Question
RISK MANAGEMENT RISK FINANCING MULTIPLE CHOICE PLEASE READ THE QUESTIONS CAREFULLY, RESEARCH AND ANSWER CORRECTLY! 26) Securitisation refers to ... a. the transfer a risk
RISK MANAGEMENT
RISK FINANCING
MULTIPLE CHOICE
PLEASE READ THE QUESTIONS CAREFULLY, RESEARCH AND ANSWER CORRECTLY!
26) Securitisation refers to ...
a.
the transfer a risk unwanted by one party to another party more inclined to take that risk.
b.
the financial markets bundle and unbundle, package and repackage, retain and
transfer of economic and financial risks with great flexibility and imagination.
c.
the transformation of insurance risks typically retained by insurers or reinsurers into risks that are generally handled by the financial markets.
d.
the complex financial instruments that derive their value from some other underlying asset or index.
27) Finite risk solutions .............
a.
achieve risk transfer by grouping similar risks.
b.
achieve risk transfer by spreading risks of one policyholder over time.
c.
are a modified form of traditional insurance.
d.
concentrate individual risks to a certain point in time.
28) Umda University is a privately owned education institution operating in four provinces of South Africa. The council of the university held four meetings during the 2023 academic year ending July 2023, where the following documents were discussed:
(1) Risk register (5 top risks)
No | Risk | Control | Residual risk | Responsible executive manager |
1 | High rate of failure in all undergraduate degrees, certificates and diplomas | Recruit 500 e-tutors at R5000 remuneration per month per tutor. | An overall average of 10% failure rate is anticipated | Chief Financial Officer (chartered accountant) |
| 2022: 45% average 2023: 40% average | ||||
2 | Increasing outstanding fees per year | Secure the services of a debt collector at a cost of 5% per each 100% collected account. | An average of 50% outstanding fees per year is anticipated. | Registrar of students (PhD Business Management) |
| 2022: 55% of fees 2023: 60% of fees | ||||
3 | Irregular spending by management per annual budget | No irregular spending is permitted. | Zero tolerance | Risk, governance and assurance services officer (PhD Risk Management) |
| 2022: R3 million 2023: R3,5 million | ||||
4 | Staff costs negative variance per annual budget | Freeze vacant posts and do not recruit. | Maintain staff negative cost variance of less than R500000 per annum | Human resource director (PhD Business Management) |
| 2022: R1,5 million 2023: R2 million | ||||
5 | Decreasing funding from sponsors per annual budget | Increase student fees by 1% for all registered students in the next academic period. | 20% of the annual budget could be funded by sponsors. | Vice-Chancellor (PhD Business Management) |
| 2022: 30% 2023: 25% |
Notes:
All risk management reports were timely communicated to both the management and council.
(2) Audit report (matters needing urgent attention)
a. Debt costs increased from 3% to 5% of university income.
b. Non-adherence to accounting policies.
c. All computer assets of the university have exceeded the SARS-prescribed depreciation rates and period.
d. Insurance policies of the university have lapsed due to non-payment of premium.
(3) Financial information
Account | 2021 | 2022 | 2023 |
Deficit | R32 million | R40 million | R45 million |
Bank overdraft | R300 000 | R4500 000 | R5200 000 |
Financial reserves | R12 million | R6 million | R2 million |
e. Performance information
The university has only achieved 2 out of 6 strategic objectives.
A recognised institution has downgraded the university teaching and research from a ranking of 11 to 26.
Council has not ensured the implementations of recommendations made by both the Internal Audit and Auditors during the last three years.
f. Audit opinion: the university obtained a disqualified opinion from auditors.
Council minutes (approved)
Composition
Council has five non-executive members who receive remuneration. Risk-related fees for non-executive members are R25 000 per meeting. The chair of the Council, who is a non-executive member, receives R50 000 per meeting, while the deputy chair, also a non-executive member, receives R45000 per meeting. All other members of Council do not receive remuneration. The cost of each meeting, excluding the remuneration of members, is R45000. It is expected that this cost will increase by 5% in the next academic period.
Decisions
Zero increase on meeting fees of Council members in the next academic period.
Increase the number of Council meetings from 4 to 6 per academic year.
Management to apply for government funding even though the Minister of Finance announced a blanket 20% budget cut in all social spending.
Management is not allowed to make any loans.
Replenish the university financial reserves by contributing 10% of surplus each year for the next ten years.
Question
Identify the compliance risk in the options below.
a.
Lapsed insurance policy
b.
Disqualified audit opinion
c.
Non adherence to SARS prescribed depreciation rates
d.
Poor achievement of strategic objectives
29) Libre Logistics Ltd. insures against accidents of its motor fleet. The fleet consists of highly specialised, imported refrigerator trucks. Contributing factors to the high value of incidents are the poor conditions of the municipal and provincial roads and the quality of drivers. The following are the records of Libre Logistics Ltd:
Table 1: Loss experience of the motor fleet over the last five years | ||||
Year | No. of vehicles | Average loss per event | No of accidents | Total cost for the year |
1 | 20 | R1,500,000 | 10 | R15,000,000 |
2 | 20 | R2,200,000 | 12 | R26,400,000 |
3 | 25 | R1,750,000 | 15 | R26,250,000 |
4 | 30 | R2,000,000 | 20 | R40,000,000 |
5 | 50 | R3,500,000 | 25 | R87,500,000 |
Table 2: Quotations under consideration for the insurance of the motor fleet | |||
Quote number | Quoted annual premium | Annual limit for damage to motor fleet | Deductible |
1 | R15,000,000.00 | R60,000,000 | R0 |
2 | R10,000,000.00 | R30,000,000 | R25,000 |
3 | R8,500,000.00 | R25,000,000 | R50,000 |
4 | R6,000,000.00 | R20,000,000 | R70,000 |
5 | R5,000,000.00 | R10,000,000 | R100,000 |
Question Calculate the TEC value for quote number 2
a.
R15,000,000.00
b.
R6,039,586.21
c.
R8,528,275.86
d.
R10,014,137.93
30) Umda University is a privately owned education institution operating in four provinces of South Africa. The council of the university held four meetings during the 2023 academic year ending July 2023, where the following documents were discussed:
(1) Risk register (5 top risks)
No | Risk | Control | Residual risk | Responsible executive manager |
1 | High rate of failure in all undergraduate degrees, certificates and diplomas | Recruit 500 e-tutors at R5000 remuneration per month per tutor. | An overall average of 10% failure rate is anticipated | Chief Financial Officer (chartered accountant) |
| 2022: 45% average 2023: 40% average | ||||
2 | Increasing outstanding fees per year | Secure the services of a debt collector at a cost of 5% per each 100% collected account. | An average of 50% outstanding fees per year is anticipated. | Registrar of students (PhD Business Management) |
| 2022: 55% of fees 2023: 60% of fees | ||||
3 | Irregular spending by management per annual budget | No irregular spending is permitted. | Zero tolerance | Risk, governance and assurance services officer (PhD Risk Management) |
| 2022: R3 million 2023: R3,5 million | ||||
4 | Staff costs negative variance per annual budget | Freeze vacant posts and do not recruit. | Maintain staff negative cost variance of less than R500000 per annum | Human resource director (PhD Business Management) |
| 2022: R1,5 million 2023: R2 million | ||||
5 | Decreasing funding from sponsors per annual budget | Increase student fees by 1% for all registered students in the next academic period. | 20% of the annual budget could be funded by sponsors. | Vice-Chancellor (PhD Business Management) |
| 2022: 30% 2023: 25% |
Notes:
All risk management reports were timely communicated to both the management and council.
(2) Audit report (matters needing urgent attention)
a. Debt costs increased from 3% to 5% of university income.
b. Non-adherence to accounting policies.
c. All computer assets of the university have exceeded the SARS-prescribed depreciation rates and period.
d. Insurance policies of the university have lapsed due to non-payment of premium.
(3) Financial information
Account | 2021 | 2022 | 2023 |
Deficit | R32 million | R40 million | R45 million |
Bank overdraft | R300 000 | R4500 000 | R5200 000 |
Financial reserves | R12 million | R6 million | R2 million |
e. Performance information
The university has only achieved 2 out of 6 strategic objectives.
A recognised institution has downgraded the university teaching and research from a ranking of 11 to 26.
Council has not ensured the implementations of recommendations made by both the Internal Audit and Auditors during the last three years.
f. Audit opinion: the university obtained a disqualified opinion from auditors.
Council minutes (approved)
Composition
Council has five non-executive members who receive remuneration. Risk-related fees for non-executive members are R25 000 per meeting. The chair of the Council, who is a non-executive member, receives R50 000 per meeting, while the deputy chair, also a non-executive member, receives R45000 per meeting. All other members of Council do not receive remuneration. The cost of each meeting, excluding the remuneration of members, is R45000. It is expected that this cost will increase by 5% in the next academic period.
Decisions
Zero increase on meeting fees of Council members in the next academic period.
Increase the number of Council meetings from 4 to 6 per academic year.
Management to apply for government funding even though the Minister of Finance announced a blanket 20% budget cut in all social spending.
Management is not allowed to make any loans.
Replenish the university financial reserves by contributing 10% of surplus each year for the next ten years.
Question
Which of the following should appear in the updated risk register of the university?
i. Lapsed insurance policy.
ii. Disqualified audit opinion.
iii. Poor achievement of strategic objectives.
iv. Nonadherence to SARS prescribed depreciation rates.
a.
i,ii, iii and iv
b.
i and ii
c.
i and iii
d.
i and iv
31) SA Logistix is a transport company that operates across South Africa. The company has a fleet of specialised vehicles to transport a wide range of products such as fresh foodstuffs, chemicals, and hazardous products.
The company is preparing for the annual insurance review. The Board of SA Logistix has instructed the Chief Financial Officer (CFO) and the Chief Risk Officer (CRO) to determine the appropriate risk financing strategies for the fleet. To determine the risk financing alternatives, the CRO recommended that the maximum probable yearly aggregate loss (MPY) must be calculated for the fleet.
The historical financial data of the fleet is incomplete and certain critical components need to be calculated. Claims inflation forms a significant component of the total claims cost per accident and for that reason it is important to include claims inflation in the data. For the purpose of this exercise, the CRO defined claims inflation as the administration cost and effect of exchange rate fluctuation. The board of Logistix stated in the last annual report that the company adopted a conservative risk appetite. Exchange rates have a significant effect on claims inflation as 40% of claims cost is in foreign currency.
Refer to the table for the annual inflation rate and appropriate exchange rate. The historical information available for the fleet is as follows:
YEAR | ANNUAL INFLATION RATE | ZAR/USD | % OF CLAIMS COST IN FX | NUMBER OF VEHICLES | BUDGETED COST PER VEHICLE | NUMBER OF ACCIDENTS | AVERAGE DAMAGE PER ACCIDENT | CLAIMS ADMIN |
2013 | 4,56% | 11,2 | 40% | 120 | R 1 800 000 | 50 | R 100 000 | R 9 000 |
2014 | 4,89% | 12,5 | 40% | 120 | R 1 900 000 | 60 | R120 000 | |
2015 | 5% | 13,2 | 40% | 120 | R 2 000 000 | 60 | R135 000 | |
2016 | 5,32% | 15,9 | 40% | 150 | R 2 100 000 | 70 | R150 000 | |
2017 | 5,42% | 15,8 | 40% | 150 | R 2 200 000 | 70 | R170 000 | |
2018 | 5,75% | 16,7 | 40% | 150 | R 2 300 000 | 90 | R200 000 | |
2019 | 5,83% | 17,5 | 40% | 150 | R 2 700 000 | 90 | R230 000 | |
2020 | 7,13% | 19,8 | 40% | 150 | R 2 750 000 | 80 | R255 000 | |
2021 | 7,43% | 20,6 | 40% | 150 | R 2 800 000 | 100 | R270 000 | |
2022 | 7,80% | 22,5 | 40% | 150 | R 2 850 000 | 90 | R300 000 |
Question:
Choose the appropriate method for SA Logistics to calculate the MPY give the above information.
a.
Normal approximation
b.
Chebyshev method
c.
Normal Power method
32) Umda University is a privately owned education institution operating in four provinces of South Africa. The council of the university held four meetings during the 2023 academic year ending July 2023, where the following documents were discussed:
(1) Risk register (5 top risks)
No | Risk | Control | Residual risk | Responsible executive manager |
1 | High rate of failure in all undergraduate degrees, certificates and diplomas | Recruit 500 e-tutors at R5000 remuneration per month per tutor. | An overall average of 10% failure rate is anticipated | Chief Financial Officer (chartered accountant) |
| 2022: 45% average 2023: 40% average | ||||
2 | Increasing outstanding fees per year | Secure the services of a debt collector at a cost of 5% per each 100% collected account. | An average of 50% outstanding fees per year is anticipated. | Registrar of students (PhD Business Management) |
| 2022: 55% of fees 2023: 60% of fees | ||||
3 | Irregular spending by management per annual budget | No irregular spending is permitted. | Zero tolerance | Risk, governance and assurance services officer (PhD Risk Management) |
| 2022: R3 million 2023: R3,5 million | ||||
4 | Staff costs negative variance per annual budget | Freeze vacant posts and do not recruit. | Maintain staff negative cost variance of less than R500000 per annum | Human resource director (PhD Business Management) |
| 2022: R1,5 million 2023: R2 million | ||||
5 | Decreasing funding from sponsors per annual budget | Increase student fees by 1% for all registered students in the next academic period. | 20% of the annual budget could be funded by sponsors. | Vice-Chancellor (PhD Business Management) |
| 2022: 30% 2023: 25% |
Notes:
All risk management reports were timely communicated to both the management and council.
(2) Audit report (matters needing urgent attention)
a. Debt costs increased from 3% to 5% of university income.
b. Non-adherence to accounting policies.
c. All computer assets of the university have exceeded the SARS-prescribed depreciation rates and period.
d. Insurance policies of the university have lapsed due to non-payment of premium.
(3) Financial information
Account | 2021 | 2022 | 2023 |
Deficit | R32 million | R40 million | R45 million |
Bank overdraft | R300 000 | R4500 000 | R5200 000 |
Financial reserves | R12 million | R6 million | R2 million |
e. Performance information
The university has only achieved 2 out of 6 strategic objectives.
A recognised institution has downgraded the university teaching and research from a ranking of 11 to 26.
Council has not ensured the implementations of recommendations made by both the Internal Audit and Auditors during the last three years.
f. Audit opinion: the university obtained a disqualified opinion from auditors.
Council minutes (approved)
Composition
Council has five non-executive members who receive remuneration. Risk-related fees for non-executive members are R25 000 per meeting. The chair of the Council, who is a non-executive member, receives R50 000 per meeting, while the deputy chair, also a non-executive member, receives R45000 per meeting. All other members of Council do not receive remuneration. The cost of each meeting, excluding the remuneration of members, is R45000. It is expected that this cost will increase by 5% in the next academic period.
Decisions
Zero increase on meeting fees of Council members in the next academic period.
Increase the number of Council meetings from 4 to 6 per academic year.
Management to apply for government funding even though the Minister of Finance announced a blanket 20% budget cut in all social spending.
Management is not allowed to make any loans.
Replenish the university financial reserves by contributing 10% of surplus each year for the next ten years.
Question
According to the presented reports to Council meeting, which of the following have failed to manage and monitor the university risks.
a.
Risk Management and Management.
b.
Risk Management and Council
c.
Council and Management
d.
Risk Management, Internal Audit and Auditors
33) ..... are complex financial instruments that derive their value from some other underlying asset or index.
a.
Reinsurance
b.
Risk Wearhouse
c.
Securitisation
d.
Derivative
34) Umda University is a privately owned education institution operating in four provinces of South Africa. The council of the university held four meetings during the 2023 academic year ending July 2023, where the following documents were discussed:
(1) Risk register (5 top risks)
No | Risk | Control | Residual risk | Responsible executive manager |
1 | High rate of failure in all undergraduate degrees, certificates and diplomas | Recruit 500 e-tutors at R5000 remuneration per month per tutor. | An overall average of 10% failure rate is anticipated | Chief Financial Officer (chartered accountant) |
| 2022: 45% average 2023: 40% average | ||||
2 | Increasing outstanding fees per year | Secure the services of a debt collector at a cost of 5% per each 100% collected account. | An average of 50% outstanding fees per year is anticipated. | Registrar of students (PhD Business Management) |
| 2022: 55% of fees 2023: 60% of fees | ||||
3 | Irregular spending by management per annual budget | No irregular spending is permitted. | Zero tolerance | Risk, governance and assurance services officer (PhD Risk Management) |
| 2022: R3 million 2023: R3,5 million | ||||
4 | Staff costs negative variance per annual budget | Freeze vacant posts and do not recruit. | Maintain staff negative cost variance of less than R500000 per annum | Human resource director (PhD Business Management) |
| 2022: R1,5 million 2023: R2 million | ||||
5 | Decreasing funding from sponsors per annual budget | Increase student fees by 1% for all registered students in the next academic period. | 20% of the annual budget could be funded by sponsors. | Vice-Chancellor (PhD Business Management) |
| 2022: 30% 2023: 25% |
Notes:
All risk management reports were timely communicated to both the management and council.
(2) Audit report (matters needing urgent attention)
a. Debt costs increased from 3% to 5% of university income.
b. Non-adherence to accounting policies.
c. All computer assets of the university have exceeded the SARS-prescribed depreciation rates and period.
d. Insurance policies of the university have lapsed due to non-payment of premium.
(3) Financial information
Account | 2021 | 2022 | 2023 |
Deficit | R32 million | R40 million | R45 million |
Bank overdraft | R300 000 | R4500 000 | R5200 000 |
Financial reserves | R12 million | R6 million | R2 million |
e. Performance information
The university has only achieved 2 out of 6 strategic objectives.
A recognised institution has downgraded the university teaching and research from a ranking of 11 to 26.
Council has not ensured the implementations of recommendations made by both the Internal Audit and Auditors during the last three years.
f. Audit opinion: the university obtained a disqualified opinion from auditors.
Council minutes (approved)
Composition
Council has five non-executive members who receive remuneration. Risk-related fees for non-executive members are R25 000 per meeting. The chair of the Council, who is a non-executive member, receives R50 000 per meeting, while the deputy chair, also a non-executive member, receives R45000 per meeting. All other members of Council do not receive remuneration. The cost of each meeting, excluding the remuneration of members, is R45000. It is expected that this cost will increase by 5% in the next academic period.
Decisions
Zero increase on meeting fees of Council members in the next academic period.
Increase the number of Council meetings from 4 to 6 per academic year.
Management to apply for government funding even though the Minister of Finance announced a blanket 20% budget cut in all social spending.
Management is not allowed to make any loans.
Replenish the university financial reserves by contributing 10% of surplus each year for the next ten years.
Question
According to the audit report, Council has failed to ... of the university
a.
sustain liquidity position
b.
play an oversight role to monitor risks
c.
manage the identified risks
d.
favourable rating of the university
35) Umda University is a privately owned education institution operating in four provinces of South Africa. The council of the university held four meetings during the 2023 academic year ending July 2023, where the following documents were discussed:
(1) Risk register (5 top risks)
No | Risk | Control | Residual risk | Responsible executive manager |
1 | High rate of failure in all undergraduate degrees, certificates and diplomas | Recruit 500 e-tutors at R5000 remuneration per month per tutor. | An overall average of 10% failure rate is anticipated | Chief Financial Officer (chartered accountant) |
| 2022: 45% average 2023: 40% average | ||||
2 | Increasing outstanding fees per year | Secure the services of a debt collector at a cost of 5% per each 100% collected account. | An average of 50% outstanding fees per year is anticipated. | Registrar of students (PhD Business Management) |
| 2022: 55% of fees 2023: 60% of fees | ||||
3 | Irregular spending by management per annual budget | No irregular spending is permitted. | Zero tolerance | Risk, governance and assurance services officer (PhD Risk Management) |
| 2022: R3 million 2023: R3,5 million | ||||
4 | Staff costs negative variance per annual budget | Freeze vacant posts and do not recruit. | Maintain staff negative cost variance of less than R500000 per annum | Human resource director (PhD Business Management) |
| 2022: R1,5 million 2023: R2 million | ||||
5 | Decreasing funding from sponsors per annual budget | Increase student fees by 1% for all registered students in the next academic period. | 20% of the annual budget could be funded by sponsors. | Vice-Chancellor (PhD Business Management) |
| 2022: 30% 2023: 25% |
Notes:
All risk management reports were timely communicated to both the management and council.
(2) Audit report (matters needing urgent attention)
a. Debt costs increased from 3% to 5% of university income.
b. Non-adherence to accounting policies.
c. All computer assets of the university have exceeded the SARS-prescribed depreciation rates and period.
d. Insurance policies of the university have lapsed due to non-payment of premium.
(3) Financial information
Account | 2021 | 2022 | 2023 |
Deficit | R32 million | R40 million | R45 million |
Bank overdraft | R300 000 | R4500 000 | R5200 000 |
Financial reserves | R12 million | R6 million | R2 million |
e. Performance information
The university has only achieved 2 out of 6 strategic objectives.
A recognised institution has downgraded the university teaching and research from a ranking of 11 to 26.
Council has not ensured the implementations of recommendations made by both the Internal Audit and Auditors during the last three years.
f. Audit opinion: the university obtained a disqualified opinion from auditors.
Council minutes (approved)
Composition
Council has five non-executive members who receive remuneration. Risk-related fees for non-executive members are R25 000 per meeting. The chair of the Council, who is a non-executive member, receives R50 000 per meeting, while the deputy chair, also a non-executive member, receives R45000 per meeting. All other members of Council do not receive remuneration. The cost of each meeting, excluding the remuneration of members, is R45000. It is expected that this cost will increase by 5% in the next academic period.
Decisions
Zero increase on meeting fees of Council members in the next academic period.
Increase the number of Council meetings from 4 to 6 per academic year.
Management to apply for government funding even though the Minister of Finance announced a blanket 20% budget cut in all social spending.
Management is not allowed to make any loans.
Replenish the university financial reserves by contributing 10% of surplus each year for the next ten years.
Question
In respect of which of the following VUCA components does the university fail?
a.
Uncertainty
b.
Ambiguity
c.
Volatility
d.
Complexity
36) ABC (Pty)Ltd is an SME furniture retailing business. On the 1st of January 2022, the premises were subject to a serious fire which destroyed the building, all contents and stock. Despite an effort to find alternative temporary premises, nothing suitable could be located before expiry of the maximum indemnity period (MIP). The insured are tenants in the building and only insure Contents, Stock and BI under their policy. There is a cessation of rent clause within the lease with the landlord. The policy is subject to average. BI insurance is provided as follows:
Gross Profit sum insured R200,000
Maximum Indemnity Period 12 months
Uninsured Working Expenses as stated in the policy are:
Purchases, net of stock movement
Delivery charges
Bad debts
The company continued to pay staff during the interruption period and all other costs remained the same.
Turnover for the years before the fire was as follows:
2019 R959,591
2020 R1,165,775
2021 R1,088,819
Financial details for the year ending 31 December 2021:
Sales | R1,088,819 | |
Finance commission | ||
Income from concession | ||
Turnover | R1,088,819 | |
Opening stock | R21,367 | |
Production wages | R71,494 | |
Purchases | R608,323 | |
Closing stock | -R22,646 | |
Cost of sales | R678,538 | |
Gross profit | R410,281 | |
Wages and salaries | R126,368 | |
Rent | R44,068 | |
Rates | R73,678 | |
Delivery charges | R36,422 | |
Utilities | R8,507 | |
Cleaning | R372 | |
Waste disposal | R779 | |
Repairs and maintenance | R2,912 | |
Communication | R2,481 | |
Advertising | R37,198 | |
Bad debts | R2,500 | |
Credit card charges | R548 | |
Depreciation | R1,015 | |
Total overheads | R336,848 | |
Net profit | R73,433 |
Question
Calculate the net loss after average for 2021.
a.
R169551
b.
R71862
c.
R81,984
d.
R68 230
37) ABC (Pty)Ltd is an SME furniture retailing business. On the 1st of January 2022, the premises were subject to a serious fire which destroyed the building, all contents and stock. Despite an effort to find alternative temporary premises, nothing suitable could be located before expiry of the maximum indemnity period (MIP). The insured are tenants in the building and only insure Contents, Stock and BI under their policy. There is a cessation of rent clause within the lease with the landlord. The policy is subject to average. BI insurance is provided as follows:
Gross Profit sum insured R200,000
Maximum Indemnity Period 12 months
Uninsured Working Expenses as stated in the policy are:
Purchases, net of stock movement
Delivery charges
Bad debts
The company continued to pay staff during the interruption period and all other costs remained the same.
Turnover for the years before the fire was as follows:
2019 R959,591
2020 R1,165,775
2021 R1,088,819
Financial details for the year ending 31 December 2021:
Sales | R1,088,819 | |
Finance commission | ||
Income from concession | ||
Turnover | R1,088,819 | |
Opening stock | R21,367 | |
Production wages | R71,494 | |
Purchases | R608,323 | |
Closing stock | -R22,646 | |
Cost of sales | R678,538 | |
Gross profit | R410,281 | |
Wages and salaries | R126,368 | |
Rent | R44,068 | |
Rates | R73,678 | |
Delivery charges | R36,422 | |
Utilities | R8,507 | |
Cleaning | R372 | |
Waste disposal | R779 | |
Repairs and maintenance | R2,912 | |
Communication | R2,481 | |
Advertising | R37,198 | |
Bad debts | R2,500 | |
Credit card charges | R548 | |
Depreciation | R1,015 | |
Total overheads | R336,848 | |
Net profit | R73,433 |
Question
Calculate the loss of gross profit amount for 2021
a.
R71 862,05
b.
413 596,39
c.
R442 853,00
d.
-R71862,05
38) Strategic risk financing ...
a.
refers to financing of risk by means other than traditional insurance, reinsurance, and retrocession.
b.
Optimize the cost of risk by locating entities in lower-taxed countries.
c.
aims to secure the assets and profits of an organisation by reducing the potential for loss, financing through insurance other means.
d.
means delivering a strategy that allows efficient risk hedging by applying cost-benefit analysis.
PLEASE READ THE QUESTIONS CAREFULLY, RESEARCH AND ANSWER CORRECTLY!
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Quantitative Methods For Business
Authors: Donald Waters
5th Edition
273739476, 978-0273739470
