FIN2603 Assignment 1 Semester 2 2023 (899319)SOLUTIONS/ANSWERS

FIN2603 Assignment 1 Semester 2 2023 ()SOLUTIONS/ANSWERS QUESTIONS ASKED: Question 1 Not yet answered Marked out of 1.00 Flag question Question text Finance can be defined as the ... Select one: a. science of the production, distribution and consumption of wealth. b. art of merchandising products and services. c. system of debits and credits. d. art and science of managing money. Clear my choice Question 2 Not yet answered Marked out of 1.00 Flag question Question text Any organisation that is managed in accordance with business principles should be able to ensure its survival because it will ... Select one: a. plan its cash inflows and outflows by means of a cash budget. b. maximise its revenue from sales and control its expenses. c. keep its cost of financing as low as possible. d. undertake all the above-mentioned financial measures. Clear my choice Question 3 Not yet answered Marked out of 1.00 Flag question Question text During periods where the consumer price index (CPI) is expected to decrease, a retail firm will have to ... Select one: a. apply credit standards more strictly due to declining interest rates, increase in sales, but a slowdown of cash inflow. b. budget more conservatively as a result of rising interest rates, a decline in sales and an increase in bad debts. c. expand due to declining interest rates, an increase in sales and improved feasibility of investment opportunities. d. relax credit standards due to a decline in sales, a decrease in bad debts and a slowdown of cash outflow. Clear my choice Question 4 Not yet answered Marked out of 1.00 Flag question Question text If the company's managers are NOT owners of the company, they are ... Select one: a. traders. b. outsiders. c. agents. d. dealers. Clear my choice Question 5 Not yet answered Marked out of 1.00 Flag question Question text The primary short-term financial goal of the firm may be best achieved by ... Select one: a. increasing expenses in order to reduce the firm’s tax liability. b. accelerating cash inflows and delaying cash outflows. c. maximising revenue and minimising expenses. d. minimising the cost of capital and maximising the internal rate of return (IRR). Clear my choice Question 6 Not yet answered Marked out of 1.00 Flag question Question text What is the main function of a financial manager? Select one: a. To earn returns greater than those of the competitors. b. To ensure liquidity and solvency. c. To increase the value of ordinary shares. d. To prevent bad debts. Clear my choice Question 7 Not yet answered Marked out of 1.00 Flag question Question text Who is/are the true owner(s) of an organisation? Select one: a. The creditors. b. The board of directors. c. The chief executive officer. d. The shareholders. Clear my choice Question 8 Not yet answered Marked out of 1.00 Flag question Question text A current ratio of 4,5:1 may indicate the firm has too much ... Select one: a. inventory. b. All of the above. c. accounts receivable. d. cash. Clear my choice Question 9 Not yet answered Marked out of 1.00 Flag question Question text A firm can best improve its ROE by increasing its ... Select one: a. net profit and using assets needed for core business only. b. sales and decreasing expenditure. c. cash sales and decreasing liabilities. d. profitability, asset turnover and financial leverage. Clear my choice Question 10 Not yet answered Marked out of 1.00 Flag question Question text If accounts receivable increase by R100, inventory increases by R200 and accounts payable increase by R400, net working capital would ... Select one: a. increase by R300. b. increase by R100. c. decrease by R100. d. decrease by R300. Clear my choice Question 11 Not yet answered Marked out of 1.00 Flag question Question text The best way in which a firm may improve its profitability without incurring additional expenses, would involve ... Select one: a. increasing sales by means of improved marketing. b. selling all its non-core assets. c. reducing expenditure on non-core business activities. d. employing fewer permanent staff and using contract workers during peak periods. Clear my choice Question 12 Not yet answered Marked out of 1.00 Flag question Question text Calculate the future value (FV) of R10 000 invested for 5 years at an interest rate of 7%, interest compounded semiannually. a. R14 900 b. R14 026 c. R16 234 d. R14 106 Clear my choice Question 13 Not yet answered Marked out of 1.00 Flag question Question text Calculate the future value (FV) of R15 000 invested for six years at an interest rate of 8%, compounded monthly. a. R14 026 b. R23 803 c. R26 734 d. R24 260 Clear my choice Question 14 Not yet answered Marked out of 1.00 Flag question Question text Calculate the present value (PV) of R100 000 received 9 years from today at an interest rate of 12%. a. R27 895 b. R43 998 c. R36 061 d. R37 980 Clear my choice Question 15 Not yet answered Marked out of 1.00 Flag question Question text Calculate the present value (PV) of R100 000 received nine years from today at an interest rate of 12%. Interest is compounded monthly. a. R43 998 b. R27 895 c. R34 142 d. R37 980 Clear my choice Question 16 Not yet answered Marked out of 1.00 Flag question Question text Charles, the manager of an export company, wishes to replace a machine four years from now, with a new machine that will cost R150 000 in four years time. If equal end-of-the-year deposits will be made into an account paying annual interest of 10 per cent, calculate the size of the each deposit. a. R 23 535.24 b. R 45 345.78 c. R 32 320.62 d. R 29 382.38 Clear my choice Question 17 Not yet answered Marked out of 1.00 Flag question Question text Find the present value of the following stream of cash flows by assuming that the organisation has an opportunity cost of 11%. Years 1–2: R 20 000 Years 3–8: R 30 000 a. R 71 203.41 b. R152 356.88 c. R100 268.41 d. R137 258.45 Clear my choice Question 18 Not yet answered Marked out of 1.00 Flag question Question text If Conrad invests R2 000 at the beginning of each year at an interest rate of 10 per cent over five year period, the future value of the investment would be ... a. R 6 105.10. b. R 6 715.61. c. R13 431.22. d. R12 210.20. Clear my choice Question 19 Not yet answered Marked out of 1.00 Flag question Question text R2 000 is invested at 7% for the first year, 8% for the second year and 9% for the third year, compounded annually. The future value at the end of the third year is closest to ... a. R2 794 b. R2 690 c. R2 849 d. R2 519 Question 20 Not yet answered Marked out of 1.00 Flag question Question text What amount must be invested annually (at the beginning of each year) for 5 successive years at 8% p.a. compounded interest in order to yield R500 000? a. R78 915.03 b. R92 000.44 c. R82 047.05 d. R89 383.2