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Transcription of this question: 2.BBTBBT is a well-established small private limited company specializing in online education, based inthe United States. The owner and founder, Mark Davis, currently owns 100% Of the shares andenjoys complete freedom in the running Of the company. The business employs three full-time staffwho have been with the business for over six years.BBT has enjoyed many years Of expansion in the provision Of online education. Mark ownsthe 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 haverecently established a presence in the online education market.Mark has to raise finance to develop new educational software to maintain or improve hismarket 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 sheethas deteriorated”.Mark’s accountant has just presented the following financial information for BBT as Of31 October 2010, which raised some working capital and liquidity issues.Extract from the balance sheet for BBT for the year ended 31 October 2010Ca ital em 10 edCashCreditorsDebtorsDe reciationFixed assetsLoan capitalNet assetsRetained profitShare ca italShort-term borrowingStockTotal (current assets)Total current liabilitiesUSSx200028 ooo150030 oooz8500200030 ooo48 ooo(This question continues on the following page)(b)(c)(i)(ii)(i)(ii)(iii)Define the term copyright.Identify two disadvantages for BBT Of operating as a private limitedcompany.Calculate the missing figures X, Y, Z and with those figures and fromthe financial information provided, construct a complete balance sheet forBBT for 2010.BBT’s net profit before interest and tax as at 31 October 2010 wasUSS27695_ Calculate the value Of BBTS current ratio and return oncapital employed (ROCE).Using financial and non-financial factors, explain why the bank managerrefused to finance the R&D Of the new educational software.Examine two possible alternative sources Of finance that Mark might use tofund the R&D of the new educational software.[2 marks][2 marks][7 marks][2 marks][6 marks][6 marks]

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