Multiple choice

Question 2

Office Economix Ltd has a department that manufactures furniture, specialising in wooden tables. Select all costs associated with the manufacturing of the tables and the general operation of the company for the following: The tables are assembled by workers at a wage cost of N$500 per table.

a.

Period (selling & administrative) cost

b.

Direct labour, Variable cost

c.

Fixed cost, Direct labour

d.

Manufacturing overheads

e.

Direct materials

Question 3

When financing assets, the following industry traits are important to consider:

a.

Seasonal variations, level of business activity, cyclical variations, stages in the lifecycle

b.

Forms of the business firm, seasonal variations, cyclical variations, stages in the lifecycle

c.

Stages in the lifecycle, seasonal variations, competitive forces, cyclical variations

d.

Competitive forces, taxes, cyclical variations, stages in the lifecycle

Question 4

The sole proprietors unwillingness to bring any outsiders to share control may hamper the ability to raise additional funds.

a.

True

b.

False

Question 5

Larger firms find it difficult to restrict themselves to only one type of financing

a.

True

b.

False

Question 6

Variable cost per unit remains constant, irrespective of the total number of units produced.

a.

True

b.

False

Question 7

The more the financial leverage a firm has

a.

the lower the risk and possible return

b.

the greater the probability of shareholders financing assets without losing control of firm

c.

all of these

d.

none of these

Question 8

Usually, the first step in the production of the master budget is the:

a.

Production budget

b.

Cash budget

c.

Sales budget

d.

Sales forecast

Question 9

A firm can finance its long-term financing by means of the following:

a.

Mortgage loan, equity, trade credit, bonds

b.

Bonds, debentures, equity, mortgage loan

c.

Trade credit, equity, overdraft, mortgage loan

d.

Equity, bank overdraft, debentures, bonds

Question 10

Financial plans do not involve predictions of the economic outlook

a.

True

b.

False