MNB1601 – ASSESSMENT 3 – Q&A – SEMESTER 1 - 2023
Marks 30.00/30.00
Grade 100.00 out of 100.00
Question 1
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Question text
Khanyisile owns a fabric store and offers a curtain-making service to her customers.
The industrial machine used to sew the curtains has broken down and Khanyisile
needs to decide if it is worth it to replace the machine right now.
A new machine is worth R50 000, but she does not really have the capital now to
replace the machine. Her brother owns such a machine and has indicated that he will
give it to her now with payment only due in three years. He is willing to let her take
the machine for R75 000 at an interest rate of 15% per year.
She has approached you to assist her and you advise her that she will need to look at
the present value of the machine before deciding. Given the high decrease of the
discounting factors along with the high interest rates offered on the machine and the
long time period she will require to pay off the machines, the following is correct:
Select one:
a.
The lower the interest rate is, the smaller the present value of a given future amount
will be.
b.
The higher the interest rate is, the bigger the present value of a given future amount
will be.
c.
The higher the interest rate is, the smaller the present value of a given future amount
will be.
d.
The lower the interest rate is, the bigger the present value of a given future amount
will be.
1
,Feedback
The correct answer is: The higher the interest rate is, the smaller the present value of
a given future amount will be.
Question 2
Correct
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Question text
If a business looks at its activities and priorities afresh on an annual basis, which
budgeting approach would the business be using?
Select one:
a.
Traditional budgeting
b.
Zero-base budgeting
c.
Financial budgeting
d.
Operating budgeting
Feedback
The correct answer is: Zero-base budgeting
Question 3
Correct
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Question text
The __________ of IBM consists primarily of receipts resulting from the sale of its products
and/or services.
Select one:
a.
profit
2
,b.
income
c.
liquidity
d.
capital structure
Feedback
The correct answer is: income
Question 4
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Question text
Expenses must often be paid before any cash income has been received. The business
needs to have sufficient cash available to meet normal current expenditures. This refers
to the ____________ motive.
Select one:
a.
speculative
b.
cash
c.
precautionary
d.
transaction
Feedback
The correct answer is: transaction
Question 5
Correct
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3
, Flag question
Question text
The formula for calculating the future value of an original investment is:
FVn = PV (1 + i)n
Where n is:
Select one:
a.
The original investment
b.
The future value of the investment
c.
The interest rate per period
d.
The number of discrete periods over which the investment extends
Feedback
The correct answer is: The number of discrete periods over which the investment extends
Question 6
Correct
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Question text
Venture-capital funding may sometimes be used to fund high-growth small companies.
Venture capitalists usually invests in companies in return for which one of the following?
Select one:
a.
Buy-back options
4
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