Question 1

Jabuletu Pty (Ltd) is expecting a cash shortfall of R60 000 in March and R70 000 in April. The financial manager of the company has arranged for an overdraft facility with a local bank at a cost of 12% per annum, paid on the outstanding balance at the end of each month. It is expected that during May, the company will receive a large payment and will repay the balance on the facility and not experience another shortfall in the financial year. Determine the total cost of financing the shortfall over March and April.

• A. R600

• B. R1300

• C. R1900

• D. R2500

Question 2

Falcon Ltd is compiling its cash budget for the months of October, November, December and January. The company had sales of R1600 000 in August and R2000 000 in September. Sales for the following four months are expected to be as follows: October November December January R 1 400 000 R 1 900 000 R 2 800 000 R 600 000 30% of the company's sales are cash and the remainder is on credit. 60% of sales are collected one month after the month of sale. 10% of sales are collected two months after the month of sale. Determine the total credit collections that the company will make in December. (The total amount collected from past credit sales in December in other words.)

• A. R140 000

• B. R1 140 000

• C. R1 280 000

• D. R2 560 000