FIN3702 EXAM
2025 UPDATED QUESTIONS AND
ANSWERS.RECENT WITH MANY MORE
QUESTIONS TO STUDY ,WELL EXPLAINED
ANSWERS. WITH THE CURRENT EXAM
TOPICS ,SUMMARIES AND
NOTES.2024,2023,2022,2021,2020………
summaries
Excellence Through Knowledge
A+ CONCEPTS
, FIN3702
CONFIDENTIAL MAY/JUNE ONLINE EXAM
UNIVERSITY EXAMINATIONS
May/June 2020
FIN3702
WORKING CAPITAL MANAGEMENT
70 Marks
2 Hours
This paper consists of 15 pages.
Instructions:
Use of a non-programmable calculator is permissible.
This is a take home examination, but you are advised not to consult your study material in order to save
time.
The exam is an assessment and it should still be your own work. Please remember to sign the honesty
declaration at the end of the examination paper.
This exam paper remains the property of the university and may not be distributed.
Please note that you submit the answers of your exam the same way you submit a written assignment on
myUNISA. It is necessary that you submit your file in PDF format. Further instructions have been provided
on myUNISA.
Adequate spaces for answering the questions have been provided on this exam paper but you are
welcome to use your own answer sheets as long as your work is legible.
Answer SECTION A and SECTION B.
Page 1 of 164
, FIN3702
CONFIDENTIAL MAY/JUNE ONLINE EXAM
SECTION A consists of 25 multiple-choice questions worth 25 marks (answer table provided on
page 8) and SECTION B consists of three essay questions totalling 45 marks. Your final mark out
of 70 will be expressed as a percentage.
SECTION A: MULTIPLE-CHOICE QUESTIONS [25 MARKS]
1. A corporation sold a fixed asset for R100 000. This is an …
1. operating cash flow and a use of funds.
2. investment cash flow and a use of funds.
3. operating cash flow and a source of funds.
4. investment cash flow and a source of funds.
2. A firm with a cash conversion cycle of 175 days can stretch its average payment period
from 30 days to 45 days. This will result in a/an …
1. decrease of 30 days in the cash conversion cycle.
2. increase of 30 days in the cash conversion cycle.
3. increase of 15 days in the cash conversion cycle.
4. decrease of 15 days in the cash conversion cycle.
3. A firm has an operating cycle of 120 days, an average collection period of 40 days, and
an average payment period of 30 days. The firm's average age of
inventory is …
1. 50 days.
2. 70 days.
3. 80 days.
4. 90 days.
4. If a firm increases its current assets relative to total assets, it …
1. reduces return and reduces risk.
2. increases return and reduces risk.
3. reduces return and increases risk.
4. increases return and increases risk.
5. As part of a union negotiation agreement, the National Education, Health and Allied
Workers’ Union (Nehawu) conceded to be paid every two weeks instead of every
week. A major firm employing hundreds of workers had a weekly payroll of R1 000
Page 2 of 164
, FIN3702
CONFIDENTIAL MAY/JUNE ONLINE EXAM
000 and the cost of short-term funds was 12%. The effect of this agreement meant that
the firm …
1. increased its cash cycle.
2. decreased its cash turnover.
3. realised an annual loss of R120 000.
4. realised an annual saving of R120 000.
6. Simunye Mining was extended credit terms of 2/15 net 30 EOM. The cost of giving up
the cash discount, assuming payment would be made on the last day of the credit
period, is … If the firm were able to stretch its accounts payable to 60 days without
damaging its credit rating, the cost of giving up the cash discount would be …
(assume a 365-day year).
1. 49.66%; 16.55%.
2. 72.99%; 18.25%.
3. 72.25%; 21.90%.
4. 75.26%; 25.09%.
7. A bank lends a firm R650 000 for one year at an interest rate of 8% and requires
compensating balances of 10% on the face value of the loan. The effective annual
interest associated with this loan is …
1. 7.0%.
2. 7.2%.
3. 8.0%.
4. 8.9%.
The following information applies to the next two questions.
Mtshali’s Bridal Ltd uses 1 440 000 metres of material each year. Furthermore, the firm orders
the material at a cost of R2 per metre, plus fixed ordering costs of R100 per order. The firm’s
carrying cost is 20% of the inventory value at cost. Assume a 365-day year for this company.
8. What is the firm’s estimated EOQ?
1. 13 563
2. 21 456
3. 26 833
4. 43 987
Page 3 of 164
2025 UPDATED QUESTIONS AND
ANSWERS.RECENT WITH MANY MORE
QUESTIONS TO STUDY ,WELL EXPLAINED
ANSWERS. WITH THE CURRENT EXAM
TOPICS ,SUMMARIES AND
NOTES.2024,2023,2022,2021,2020………
summaries
Excellence Through Knowledge
A+ CONCEPTS
, FIN3702
CONFIDENTIAL MAY/JUNE ONLINE EXAM
UNIVERSITY EXAMINATIONS
May/June 2020
FIN3702
WORKING CAPITAL MANAGEMENT
70 Marks
2 Hours
This paper consists of 15 pages.
Instructions:
Use of a non-programmable calculator is permissible.
This is a take home examination, but you are advised not to consult your study material in order to save
time.
The exam is an assessment and it should still be your own work. Please remember to sign the honesty
declaration at the end of the examination paper.
This exam paper remains the property of the university and may not be distributed.
Please note that you submit the answers of your exam the same way you submit a written assignment on
myUNISA. It is necessary that you submit your file in PDF format. Further instructions have been provided
on myUNISA.
Adequate spaces for answering the questions have been provided on this exam paper but you are
welcome to use your own answer sheets as long as your work is legible.
Answer SECTION A and SECTION B.
Page 1 of 164
, FIN3702
CONFIDENTIAL MAY/JUNE ONLINE EXAM
SECTION A consists of 25 multiple-choice questions worth 25 marks (answer table provided on
page 8) and SECTION B consists of three essay questions totalling 45 marks. Your final mark out
of 70 will be expressed as a percentage.
SECTION A: MULTIPLE-CHOICE QUESTIONS [25 MARKS]
1. A corporation sold a fixed asset for R100 000. This is an …
1. operating cash flow and a use of funds.
2. investment cash flow and a use of funds.
3. operating cash flow and a source of funds.
4. investment cash flow and a source of funds.
2. A firm with a cash conversion cycle of 175 days can stretch its average payment period
from 30 days to 45 days. This will result in a/an …
1. decrease of 30 days in the cash conversion cycle.
2. increase of 30 days in the cash conversion cycle.
3. increase of 15 days in the cash conversion cycle.
4. decrease of 15 days in the cash conversion cycle.
3. A firm has an operating cycle of 120 days, an average collection period of 40 days, and
an average payment period of 30 days. The firm's average age of
inventory is …
1. 50 days.
2. 70 days.
3. 80 days.
4. 90 days.
4. If a firm increases its current assets relative to total assets, it …
1. reduces return and reduces risk.
2. increases return and reduces risk.
3. reduces return and increases risk.
4. increases return and increases risk.
5. As part of a union negotiation agreement, the National Education, Health and Allied
Workers’ Union (Nehawu) conceded to be paid every two weeks instead of every
week. A major firm employing hundreds of workers had a weekly payroll of R1 000
Page 2 of 164
, FIN3702
CONFIDENTIAL MAY/JUNE ONLINE EXAM
000 and the cost of short-term funds was 12%. The effect of this agreement meant that
the firm …
1. increased its cash cycle.
2. decreased its cash turnover.
3. realised an annual loss of R120 000.
4. realised an annual saving of R120 000.
6. Simunye Mining was extended credit terms of 2/15 net 30 EOM. The cost of giving up
the cash discount, assuming payment would be made on the last day of the credit
period, is … If the firm were able to stretch its accounts payable to 60 days without
damaging its credit rating, the cost of giving up the cash discount would be …
(assume a 365-day year).
1. 49.66%; 16.55%.
2. 72.99%; 18.25%.
3. 72.25%; 21.90%.
4. 75.26%; 25.09%.
7. A bank lends a firm R650 000 for one year at an interest rate of 8% and requires
compensating balances of 10% on the face value of the loan. The effective annual
interest associated with this loan is …
1. 7.0%.
2. 7.2%.
3. 8.0%.
4. 8.9%.
The following information applies to the next two questions.
Mtshali’s Bridal Ltd uses 1 440 000 metres of material each year. Furthermore, the firm orders
the material at a cost of R2 per metre, plus fixed ordering costs of R100 per order. The firm’s
carrying cost is 20% of the inventory value at cost. Assume a 365-day year for this company.
8. What is the firm’s estimated EOQ?
1. 13 563
2. 21 456
3. 26 833
4. 43 987
Page 3 of 164
