QUESTIONS

1. Which one of following statements, concerning Mission Statement, Business Idea and Business Plan, is correct?

1. The mentioned elements (Mission Statement, Business Idea and Business Plan) are not requested when registering a new company. They can be seen as managerial tools for internal use.
2. The mentioned elements (Mission Statement, Business Idea and Business Plan) can be seen as marketing tools, methods of advertising.
3. The mentioned elements (Mission Statement, Business Idea and Business Plan) are synonymies, equivalence of meaning.
4. The mentioned elements (Mission Statement, Business Idea and Business Plan) are only connected with large corporations.

2. Which one of the following statements is correct?

1. A companys comprehensive financial structure consist of two elements; equity capital and borrowed capital.
2. There is no practical difference between equity capital and borrowed capital.
3. A companys suppliers (delivering for instance raw material) can also be seen as financers.
4. A companys suppliers (delivering for instance raw material) can never be seen as financers.

3. Which one of the following statements, concerning the division of company forms into two categories (personal companies and capital companies), is correct?

1. Number of companys owners is significant; there are more owners in capital companies than in personal companies.
2. Number of companys owners is significant; there are more owners in personal companies than in capital companies.
3. Responsibility for companys liabilities is significant; in personal companies the owner(s) is/are finally responsible.
4. The size of the company is significant; capital companies are bigger than personal companies.

4. Which one of the following statements, concerning SWOT analysis, is correct?

1. Strengths and Weaknesses represent factors provided by external matters.
2. Weaknesses and Threats represent negative factors provided by external matters.
3. Strengths and Opportunities represent positive factors provided by internal matters.
4. Threats and Opportunities represent factors provided by eternal matters.

5. Which one of the following statements is correct?

1. Purchasing activity and investment are the same thing (equivalence of meaning).
2. Purchasing activity refers to creation of operational framework.
3. Capital financing refers to creation of operational framework.
4. Capital financing refers to cash flow (revenue from the customers).

6. Which one of the following statements is correct?

1. If the variable cost increases, the contribution margin will decrease.
2. If the fixed cost increases, the contribution margin will decrease.
3. If the fixed cost increases, the contribution margin will increase.
4. None of the alternatives a-c is correct.

7. Which one of the following statements is correct?

1. At break even, the financial result is zero; neither loss nor profit.
2. The profit at break even depends on the level of sales and the sum of total cost.
3. Break even can only be expressed in terms of volume (units sold), not in terms of sales (currency).
4. Break even and Contribution Margin are synonymies, equivalence of meaning.

8. Suppose,

A = Turnover

B = Money owed by the business for purchased goods and services

C = Stock

D = Borrowed Capital (long-term loans)

E = Equity Capital

F = Money owed to the business

Which one of the following equations (statements) is correct?

1. A - E + D = Working Capital
2. D + F + C = Working Capital
3. F + C - B = Working Capital
4. None of the alternatives a-c is correct.

9. Which one of the following statements is correct?

1. Inventory cycle rate in turns indicates, how many times the inventories (stock) has been emptied and refilled during a certain period of time.
2. Increased turnover leads to a lower Working Capital.
3. Inventory cycle rate in days indicates, how many times the inventories (stock) has been emptied and refilled during a certain period of time.
4. Changes in turnover have no effect on Working Capital.

10. Which one of the following statements, concerning Factoring, is correct?

1. Increases costs.
2. Is appreciated by the customers.
3. Does not release cash.
4. Guarantees higher sales.

11. Suppose,

Fixed costs: 15 000

Variable cost/unit: 19,50

Price/unit: 27,50

Volume: 2 000 units

How much is break even?

1. 55 000
2. Above 2 000 units
3. 36 563
4. 1 875 units

12. Suppose as in question 11 (above).

How much is safety margin?

1. 2 000 units
2. 51 563
3. 125 units
4. 55 000

13. There is information about a companys capacity and costs, as follows:

Capacity Total costs

50 % 16 000

60 % 17 200

70 % 18 400

When the capacity is fully used (100 %), the company produces 20 units.

How much is the variable cost per unit?

1. 800
2. 600
3. 10 000
4. None of the alternatives a-c is correct.

14. A companys annual turnover is 8 000 000 and annual purchases 2 700 000 . Other information (from the balance sheet) as follows:

Accounts receivable: 950 000

Inventories: 800 000

Property plant and Equipment: 280 000

Accounts payable: 450 000

Other liabilities: 880 000

Paid-in capital and retained earnings: 700 000

What is the amount of working capital?

1. 1 860 000
2. 2 200 000
3. 2 030 000
4. 1 300 000

15. Information as in question 14 (above).

What is the average payment period of accounts payable (in days)?

1. 43 days
2. 61 days
3. 18 days
4. 107 days