For the financial year 2020, EZ Bhd recorded a 37.9 % decrease in…

Question Answered step-by-step For the financial year 2020, EZ Bhd recorded a 37.9 % decrease in… For the financial year 2020, EZ Bhd recorded a 37.9 % decrease in revenue from RM26.4 million in the previous financial year to RM16.4 million in this financial year, a decrease of RM10 million. The decrease in the Group’s total revenue was mainly due to lower contribution from the plantation segment. This was mainly due to the lower crude palm oil commodity prices coupled with lower fresh fruit bunches (FFB) production during the financial year under review. EZ Bhd currently owns and manages 4,019 hectares of oil palm plantation located in the state of Pahang. Due to the shortage of production of FFB, EZ Bhd plans to expand palm oil plantation to the new area in Terengganu, to cater for the long-term market demand.  The board of directors of the company has two options for the business strategy expansion, firstly by acquiring shares of an existing plantation company in Terengganu to exercise significant influence over the business operations. Secondly, through joint venture arrangements, both parties could share costs and risks. The company’s Chairman seeks the management team to do some study and come out with the best recommendation between these two options to be proposed in the BOD meeting for the strategic planning of EZ Bhd business expansion strategy.  The written report for the business expansion strategy whether to invest as an associate company or joint venture should be handed over to BOD at the earliest date possible for the BOD to discuss in the meeting.    1. Discussion on the advantages and disadvantages of  joint venture (generate ideas or solutions) (20 marks) Accounting Business Financial Accounting BKAR 3043 Share QuestionEmailCopy link Comments (0)