FIN2603 - Finance For Non-Financial Managers (FIN2603)
Exam (elaborations)
FIN2603 ASSESSMENT 2 OF SEM 2 2023 EXPECTED QUESTIONS AND ANSWERS
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Course
FIN2603 - Finance For Non-Financial Managers (FIN2603)
Institution
University Of South Africa (Unisa)
THIS DOCUMENT HAS BEEN CAREFULLY PREPARED BY YOUR TOP TUTORS. IT PROVIDES GUIDANCE ON EXPECTED QUESTIONS AND POSSIBLE ANSWERS TO FIN2603 ASSESSMENT 2 OF SEM 2 2023. USING IT CORRECTLY AS A GUIDE WILL HELP YOU SCORE ABOVE 80%
FIN2603 - Finance For Non-Financial Managers (FIN2603)
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Started on Tuesday, 12 September 2023, 7:00 AM
State Finished
Completed on Tuesday, 12 September 2023, 7:57 AM
Time taken 56 mins 51 secs
Question 1 What amount must be invested annually (at the beginning of each year) for 5 successive years
Complete at 8% p.a. compounded interest in order to yield R500 000?
M arked out of
1.00 a. R89 383.21
b. R92 000.44
c. R78 915.03
d. R82 047.05
Question 2 The financial manager is evaluating a proposal for a new project with the following cash flows:
Complete Year Net cash flows 0 -R 1 000 000 1 R 550 000 2 R 350 000 3 R 90 000The payback
period is ...
M arked out of
1.00
a. two years.
b. between one and two years.
c. three years.
d. more than three years.
Question 3 Mr Hamilton has arranged for a 90-day loan at an annual rate of interest of 8%. If the loan
Complete amount is R1000 000, how much interest in rand terms will Megatron pay? (Assume a 365-day
year)
M arked out of
1.00
a. R0
b. R19 726.03
c. R80 000.00
d. R20 000.00
, Question 4 A company has financed 45% of its assets through a 11% after-tax cost of debt loan. The
Complete remainder of its assets are financed through equity. The firm’s required return on equity is 16%.
Calculate the company's weighted average cost of capital (WACC)?
M arked out of
1.00
a. 11.25%
b. 43.56%
c. 28.50%
d. 13.75%
Question 5 Calculate the EOQ based on the following information: 21 000 units used annually, purchased at
Complete R65 per unit. Order cost is R340 per order. Carrying cost is 9% of inventory value.
M arked out of
1.00 a. 1 599 units
b. 1 614 units
c. 1 562 units
d. 1 633 units
Question 6 A firm with a cash conversion cycle of 40 days can stretch its average payment period from 15
Complete days to 20 days. This will result in a/an ...
M arked out of
1.00 a. increase of 20 days in the cash conversion cycle.
b. decrease of 5 days in the cash conversion cycle.
c. decrease of 20 days in the cash conversion cycle.
d. increase of 5 days in the cash conversion cycle.
Question 7 The before-tax cost of debt for a firm which has a 35% marginal tax rate is correctly calculated
Complete at 12%. Calculate the after-tax cost of debt.
M arked out of
1.00 a. 9.6%
b. 8.4%
c. 7.8%
d. 12.0%
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