Business Studies · Oct / Nov 2017 · Paper 11 · Question 2
7115
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NMBJ makes a range of cookies (biscuits) using batch production. Last year profit increased by $1.5million. The directors think this is because of an increase in productivity and better management of working capital. NMBJ has a low level of inventory. NMBJ plans to increase the wages of all 300 employees by $50 per month from March. The Finance Director is worried: ‘This decision will add $15000 to wages each month. Many employees are leaving. Is paying higher wages the best way to improve motivation?’ Table 2: Cash flow forecast for the period January - March 2018 ($000) January February March Cash inflow 560 520 600 Cash outflows: Wages 60 60 X Other costs 500 480 520 Total cash outflows 560 540 595 Net cash flow 0 (20) Y Opening balance 5 W (15) Closing balance 5 (15) Z
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2(a)[2]
2(b)[2]
2(c)[4]
2(d)[6]
2(e)[6]
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