FIN3702 Assignment
2 (COMPLETE
ANSWERS) Semester 2
2024 (215721)- DUE 30
September 2024 ;
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ADMIN
[COMPANY NAME]
,Question 1 Not yet answered Marked out of 1.00 Question 2 Not
yet answered Marked out of 1.00 QUIZ The information below
applies to the next four questions. Extracted statement of fi
nancial position for AB Pharmacies Ltd Assets Equity &
Liabilities Current assets R10 000 Current liabilities R5 000
Fixed assets R20 000 Long-term debt R12 000 Equity R13 000
Total R30 000 Total R30 000 The company earns 5% on current
assets and 15% on fi xed assets. The fi rm’s current liabilities
cost 7% to maintain and theaverage annual cost of long-term
funds is 20%. Question 01 The fi rm’s initial annual profi ts on
total assets are ... 1. R2 500. 2. R3 000. 3. R3 500. 4. R4 500. If
the fi rm were to shift R3 000 of current assets to fi xed assets,
the fi rm’s net working capital would … the annual profi ts
ontotal assets would … and the risk of technical insolvency
would … respectively. 1. decrease; increase; increase 2.
increase; decrease; decrease 3. decrease; increase; decrease 4.
increase; decrease; increase Question 3 Not yet answered
Marked out of 1.00 Question 4 Not yet answered Marked out of
1.00 If the fi rm were to shift R7 000 of fi xed assets to current
assets, the fi rm’s net working capital would … the annual profi
ts ontotal assets would … and the risk of on not being able to
meet current obligations would … respectively. 1. increase;
decrease; decrease 2. decrease; increase; increase 3. decrease;
increase; decrease 4. increase, decrease; increase If the fi rm
were to shift R2 000 of current liabilities to long-term funds, the
, fi rm’s net working capital would … the annual costof fi
nancing would … and the risk of technical insolvency would …
respectively. 1. decrease; decrease; increase 2. increase;
increase; decrease 3. increase; decrease; decrease 4. decrease;
increase; decrease Question 5 Not yet answered Marked out of
1.00 Question 6 Not yet answered Marked out of 1.00 The next
two questions apply to the information provided below: Bolts
and Nuts Ltd has 10 different items in its inventory. The average
number of units held in inventory and the average unitcost for
each item are provided in the table below. The fi rm uses an
ABC system of inventory. Use the information below toanswer
questions 5 and 6. Item Average number of units Average unit
cost (R) 1 5 000 0.05 2 2 000 1.50 3 100 8.50 4 500 45.00 5 650
3.50 6 10 000 100.00 7 5 100 0.25 8 3 100 5.00 9 20 0.75 10 1
150 2.00 Question 5 According to the table above, the items that
belong in the category A include … 1. items 1 and 7. 2. items 4
and 6. 3. items 3 and 9. 4. items 1, 6 and 7. According to the
table above, the items that belong in the category C include … 1.
items 4 and 6. 2. items 1 and 7. 3. items 1, 3 and 9. 4. items 1, 6
and 7. Question 7 Not yet answered Marked out of 1.00
Question 8 Not yet answered Marked out of 1.00 Question 9 Not
yet answered Marked out of 1.00 A fi rm has an operating cycle
of 195 days and an average collection period of 49 days and an
average payment period of 60days. Assuming 365 days per year,
this fi rm will have an average inventory turnover per year of …
1. 2.5 times. 2. 3.2 times. 3. 3.6 times. 4. 4.0 times. In a period
of rising sales, the percent-of-sales method used to prepare pro
forma fi nancial statements and to plan fi nancing,will tend to …
1. understate retained earnings and overstate the fi nancing
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