FINANCIAL MANAGEMEMT

Question 1 State ANY TWO roles of Finance Manager. (2 marks) Question 2 ABC Sdn Bhd had achieved RM15,000,000 sales (all credit) for the year ended 31 October 2020 and gross profit on cost of sales was at 25%. Extract Statement of Financial Position as at 31 October 2020 will be as follow: RM'000 Current Assets Inventory (Cost 2,600,000, NRV 2,500,000) ? Trade Receivables 2,800 Current Liabilities Trade Payables Bank Overdraft 1,800 2,400 Additional information: () ABC Sdn Bhd is expecting cost of sales (all credit) will be increasing by 20% and changed from gross profit on cost of sales to gross profit on sales at 50% for the year ending 31 October 2021. (ii) The following cash operating cycles (expressed in days) and bank overdraft of RM200,000 have been forecast for the year ending 31 October 2021: Inventory turnover days 60 days Trade receivables collection periods 65 days Trade payables payment periods 75 days Required: (a) Determine the cash operating cycles (express in days) for the year ended 31 October 2020. With assuming there are 360 days in a year. (3 marks) (b) What is the working capital requirement for inventory, trade receivables and trade payables (to the nearest RM000) for the year ending 31 October 2021. (3 marks) (c) Calculate the current and quick (acid test) ratio for the year ended 31 October 2020 & year ending 31 October 2021. (2 marks) [10 marks Question 3 BBC Sdn Bhd provide you with the following investment data on Project A. Years Profit/(Losses) - (AFTER depreciation) RM'000 1 (23) 2 67 3 102 4 77 5 52 -Tn Additional information: (1) The initial investment of the machine for Project A is RM290,000 (1) The scrap/terminal value of the machine will be RM50,000 at the end of Year 5. (iii) Company's cost of capital is 10%. 10% 25% Years 0 1.000 1.000 1 0.909 0.800 2 0.826 0.640 3 0.751 0.512 4 0,683 0.410 5 0.621 0.328 Required: (a) Shown the depreciation per annum and the Net Present Value (NPV) to the nearest RM'000 for Project A at 10% and 25%. (5 marks) (b) What is the Internal Rate of Return (IRR) for Project A. (1 mark) (c) Calculate the Accounting Rate of Return (ARR) for Project A. (2 marks) Question 4 Differentiate capital expenditure and revenue expenditure (examples are not required). (2 marks) [10 marks