has refused to lend funds for the
research and development (R&D) of the new software. He said "software has a
short product life cycle, and your balance sheet has deteriorated".
Mark's accountant has just presented the following financial information for
BBT as of 31 October 2010, which raised some working capital and liquidity
issues.

a) (i) Define the term copyright [2 marks]

It is used to describe the rights of creators

(ii) Identify two disadvantages for BBT of operating as a private limited company. [2 marks]

1. It cannot sell its shares to the public or go public, which limits capital.
2. BBT is subject to more legal and regulatory requirements than an individual company.

b) (i) Calculate the missing figures X, Y, Z and with those figures and from the financial
information provided, construct a complete balance sheet for BBT for 2010. [7 marks]

The total assets= 235000

Total liabilities=235000
shareholders=115000

● X = Capital Stock + Retained Earnings

● Y = Net Income - Dividends
● Z = Revenues - Expense
X= 12000+Y

Y=Z-O

Z=700000-100000

T,Y=Z=600000

X=720000

Assests Amount Liabilities and Amount

shareholders equity

Cash 60.000 Notes Payable 103.000

Accounts receivable 70.000 Accounts P. 112.000

Supplies 18.000 Salaries P. 20.000

Equipment 30.000 Total Liabilities 235.00

Trucks 42.000 Capital Stock 120.000

Building 50.000 Retained Earnings 600.000

Land 80.000 Total shareholders 720.000

equity

Total Assets 350.000 Total Liabilities and 350.000

shareholders equity

(ii) BBT's net profit before interest and tax as at 31 October 2010 was US$27 695. If interest
payments were 10% of this value and corporation tax was 30% Calculate the value of interest
paid and total corporation tax. [2 marks]

10%

0.10×27,695=$2,769.50

total comporation the 30%

0.30x27,695=8.308.50

(iii) Using financial and non-financial factors, explain why the bank manager refused to
finance the R&D of the new educational software. [6 marks]

● High risk of failure: The bank manager may have perceived the R&D project as too risky.
● Low financial results: The bank manager may not be satisfied with BBT's financial results,
as indicated by the deteriorating balance sheet.

c) Examine two possible alternative sources of finance that Mark might use to fund the R&D of the
new educational software. [6 marks]

Venture capital: Mark could approach a venture capital firm specializing in the online education
sector and pitch his idea for new software. If successful, he could get the funding he needs, as
well as access to the venture capitalist's expertise and network.
Crowdfunding: Mark could use crowdfunding to raise money for R&D of the new software by
creating a campaign that showcases his vision, goals and benefits of the software. He could offer
rewards or incentives to backers, such as early access, discounts or recognition. Crowdfunding
could help Mark generate interest and awareness for his software, as well as feedback and
validation from potential customers.