\fThe following financial information relates to HGR Co: Statement of financial position at the current date (extracts) $000 $000 $000 Non-current assets 48,965 Current assets Inventory 8,160 Accounts receivable 8,775 16,935 Total assets 65,900 Current liabilities Overdraft 3.800 Accounts payable 10,200 14,000Phoenix has carried on business for a number of years as a retailer of a wide variety of consumer products and it operates from a number of stores. In recent years the entity has found it necessary to provide credit facilities to its customers in order to maintain growth in revenue. As a result of this decision the liability to its bankers has increased substantially. Extracts from the financial statements for the year are provided below. INCOME STATEMENTS FOR THE YEARS ENDED 30 JUNE 20X7 20X8 20X9 Sm Sm Sm Revenue 1,850 2.200 2.500 Cost of sales (1.250] (1,500) (1,750) Gross profit 700 750 Other operating costs (550) (640 (700) Profit before interest 50 50 50 Interest from credit sales 45 60 90 Interest payable (25] (110) Profit before taxation 70 60 30 Income tax expense 123 Profit for the year 47 40 20 STATEMENTS OF FINANCIAL POSITION AT 30 JUNE 20X7 20X8 20X9 Sm $m $m Property, plant and equipment 278 290 322 Inventories 400 540 620 Trade receivables 492 550 633 Cash 12 12 15 Total assets 1,182 1.392 1,590 Share capital 90 90 Reserves 282 203 282 372 382 372 Bank loans 320 520 610 Other interest bearing borrowings 200 200 320 Trade payables 270 270 280 Tax payable 20 20 8 Total equity and liabilities 1,182 1,392 1,590 Other information Depreciation charged for the three years in question was as follows. Year ended 30 June 20X7 20X9 $m $m $m 55 70E'000 Initial outlay 400 Afterone year 40 After two years 300 After three years 300 What will be the NPV (net present value) of this project if a discount rate of 15% is used? O +160.8k O -160.8k O+E240k +460.8kThe quick ratio EXCLUDES which of the following accounts? Accounts Receivable Inventory CashCurrent assets DIVIDED BY current liabilities is the Current Ratio Net Worth Ratio Working Capital9. Which of the following statements concerning the payback period, is not true? The payback period is simple to calculate and understand. The payback period measures the time that a project will take to generate enough cash flows to cover the initial investment. The payback period ignores cash flows after the payback point has been reached. O It takes account of the time value of money.\fFor its most recent year a company had Sales (all on credit) of $830,000 and Cost of Goods Sold of $525,000. At the beginning of the year, its Accounts Receivable were $80,000 and its Inventory was $100,000. At the end of the year, its Accounts Receivable were $86,000 and its Inventory was $110,000.At December 31 a company's records show the following information: Cash $ 10,000 Accounts Receivable 30,000 Inventory 80,000 Prepaid Insurance 6,000 Long-term Assets 200,000 Accounts Payable 30,000 Notes Payable due in 10 months 25,000 Wages Payable 5,000 Long-term Liabilities 70,000 Stockholders' (Owner's) Equity 196,000On average how many days of sales were in Accounts Receivable during the year? 27 37 49E At start (120,000) Year 1 40.000 Year 2 50,000 Year 3 60.000 Residual value of project at the end of 3 years 20.000 The payback period for this project would be: O 2 years and 3 months. 2 years and 6 months. 3 years. 2 years.8. Bond Ltd is considering two possible projects but can only raise enough funds to proceed with one of them. Investment appraisal techniques have been used and the following results found: Project W Project X Payback period 3.8 years 2.8 years Accounting rate of return 16% 14% Net present value +E880,000 +$610,000 Which of the following is the most logical interpretation of the results? O Project W should be selected as it gives the longest payback period. O Project W should be selected because it will yield the highest NPV. O Project X should be selected because it will yield the lowest NPV O The ARR is the most meaningful investment appraisal technique and hence Project W should be selected