FIN3702
Assignment 2
Semester 2
2024 (215721)-
DUE 30
September
2024
[Type the document subtitle]
, [Pick the date]
[Type the company name]
tabbymwesh59@gmail.com
Book
Working Capital Management
FIN3702 Assignment 2 (COMPLETE ANSWERS) Semester 2 2024 (215721)-
DUE 30 September 2024 ; 100% TRUSTED Complete, trusted solutions and
explanations.
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
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