This question was the most popular and probably the best answered of all the questions on the paper with many candidates gaining a high proportion of the marks for their answers. The question consider a management buy- out, and forecasting future earnings of the new company in order to assess the possibility of future breaches in debt covenants, implications of the breaches, and how to tackle these.

Generally part (a) was done well and many responses gained high marks. Some responses discussed the benefits to the management team and not just Proteus Co, which was not asked for.