1. A firm with an operating cycle of 50 days and a cash conversion cycle of 30 days, has an average payment period of ... days.

A. -80

B. -20

C. 20

D. 80

2. W Ltd. has an average age of inventory of 60 days, an average collection period of 20 days and an average payment period of 30 days. Calculate the firm's cash conversion cycle.

A. 110 days

B. 50 days

C. 70 days

D. 10 days

3. The financial manager is evaluating two new projects. The firm has a cost of capital of 8%. The two projects are expected to have the following cash flows:

YearProject A (R)Project B (R)

1-50 000-80 000

220 00040 000

330 00030 000

410 00030 000

What is the profitability index for Project A:

A. 1,13

B. 1,04

C. 1,20

D. 0,04

4. P Ltd. is evaluating two mutually exclusive investment projects for the next financial year. The firm's cost of capital is determined at 9%. The information pertaining to the two projects is as follows:

YearProject XProject Y

0(-R80 000)(-R25 000)

1R5 000R5 000

2R10 000R5 000

3R20 000R5 000

4R40 000R5 000

5R50 000R5 000

The net present value (NPV) of Project X is ...

A. R4 640,60

B. R10 235,78

C. R9 281,20

D. R50 000,00