AB is a large business providing services in country Z. [Figure 1: Market Distribution of Sales (2009)] shows the market distribution of its sales in 2009. Table 2 shows a summary of its financial data in the same year. Table 2: Financial Data (2009) Sales turnover | $750m Net Profit | $150m Net profit margin | 20% Return on capital employed | 15%

1. (a)What is meant by a return on capital employed [ROCE]?[2]
2. (b)Calculate the value of domestic sales in 2009.[2]
3. (c)AB has borrowed a lot of money from banks in order to expand. Identify and explain two disadvantages to a company of owing a lot of money to banks.[4]
4. (d)Country Z is in recession. Identify and explain three ways in which a recession might affect AB.[6]
5. (e)The Government of country Z is to take control of AB. Do you think that this will be in the best interests of the stakeholders in AB? Justify your answer.[6]

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