17 Not yet answered Marked out of 1.00 The next two questions apply to the information provided below: Yoyos and Us Ltd is analysing the performance of its cash management department. The store has an inventory turnover of 7.2, an average payment period of 40 days and an average collection period of 60 days. The store's annual outlay is R2 500 000 (assume a 365-day year). Question 17: The firm's cash conversion cycle is... 1. 50.69 days. 2. 60.31 days. 3. 70.69 days. 4. 110.69 days. 4. Gold Trust Bank Ltd has offered a manufacturing company the following alternatives in response to the R275 000 one-year loan application made to the bank. alternative 1: 15% discount interest, with an 8% compensating balance alternative 2: 16% simple interest with interest paid monthly What will the effective annual rate be if this company chooses to take the cheaper alternative? 1. 13.63% 2. 16.45% 3. 17.22% D Home Supplies Ltd maintains an average inventory of 2 500 desks to supply to schools. The carrying cost per desk is estimated at R1.25. Betty places an order for 5 000 desks on the first day of each quarter and the order cost is R80. What will Betty's carrying cost be if her firm uses the EOQ method of inventory management? 1. R894 2. R1 215 3. R2 500 4. R3 125 Assessment 1 @$28% 11:05 Question 9 Not yet answered Marked out of 1.00 The key output(s) of the short-run financial planning process are a 1. sales forecasts and cash budget. 2. cash budget, sales forecast and income statement. 3. income statement, balance sheet, source and O use statement. 4. cash budget, pro forma income statement and pro forma balance sheet. Question 6 Not yet answered Marked out of 1.00 When a firm initiates or increases a cash discount, sales are expected to ..., the investment in accounts receivable is expected to ..., the bad debts expense is expected to ... and the profit per unit is expected to ... 1. decrease; increase; increase; increase. 2. decrease; decrease; increase; increase. 3. increase; increase; decrease; decrease. 4. increase; decrease; decrease; decrease. CLEAR MY CHOICE Question 5 Not yet answered Marked out of 1.00 Home Supplies Ltd maintains an average inventory of 2 500 desks to supply to schools. The carrying cost per desk is estimated at R1.25. Betty places an order for 5 000 desks on the first day of each quarter and the order cost is R80. What will Betty's carrying cost be if her firm uses the EOQ method of inventory management? 1. R894 2. R1 215 3. R2 500 4. R3 125 CLEAR MY CHOICE Question 7 Not yet answered Marked out of 1.00 Nedbank Ltd has offered Rice Cookies Ltd the following in response to a R100 000 one-year loan application which was made to the bank. The stated rate was 6% with a 20% compensating balance. What will the effective annual rate be? 1. 7.50% 2. 8.40% 28 3. 38 8.75% 4. 11.25% CLEAR MY CHOICE Question 8 Not yet answered Marked out of 1.00 Rene Zellweger purchased inventory to the value of R100 000. The terms of sale were 3/15 net 45. What is the effective annual interest rate if she paid the full amount in 45 days? Assume 365 days in a year. 1. 28.00% 2. 37.60% 3. 44.30% 4. 44.90% CLEAR MY CHOICE Question 9 Not yet answered Marked out of 1.00 The key output(s) of the short-run financial planning process are a 1. sales forecasts and cash budget. 2. cash budget, sales forecast and income statement. 3. income statement, balance sheet, source and O use statement. 4. cash budget, pro forma income statement and pro forma balance sheet. CLEAR MY CHOICE Question 10 Not yet answered Marked out of 1.00 A firm which uses the aggressive financing strategy plans to purchase a major fixed asset financed with a loan. The most likely consequence of this action is ... 1. an increase in long-term debt. 2. a decrease in the current ratio. 3. an increase in the net working capital. 4. a decrease in the risk of technical insolvency. CLEAR MY CHOICE Question 11 Not yet answered Marked out of 1.00 The ... inventory contains the basic components of the production process. 1. capital goods 2. raw materials 3. finished goods 4. work-in-progress CLEAR MY CHOICE Question 12 Not yet answered Marked out of 1.00 A firm's credit terms cover all of the following EXCEPT ... 1. credit period. cash discount. 3. credit standards. 4. cash discounts period. CLEAR MY CHOICE Question 13 Not yet answered Marked out of 1.00 The ... float is the delay between the receipt of a check and the actual deposit of the check into the firm's account. 1. deposit O 2. clearing O 3. processing 4. disbursement Question 14 Not yet answered Marked out of 1.00 Fashionista Ltd.'s total sales are R600 000, 90% of which are made on credit. The receivables turnover is four days. Based on a 365-day year, the average collection period and year-end receivables are closest to ... 1. 73 days and R108 000. 2. 73 days and R120 000. 3. 91 days and R135 000. 4. 365 days and R120 000. CLEAR MY CHOICE Question 18 Answer saved Marked out of 1.00 The amount required to support Yoyos and Us's cash conversion cycle is... 1. R6 849. 2. R484 178. 3. R2 500 000. 4. R2 506 849. Question 19 Answer saved Marked out of 1.00 Pledges of accounts receivable and factoring of accounts receivable are made on ... basis, respectively. 1. a notification and a recourse 2. a non-recourse and a notification 3. 310 a notification and a non-recourse 4. a non-notification and a notification CLEAR MY CHOICE