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The questions

  1. Oct/Nov 2019, Q431 mark · multiple choice

    This section is Financial Management. Two discounting-factor tables are supplied for use anywhere in the section: (1) discounting factors to calculate PRESENT values for periods n = 1 to 6 at 5%, 10% and 15% are 0,9524/0,9091/0,8696 (n=1); 0,9070/0,8264/0,7561 (n=2); 0,8638/0,7513/0,6575 (n=3); 0,8227/0,6830/0,5718 (n=4); 0,7835/0,6209/0,4972 (n=5); 0,7462/0,5645/0,4323 (n=6); and (2) discounting factors to calculate FUTURE values for periods n = 1 to 6 at 5%, 10% and 15% are 1,0500/1,1000/1,1500 (n=1); 1,1025/1,2100/1,3225 (n=2); 1,1576/1,3310/1,5209 (n=3); 1,2155/1,4641/1,7490 (n=4); 1,2763/1,6105/2,0114 (n=5); 1,3401/1,7716/2,3131 (n=6). Questions 43 to 45 are based on an extract from the business case 'Financial management: IBM' (Business Cases, 2nd edition), which states that for the period 1983 to 1989 IBM's profit as a percentage of revenue fell from 13,6% to 6%, that in 1991 and 1992 the company made a loss, and that Microsoft and Intel, in contrast, showed significant increases in their profit as a percentage of revenue over the same period. Based on the IBM business case extract (IBM's profit as a percentage of revenue fell from 13,6% in 1983 to 6% in 1989, and the company made a loss in 1991 and 1992, while Microsoft and Intel showed significant increases in their profit as a percentage of revenue), which one of the following equations would IBM have used to calculate the company's profit or loss?

  2. Oct/Nov 2019, Q441 mark · multiple choice

    This section is Financial Management. Two discounting-factor tables are supplied for use anywhere in the section: (1) discounting factors to calculate PRESENT values for periods n = 1 to 6 at 5%, 10% and 15% are 0,9524/0,9091/0,8696 (n=1); 0,9070/0,8264/0,7561 (n=2); 0,8638/0,7513/0,6575 (n=3); 0,8227/0,6830/0,5718 (n=4); 0,7835/0,6209/0,4972 (n=5); 0,7462/0,5645/0,4323 (n=6); and (2) discounting factors to calculate FUTURE values for periods n = 1 to 6 at 5%, 10% and 15% are 1,0500/1,1000/1,1500 (n=1); 1,1025/1,2100/1,3225 (n=2); 1,1576/1,3310/1,5209 (n=3); 1,2155/1,4641/1,7490 (n=4); 1,2763/1,6105/2,0114 (n=5); 1,3401/1,7716/2,3131 (n=6). Questions 43 to 45 are based on an extract from the business case 'Financial management: IBM' (Business Cases, 2nd edition), which states that for the period 1983 to 1989 IBM's profit as a percentage of revenue fell from 13,6% to 6%, that in 1991 and 1992 the company made a loss, and that Microsoft and Intel, in contrast, showed significant increases in their profit as a percentage of revenue over the same period. Still referring to the same IBM business case extract, which one of the following equations would Microsoft have used to calculate their revenue (income)?

  3. Oct/Nov 2019, Q451 mark · multiple choice

    This section is Financial Management. Two discounting-factor tables are supplied for use anywhere in the section: (1) discounting factors to calculate PRESENT values for periods n = 1 to 6 at 5%, 10% and 15% are 0,9524/0,9091/0,8696 (n=1); 0,9070/0,8264/0,7561 (n=2); 0,8638/0,7513/0,6575 (n=3); 0,8227/0,6830/0,5718 (n=4); 0,7835/0,6209/0,4972 (n=5); 0,7462/0,5645/0,4323 (n=6); and (2) discounting factors to calculate FUTURE values for periods n = 1 to 6 at 5%, 10% and 15% are 1,0500/1,1000/1,1500 (n=1); 1,1025/1,2100/1,3225 (n=2); 1,1576/1,3310/1,5209 (n=3); 1,2155/1,4641/1,7490 (n=4); 1,2763/1,6105/2,0114 (n=5); 1,3401/1,7716/2,3131 (n=6). Questions 43 to 45 are based on an extract from the business case 'Financial management: IBM' (Business Cases, 2nd edition), which states that for the period 1983 to 1989 IBM's profit as a percentage of revenue fell from 13,6% to 6%, that in 1991 and 1992 the company made a loss, and that Microsoft and Intel, in contrast, showed significant increases in their profit as a percentage of revenue over the same period. If IBM decided to increase its profitability by focusing on the return on assets, which one of the following options would be an appropriate suggestion for IBM to make?

  4. Oct/Nov 2019, Q461 mark · multiple choice

    This section is Financial Management. Two discounting-factor tables are supplied for use anywhere in the section: (1) discounting factors to calculate PRESENT values for periods n = 1 to 6 at 5%, 10% and 15% are 0,9524/0,9091/0,8696 (n=1); 0,9070/0,8264/0,7561 (n=2); 0,8638/0,7513/0,6575 (n=3); 0,8227/0,6830/0,5718 (n=4); 0,7835/0,6209/0,4972 (n=5); 0,7462/0,5645/0,4323 (n=6); and (2) discounting factors to calculate FUTURE values for periods n = 1 to 6 at 5%, 10% and 15% are 1,0500/1,1000/1,1500 (n=1); 1,1025/1,2100/1,3225 (n=2); 1,1576/1,3310/1,5209 (n=3); 1,2155/1,4641/1,7490 (n=4); 1,2763/1,6105/2,0114 (n=5); 1,3401/1,7716/2,3131 (n=6). Questions 43 to 45 are based on an extract from the business case 'Financial management: IBM' (Business Cases, 2nd edition), which states that for the period 1983 to 1989 IBM's profit as a percentage of revenue fell from 13,6% to 6%, that in 1991 and 1992 the company made a loss, and that Microsoft and Intel, in contrast, showed significant increases in their profit as a percentage of revenue over the same period. Zanele is the financial manager at Brophy and Associates. She is currently compiling the financial statements that will be presented to the board. Which one of the following financial statements would be used to present the capital structure of Brophy and Associates?

  5. Oct/Nov 2019, Q471 mark · multiple choice

    This section is Financial Management. Two discounting-factor tables are supplied for use anywhere in the section: (1) discounting factors to calculate PRESENT values for periods n = 1 to 6 at 5%, 10% and 15% are 0,9524/0,9091/0,8696 (n=1); 0,9070/0,8264/0,7561 (n=2); 0,8638/0,7513/0,6575 (n=3); 0,8227/0,6830/0,5718 (n=4); 0,7835/0,6209/0,4972 (n=5); 0,7462/0,5645/0,4323 (n=6); and (2) discounting factors to calculate FUTURE values for periods n = 1 to 6 at 5%, 10% and 15% are 1,0500/1,1000/1,1500 (n=1); 1,1025/1,2100/1,3225 (n=2); 1,1576/1,3310/1,5209 (n=3); 1,2155/1,4641/1,7490 (n=4); 1,2763/1,6105/2,0114 (n=5); 1,3401/1,7716/2,3131 (n=6). Questions 43 to 45 are based on an extract from the business case 'Financial management: IBM' (Business Cases, 2nd edition), which states that for the period 1983 to 1989 IBM's profit as a percentage of revenue fell from 13,6% to 6%, that in 1991 and 1992 the company made a loss, and that Microsoft and Intel, in contrast, showed significant increases in their profit as a percentage of revenue over the same period. Which one of the following items would NOT contribute to shareholders' interest?

  6. Oct/Nov 2019, Q481 mark · multiple choice

    This section is Financial Management. Two discounting-factor tables are supplied for use anywhere in the section: (1) discounting factors to calculate PRESENT values for periods n = 1 to 6 at 5%, 10% and 15% are 0,9524/0,9091/0,8696 (n=1); 0,9070/0,8264/0,7561 (n=2); 0,8638/0,7513/0,6575 (n=3); 0,8227/0,6830/0,5718 (n=4); 0,7835/0,6209/0,4972 (n=5); 0,7462/0,5645/0,4323 (n=6); and (2) discounting factors to calculate FUTURE values for periods n = 1 to 6 at 5%, 10% and 15% are 1,0500/1,1000/1,1500 (n=1); 1,1025/1,2100/1,3225 (n=2); 1,1576/1,3310/1,5209 (n=3); 1,2155/1,4641/1,7490 (n=4); 1,2763/1,6105/2,0114 (n=5); 1,3401/1,7716/2,3131 (n=6). Questions 43 to 45 are based on an extract from the business case 'Financial management: IBM' (Business Cases, 2nd edition), which states that for the period 1983 to 1989 IBM's profit as a percentage of revenue fell from 13,6% to 6%, that in 1991 and 1992 the company made a loss, and that Microsoft and Intel, in contrast, showed significant increases in their profit as a percentage of revenue over the same period. Fill in the missing term: ________ is the ability of a business to satisfy its short-term obligations as they become due.

  7. Oct/Nov 2019, Q491 mark · multiple choice

    This section is Financial Management. Two discounting-factor tables are supplied for use anywhere in the section: (1) discounting factors to calculate PRESENT values for periods n = 1 to 6 at 5%, 10% and 15% are 0,9524/0,9091/0,8696 (n=1); 0,9070/0,8264/0,7561 (n=2); 0,8638/0,7513/0,6575 (n=3); 0,8227/0,6830/0,5718 (n=4); 0,7835/0,6209/0,4972 (n=5); 0,7462/0,5645/0,4323 (n=6); and (2) discounting factors to calculate FUTURE values for periods n = 1 to 6 at 5%, 10% and 15% are 1,0500/1,1000/1,1500 (n=1); 1,1025/1,2100/1,3225 (n=2); 1,1576/1,3310/1,5209 (n=3); 1,2155/1,4641/1,7490 (n=4); 1,2763/1,6105/2,0114 (n=5); 1,3401/1,7716/2,3131 (n=6). Questions 43 to 45 are based on an extract from the business case 'Financial management: IBM' (Business Cases, 2nd edition), which states that for the period 1983 to 1989 IBM's profit as a percentage of revenue fell from 13,6% to 6%, that in 1991 and 1992 the company made a loss, and that Microsoft and Intel, in contrast, showed significant increases in their profit as a percentage of revenue over the same period. Kaniki is the financial manager at Eat Fast, a popular take-away restaurant in Pinetown. He is analysing the cost-volume-profit relationship of their very popular bunny chow dish, using the following figures: the sales price is R12 per dish, the variable cost is R8 per dish, the total fixed cost per annum is R100 000, and the number of meals made and sold per year is 30 000. What is the estimated profitability of Eat Fast's bunny chow dish?

  8. Oct/Nov 2019, Q501 mark · multiple choice

    This section is Financial Management. Two discounting-factor tables are supplied for use anywhere in the section: (1) discounting factors to calculate PRESENT values for periods n = 1 to 6 at 5%, 10% and 15% are 0,9524/0,9091/0,8696 (n=1); 0,9070/0,8264/0,7561 (n=2); 0,8638/0,7513/0,6575 (n=3); 0,8227/0,6830/0,5718 (n=4); 0,7835/0,6209/0,4972 (n=5); 0,7462/0,5645/0,4323 (n=6); and (2) discounting factors to calculate FUTURE values for periods n = 1 to 6 at 5%, 10% and 15% are 1,0500/1,1000/1,1500 (n=1); 1,1025/1,2100/1,3225 (n=2); 1,1576/1,3310/1,5209 (n=3); 1,2155/1,4641/1,7490 (n=4); 1,2763/1,6105/2,0114 (n=5); 1,3401/1,7716/2,3131 (n=6). Questions 43 to 45 are based on an extract from the business case 'Financial management: IBM' (Business Cases, 2nd edition), which states that for the period 1983 to 1989 IBM's profit as a percentage of revenue fell from 13,6% to 6%, that in 1991 and 1992 the company made a loss, and that Microsoft and Intel, in contrast, showed significant increases in their profit as a percentage of revenue over the same period. Complete the definition: the present value is the amount that can be ________.

  9. Oct/Nov 2019, Q511 mark · multiple choice

    This section is Financial Management. Two discounting-factor tables are supplied for use anywhere in the section: (1) discounting factors to calculate PRESENT values for periods n = 1 to 6 at 5%, 10% and 15% are 0,9524/0,9091/0,8696 (n=1); 0,9070/0,8264/0,7561 (n=2); 0,8638/0,7513/0,6575 (n=3); 0,8227/0,6830/0,5718 (n=4); 0,7835/0,6209/0,4972 (n=5); 0,7462/0,5645/0,4323 (n=6); and (2) discounting factors to calculate FUTURE values for periods n = 1 to 6 at 5%, 10% and 15% are 1,0500/1,1000/1,1500 (n=1); 1,1025/1,2100/1,3225 (n=2); 1,1576/1,3310/1,5209 (n=3); 1,2155/1,4641/1,7490 (n=4); 1,2763/1,6105/2,0114 (n=5); 1,3401/1,7716/2,3131 (n=6). Questions 43 to 45 are based on an extract from the business case 'Financial management: IBM' (Business Cases, 2nd edition), which states that for the period 1983 to 1989 IBM's profit as a percentage of revenue fell from 13,6% to 6%, that in 1991 and 1992 the company made a loss, and that Microsoft and Intel, in contrast, showed significant increases in their profit as a percentage of revenue over the same period. Nomvula is the secretary of a labour union at Goliath National Mine in Uganda. He has asked the financial manager to send him the mine's latest financial ratios. Why would Nomvula be interested in the mine's financial ratios?

  10. Oct/Nov 2019, Q521 mark · multiple choice

    This section is Financial Management. Two discounting-factor tables are supplied for use anywhere in the section: (1) discounting factors to calculate PRESENT values for periods n = 1 to 6 at 5%, 10% and 15% are 0,9524/0,9091/0,8696 (n=1); 0,9070/0,8264/0,7561 (n=2); 0,8638/0,7513/0,6575 (n=3); 0,8227/0,6830/0,5718 (n=4); 0,7835/0,6209/0,4972 (n=5); 0,7462/0,5645/0,4323 (n=6); and (2) discounting factors to calculate FUTURE values for periods n = 1 to 6 at 5%, 10% and 15% are 1,0500/1,1000/1,1500 (n=1); 1,1025/1,2100/1,3225 (n=2); 1,1576/1,3310/1,5209 (n=3); 1,2155/1,4641/1,7490 (n=4); 1,2763/1,6105/2,0114 (n=5); 1,3401/1,7716/2,3131 (n=6). Questions 43 to 45 are based on an extract from the business case 'Financial management: IBM' (Business Cases, 2nd edition), which states that for the period 1983 to 1989 IBM's profit as a percentage of revenue fell from 13,6% to 6%, that in 1991 and 1992 the company made a loss, and that Microsoft and Intel, in contrast, showed significant increases in their profit as a percentage of revenue over the same period. On 1 January 2019 a person deposits R3 000 into a savings account earning a rate of return of 10% per annum. On 1 January 2021 he deposits a further R1 000 into that same account. On 31 December 2021 he closes the account and reinvests the total proceeds into another account earning a rate of return of 15%. How much money will he have in this second account on 31 December 2023?

  11. Oct/Nov 2019, Q531 mark · multiple choice

    This section is Financial Management. Two discounting-factor tables are supplied for use anywhere in the section: (1) discounting factors to calculate PRESENT values for periods n = 1 to 6 at 5%, 10% and 15% are 0,9524/0,9091/0,8696 (n=1); 0,9070/0,8264/0,7561 (n=2); 0,8638/0,7513/0,6575 (n=3); 0,8227/0,6830/0,5718 (n=4); 0,7835/0,6209/0,4972 (n=5); 0,7462/0,5645/0,4323 (n=6); and (2) discounting factors to calculate FUTURE values for periods n = 1 to 6 at 5%, 10% and 15% are 1,0500/1,1000/1,1500 (n=1); 1,1025/1,2100/1,3225 (n=2); 1,1576/1,3310/1,5209 (n=3); 1,2155/1,4641/1,7490 (n=4); 1,2763/1,6105/2,0114 (n=5); 1,3401/1,7716/2,3131 (n=6). Questions 43 to 45 are based on an extract from the business case 'Financial management: IBM' (Business Cases, 2nd edition), which states that for the period 1983 to 1989 IBM's profit as a percentage of revenue fell from 13,6% to 6%, that in 1991 and 1992 the company made a loss, and that Microsoft and Intel, in contrast, showed significant increases in their profit as a percentage of revenue over the same period. Fill in the missing term: ________ are the most common form of non-current liabilities, and a certificate is issued showing the conditions of the loan.

  12. Oct/Nov 2019, Q541 mark · multiple choice

    This section is Financial Management. Two discounting-factor tables are supplied for use anywhere in the section: (1) discounting factors to calculate PRESENT values for periods n = 1 to 6 at 5%, 10% and 15% are 0,9524/0,9091/0,8696 (n=1); 0,9070/0,8264/0,7561 (n=2); 0,8638/0,7513/0,6575 (n=3); 0,8227/0,6830/0,5718 (n=4); 0,7835/0,6209/0,4972 (n=5); 0,7462/0,5645/0,4323 (n=6); and (2) discounting factors to calculate FUTURE values for periods n = 1 to 6 at 5%, 10% and 15% are 1,0500/1,1000/1,1500 (n=1); 1,1025/1,2100/1,3225 (n=2); 1,1576/1,3310/1,5209 (n=3); 1,2155/1,4641/1,7490 (n=4); 1,2763/1,6105/2,0114 (n=5); 1,3401/1,7716/2,3131 (n=6). Questions 43 to 45 are based on an extract from the business case 'Financial management: IBM' (Business Cases, 2nd edition), which states that for the period 1983 to 1989 IBM's profit as a percentage of revenue fell from 13,6% to 6%, that in 1991 and 1992 the company made a loss, and that Microsoft and Intel, in contrast, showed significant increases in their profit as a percentage of revenue over the same period. Which one of the following is a characteristic of ordinary shares?

  13. Oct/Nov 2019, Q551 mark · multiple choice

    This section is Financial Management. Two discounting-factor tables are supplied for use anywhere in the section: (1) discounting factors to calculate PRESENT values for periods n = 1 to 6 at 5%, 10% and 15% are 0,9524/0,9091/0,8696 (n=1); 0,9070/0,8264/0,7561 (n=2); 0,8638/0,7513/0,6575 (n=3); 0,8227/0,6830/0,5718 (n=4); 0,7835/0,6209/0,4972 (n=5); 0,7462/0,5645/0,4323 (n=6); and (2) discounting factors to calculate FUTURE values for periods n = 1 to 6 at 5%, 10% and 15% are 1,0500/1,1000/1,1500 (n=1); 1,1025/1,2100/1,3225 (n=2); 1,1576/1,3310/1,5209 (n=3); 1,2155/1,4641/1,7490 (n=4); 1,2763/1,6105/2,0114 (n=5); 1,3401/1,7716/2,3131 (n=6). Questions 43 to 45 are based on an extract from the business case 'Financial management: IBM' (Business Cases, 2nd edition), which states that for the period 1983 to 1989 IBM's profit as a percentage of revenue fell from 13,6% to 6%, that in 1991 and 1992 the company made a loss, and that Microsoft and Intel, in contrast, showed significant increases in their profit as a percentage of revenue over the same period. Which one of the following is a purpose of financial budgets?

  14. Oct/Nov 2019, Q561 mark · multiple choice

    This section is Financial Management. Two discounting-factor tables are supplied for use anywhere in the section: (1) discounting factors to calculate PRESENT values for periods n = 1 to 6 at 5%, 10% and 15% are 0,9524/0,9091/0,8696 (n=1); 0,9070/0,8264/0,7561 (n=2); 0,8638/0,7513/0,6575 (n=3); 0,8227/0,6830/0,5718 (n=4); 0,7835/0,6209/0,4972 (n=5); 0,7462/0,5645/0,4323 (n=6); and (2) discounting factors to calculate FUTURE values for periods n = 1 to 6 at 5%, 10% and 15% are 1,0500/1,1000/1,1500 (n=1); 1,1025/1,2100/1,3225 (n=2); 1,1576/1,3310/1,5209 (n=3); 1,2155/1,4641/1,7490 (n=4); 1,2763/1,6105/2,0114 (n=5); 1,3401/1,7716/2,3131 (n=6). Questions 43 to 45 are based on an extract from the business case 'Financial management: IBM' (Business Cases, 2nd edition), which states that for the period 1983 to 1989 IBM's profit as a percentage of revenue fell from 13,6% to 6%, that in 1991 and 1992 the company made a loss, and that Microsoft and Intel, in contrast, showed significant increases in their profit as a percentage of revenue over the same period. Suren is the financial manager of Exiplex, a company that manufactures Plexiglas for industrial use. Because Exiplex relies on large and expensive machinery in its production process, one of Suren's main tasks is to make sure there is sufficient finance available for this machinery. Suren prefers to use long-term funds to finance temporary current-asset requirements, since she regards this as less risky. What type of short-term financing approach is Suren using at Exiplex?

  15. May/Jun 2019, Q431 mark · multiple choice

    This section on financial management provides two discounting-factor tables for use throughout. The present-value discounting factors are: for 1 period, 0.9524 at 5%, 0.9091 at 10%, 0.8696 at 15%; for 2 periods, 0.9070 at 5%, 0.8264 at 10%, 0.7561 at 15%; for 3 periods, 0.8638 at 5%, 0.7513 at 10%, 0.6575 at 15%; for 4 periods, 0.8227 at 5%, 0.6830 at 10%, 0.5718 at 15%; for 5 periods, 0.7835 at 5%, 0.6209 at 10%, 0.4972 at 15%; and for 6 periods, 0.7462 at 5%, 0.5645 at 10%, 0.4323 at 15%. The future-value discounting factors are: for 1 period, 1.0500 at 5%, 1.1000 at 10%, 1.1500 at 15%; for 2 periods, 1.1025 at 5%, 1.2100 at 10%, 1.3225 at 15%; for 3 periods, 1.1576 at 5%, 1.3310 at 10%, 1.5209 at 15%; for 4 periods, 1.2155 at 5%, 1.4641 at 10%, 1.7490 at 15%; for 5 periods, 1.2763 at 5%, 1.6105 at 10%, 2.0114 at 15%; and for 6 periods, 1.3401 at 5%, 1.7716 at 10%, 2.3131 at 15%. An extract from the business case 'Financial management: IBM' (Business Cases, 2nd edition) states that despite having a better statement of financial position and a renaissance in its laboratories, IBM fell further behind every year; in Unix servers, the backbone of the internet, IBM's sales rose only 3% in 1998 while a competitor, Sun Microsystems, grew by 29%. Given that IBM had a better statement of financial position despite falling behind in sales, which one of the following best describes what a statement of financial position is?

  16. May/Jun 2019, Q441 mark · multiple choice

    This section on financial management provides two discounting-factor tables for use throughout. The present-value discounting factors are: for 1 period, 0.9524 at 5%, 0.9091 at 10%, 0.8696 at 15%; for 2 periods, 0.9070 at 5%, 0.8264 at 10%, 0.7561 at 15%; for 3 periods, 0.8638 at 5%, 0.7513 at 10%, 0.6575 at 15%; for 4 periods, 0.8227 at 5%, 0.6830 at 10%, 0.5718 at 15%; for 5 periods, 0.7835 at 5%, 0.6209 at 10%, 0.4972 at 15%; and for 6 periods, 0.7462 at 5%, 0.5645 at 10%, 0.4323 at 15%. The future-value discounting factors are: for 1 period, 1.0500 at 5%, 1.1000 at 10%, 1.1500 at 15%; for 2 periods, 1.1025 at 5%, 1.2100 at 10%, 1.3225 at 15%; for 3 periods, 1.1576 at 5%, 1.3310 at 10%, 1.5209 at 15%; for 4 periods, 1.2155 at 5%, 1.4641 at 10%, 1.7490 at 15%; for 5 periods, 1.2763 at 5%, 1.6105 at 10%, 2.0114 at 15%; and for 6 periods, 1.3401 at 5%, 1.7716 at 10%, 2.3131 at 15%. Continuing with the IBM business case, which one of the following items would appear on IBM's statement of financial position?

  17. May/Jun 2019, Q451 mark · multiple choice

    This section on financial management provides two discounting-factor tables for use throughout. The present-value discounting factors are: for 1 period, 0.9524 at 5%, 0.9091 at 10%, 0.8696 at 15%; for 2 periods, 0.9070 at 5%, 0.8264 at 10%, 0.7561 at 15%; for 3 periods, 0.8638 at 5%, 0.7513 at 10%, 0.6575 at 15%; for 4 periods, 0.8227 at 5%, 0.6830 at 10%, 0.5718 at 15%; for 5 periods, 0.7835 at 5%, 0.6209 at 10%, 0.4972 at 15%; and for 6 periods, 0.7462 at 5%, 0.5645 at 10%, 0.4323 at 15%. The future-value discounting factors are: for 1 period, 1.0500 at 5%, 1.1000 at 10%, 1.1500 at 15%; for 2 periods, 1.1025 at 5%, 1.2100 at 10%, 1.3225 at 15%; for 3 periods, 1.1576 at 5%, 1.3310 at 10%, 1.5209 at 15%; for 4 periods, 1.2155 at 5%, 1.4641 at 10%, 1.7490 at 15%; for 5 periods, 1.2763 at 5%, 1.6105 at 10%, 2.0114 at 15%; and for 6 periods, 1.3401 at 5%, 1.7716 at 10%, 2.3131 at 15%. Regarding IBM, complete the statement: the blank of IBM consists primarily of receipts resulting from the sale of its products and/or services.

  18. May/Jun 2019, Q461 mark · multiple choice

    This section on financial management provides two discounting-factor tables for use throughout. The present-value discounting factors are: for 1 period, 0.9524 at 5%, 0.9091 at 10%, 0.8696 at 15%; for 2 periods, 0.9070 at 5%, 0.8264 at 10%, 0.7561 at 15%; for 3 periods, 0.8638 at 5%, 0.7513 at 10%, 0.6575 at 15%; for 4 periods, 0.8227 at 5%, 0.6830 at 10%, 0.5718 at 15%; for 5 periods, 0.7835 at 5%, 0.6209 at 10%, 0.4972 at 15%; and for 6 periods, 0.7462 at 5%, 0.5645 at 10%, 0.4323 at 15%. The future-value discounting factors are: for 1 period, 1.0500 at 5%, 1.1000 at 10%, 1.1500 at 15%; for 2 periods, 1.1025 at 5%, 1.2100 at 10%, 1.3225 at 15%; for 3 periods, 1.1576 at 5%, 1.3310 at 10%, 1.5209 at 15%; for 4 periods, 1.2155 at 5%, 1.4641 at 10%, 1.7490 at 15%; for 5 periods, 1.2763 at 5%, 1.6105 at 10%, 2.0114 at 15%; and for 6 periods, 1.3401 at 5%, 1.7716 at 10%, 2.3131 at 15%. Still regarding IBM, complete the statement: IBM's sales would be indicated on the statement of financial blank and is also known as blank income.

  19. May/Jun 2019, Q471 mark · multiple choice

    This section on financial management provides two discounting-factor tables for use throughout. The present-value discounting factors are: for 1 period, 0.9524 at 5%, 0.9091 at 10%, 0.8696 at 15%; for 2 periods, 0.9070 at 5%, 0.8264 at 10%, 0.7561 at 15%; for 3 periods, 0.8638 at 5%, 0.7513 at 10%, 0.6575 at 15%; for 4 periods, 0.8227 at 5%, 0.6830 at 10%, 0.5718 at 15%; for 5 periods, 0.7835 at 5%, 0.6209 at 10%, 0.4972 at 15%; and for 6 periods, 0.7462 at 5%, 0.5645 at 10%, 0.4323 at 15%. The future-value discounting factors are: for 1 period, 1.0500 at 5%, 1.1000 at 10%, 1.1500 at 15%; for 2 periods, 1.1025 at 5%, 1.2100 at 10%, 1.3225 at 15%; for 3 periods, 1.1576 at 5%, 1.3310 at 10%, 1.5209 at 15%; for 4 periods, 1.2155 at 5%, 1.4641 at 10%, 1.7490 at 15%; for 5 periods, 1.2763 at 5%, 1.6105 at 10%, 2.0114 at 15%; and for 6 periods, 1.3401 at 5%, 1.7716 at 10%, 2.3131 at 15%. The formula for calculating the future value of an original investment is FV^n = PV(1 + i)^n. In this formula, what does 'n' represent?

  20. May/Jun 2019, Q481 mark · multiple choice

    This section on financial management provides two discounting-factor tables for use throughout. The present-value discounting factors are: for 1 period, 0.9524 at 5%, 0.9091 at 10%, 0.8696 at 15%; for 2 periods, 0.9070 at 5%, 0.8264 at 10%, 0.7561 at 15%; for 3 periods, 0.8638 at 5%, 0.7513 at 10%, 0.6575 at 15%; for 4 periods, 0.8227 at 5%, 0.6830 at 10%, 0.5718 at 15%; for 5 periods, 0.7835 at 5%, 0.6209 at 10%, 0.4972 at 15%; and for 6 periods, 0.7462 at 5%, 0.5645 at 10%, 0.4323 at 15%. The future-value discounting factors are: for 1 period, 1.0500 at 5%, 1.1000 at 10%, 1.1500 at 15%; for 2 periods, 1.1025 at 5%, 1.2100 at 10%, 1.3225 at 15%; for 3 periods, 1.1576 at 5%, 1.3310 at 10%, 1.5209 at 15%; for 4 periods, 1.2155 at 5%, 1.4641 at 10%, 1.7490 at 15%; for 5 periods, 1.2763 at 5%, 1.6105 at 10%, 2.0114 at 15%; and for 6 periods, 1.3401 at 5%, 1.7716 at 10%, 2.3131 at 15%. Consider the case of Khanyisile, who owns a fabric store and offers a curtain-making service to her customers. Her industrial curtain-sewing machine has broken down and she must decide whether replacing it now is worthwhile. A new machine costs R50 000, but she does not have the capital available. Her brother owns such a machine and has offered to 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. You advise her that she needs to look at the machine's present value before deciding. Given the significant decrease in the discounting factors as the interest rate and time period increase, which one of the following statements is correct?

  21. May/Jun 2019, Q491 mark · multiple choice

    This section on financial management provides two discounting-factor tables for use throughout. The present-value discounting factors are: for 1 period, 0.9524 at 5%, 0.9091 at 10%, 0.8696 at 15%; for 2 periods, 0.9070 at 5%, 0.8264 at 10%, 0.7561 at 15%; for 3 periods, 0.8638 at 5%, 0.7513 at 10%, 0.6575 at 15%; for 4 periods, 0.8227 at 5%, 0.6830 at 10%, 0.5718 at 15%; for 5 periods, 0.7835 at 5%, 0.6209 at 10%, 0.4972 at 15%; and for 6 periods, 0.7462 at 5%, 0.5645 at 10%, 0.4323 at 15%. The future-value discounting factors are: for 1 period, 1.0500 at 5%, 1.1000 at 10%, 1.1500 at 15%; for 2 periods, 1.1025 at 5%, 1.2100 at 10%, 1.3225 at 15%; for 3 periods, 1.1576 at 5%, 1.3310 at 10%, 1.5209 at 15%; for 4 periods, 1.2155 at 5%, 1.4641 at 10%, 1.7490 at 15%; for 5 periods, 1.2763 at 5%, 1.6105 at 10%, 2.0114 at 15%; and for 6 periods, 1.3401 at 5%, 1.7716 at 10%, 2.3131 at 15%. Using the same scenario, in which Khanyisile's brother offers her the machine for R75 000 payable in three years at an interest rate of 15% per year, calculate what the machine's present value would be if Khanyisile decides to accept her brother's offer.

  22. May/Jun 2019, Q501 mark · multiple choice

    This section on financial management provides two discounting-factor tables for use throughout. The present-value discounting factors are: for 1 period, 0.9524 at 5%, 0.9091 at 10%, 0.8696 at 15%; for 2 periods, 0.9070 at 5%, 0.8264 at 10%, 0.7561 at 15%; for 3 periods, 0.8638 at 5%, 0.7513 at 10%, 0.6575 at 15%; for 4 periods, 0.8227 at 5%, 0.6830 at 10%, 0.5718 at 15%; for 5 periods, 0.7835 at 5%, 0.6209 at 10%, 0.4972 at 15%; and for 6 periods, 0.7462 at 5%, 0.5645 at 10%, 0.4323 at 15%. The future-value discounting factors are: for 1 period, 1.0500 at 5%, 1.1000 at 10%, 1.1500 at 15%; for 2 periods, 1.1025 at 5%, 1.2100 at 10%, 1.3225 at 15%; for 3 periods, 1.1576 at 5%, 1.3310 at 10%, 1.5209 at 15%; for 4 periods, 1.2155 at 5%, 1.4641 at 10%, 1.7490 at 15%; for 5 periods, 1.2763 at 5%, 1.6105 at 10%, 2.0114 at 15%; and for 6 periods, 1.3401 at 5%, 1.7716 at 10%, 2.3131 at 15%. Which financial ratio is used by providers of loan capital to determine the degree to which a business can meet its debt obligations fully and punctually in the normal course of events?

  23. May/Jun 2019, Q511 mark · multiple choice

    This section on financial management provides two discounting-factor tables for use throughout. The present-value discounting factors are: for 1 period, 0.9524 at 5%, 0.9091 at 10%, 0.8696 at 15%; for 2 periods, 0.9070 at 5%, 0.8264 at 10%, 0.7561 at 15%; for 3 periods, 0.8638 at 5%, 0.7513 at 10%, 0.6575 at 15%; for 4 periods, 0.8227 at 5%, 0.6830 at 10%, 0.5718 at 15%; for 5 periods, 0.7835 at 5%, 0.6209 at 10%, 0.4972 at 15%; and for 6 periods, 0.7462 at 5%, 0.5645 at 10%, 0.4323 at 15%. The future-value discounting factors are: for 1 period, 1.0500 at 5%, 1.1000 at 10%, 1.1500 at 15%; for 2 periods, 1.1025 at 5%, 1.2100 at 10%, 1.3225 at 15%; for 3 periods, 1.1576 at 5%, 1.3310 at 10%, 1.5209 at 15%; for 4 periods, 1.2155 at 5%, 1.4641 at 10%, 1.7490 at 15%; for 5 periods, 1.2763 at 5%, 1.6105 at 10%, 2.0114 at 15%; and for 6 periods, 1.3401 at 5%, 1.7716 at 10%, 2.3131 at 15%. Rapula is the financial manager of Plastic Fantastic, a plastic container manufacturer. While preparing the financial statements, Rapula needs to calculate the return on investment (ROI). In addition to net profit after tax, what else will Rapula require in order to calculate this ratio?

  24. May/Jun 2019, Q521 mark · multiple choice

    This section on financial management provides two discounting-factor tables for use throughout. The present-value discounting factors are: for 1 period, 0.9524 at 5%, 0.9091 at 10%, 0.8696 at 15%; for 2 periods, 0.9070 at 5%, 0.8264 at 10%, 0.7561 at 15%; for 3 periods, 0.8638 at 5%, 0.7513 at 10%, 0.6575 at 15%; for 4 periods, 0.8227 at 5%, 0.6830 at 10%, 0.5718 at 15%; for 5 periods, 0.7835 at 5%, 0.6209 at 10%, 0.4972 at 15%; and for 6 periods, 0.7462 at 5%, 0.5645 at 10%, 0.4323 at 15%. The future-value discounting factors are: for 1 period, 1.0500 at 5%, 1.1000 at 10%, 1.1500 at 15%; for 2 periods, 1.1025 at 5%, 1.2100 at 10%, 1.3225 at 15%; for 3 periods, 1.1576 at 5%, 1.3310 at 10%, 1.5209 at 15%; for 4 periods, 1.2155 at 5%, 1.4641 at 10%, 1.7490 at 15%; for 5 periods, 1.2763 at 5%, 1.6105 at 10%, 2.0114 at 15%; and for 6 periods, 1.3401 at 5%, 1.7716 at 10%, 2.3131 at 15%. The focal points of a budget for an income centre are determined by measuring what?

  25. May/Jun 2019, Q531 mark · multiple choice

    This section on financial management provides two discounting-factor tables for use throughout. The present-value discounting factors are: for 1 period, 0.9524 at 5%, 0.9091 at 10%, 0.8696 at 15%; for 2 periods, 0.9070 at 5%, 0.8264 at 10%, 0.7561 at 15%; for 3 periods, 0.8638 at 5%, 0.7513 at 10%, 0.6575 at 15%; for 4 periods, 0.8227 at 5%, 0.6830 at 10%, 0.5718 at 15%; for 5 periods, 0.7835 at 5%, 0.6209 at 10%, 0.4972 at 15%; and for 6 periods, 0.7462 at 5%, 0.5645 at 10%, 0.4323 at 15%. The future-value discounting factors are: for 1 period, 1.0500 at 5%, 1.1000 at 10%, 1.1500 at 15%; for 2 periods, 1.1025 at 5%, 1.2100 at 10%, 1.3225 at 15%; for 3 periods, 1.1576 at 5%, 1.3310 at 10%, 1.5209 at 15%; for 4 periods, 1.2155 at 5%, 1.4641 at 10%, 1.7490 at 15%; for 5 periods, 1.2763 at 5%, 1.6105 at 10%, 2.0114 at 15%; and for 6 periods, 1.3401 at 5%, 1.7716 at 10%, 2.3131 at 15%. Kabelo and Hendrik are joint owners of Fitness Gym. At the beginning of each year, they draw up the budget afresh, and it is expected that they must justify anew their budget requests for the year to each other. Although this approach has improved the prioritisation of their resource allocations, their partnership is under strain due to the constant justification of their activities and expenses to each other. Which type of budgeting do Kabelo and Hendrik use at Fitness Gym?

  26. May/Jun 2019, Q541 mark · multiple choice

    This section on financial management provides two discounting-factor tables for use throughout. The present-value discounting factors are: for 1 period, 0.9524 at 5%, 0.9091 at 10%, 0.8696 at 15%; for 2 periods, 0.9070 at 5%, 0.8264 at 10%, 0.7561 at 15%; for 3 periods, 0.8638 at 5%, 0.7513 at 10%, 0.6575 at 15%; for 4 periods, 0.8227 at 5%, 0.6830 at 10%, 0.5718 at 15%; for 5 periods, 0.7835 at 5%, 0.6209 at 10%, 0.4972 at 15%; and for 6 periods, 0.7462 at 5%, 0.5645 at 10%, 0.4323 at 15%. The future-value discounting factors are: for 1 period, 1.0500 at 5%, 1.1000 at 10%, 1.1500 at 15%; for 2 periods, 1.1025 at 5%, 1.2100 at 10%, 1.3225 at 15%; for 3 periods, 1.1576 at 5%, 1.3310 at 10%, 1.5209 at 15%; for 4 periods, 1.2155 at 5%, 1.4641 at 10%, 1.7490 at 15%; for 5 periods, 1.2763 at 5%, 1.6105 at 10%, 2.0114 at 15%; and for 6 periods, 1.3401 at 5%, 1.7716 at 10%, 2.3131 at 15%. Expenses must often be paid before any cash income has been received, and a business needs sufficient cash available to meet normal current expenditures. This need refers to which motive for holding cash?

  27. May/Jun 2019, Q551 mark · multiple choice

    This section on financial management provides two discounting-factor tables for use throughout. The present-value discounting factors are: for 1 period, 0.9524 at 5%, 0.9091 at 10%, 0.8696 at 15%; for 2 periods, 0.9070 at 5%, 0.8264 at 10%, 0.7561 at 15%; for 3 periods, 0.8638 at 5%, 0.7513 at 10%, 0.6575 at 15%; for 4 periods, 0.8227 at 5%, 0.6830 at 10%, 0.5718 at 15%; for 5 periods, 0.7835 at 5%, 0.6209 at 10%, 0.4972 at 15%; and for 6 periods, 0.7462 at 5%, 0.5645 at 10%, 0.4323 at 15%. The future-value discounting factors are: for 1 period, 1.0500 at 5%, 1.1000 at 10%, 1.1500 at 15%; for 2 periods, 1.1025 at 5%, 1.2100 at 10%, 1.3225 at 15%; for 3 periods, 1.1576 at 5%, 1.3310 at 10%, 1.5209 at 15%; for 4 periods, 1.2155 at 5%, 1.4641 at 10%, 1.7490 at 15%; for 5 periods, 1.2763 at 5%, 1.6105 at 10%, 2.0114 at 15%; and for 6 periods, 1.3401 at 5%, 1.7716 at 10%, 2.3131 at 15%. Boya Ltd produces e-readers for use in primary schools. Each e-reader is sold for R1 500, with a variable cost of R665 per unit and total fixed costs of R960 000. How many e-readers must Boya Ltd sell in order to break even? (Round your answer up to the nearest unit.)

  28. May/Jun 2019, Q561 mark · multiple choice

    This section on financial management provides two discounting-factor tables for use throughout. The present-value discounting factors are: for 1 period, 0.9524 at 5%, 0.9091 at 10%, 0.8696 at 15%; for 2 periods, 0.9070 at 5%, 0.8264 at 10%, 0.7561 at 15%; for 3 periods, 0.8638 at 5%, 0.7513 at 10%, 0.6575 at 15%; for 4 periods, 0.8227 at 5%, 0.6830 at 10%, 0.5718 at 15%; for 5 periods, 0.7835 at 5%, 0.6209 at 10%, 0.4972 at 15%; and for 6 periods, 0.7462 at 5%, 0.5645 at 10%, 0.4323 at 15%. The future-value discounting factors are: for 1 period, 1.0500 at 5%, 1.1000 at 10%, 1.1500 at 15%; for 2 periods, 1.1025 at 5%, 1.2100 at 10%, 1.3225 at 15%; for 3 periods, 1.1576 at 5%, 1.3310 at 10%, 1.5209 at 15%; for 4 periods, 1.2155 at 5%, 1.4641 at 10%, 1.7490 at 15%; for 5 periods, 1.2763 at 5%, 1.6105 at 10%, 2.0114 at 15%; and for 6 periods, 1.3401 at 5%, 1.7716 at 10%, 2.3131 at 15%. Kate owns her own bakery and leases her operating equipment, such as ovens and fridges, from EasyBake. The lease amount, which Kate repays in regular instalments, is structured so that the value of the asset plus an interest charge is fully paid back by the end of the lease term, which is usually related to the lifespan of the asset. Which type of financial leasing agreement does Kate have with EasyBake?

  29. Oct/Nov 2018, Q431 mark · multiple choice

    For this section on financial management, discounting factor tables for present and future values at 5%, 10% and 15% over periods 1 to 6 are supplied for use where needed. An extract from the business case 'Financial management: IBM' (Business Cases, 2nd edition) notes that for 2009 and 2008 the gross profit margins were 45,72% and 44,06% respectively, and that both the net profit margin and the gross profit margin showed stronger financial positions for IBM from 2008 until 2010. Based on this extract, which one of the following equations would IBM have used to calculate its gross profit margins?

  30. Oct/Nov 2018, Q441 mark · multiple choice

    Continuing with the IBM extract on gross profit margins, by examining IBM's gross profit margin one would be able to determine ____.

  31. Oct/Nov 2018, Q451 mark · multiple choice

    Still referring to IBM's gross profit margin calculations, when working out the gross profit margin, IBM should aim to achieve the ____ gross profit margin.

  32. Oct/Nov 2018, Q461 mark · multiple choice

    If IBM wanted to improve its gross profit margin, which one of the following strategies would be the most appropriate? IBM would have to ____.

  33. Oct/Nov 2018, Q471 mark · multiple choice

    The formula for calculating the future value of an original investment is FV^n = PV(1 + i)^n. In this formula, i represents ____.

  34. Oct/Nov 2018, Q481 mark · multiple choice

    Financial ratios on their own have little, if any, use value and must be viewed against certain norms to become meaningful. Which one of the following represents a comparison that is significant in this regard?

  35. Oct/Nov 2018, Q491 mark · multiple choice

    Mohammad owns a gourmet ice-cream shop in Durban. For the 2018 December holidays he has designed a brand-new marketing and promotion campaign. Which budget would Mohammad use to measure the marketing and sales effectiveness of his December campaign?

  36. Oct/Nov 2018, Q501 mark · multiple choice

    Mohammad is busy preparing his ice-cream shop for the upcoming 2018 December holiday period. He is currently reviewing his financial statements for the past six months and has noticed that the majority of his sales are cash-based. Which one of the following would be a cost of holding little or no cash for Mohammad?

  37. Oct/Nov 2018, Q511 mark · multiple choice

    While preparing for the busy holiday season, Mohammad notices that his biggest competitor, SoftServe, has gone out of business and is selling its ice-cream machine at a very good price during its liquidation sale. Because Mohammad has set aside extra cash, he is able to take advantage of this opportunity. Which one of the following represents Mohammad's reason for keeping cash available in this scenario?

  38. Oct/Nov 2018, Q521 mark · multiple choice

    Sarah decides to invest R100 000 into an account for the future expansion of her perfume shop. What is the future value of this amount if she invests it for three years at an interest rate of 5% per annum?

  39. Oct/Nov 2018, Q531 mark · multiple choice

    The following information is supplied for Hetisani Ltd for the month of October 2018: fixed assets amount to R1 000 000; current assets consist of cash of R80 000, marketable securities of R100 000, inventory of R500 000 and debtors of R300 000; shareholders' capital is R700 000; long-term debt is R250 000; and current liabilities amount to R300 000. What would the acid-test ratio for Hetisani Ltd be?

  40. Oct/Nov 2018, Q541 mark · multiple choice

    Gunn&Moore manufactures cricket bats at one of its plants. The fixed cost amounts to R1 600 000 per annum. The bats are sold at R400 each and the variable cost per unit amounts to R150. What is the break-even point of this plant, expressed in units?

  41. Oct/Nov 2018, Q551 mark · multiple choice

    Calculate the total present value of the following cash flow amounts, each received at the end of the respective year, using an interest rate of 10% and rounding your answer up to the nearest Rand: Year 1 cash flow of R3 000; Year 2 cash flow of R2 000; Year 3 cash flow of R5 000.

  42. Oct/Nov 2018, Q561 mark · multiple choice

    Which one of the following is a characteristic of ordinary shares?

  43. May/Jun 2018, Q431 mark · multiple choice

    This section covers Financial Management. Two discounting-factor tables are supplied for the section: the present-value factors (for periods 1-6) are 0.9524, 0.9070, 0.8638, 0.8227, 0.7835, 0.7462 at 5%; 0.9091, 0.8264, 0.7513, 0.6830, 0.6209, 0.5645 at 10%; and 0.8696, 0.7561, 0.6575, 0.5718, 0.4972, 0.4323 at 15%. The future-value factors (for periods 1-6) are 1.0500, 1.1025, 1.1576, 1.2155, 1.2763, 1.3401 at 5%; 1.1000, 1.2100, 1.3310, 1.4641, 1.6105, 1.7716 at 10%; and 1.1500, 1.3225, 1.5209, 1.7490, 2.0114, 2.3131 at 15%. These factors should be used wherever needed in this section. An extract from a business case titled 'Financial management: IBM' shows IBM's latest financial highlights for 2010 compared with 2009: revenue of $99 870 (2010) versus $95 758 (2009); net income of $14 833 versus $13 425; earnings per share of common stock of $11.69 versus $10.12; market capitalisation of $180 220 versus $170 869; stock price per common share of $146.76 versus $130.90; and 426 751 employees versus 399 400. Given that IBM increased its earnings per share of common stock in 2010 to $11.69, which one of the following strategies would have made it possible to improve the earnings per share?

  44. May/Jun 2018, Q441 mark · multiple choice

    This section covers Financial Management. Two discounting-factor tables are supplied for the section: the present-value factors (for periods 1-6) are 0.9524, 0.9070, 0.8638, 0.8227, 0.7835, 0.7462 at 5%; 0.9091, 0.8264, 0.7513, 0.6830, 0.6209, 0.5645 at 10%; and 0.8696, 0.7561, 0.6575, 0.5718, 0.4972, 0.4323 at 15%. The future-value factors (for periods 1-6) are 1.0500, 1.1025, 1.1576, 1.2155, 1.2763, 1.3401 at 5%; 1.1000, 1.2100, 1.3310, 1.4641, 1.6105, 1.7716 at 10%; and 1.1500, 1.3225, 1.5209, 1.7490, 2.0114, 2.3131 at 15%. These factors should be used wherever needed in this section. Using the same IBM financial highlights extract (2010 revenue of $99 870, net income $14 833, earnings per share $11.69, market capitalisation $180 220, stock price per common share $146.76, and 426 751 employees, compared with 2009 figures of $95 758, $13 425, $10.12, $170 869, $130.90 and 399 400 respectively), the paper states that IBM recorded a net income of $99 870 for 2010. The income of a business primarily consists of receipts resulting from which of the following?

  45. May/Jun 2018, Q451 mark · multiple choice

    This section covers Financial Management. Two discounting-factor tables are supplied for the section: the present-value factors (for periods 1-6) are 0.9524, 0.9070, 0.8638, 0.8227, 0.7835, 0.7462 at 5%; 0.9091, 0.8264, 0.7513, 0.6830, 0.6209, 0.5645 at 10%; and 0.8696, 0.7561, 0.6575, 0.5718, 0.4972, 0.4323 at 15%. The future-value factors (for periods 1-6) are 1.0500, 1.1025, 1.1576, 1.2155, 1.2763, 1.3401 at 5%; 1.1000, 1.2100, 1.3310, 1.4641, 1.6105, 1.7716 at 10%; and 1.1500, 1.3225, 1.5209, 1.7490, 2.0114, 2.3131 at 15%. These factors should be used wherever needed in this section. Balls Galore, a tennis ball manufacturing company, produced 2 500 units which were sold at R17 per unit. At the end of its financial year, its financial statements reflected the following costs: salaries of R10 000, factory rent of R15 000, materials of R7 500, and depreciation of R5 000. Which one of these four costs cannot be classified as a fixed cost?

  46. May/Jun 2018, Q461 mark · multiple choice

    This section covers Financial Management. Two discounting-factor tables are supplied for the section: the present-value factors (for periods 1-6) are 0.9524, 0.9070, 0.8638, 0.8227, 0.7835, 0.7462 at 5%; 0.9091, 0.8264, 0.7513, 0.6830, 0.6209, 0.5645 at 10%; and 0.8696, 0.7561, 0.6575, 0.5718, 0.4972, 0.4323 at 15%. The future-value factors (for periods 1-6) are 1.0500, 1.1025, 1.1576, 1.2155, 1.2763, 1.3401 at 5%; 1.1000, 1.2100, 1.3310, 1.4641, 1.6105, 1.7716 at 10%; and 1.1500, 1.3225, 1.5209, 1.7490, 2.0114, 2.3131 at 15%. These factors should be used wherever needed in this section. Using the same Balls Galore scenario (2 500 units produced and sold at R17 each, with costs of R10 000 salaries, R15 000 factory rent, R7 500 materials and R5 000 depreciation), what is the profit or loss made by Balls Galore?

  47. May/Jun 2018, Q471 mark · multiple choice

    This section covers Financial Management. Two discounting-factor tables are supplied for the section: the present-value factors (for periods 1-6) are 0.9524, 0.9070, 0.8638, 0.8227, 0.7835, 0.7462 at 5%; 0.9091, 0.8264, 0.7513, 0.6830, 0.6209, 0.5645 at 10%; and 0.8696, 0.7561, 0.6575, 0.5718, 0.4972, 0.4323 at 15%. The future-value factors (for periods 1-6) are 1.0500, 1.1025, 1.1576, 1.2155, 1.2763, 1.3401 at 5%; 1.1000, 1.2100, 1.3310, 1.4641, 1.6105, 1.7716 at 10%; and 1.1500, 1.3225, 1.5209, 1.7490, 2.0114, 2.3131 at 15%. These factors should be used wherever needed in this section. Which one of the following items is an element that forms part of the cash budget?

  48. May/Jun 2018, Q481 mark · multiple choice

    This section covers Financial Management. Two discounting-factor tables are supplied for the section: the present-value factors (for periods 1-6) are 0.9524, 0.9070, 0.8638, 0.8227, 0.7835, 0.7462 at 5%; 0.9091, 0.8264, 0.7513, 0.6830, 0.6209, 0.5645 at 10%; and 0.8696, 0.7561, 0.6575, 0.5718, 0.4972, 0.4323 at 15%. The future-value factors (for periods 1-6) are 1.0500, 1.1025, 1.1576, 1.2155, 1.2763, 1.3401 at 5%; 1.1000, 1.2100, 1.3310, 1.4641, 1.6105, 1.7716 at 10%; and 1.1500, 1.3225, 1.5209, 1.7490, 2.0114, 2.3131 at 15%. These factors should be used wherever needed in this section. Paul owns a sport store that specialises in extreme sports such as paragliding and wakeboarding. To encourage customers to spend more, he has recently introduced store credit, subject to approval. Which one of the following represents a cost of granting credit that Paul needs to be aware of?

  49. May/Jun 2018, Q491 mark · multiple choice

    This section covers Financial Management. Two discounting-factor tables are supplied for the section: the present-value factors (for periods 1-6) are 0.9524, 0.9070, 0.8638, 0.8227, 0.7835, 0.7462 at 5%; 0.9091, 0.8264, 0.7513, 0.6830, 0.6209, 0.5645 at 10%; and 0.8696, 0.7561, 0.6575, 0.5718, 0.4972, 0.4323 at 15%. The future-value factors (for periods 1-6) are 1.0500, 1.1025, 1.1576, 1.2155, 1.2763, 1.3401 at 5%; 1.1000, 1.2100, 1.3310, 1.4641, 1.6105, 1.7716 at 10%; and 1.1500, 1.3225, 1.5209, 1.7490, 2.0114, 2.3131 at 15%. These factors should be used wherever needed in this section. The net present value (NPV) technique helps a company decide whether to pursue a particular investment opportunity. If a large shopping mall project produces an NPV of 1 340, which one of the following describes the correct decision criteria to apply?

  50. May/Jun 2018, Q501 mark · multiple choice

    This section covers Financial Management. Two discounting-factor tables are supplied for the section: the present-value factors (for periods 1-6) are 0.9524, 0.9070, 0.8638, 0.8227, 0.7835, 0.7462 at 5%; 0.9091, 0.8264, 0.7513, 0.6830, 0.6209, 0.5645 at 10%; and 0.8696, 0.7561, 0.6575, 0.5718, 0.4972, 0.4323 at 15%. The future-value factors (for periods 1-6) are 1.0500, 1.1025, 1.1576, 1.2155, 1.2763, 1.3401 at 5%; 1.1000, 1.2100, 1.3310, 1.4641, 1.6105, 1.7716 at 10%; and 1.1500, 1.3225, 1.5209, 1.7490, 2.0114, 2.3131 at 15%. These factors should be used wherever needed in this section. Mohammad owns a gourmet ice-cream shop in Durban that has just opened ahead of the December holidays. He has secured financing for his opening inventory from Vivoli Gelato, which has agreed to supply R20 000 worth of ice-cream for the store in exchange for a R10 000 down payment, with the remaining balance due within 30 days. Which source of financing for small businesses does this arrangement illustrate?

  51. May/Jun 2018, Q511 mark · multiple choice

    This section covers Financial Management. Two discounting-factor tables are supplied for the section: the present-value factors (for periods 1-6) are 0.9524, 0.9070, 0.8638, 0.8227, 0.7835, 0.7462 at 5%; 0.9091, 0.8264, 0.7513, 0.6830, 0.6209, 0.5645 at 10%; and 0.8696, 0.7561, 0.6575, 0.5718, 0.4972, 0.4323 at 15%. The future-value factors (for periods 1-6) are 1.0500, 1.1025, 1.1576, 1.2155, 1.2763, 1.3401 at 5%; 1.1000, 1.2100, 1.3310, 1.4641, 1.6105, 1.7716 at 10%; and 1.1500, 1.3225, 1.5209, 1.7490, 2.0114, 2.3131 at 15%. These factors should be used wherever needed in this section. A particular category of financing consists of unsecured loans that are not freely negotiable, where the name of the lender and the credit conditions are recorded. Which term describes this category of financing?

  52. May/Jun 2018, Q521 mark · multiple choice

    This section covers Financial Management. Two discounting-factor tables are supplied for the section: the present-value factors (for periods 1-6) are 0.9524, 0.9070, 0.8638, 0.8227, 0.7835, 0.7462 at 5%; 0.9091, 0.8264, 0.7513, 0.6830, 0.6209, 0.5645 at 10%; and 0.8696, 0.7561, 0.6575, 0.5718, 0.4972, 0.4323 at 15%. The future-value factors (for periods 1-6) are 1.0500, 1.1025, 1.1576, 1.2155, 1.2763, 1.3401 at 5%; 1.1000, 1.2100, 1.3310, 1.4641, 1.6105, 1.7716 at 10%; and 1.1500, 1.3225, 1.5209, 1.7490, 2.0114, 2.3131 at 15%. These factors should be used wherever needed in this section. Mosibudi is passionate about the South African motor industry and likes to invest his discretionary funds in the sector by buying shares. He has recently purchased shares from a well-known car dealership that give him preferential claims on profit after tax, as well as preferential claims on any of the business's assets should it be liquidated. What type of shares did Mosibudi buy?

  53. May/Jun 2018, Q531 mark · multiple choice

    This section covers Financial Management. Two discounting-factor tables are supplied for the section: the present-value factors (for periods 1-6) are 0.9524, 0.9070, 0.8638, 0.8227, 0.7835, 0.7462 at 5%; 0.9091, 0.8264, 0.7513, 0.6830, 0.6209, 0.5645 at 10%; and 0.8696, 0.7561, 0.6575, 0.5718, 0.4972, 0.4323 at 15%. The future-value factors (for periods 1-6) are 1.0500, 1.1025, 1.1576, 1.2155, 1.2763, 1.3401 at 5%; 1.1000, 1.2100, 1.3310, 1.4641, 1.6105, 1.7716 at 10%; and 1.1500, 1.3225, 1.5209, 1.7490, 2.0114, 2.3131 at 15%. These factors should be used wherever needed in this section. Suren is the financial manager of Exiplex, a company that manufactures Plexiglas for industrial use. Because Exiplex relies on large and expensive machinery during production, one of Suren's main responsibilities is to ensure there is enough finance available for this machinery. Suren prefers to use long-term funds to finance temporary current-asset requirements, since this is regarded as less risky. What type of short-term financing approach does Suren use at Exiplex?

  54. May/Jun 2018, Q541 mark · multiple choice

    This section covers Financial Management. Two discounting-factor tables are supplied for the section: the present-value factors (for periods 1-6) are 0.9524, 0.9070, 0.8638, 0.8227, 0.7835, 0.7462 at 5%; 0.9091, 0.8264, 0.7513, 0.6830, 0.6209, 0.5645 at 10%; and 0.8696, 0.7561, 0.6575, 0.5718, 0.4972, 0.4323 at 15%. The future-value factors (for periods 1-6) are 1.0500, 1.1025, 1.1576, 1.2155, 1.2763, 1.3401 at 5%; 1.1000, 1.2100, 1.3310, 1.4641, 1.6105, 1.7716 at 10%; and 1.1500, 1.3225, 1.5209, 1.7490, 2.0114, 2.3131 at 15%. These factors should be used wherever needed in this section. A particular banking arrangement allows a business to make payments from a cheque account even when this exceeds the balance held in that account. What is this arrangement called?

  55. May/Jun 2018, Q551 mark · multiple choice

    This section covers Financial Management. Two discounting-factor tables are supplied for the section: the present-value factors (for periods 1-6) are 0.9524, 0.9070, 0.8638, 0.8227, 0.7835, 0.7462 at 5%; 0.9091, 0.8264, 0.7513, 0.6830, 0.6209, 0.5645 at 10%; and 0.8696, 0.7561, 0.6575, 0.5718, 0.4972, 0.4323 at 15%. The future-value factors (for periods 1-6) are 1.0500, 1.1025, 1.1576, 1.2155, 1.2763, 1.3401 at 5%; 1.1000, 1.2100, 1.3310, 1.4641, 1.6105, 1.7716 at 10%; and 1.1500, 1.3225, 1.5209, 1.7490, 2.0114, 2.3131 at 15%. These factors should be used wherever needed in this section. Mandla works for Money Matters, a large financial institution that offers various financial services to businesses. Mandla is responsible for one of these services, in which he acts as an intermediary between savers—businesses with excess funds—and businesses experiencing a shortage of funds, within the financial market. Which financial service is Mandla responsible for?

  56. May/Jun 2018, Q561 mark · multiple choice

    This section covers Financial Management. Two discounting-factor tables are supplied for the section: the present-value factors (for periods 1-6) are 0.9524, 0.9070, 0.8638, 0.8227, 0.7835, 0.7462 at 5%; 0.9091, 0.8264, 0.7513, 0.6830, 0.6209, 0.5645 at 10%; and 0.8696, 0.7561, 0.6575, 0.5718, 0.4972, 0.4323 at 15%. The future-value factors (for periods 1-6) are 1.0500, 1.1025, 1.1576, 1.2155, 1.2763, 1.3401 at 5%; 1.1000, 1.2100, 1.3310, 1.4641, 1.6105, 1.7716 at 10%; and 1.1500, 1.3225, 1.5209, 1.7490, 2.0114, 2.3131 at 15%. These factors should be used wherever needed in this section. Adventure Trails offers city dwellers an ideal adventure escape from its large estate near Hartbeespoort Dam, providing various adrenaline-fuelled activities. The manager, Glen, wants to expand the range of activities and has asked for advice in choosing between two possible projects, both of which will use a 10% interest rate: constructing a bungee jump slide, requiring an initial investment of R21 000 with net cash flows of R3 800 in year 1, R4 200 in year 2, R5 300 in year 3 and R6 900 in year 4; and developing an obstacle course, requiring an initial investment of R12 000 with net cash flows of R2 800 in year 1, R3 200 in year 2, R4 600 in year 3 and R5 900 in year 4. Using the present-value discounting factors provided for the section, calculate the Net Present Value for the bungee jump slide and for the obstacle course, and select the option giving both values correctly (bungee jump NPV first, obstacle course NPV second).

  57. May/Jun 2015, Q431 mark · multiple choice

    This block forms the Financial Management section of the multiple-choice paper. Candidates must use the supplied discounting-factor tables (present value factors for 5%, 10% and 15% over periods 1–6, and future value factors for the same rates and periods) wherever needed. Questions 47 to 50 relate to a scenario about Sarah, who owns a perfume shop where she designs perfumes according to client preferences and has just finalised her 2014 financial statements: fixed assets of R550 000; current assets consisting of cash of R50 000, inventory of R20 000 and debtors of R100 000; shareholder's capital of R100 000; total debt of R200 000; and current liabilities of R100 000. Questions 55 and 56 relate to an extract from case study 1, 'Sustainability – South African Breweries', listing key statistics for the South African liquor industry in 2009: 4,053 billion litres of alcoholic beverages were sold; R62,5 billion was the value of total liquor sales at off-premise prices; 51% of total liquor sales came from malt beer; R60 million is invested annually in corporate social responsibility; and R10,2 billion in tax was paid in 2009. Identify which pair of items represents the most common expenses accrued by businesses.

  58. May/Jun 2015, Q441 mark · multiple choice

    This block forms the Financial Management section of the multiple-choice paper. Candidates must use the supplied discounting-factor tables (present value factors for 5%, 10% and 15% over periods 1–6, and future value factors for the same rates and periods) wherever needed. Questions 47 to 50 relate to a scenario about Sarah, who owns a perfume shop where she designs perfumes according to client preferences and has just finalised her 2014 financial statements: fixed assets of R550 000; current assets consisting of cash of R50 000, inventory of R20 000 and debtors of R100 000; shareholder's capital of R100 000; total debt of R200 000; and current liabilities of R100 000. Questions 55 and 56 relate to an extract from case study 1, 'Sustainability – South African Breweries', listing key statistics for the South African liquor industry in 2009: 4,053 billion litres of alcoholic beverages were sold; R62,5 billion was the value of total liquor sales at off-premise prices; 51% of total liquor sales came from malt beer; R60 million is invested annually in corporate social responsibility; and R10,2 billion in tax was paid in 2009. Share capital is used by a business as a source of long-term financing. On the balance sheet, how would this share capital be classified?

  59. May/Jun 2015, Q451 mark · multiple choice

    This block forms the Financial Management section of the multiple-choice paper. Candidates must use the supplied discounting-factor tables (present value factors for 5%, 10% and 15% over periods 1–6, and future value factors for the same rates and periods) wherever needed. Questions 47 to 50 relate to a scenario about Sarah, who owns a perfume shop where she designs perfumes according to client preferences and has just finalised her 2014 financial statements: fixed assets of R550 000; current assets consisting of cash of R50 000, inventory of R20 000 and debtors of R100 000; shareholder's capital of R100 000; total debt of R200 000; and current liabilities of R100 000. Questions 55 and 56 relate to an extract from case study 1, 'Sustainability – South African Breweries', listing key statistics for the South African liquor industry in 2009: 4,053 billion litres of alcoholic beverages were sold; R62,5 billion was the value of total liquor sales at off-premise prices; 51% of total liquor sales came from malt beer; R60 million is invested annually in corporate social responsibility; and R10,2 billion in tax was paid in 2009. Manke has just been appointed the new CEO of Classic Wedding Photography Ltd. The company is struggling financially because many clients do not pay for their services in advance, only paying once they have received their wedding photos, resulting in an extremely high level of bad debt. Manke has decided to dramatically change the credit period: clients will now have to pay within a month of services being rendered, with an additional 10% discount offered if full payment is made in advance. Which aspect of the company's financial management does this change form part of?

  60. May/Jun 2015, Q461 mark · multiple choice

    This block forms the Financial Management section of the multiple-choice paper. Candidates must use the supplied discounting-factor tables (present value factors for 5%, 10% and 15% over periods 1–6, and future value factors for the same rates and periods) wherever needed. Questions 47 to 50 relate to a scenario about Sarah, who owns a perfume shop where she designs perfumes according to client preferences and has just finalised her 2014 financial statements: fixed assets of R550 000; current assets consisting of cash of R50 000, inventory of R20 000 and debtors of R100 000; shareholder's capital of R100 000; total debt of R200 000; and current liabilities of R100 000. Questions 55 and 56 relate to an extract from case study 1, 'Sustainability – South African Breweries', listing key statistics for the South African liquor industry in 2009: 4,053 billion litres of alcoholic beverages were sold; R62,5 billion was the value of total liquor sales at off-premise prices; 51% of total liquor sales came from malt beer; R60 million is invested annually in corporate social responsibility; and R10,2 billion in tax was paid in 2009. Which one of the following formulas correctly calculates present value (PV), where FVn is the future value, i is the interest rate and n is the number of periods?

  61. May/Jun 2015, Q471 mark · multiple choice

    This block forms the Financial Management section of the multiple-choice paper. Candidates must use the supplied discounting-factor tables (present value factors for 5%, 10% and 15% over periods 1–6, and future value factors for the same rates and periods) wherever needed. Questions 47 to 50 relate to a scenario about Sarah, who owns a perfume shop where she designs perfumes according to client preferences and has just finalised her 2014 financial statements: fixed assets of R550 000; current assets consisting of cash of R50 000, inventory of R20 000 and debtors of R100 000; shareholder's capital of R100 000; total debt of R200 000; and current liabilities of R100 000. Questions 55 and 56 relate to an extract from case study 1, 'Sustainability – South African Breweries', listing key statistics for the South African liquor industry in 2009: 4,053 billion litres of alcoholic beverages were sold; R62,5 billion was the value of total liquor sales at off-premise prices; 51% of total liquor sales came from malt beer; R60 million is invested annually in corporate social responsibility; and R10,2 billion in tax was paid in 2009. Using Sarah's 2014 financial statements for her perfume shop — fixed assets of R550 000; current assets comprising cash of R50 000, inventory of R20 000 and debtors of R100 000; shareholder's capital of R100 000; total debt of R200 000; and current liabilities of R100 000 — calculate the acid-test ratio for Sarah's perfume shop.

  62. May/Jun 2015, Q481 mark · multiple choice

    This block forms the Financial Management section of the multiple-choice paper. Candidates must use the supplied discounting-factor tables (present value factors for 5%, 10% and 15% over periods 1–6, and future value factors for the same rates and periods) wherever needed. Questions 47 to 50 relate to a scenario about Sarah, who owns a perfume shop where she designs perfumes according to client preferences and has just finalised her 2014 financial statements: fixed assets of R550 000; current assets consisting of cash of R50 000, inventory of R20 000 and debtors of R100 000; shareholder's capital of R100 000; total debt of R200 000; and current liabilities of R100 000. Questions 55 and 56 relate to an extract from case study 1, 'Sustainability – South African Breweries', listing key statistics for the South African liquor industry in 2009: 4,053 billion litres of alcoholic beverages were sold; R62,5 billion was the value of total liquor sales at off-premise prices; 51% of total liquor sales came from malt beer; R60 million is invested annually in corporate social responsibility; and R10,2 billion in tax was paid in 2009. Using the same 2014 financial statements for Sarah's perfume shop — fixed assets of R550 000; current assets comprising cash of R50 000, inventory of R20 000 and debtors of R100 000; shareholder's capital of R100 000; total debt of R200 000; and current liabilities of R100 000 — calculate the debt ratio (rounded up) for Sarah's perfume shop.

  63. May/Jun 2015, Q491 mark · multiple choice

    This block forms the Financial Management section of the multiple-choice paper. Candidates must use the supplied discounting-factor tables (present value factors for 5%, 10% and 15% over periods 1–6, and future value factors for the same rates and periods) wherever needed. Questions 47 to 50 relate to a scenario about Sarah, who owns a perfume shop where she designs perfumes according to client preferences and has just finalised her 2014 financial statements: fixed assets of R550 000; current assets consisting of cash of R50 000, inventory of R20 000 and debtors of R100 000; shareholder's capital of R100 000; total debt of R200 000; and current liabilities of R100 000. Questions 55 and 56 relate to an extract from case study 1, 'Sustainability – South African Breweries', listing key statistics for the South African liquor industry in 2009: 4,053 billion litres of alcoholic beverages were sold; R62,5 billion was the value of total liquor sales at off-premise prices; 51% of total liquor sales came from malt beer; R60 million is invested annually in corporate social responsibility; and R10,2 billion in tax was paid in 2009. If Sarah wants to review her perfume shop's activities and priorities afresh on an annual basis, which budgeting approach would she be using?

  64. May/Jun 2015, Q501 mark · multiple choice

    This block forms the Financial Management section of the multiple-choice paper. Candidates must use the supplied discounting-factor tables (present value factors for 5%, 10% and 15% over periods 1–6, and future value factors for the same rates and periods) wherever needed. Questions 47 to 50 relate to a scenario about Sarah, who owns a perfume shop where she designs perfumes according to client preferences and has just finalised her 2014 financial statements: fixed assets of R550 000; current assets consisting of cash of R50 000, inventory of R20 000 and debtors of R100 000; shareholder's capital of R100 000; total debt of R200 000; and current liabilities of R100 000. Questions 55 and 56 relate to an extract from case study 1, 'Sustainability – South African Breweries', listing key statistics for the South African liquor industry in 2009: 4,053 billion litres of alcoholic beverages were sold; R62,5 billion was the value of total liquor sales at off-premise prices; 51% of total liquor sales came from malt beer; R60 million is invested annually in corporate social responsibility; and R10,2 billion in tax was paid in 2009. Sarah's signature perfume, Living Green, won an award during 2014, and the prize money of $20 000 was paid into her personal account. She decides to use this money to start another perfume shop. Considering other possible sources of financing she could have used to start the new shop besides the prize money, which combination of the following is correct: (a) loans from friends and relatives; (b) taking in partners; (c) loans or credit from equipment sellers; (d) selling capital shares?

  65. May/Jun 2015, Q511 mark · multiple choice

    This block forms the Financial Management section of the multiple-choice paper. Candidates must use the supplied discounting-factor tables (present value factors for 5%, 10% and 15% over periods 1–6, and future value factors for the same rates and periods) wherever needed. Questions 47 to 50 relate to a scenario about Sarah, who owns a perfume shop where she designs perfumes according to client preferences and has just finalised her 2014 financial statements: fixed assets of R550 000; current assets consisting of cash of R50 000, inventory of R20 000 and debtors of R100 000; shareholder's capital of R100 000; total debt of R200 000; and current liabilities of R100 000. Questions 55 and 56 relate to an extract from case study 1, 'Sustainability – South African Breweries', listing key statistics for the South African liquor industry in 2009: 4,053 billion litres of alcoholic beverages were sold; R62,5 billion was the value of total liquor sales at off-premise prices; 51% of total liquor sales came from malt beer; R60 million is invested annually in corporate social responsibility; and R10,2 billion in tax was paid in 2009. Which one of the following costs is classified as a variable cost?

  66. May/Jun 2015, Q521 mark · multiple choice

    This block forms the Financial Management section of the multiple-choice paper. Candidates must use the supplied discounting-factor tables (present value factors for 5%, 10% and 15% over periods 1–6, and future value factors for the same rates and periods) wherever needed. Questions 47 to 50 relate to a scenario about Sarah, who owns a perfume shop where she designs perfumes according to client preferences and has just finalised her 2014 financial statements: fixed assets of R550 000; current assets consisting of cash of R50 000, inventory of R20 000 and debtors of R100 000; shareholder's capital of R100 000; total debt of R200 000; and current liabilities of R100 000. Questions 55 and 56 relate to an extract from case study 1, 'Sustainability – South African Breweries', listing key statistics for the South African liquor industry in 2009: 4,053 billion litres of alcoholic beverages were sold; R62,5 billion was the value of total liquor sales at off-premise prices; 51% of total liquor sales came from malt beer; R60 million is invested annually in corporate social responsibility; and R10,2 billion in tax was paid in 2009. The process used to calculate future values is known as ____, while the process used to calculate present values is known as ____. Select the pair that correctly completes the statement.

  67. May/Jun 2015, Q531 mark · multiple choice

    This block forms the Financial Management section of the multiple-choice paper. Candidates must use the supplied discounting-factor tables (present value factors for 5%, 10% and 15% over periods 1–6, and future value factors for the same rates and periods) wherever needed. Questions 47 to 50 relate to a scenario about Sarah, who owns a perfume shop where she designs perfumes according to client preferences and has just finalised her 2014 financial statements: fixed assets of R550 000; current assets consisting of cash of R50 000, inventory of R20 000 and debtors of R100 000; shareholder's capital of R100 000; total debt of R200 000; and current liabilities of R100 000. Questions 55 and 56 relate to an extract from case study 1, 'Sustainability – South African Breweries', listing key statistics for the South African liquor industry in 2009: 4,053 billion litres of alcoholic beverages were sold; R62,5 billion was the value of total liquor sales at off-premise prices; 51% of total liquor sales came from malt beer; R60 million is invested annually in corporate social responsibility; and R10,2 billion in tax was paid in 2009. In the ____ approach, the financial manager uses more short-term financing and partially finances permanent current assets with short-term funds instead of relying on long-term funds only. Which approach is being described?

  68. May/Jun 2015, Q541 mark · multiple choice

    This block forms the Financial Management section of the multiple-choice paper. Candidates must use the supplied discounting-factor tables (present value factors for 5%, 10% and 15% over periods 1–6, and future value factors for the same rates and periods) wherever needed. Questions 47 to 50 relate to a scenario about Sarah, who owns a perfume shop where she designs perfumes according to client preferences and has just finalised her 2014 financial statements: fixed assets of R550 000; current assets consisting of cash of R50 000, inventory of R20 000 and debtors of R100 000; shareholder's capital of R100 000; total debt of R200 000; and current liabilities of R100 000. Questions 55 and 56 relate to an extract from case study 1, 'Sustainability – South African Breweries', listing key statistics for the South African liquor industry in 2009: 4,053 billion litres of alcoholic beverages were sold; R62,5 billion was the value of total liquor sales at off-premise prices; 51% of total liquor sales came from malt beer; R60 million is invested annually in corporate social responsibility; and R10,2 billion in tax was paid in 2009. Calculate the gearing ratio using the following figures: gross profit of R3 500; owners' equity of R8 500; current assets of R5 500; debt of R5 000; and current liabilities of R2 500.

  69. May/Jun 2015, Q551 mark · multiple choice

    This block forms the Financial Management section of the multiple-choice paper. Candidates must use the supplied discounting-factor tables (present value factors for 5%, 10% and 15% over periods 1–6, and future value factors for the same rates and periods) wherever needed. Questions 47 to 50 relate to a scenario about Sarah, who owns a perfume shop where she designs perfumes according to client preferences and has just finalised her 2014 financial statements: fixed assets of R550 000; current assets consisting of cash of R50 000, inventory of R20 000 and debtors of R100 000; shareholder's capital of R100 000; total debt of R200 000; and current liabilities of R100 000. Questions 55 and 56 relate to an extract from case study 1, 'Sustainability – South African Breweries', listing key statistics for the South African liquor industry in 2009: 4,053 billion litres of alcoholic beverages were sold; R62,5 billion was the value of total liquor sales at off-premise prices; 51% of total liquor sales came from malt beer; R60 million is invested annually in corporate social responsibility; and R10,2 billion in tax was paid in 2009. According to the extract from case study 1, 'Sustainability – South African Breweries', 51% of South Africa's liquor sales in 2009 came from malt beer. Malt beer retails for R15 a bottle, with a variable cost of R4,50 per bottle, and the fixed cost of producing malt beer is R625 000 per annum. If SAB sold 61 520 bottles of malt beer in 2009, what profit did they make on their malt beer sales?

  70. May/Jun 2015, Q561 mark · multiple choice

    This block forms the Financial Management section of the multiple-choice paper. Candidates must use the supplied discounting-factor tables (present value factors for 5%, 10% and 15% over periods 1–6, and future value factors for the same rates and periods) wherever needed. Questions 47 to 50 relate to a scenario about Sarah, who owns a perfume shop where she designs perfumes according to client preferences and has just finalised her 2014 financial statements: fixed assets of R550 000; current assets consisting of cash of R50 000, inventory of R20 000 and debtors of R100 000; shareholder's capital of R100 000; total debt of R200 000; and current liabilities of R100 000. Questions 55 and 56 relate to an extract from case study 1, 'Sustainability – South African Breweries', listing key statistics for the South African liquor industry in 2009: 4,053 billion litres of alcoholic beverages were sold; R62,5 billion was the value of total liquor sales at off-premise prices; 51% of total liquor sales came from malt beer; R60 million is invested annually in corporate social responsibility; and R10,2 billion in tax was paid in 2009. According to the case study extract, R60 million is invested annually by SAB in corporate social investments. SAB decides to invest R800 000 in a long-term investment account bearing interest at 15% per annum, with the money to be used exclusively to pay the university fees of some of their employees' children. If the children only enrol for their first year at university in six years' time, how much money will be in the fund at that point?

  71. Oct/Nov 2014, Q431 mark · multiple choice

    This section covers Financial Management. Two discounting-factor tables are supplied for present-value and future-value calculations at 5%, 10% and 15% over periods 1 to 5 (present-value factors: year1 0.9524/0.9091/0.8696; year2 0.9070/0.8264/0.7561; year3 0.8638/0.7513/0.6575; year4 0.8227/0.6830/0.5718; year5 0.7835/0.6209/0.4972; future-value factors: year1 1.0500/1.1000/1.1500; year2 1.1025/1.2100/1.3225; year3 1.1576/1.3310/1.5209; year4 1.2155/1.4641/1.7490; year5 1.2763/1.6105/2.0114). Several questions are based on short scenarios: an extract from Case Study 10 on International Business Machines Corporation (IBM), a scenario about Sarah who owns a perfume shop, financial data for XYZ Enterprises for the year ended 2014, a scenario about Sarah's leather-shoe factory (Brinx) leasing a machine from Stretch Unlimited, and a scenario about Google. In his 2010 chairperson's letter for IBM, Mr Palmisano wrote that IBM had another strong year, outperforming the industry and market, with record pre-tax earnings, record earnings per share, record free cash flow and improved profit margins alongside increased revenue. Given that IBM reported a record free cash flow for the 2010 financial year, and that the cash flow statement tracks the movement of money into and out of the business, it is important for a business to keep enough cash available to deal with any unforeseen circumstances. This need to hold cash for such contingencies is known as the ________ motive. Choose the correct word to fill the blank.

  72. Oct/Nov 2014, Q441 mark · multiple choice

    This section covers Financial Management. Two discounting-factor tables are supplied for present-value and future-value calculations at 5%, 10% and 15% over periods 1 to 5 (present-value factors: year1 0.9524/0.9091/0.8696; year2 0.9070/0.8264/0.7561; year3 0.8638/0.7513/0.6575; year4 0.8227/0.6830/0.5718; year5 0.7835/0.6209/0.4972; future-value factors: year1 1.0500/1.1000/1.1500; year2 1.1025/1.2100/1.3225; year3 1.1576/1.3310/1.5209; year4 1.2155/1.4641/1.7490; year5 1.2763/1.6105/2.0114). Several questions are based on short scenarios: an extract from Case Study 10 on International Business Machines Corporation (IBM), a scenario about Sarah who owns a perfume shop, financial data for XYZ Enterprises for the year ended 2014, a scenario about Sarah's leather-shoe factory (Brinx) leasing a machine from Stretch Unlimited, and a scenario about Google. Referring to the same IBM extract, which one of the following ratio formulas would IBM have used to calculate the gross profit margin?

  73. Oct/Nov 2014, Q451 mark · multiple choice

    This section covers Financial Management. Two discounting-factor tables are supplied for present-value and future-value calculations at 5%, 10% and 15% over periods 1 to 5 (present-value factors: year1 0.9524/0.9091/0.8696; year2 0.9070/0.8264/0.7561; year3 0.8638/0.7513/0.6575; year4 0.8227/0.6830/0.5718; year5 0.7835/0.6209/0.4972; future-value factors: year1 1.0500/1.1000/1.1500; year2 1.1025/1.2100/1.3225; year3 1.1576/1.3310/1.5209; year4 1.2155/1.4641/1.7490; year5 1.2763/1.6105/2.0114). Several questions are based on short scenarios: an extract from Case Study 10 on International Business Machines Corporation (IBM), a scenario about Sarah who owns a perfume shop, financial data for XYZ Enterprises for the year ended 2014, a scenario about Sarah's leather-shoe factory (Brinx) leasing a machine from Stretch Unlimited, and a scenario about Google. Using the supplied present-value discounting-factor table, calculate the total present value of a series of cash flows received at the end of each year, discounted at an interest rate of 10%. The cash flows are R3 000 received at the end of year 1, R2 000 received at the end of year 2, and R5 000 received at the end of year 3.

  74. Oct/Nov 2014, Q461 mark · multiple choice

    This section covers Financial Management. Two discounting-factor tables are supplied for present-value and future-value calculations at 5%, 10% and 15% over periods 1 to 5 (present-value factors: year1 0.9524/0.9091/0.8696; year2 0.9070/0.8264/0.7561; year3 0.8638/0.7513/0.6575; year4 0.8227/0.6830/0.5718; year5 0.7835/0.6209/0.4972; future-value factors: year1 1.0500/1.1000/1.1500; year2 1.1025/1.2100/1.3225; year3 1.1576/1.3310/1.5209; year4 1.2155/1.4641/1.7490; year5 1.2763/1.6105/2.0114). Several questions are based on short scenarios: an extract from Case Study 10 on International Business Machines Corporation (IBM), a scenario about Sarah who owns a perfume shop, financial data for XYZ Enterprises for the year ended 2014, a scenario about Sarah's leather-shoe factory (Brinx) leasing a machine from Stretch Unlimited, and a scenario about Google. Consider the following four statements about financial ratios: (a) the acid test ratio should be used in combination with the current ratio; (b) the current ratio reflects the relationship between the value of current assets and the extent of current liabilities; (c) the liquidity ratio indicates the ability of the business to repay its debts from the sale of its assets upon liquidation; (d) the solvency ratio provides an indication of the ability of a business to meet its short-term obligations as they become due without curtailing or ceasing its normal activities. Which combination of these statements is correct?

  75. Oct/Nov 2014, Q471 mark · multiple choice

    This section covers Financial Management. Two discounting-factor tables are supplied for present-value and future-value calculations at 5%, 10% and 15% over periods 1 to 5 (present-value factors: year1 0.9524/0.9091/0.8696; year2 0.9070/0.8264/0.7561; year3 0.8638/0.7513/0.6575; year4 0.8227/0.6830/0.5718; year5 0.7835/0.6209/0.4972; future-value factors: year1 1.0500/1.1000/1.1500; year2 1.1025/1.2100/1.3225; year3 1.1576/1.3310/1.5209; year4 1.2155/1.4641/1.7490; year5 1.2763/1.6105/2.0114). Several questions are based on short scenarios: an extract from Case Study 10 on International Business Machines Corporation (IBM), a scenario about Sarah who owns a perfume shop, financial data for XYZ Enterprises for the year ended 2014, a scenario about Sarah's leather-shoe factory (Brinx) leasing a machine from Stretch Unlimited, and a scenario about Google. Sarah runs her own perfume shop where she designs perfumes according to client preferences. While preparing her financial analysis for the past financial year, she recorded the following figures: a sales price of R260 per bottle, a variable cost of R75 per bottle, total fixed costs of R40 000 per annum, and 520 bottles manufactured and sold during the year. Based on this information, calculate the profit Sarah would make for the financial year.

  76. Oct/Nov 2014, Q481 mark · multiple choice

    This section covers Financial Management. Two discounting-factor tables are supplied for present-value and future-value calculations at 5%, 10% and 15% over periods 1 to 5 (present-value factors: year1 0.9524/0.9091/0.8696; year2 0.9070/0.8264/0.7561; year3 0.8638/0.7513/0.6575; year4 0.8227/0.6830/0.5718; year5 0.7835/0.6209/0.4972; future-value factors: year1 1.0500/1.1000/1.1500; year2 1.1025/1.2100/1.3225; year3 1.1576/1.3310/1.5209; year4 1.2155/1.4641/1.7490; year5 1.2763/1.6105/2.0114). Several questions are based on short scenarios: an extract from Case Study 10 on International Business Machines Corporation (IBM), a scenario about Sarah who owns a perfume shop, financial data for XYZ Enterprises for the year ended 2014, a scenario about Sarah's leather-shoe factory (Brinx) leasing a machine from Stretch Unlimited, and a scenario about Google. Using the same figures for Sarah's perfume shop (sales price R260 per bottle, variable cost R75 per bottle, total fixed cost R40 000 per annum, and 520 bottles manufactured and sold for the year), and given that Sarah is expecting a decline in sales due to the economic recession, calculate the break-even point in bottles that Sarah must reach. Round your answer up to the nearest whole unit.

  77. Oct/Nov 2014, Q491 mark · multiple choice

    This section covers Financial Management. Two discounting-factor tables are supplied for present-value and future-value calculations at 5%, 10% and 15% over periods 1 to 5 (present-value factors: year1 0.9524/0.9091/0.8696; year2 0.9070/0.8264/0.7561; year3 0.8638/0.7513/0.6575; year4 0.8227/0.6830/0.5718; year5 0.7835/0.6209/0.4972; future-value factors: year1 1.0500/1.1000/1.1500; year2 1.1025/1.2100/1.3225; year3 1.1576/1.3310/1.5209; year4 1.2155/1.4641/1.7490; year5 1.2763/1.6105/2.0114). Several questions are based on short scenarios: an extract from Case Study 10 on International Business Machines Corporation (IBM), a scenario about Sarah who owns a perfume shop, financial data for XYZ Enterprises for the year ended 2014, a scenario about Sarah's leather-shoe factory (Brinx) leasing a machine from Stretch Unlimited, and a scenario about Google. Match each element in Column A with the corresponding element in Column B. Column A lists: (a) environmental factor, (b) task of financial management, (c) non-current asset, and (d) current asset. Column B lists: (i) machinery, (ii) incentive measures, (iii) debtors, and (iv) financial analysis. Select the option that correctly pairs each letter in Column A with its matching Roman numeral in Column B.

  78. Oct/Nov 2014, Q501 mark · multiple choice

    This section covers Financial Management. Two discounting-factor tables are supplied for present-value and future-value calculations at 5%, 10% and 15% over periods 1 to 5 (present-value factors: year1 0.9524/0.9091/0.8696; year2 0.9070/0.8264/0.7561; year3 0.8638/0.7513/0.6575; year4 0.8227/0.6830/0.5718; year5 0.7835/0.6209/0.4972; future-value factors: year1 1.0500/1.1000/1.1500; year2 1.1025/1.2100/1.3225; year3 1.1576/1.3310/1.5209; year4 1.2155/1.4641/1.7490; year5 1.2763/1.6105/2.0114). Several questions are based on short scenarios: an extract from Case Study 10 on International Business Machines Corporation (IBM), a scenario about Sarah who owns a perfume shop, financial data for XYZ Enterprises for the year ended 2014, a scenario about Sarah's leather-shoe factory (Brinx) leasing a machine from Stretch Unlimited, and a scenario about Google. The Khula Equity Scheme provides equity and loan capital to potentially high-growth small companies. As a source of financing for small businesses, into which category would the Khula Equity Scheme be classified?

  79. Oct/Nov 2014, Q511 mark · multiple choice

    This section covers Financial Management. Two discounting-factor tables are supplied for present-value and future-value calculations at 5%, 10% and 15% over periods 1 to 5 (present-value factors: year1 0.9524/0.9091/0.8696; year2 0.9070/0.8264/0.7561; year3 0.8638/0.7513/0.6575; year4 0.8227/0.6830/0.5718; year5 0.7835/0.6209/0.4972; future-value factors: year1 1.0500/1.1000/1.1500; year2 1.1025/1.2100/1.3225; year3 1.1576/1.3310/1.5209; year4 1.2155/1.4641/1.7490; year5 1.2763/1.6105/2.0114). Several questions are based on short scenarios: an extract from Case Study 10 on International Business Machines Corporation (IBM), a scenario about Sarah who owns a perfume shop, financial data for XYZ Enterprises for the year ended 2014, a scenario about Sarah's leather-shoe factory (Brinx) leasing a machine from Stretch Unlimited, and a scenario about Google. Sarah owns a large factory that manufactures high-quality leather shoes known as Brinx, which are exported worldwide. The machine used to stretch the leather before it is made into shoes is leased from Stretch Unlimited under a contract stating that once the lease period ends, Sarah will become the owner of the machine. This arrangement forms part of a non-terminative agreement between Sarah and Stretch Unlimited. This type of arrangement is known as ________, which is a form of ________ debt. Fill in the two blanks using the correct pair of terms.

  80. Oct/Nov 2014, Q521 mark · multiple choice

    This section covers Financial Management. Two discounting-factor tables are supplied for present-value and future-value calculations at 5%, 10% and 15% over periods 1 to 5 (present-value factors: year1 0.9524/0.9091/0.8696; year2 0.9070/0.8264/0.7561; year3 0.8638/0.7513/0.6575; year4 0.8227/0.6830/0.5718; year5 0.7835/0.6209/0.4972; future-value factors: year1 1.0500/1.1000/1.1500; year2 1.1025/1.2100/1.3225; year3 1.1576/1.3310/1.5209; year4 1.2155/1.4641/1.7490; year5 1.2763/1.6105/2.0114). Several questions are based on short scenarios: an extract from Case Study 10 on International Business Machines Corporation (IBM), a scenario about Sarah who owns a perfume shop, financial data for XYZ Enterprises for the year ended 2014, a scenario about Sarah's leather-shoe factory (Brinx) leasing a machine from Stretch Unlimited, and a scenario about Google. ________ shares are issued to the owners of a business, but they may differ in value. Which term correctly completes this statement?

  81. Oct/Nov 2014, Q531 mark · multiple choice

    This section covers Financial Management. Two discounting-factor tables are supplied for present-value and future-value calculations at 5%, 10% and 15% over periods 1 to 5 (present-value factors: year1 0.9524/0.9091/0.8696; year2 0.9070/0.8264/0.7561; year3 0.8638/0.7513/0.6575; year4 0.8227/0.6830/0.5718; year5 0.7835/0.6209/0.4972; future-value factors: year1 1.0500/1.1000/1.1500; year2 1.1025/1.2100/1.3225; year3 1.1576/1.3310/1.5209; year4 1.2155/1.4641/1.7490; year5 1.2763/1.6105/2.0114). Several questions are based on short scenarios: an extract from Case Study 10 on International Business Machines Corporation (IBM), a scenario about Sarah who owns a perfume shop, financial data for XYZ Enterprises for the year ended 2014, a scenario about Sarah's leather-shoe factory (Brinx) leasing a machine from Stretch Unlimited, and a scenario about Google. The net present value (NPV) method helps a company decide whether or not to pursue certain investment opportunities. If a large shopping mall's project is found to have an NPV of 1 340, which one of the following would represent the correct decision criteria and reasoning?

  82. Oct/Nov 2014, Q541 mark · multiple choice

    This section covers Financial Management. Two discounting-factor tables are supplied for present-value and future-value calculations at 5%, 10% and 15% over periods 1 to 5 (present-value factors: year1 0.9524/0.9091/0.8696; year2 0.9070/0.8264/0.7561; year3 0.8638/0.7513/0.6575; year4 0.8227/0.6830/0.5718; year5 0.7835/0.6209/0.4972; future-value factors: year1 1.0500/1.1000/1.1500; year2 1.1025/1.2100/1.3225; year3 1.1576/1.3310/1.5209; year4 1.2155/1.4641/1.7490; year5 1.2763/1.6105/2.0114). Several questions are based on short scenarios: an extract from Case Study 10 on International Business Machines Corporation (IBM), a scenario about Sarah who owns a perfume shop, financial data for XYZ Enterprises for the year ended 2014, a scenario about Sarah's leather-shoe factory (Brinx) leasing a machine from Stretch Unlimited, and a scenario about Google. XYZ Enterprises reported the following financial data for the year ended 2014: current assets R1 300 000; current liabilities R550 000; inventory R551 000; cost of sales R3 480 000; total debt R993 000; total assets R1 797 000; owner's equity R895 000; gross profit R540 000; and sales R3 840 000. Using this data, calculate XYZ Enterprises' debt ratio, rounded up.

  83. Oct/Nov 2014, Q551 mark · multiple choice

    This section covers Financial Management. Two discounting-factor tables are supplied for present-value and future-value calculations at 5%, 10% and 15% over periods 1 to 5 (present-value factors: year1 0.9524/0.9091/0.8696; year2 0.9070/0.8264/0.7561; year3 0.8638/0.7513/0.6575; year4 0.8227/0.6830/0.5718; year5 0.7835/0.6209/0.4972; future-value factors: year1 1.0500/1.1000/1.1500; year2 1.1025/1.2100/1.3225; year3 1.1576/1.3310/1.5209; year4 1.2155/1.4641/1.7490; year5 1.2763/1.6105/2.0114). Several questions are based on short scenarios: an extract from Case Study 10 on International Business Machines Corporation (IBM), a scenario about Sarah who owns a perfume shop, financial data for XYZ Enterprises for the year ended 2014, a scenario about Sarah's leather-shoe factory (Brinx) leasing a machine from Stretch Unlimited, and a scenario about Google. Using the same financial data for XYZ Enterprises for the year ended 2014 (current assets R1 300 000; current liabilities R550 000; inventory R551 000; cost of sales R3 480 000; total debt R993 000; total assets R1 797 000; owner's equity R895 000; gross profit R540 000; sales R3 840 000), calculate XYZ Enterprises' gearing ratio.

  84. Oct/Nov 2014, Q561 mark · multiple choice

    This section covers Financial Management. Two discounting-factor tables are supplied for present-value and future-value calculations at 5%, 10% and 15% over periods 1 to 5 (present-value factors: year1 0.9524/0.9091/0.8696; year2 0.9070/0.8264/0.7561; year3 0.8638/0.7513/0.6575; year4 0.8227/0.6830/0.5718; year5 0.7835/0.6209/0.4972; future-value factors: year1 1.0500/1.1000/1.1500; year2 1.1025/1.2100/1.3225; year3 1.1576/1.3310/1.5209; year4 1.2155/1.4641/1.7490; year5 1.2763/1.6105/2.0114). Several questions are based on short scenarios: an extract from Case Study 10 on International Business Machines Corporation (IBM), a scenario about Sarah who owns a perfume shop, financial data for XYZ Enterprises for the year ended 2014, a scenario about Sarah's leather-shoe factory (Brinx) leasing a machine from Stretch Unlimited, and a scenario about Google. Google currently employs around 1 000 people, including brilliant mathematicians, engineers and technologists. If a new project is launched that requires an additional 500 employees, which one of the following statements would be correct?

  85. May/Jun 2014, Q431 mark · multiple choice

    This block covers the Financial Management section. Two reference tables of discounting factors are supplied for present values and future values, each listed for periods 1 to 5 at 5%, 10% and 15% interest. The present-value discounting factors are: period 1 - 0,9524 (5%), 0,9091 (10%), 0,8696 (15%); period 2 - 0,9070, 0,8264, 0,7561; period 3 - 0,8638, 0,7513, 0,6575; period 4 - 0,8227, 0,6830, 0,5718; period 5 - 0,7835, 0,6209, 0,4972. The future-value discounting factors are: period 1 - 1,0500, 1,1000, 1,1500; period 2 - 1,1025, 1,2100, 1,3225; period 3 - 1,1576, 1,3310, 1,5209; period 4 - 1,2155, 1,4641, 1,7490; period 5 - 1,2763, 1,6105, 2,0114. Candidates should use these tables where needed to answer the questions below. You are given data on two capital projects, both discounted at 10%. Project X requires an initial investment of R100 000 and Project Y requires R180 000. Project X's net cash flows are R20 000 at T=1, R30 000 at T=2, R50 000 at T=3 and R10 000 at T=4 (printed as T=3 in the table). Project Y's net cash flows are R90 000 at T=1, R150 000 at T=2, R60 000 at T=3 and R30 000 at T=4 (also printed as T=3). What are the net present values (NPV) for Project X and Project Y respectively?

  86. May/Jun 2014, Q441 mark · multiple choice

    This block covers the Financial Management section. Two reference tables of discounting factors are supplied for present values and future values, each listed for periods 1 to 5 at 5%, 10% and 15% interest. The present-value discounting factors are: period 1 - 0,9524 (5%), 0,9091 (10%), 0,8696 (15%); period 2 - 0,9070, 0,8264, 0,7561; period 3 - 0,8638, 0,7513, 0,6575; period 4 - 0,8227, 0,6830, 0,5718; period 5 - 0,7835, 0,6209, 0,4972. The future-value discounting factors are: period 1 - 1,0500, 1,1000, 1,1500; period 2 - 1,1025, 1,2100, 1,3225; period 3 - 1,1576, 1,3310, 1,5209; period 4 - 1,2155, 1,4641, 1,7490; period 5 - 1,2763, 1,6105, 2,0114. Candidates should use these tables where needed to answer the questions below. Donald deposits money into an account earning 10% annual interest: R1 000 at the beginning of year 1, R2 000 at the beginning of year 2, and R800 at the beginning of year 4. How much will Donald have accumulated by the end of year 5?

  87. May/Jun 2014, Q451 mark · multiple choice

    This block covers the Financial Management section. Two reference tables of discounting factors are supplied for present values and future values, each listed for periods 1 to 5 at 5%, 10% and 15% interest. The present-value discounting factors are: period 1 - 0,9524 (5%), 0,9091 (10%), 0,8696 (15%); period 2 - 0,9070, 0,8264, 0,7561; period 3 - 0,8638, 0,7513, 0,6575; period 4 - 0,8227, 0,6830, 0,5718; period 5 - 0,7835, 0,6209, 0,4972. The future-value discounting factors are: period 1 - 1,0500, 1,1000, 1,1500; period 2 - 1,1025, 1,2100, 1,3225; period 3 - 1,1576, 1,3310, 1,5209; period 4 - 1,2155, 1,4641, 1,7490; period 5 - 1,2763, 1,6105, 2,0114. Candidates should use these tables where needed to answer the questions below. Read the extract from case study 10 on International Business Machines Corporation (IBM): in 1991 IBM's revenues approached $67 billion; although profits had dropped slightly from the 1984 peak of $6.5 billion, its common stock still commanded a price-earnings ratio of over 100. Four years later, in 1993, IBM was among the biggest loss-makers in corporate history, reporting a record $5.46 billion loss for the fourth quarter of 1992 (announced on 19 January 1993). Given that IBM noted revenue (income) of $67 billion in 1991, which formula would they have used to calculate this figure?

  88. May/Jun 2014, Q461 mark · multiple choice

    This block covers the Financial Management section. Two reference tables of discounting factors are supplied for present values and future values, each listed for periods 1 to 5 at 5%, 10% and 15% interest. The present-value discounting factors are: period 1 - 0,9524 (5%), 0,9091 (10%), 0,8696 (15%); period 2 - 0,9070, 0,8264, 0,7561; period 3 - 0,8638, 0,7513, 0,6575; period 4 - 0,8227, 0,6830, 0,5718; period 5 - 0,7835, 0,6209, 0,4972. The future-value discounting factors are: period 1 - 1,0500, 1,1000, 1,1500; period 2 - 1,1025, 1,2100, 1,3225; period 3 - 1,1576, 1,3310, 1,5209; period 4 - 1,2155, 1,4641, 1,7490; period 5 - 1,2763, 1,6105, 2,0114. Candidates should use these tables where needed to answer the questions below. Continuing with the IBM case study, in 1993 IBM was one of the biggest loss-makers in corporate history. A loss results when a certain figure exceeds another. Which pair of terms correctly completes the statement 'a loss results when the ___ exceeds the ___'?

  89. May/Jun 2014, Q471 mark · multiple choice

    This block covers the Financial Management section. Two reference tables of discounting factors are supplied for present values and future values, each listed for periods 1 to 5 at 5%, 10% and 15% interest. The present-value discounting factors are: period 1 - 0,9524 (5%), 0,9091 (10%), 0,8696 (15%); period 2 - 0,9070, 0,8264, 0,7561; period 3 - 0,8638, 0,7513, 0,6575; period 4 - 0,8227, 0,6830, 0,5718; period 5 - 0,7835, 0,6209, 0,4972. The future-value discounting factors are: period 1 - 1,0500, 1,1000, 1,1500; period 2 - 1,1025, 1,2100, 1,3225; period 3 - 1,1576, 1,3310, 1,5209; period 4 - 1,2155, 1,4641, 1,7490; period 5 - 1,2763, 1,6105, 2,0114. Candidates should use these tables where needed to answer the questions below. The financial manager of B Boost Ltd wants to use more long-term funds to finance the company's current assets. Which approach would be appropriate for this strategy - a/an ___ approach?

  90. May/Jun 2014, Q481 mark · multiple choice

    This block covers the Financial Management section. Two reference tables of discounting factors are supplied for present values and future values, each listed for periods 1 to 5 at 5%, 10% and 15% interest. The present-value discounting factors are: period 1 - 0,9524 (5%), 0,9091 (10%), 0,8696 (15%); period 2 - 0,9070, 0,8264, 0,7561; period 3 - 0,8638, 0,7513, 0,6575; period 4 - 0,8227, 0,6830, 0,5718; period 5 - 0,7835, 0,6209, 0,4972. The future-value discounting factors are: period 1 - 1,0500, 1,1000, 1,1500; period 2 - 1,1025, 1,2100, 1,3225; period 3 - 1,1576, 1,3310, 1,5209; period 4 - 1,2155, 1,4641, 1,7490; period 5 - 1,2763, 1,6105, 2,0114. Candidates should use these tables where needed to answer the questions below. Edcon's Edgars stores need cash in their registers to process customers' cash transactions. Which one of the following would represent a cost of holding cash for Edcon?

  91. May/Jun 2014, Q491 mark · multiple choice

    This block covers the Financial Management section. Two reference tables of discounting factors are supplied for present values and future values, each listed for periods 1 to 5 at 5%, 10% and 15% interest. The present-value discounting factors are: period 1 - 0,9524 (5%), 0,9091 (10%), 0,8696 (15%); period 2 - 0,9070, 0,8264, 0,7561; period 3 - 0,8638, 0,7513, 0,6575; period 4 - 0,8227, 0,6830, 0,5718; period 5 - 0,7835, 0,6209, 0,4972. The future-value discounting factors are: period 1 - 1,0500, 1,1000, 1,1500; period 2 - 1,1025, 1,2100, 1,3225; period 3 - 1,1576, 1,3310, 1,5209; period 4 - 1,2155, 1,4641, 1,7490; period 5 - 1,2763, 1,6105, 2,0114. Candidates should use these tables where needed to answer the questions below. Toyota's production process focuses on efficiency, which requires accurately measuring outputs. These outputs include the material and labour costs of each production item, as well as estimated overhead costs. Which budget would you recommend Toyota use to measure this efficiency?

  92. May/Jun 2014, Q501 mark · multiple choice

    This block covers the Financial Management section. Two reference tables of discounting factors are supplied for present values and future values, each listed for periods 1 to 5 at 5%, 10% and 15% interest. The present-value discounting factors are: period 1 - 0,9524 (5%), 0,9091 (10%), 0,8696 (15%); period 2 - 0,9070, 0,8264, 0,7561; period 3 - 0,8638, 0,7513, 0,6575; period 4 - 0,8227, 0,6830, 0,5718; period 5 - 0,7835, 0,6209, 0,4972. The future-value discounting factors are: period 1 - 1,0500, 1,1000, 1,1500; period 2 - 1,1025, 1,2100, 1,3225; period 3 - 1,1576, 1,3310, 1,5209; period 4 - 1,2155, 1,4641, 1,7490; period 5 - 1,2763, 1,6105, 2,0114. Candidates should use these tables where needed to answer the questions below. K-ZEE Ltd, a local manufacturer of a South African soccer team's jerseys, has a fixed cost of R150 000 per year. The variable cost per jersey is R250, and jerseys are sold at R450 each. How much profit will K-ZEE Ltd make if they sell 1000 jerseys?

  93. May/Jun 2014, Q511 mark · multiple choice

    This block covers the Financial Management section. Two reference tables of discounting factors are supplied for present values and future values, each listed for periods 1 to 5 at 5%, 10% and 15% interest. The present-value discounting factors are: period 1 - 0,9524 (5%), 0,9091 (10%), 0,8696 (15%); period 2 - 0,9070, 0,8264, 0,7561; period 3 - 0,8638, 0,7513, 0,6575; period 4 - 0,8227, 0,6830, 0,5718; period 5 - 0,7835, 0,6209, 0,4972. The future-value discounting factors are: period 1 - 1,0500, 1,1000, 1,1500; period 2 - 1,1025, 1,2100, 1,3225; period 3 - 1,1576, 1,3310, 1,5209; period 4 - 1,2155, 1,4641, 1,7490; period 5 - 1,2763, 1,6105, 2,0114. Candidates should use these tables where needed to answer the questions below. Still considering K-ZEE Ltd, which has a fixed cost of R150 000 per year, a variable cost per jersey of R250, and a selling price of R450 per jersey, if the company's fixed cost decreases by R50 000, how many jerseys must they sell to achieve a profit of R200 000?

  94. May/Jun 2014, Q521 mark · multiple choice

    This block covers the Financial Management section. Two reference tables of discounting factors are supplied for present values and future values, each listed for periods 1 to 5 at 5%, 10% and 15% interest. The present-value discounting factors are: period 1 - 0,9524 (5%), 0,9091 (10%), 0,8696 (15%); period 2 - 0,9070, 0,8264, 0,7561; period 3 - 0,8638, 0,7513, 0,6575; period 4 - 0,8227, 0,6830, 0,5718; period 5 - 0,7835, 0,6209, 0,4972. The future-value discounting factors are: period 1 - 1,0500, 1,1000, 1,1500; period 2 - 1,1025, 1,2100, 1,3225; period 3 - 1,1576, 1,3310, 1,5209; period 4 - 1,2155, 1,4641, 1,7490; period 5 - 1,2763, 1,6105, 2,0114. Candidates should use these tables where needed to answer the questions below. Bank overdrafts are classified as which of the following?

  95. May/Jun 2014, Q531 mark · multiple choice

    This block covers the Financial Management section. Two reference tables of discounting factors are supplied for present values and future values, each listed for periods 1 to 5 at 5%, 10% and 15% interest. The present-value discounting factors are: period 1 - 0,9524 (5%), 0,9091 (10%), 0,8696 (15%); period 2 - 0,9070, 0,8264, 0,7561; period 3 - 0,8638, 0,7513, 0,6575; period 4 - 0,8227, 0,6830, 0,5718; period 5 - 0,7835, 0,6209, 0,4972. The future-value discounting factors are: period 1 - 1,0500, 1,1000, 1,1500; period 2 - 1,1025, 1,2100, 1,3225; period 3 - 1,1576, 1,3310, 1,5209; period 4 - 1,2155, 1,4641, 1,7490; period 5 - 1,2763, 1,6105, 2,0114. Candidates should use these tables where needed to answer the questions below. Itu owns his own business, and the current bank account of the business has a positive balance of R35 000. He intends to use this money within eight months for needs within the business. On the balance sheet, how would this amount be classified - as a/an ___?

  96. May/Jun 2014, Q541 mark · multiple choice

    This block covers the Financial Management section. Two reference tables of discounting factors are supplied for present values and future values, each listed for periods 1 to 5 at 5%, 10% and 15% interest. The present-value discounting factors are: period 1 - 0,9524 (5%), 0,9091 (10%), 0,8696 (15%); period 2 - 0,9070, 0,8264, 0,7561; period 3 - 0,8638, 0,7513, 0,6575; period 4 - 0,8227, 0,6830, 0,5718; period 5 - 0,7835, 0,6209, 0,4972. The future-value discounting factors are: period 1 - 1,0500, 1,1000, 1,1500; period 2 - 1,1025, 1,2100, 1,3225; period 3 - 1,1576, 1,3310, 1,5209; period 4 - 1,2155, 1,4641, 1,7490; period 5 - 1,2763, 1,6105, 2,0114. Candidates should use these tables where needed to answer the questions below. Which term describes the process used to calculate the future value of an initial investment by adding interest to the investment amount at the end of each preceding period?

  97. May/Jun 2014, Q551 mark · multiple choice

    This block covers the Financial Management section. Two reference tables of discounting factors are supplied for present values and future values, each listed for periods 1 to 5 at 5%, 10% and 15% interest. The present-value discounting factors are: period 1 - 0,9524 (5%), 0,9091 (10%), 0,8696 (15%); period 2 - 0,9070, 0,8264, 0,7561; period 3 - 0,8638, 0,7513, 0,6575; period 4 - 0,8227, 0,6830, 0,5718; period 5 - 0,7835, 0,6209, 0,4972. The future-value discounting factors are: period 1 - 1,0500, 1,1000, 1,1500; period 2 - 1,1025, 1,2100, 1,3225; period 3 - 1,1576, 1,3310, 1,5209; period 4 - 1,2155, 1,4641, 1,7490; period 5 - 1,2763, 1,6105, 2,0114. Candidates should use these tables where needed to answer the questions below. Study IBM's financial statements for the years ended 31 December 2010, 2009 and 2008. Current assets were R48 116 000, R48 935 000 and R49 004 000 respectively. Current liabilities were R40 562 000, R36 002 000 and R42 435 000. Inventory was R2 450 000, R2 494 000 and R2 701 000. Total liabilities were R90 405 000, R86 385 000 and R96 058 000. Total assets were R113 452 000, R109 022 000 and R109 524 000. Net income was R14 833 000, R13 425 000 and R12 334 000. Gross profit was R46 014 000, R43 785 000 and R45 661 000. Sales were R99 870 000, R95 758 000 and R103 630 000. Based on this information, what is the acid-test ratio for the year 2008?

  98. May/Jun 2014, Q561 mark · multiple choice

    This block covers the Financial Management section. Two reference tables of discounting factors are supplied for present values and future values, each listed for periods 1 to 5 at 5%, 10% and 15% interest. The present-value discounting factors are: period 1 - 0,9524 (5%), 0,9091 (10%), 0,8696 (15%); period 2 - 0,9070, 0,8264, 0,7561; period 3 - 0,8638, 0,7513, 0,6575; period 4 - 0,8227, 0,6830, 0,5718; period 5 - 0,7835, 0,6209, 0,4972. The future-value discounting factors are: period 1 - 1,0500, 1,1000, 1,1500; period 2 - 1,1025, 1,2100, 1,3225; period 3 - 1,1576, 1,3310, 1,5209; period 4 - 1,2155, 1,4641, 1,7490; period 5 - 1,2763, 1,6105, 2,0114. Candidates should use these tables where needed to answer the questions below. Using the same IBM financial statement figures for 2010, 2009 and 2008 (current assets, current liabilities, inventory, total liabilities, total assets, net income, gross profit and sales as given), what is the gross profit margin for the year 2010?

  99. Oct/Nov 2013, Q431 mark · multiple choice

    This part of the paper deals with Financial management (14 objective questions, each worth one mark). Candidates are told to use two discounting-factor tables wherever needed in this section. The present-value discounting factors are: for 1 period, 0,9524 at 5%, 0,9091 at 10%, 0,8696 at 15%; for 2 periods, 0,9070 at 5%, 0,8264 at 10%, 0,7561 at 15%; for 3 periods, 0,8638 at 5%, 0,7513 at 10%, 0,6575 at 15%; for 4 periods, 0,8227 at 5%, 0,6830 at 10%, 0,5718 at 15%; for 5 periods, 0,7835 at 5%, 0,6209 at 10%, 0,4972 at 15%. The future-value discounting factors are: for 1 period, 1,0500 at 5%, 1,1000 at 10%, 1,1500 at 15%; for 2 periods, 1,1025 at 5%, 1,2100 at 10%, 1,3225 at 15%; for 3 periods, 1,1576 at 5%, 1,3310 at 10%, 1,5209 at 15%; for 4 periods, 1,2155 at 5%, 1,4641 at 10%, 1,7490 at 15%; for 5 periods, 1,2763 at 5%, 1,6105 at 10%, 2,0114 at 15%. Questions 55 and 56 are also based on extracts from IBM's financial statements (case study 10, Business Cases): for the year ended 31 December 2010, current assets were R48 116 000, current liabilities R40 562 000, inventory R2 450 000, total liabilities R90 405 000, total assets R113 452 000, net income R14 833 000, gross profit R46 014 000 and total revenue R99 870 000; for 31 December 2009, current assets were R48 935 000, current liabilities R36 002 000, inventory R2 494 000, total liabilities R86 385 000, total assets R109 022 000, net income R13 425 000, gross profit R43 785 000 and total revenue R95 758 000; for 31 December 2008, current assets were R49 004 000, current liabilities R42 435 000, inventory R2 701 000, total liabilities R96 058 000, total assets R109 524 000, net income R12 334 000, gross profit R45 661 000 and total revenue R103 630 000. IBM has many shareholders (refer to case study 10, Business Cases). Consider the following possible contributors to shareholders' interest in IBM: (a) owners' equity; (b) preference-share capital; (c) ordinary share capital; (d) current liabilities; (e) debentures. Which combination of these correctly identifies items that contribute to shareholders' interest in IBM?

  100. Oct/Nov 2013, Q441 mark · multiple choice

    This part of the paper deals with Financial management (14 objective questions, each worth one mark). Candidates are told to use two discounting-factor tables wherever needed in this section. The present-value discounting factors are: for 1 period, 0,9524 at 5%, 0,9091 at 10%, 0,8696 at 15%; for 2 periods, 0,9070 at 5%, 0,8264 at 10%, 0,7561 at 15%; for 3 periods, 0,8638 at 5%, 0,7513 at 10%, 0,6575 at 15%; for 4 periods, 0,8227 at 5%, 0,6830 at 10%, 0,5718 at 15%; for 5 periods, 0,7835 at 5%, 0,6209 at 10%, 0,4972 at 15%. The future-value discounting factors are: for 1 period, 1,0500 at 5%, 1,1000 at 10%, 1,1500 at 15%; for 2 periods, 1,1025 at 5%, 1,2100 at 10%, 1,3225 at 15%; for 3 periods, 1,1576 at 5%, 1,3310 at 10%, 1,5209 at 15%; for 4 periods, 1,2155 at 5%, 1,4641 at 10%, 1,7490 at 15%; for 5 periods, 1,2763 at 5%, 1,6105 at 10%, 2,0114 at 15%. Questions 55 and 56 are also based on extracts from IBM's financial statements (case study 10, Business Cases): for the year ended 31 December 2010, current assets were R48 116 000, current liabilities R40 562 000, inventory R2 450 000, total liabilities R90 405 000, total assets R113 452 000, net income R14 833 000, gross profit R46 014 000 and total revenue R99 870 000; for 31 December 2009, current assets were R48 935 000, current liabilities R36 002 000, inventory R2 494 000, total liabilities R86 385 000, total assets R109 022 000, net income R13 425 000, gross profit R43 785 000 and total revenue R95 758 000; for 31 December 2008, current assets were R49 004 000, current liabilities R42 435 000, inventory R2 701 000, total liabilities R96 058 000, total assets R109 524 000, net income R12 334 000, gross profit R45 661 000 and total revenue R103 630 000. As a large international business, IBM (case study 10, Business Cases) needs capital to invest in current assets. This requirement is also referred to as which of the following?

  101. Oct/Nov 2013, Q451 mark · multiple choice

    This part of the paper deals with Financial management (14 objective questions, each worth one mark). Candidates are told to use two discounting-factor tables wherever needed in this section. The present-value discounting factors are: for 1 period, 0,9524 at 5%, 0,9091 at 10%, 0,8696 at 15%; for 2 periods, 0,9070 at 5%, 0,8264 at 10%, 0,7561 at 15%; for 3 periods, 0,8638 at 5%, 0,7513 at 10%, 0,6575 at 15%; for 4 periods, 0,8227 at 5%, 0,6830 at 10%, 0,5718 at 15%; for 5 periods, 0,7835 at 5%, 0,6209 at 10%, 0,4972 at 15%. The future-value discounting factors are: for 1 period, 1,0500 at 5%, 1,1000 at 10%, 1,1500 at 15%; for 2 periods, 1,1025 at 5%, 1,2100 at 10%, 1,3225 at 15%; for 3 periods, 1,1576 at 5%, 1,3310 at 10%, 1,5209 at 15%; for 4 periods, 1,2155 at 5%, 1,4641 at 10%, 1,7490 at 15%; for 5 periods, 1,2763 at 5%, 1,6105 at 10%, 2,0114 at 15%. Questions 55 and 56 are also based on extracts from IBM's financial statements (case study 10, Business Cases): for the year ended 31 December 2010, current assets were R48 116 000, current liabilities R40 562 000, inventory R2 450 000, total liabilities R90 405 000, total assets R113 452 000, net income R14 833 000, gross profit R46 014 000 and total revenue R99 870 000; for 31 December 2009, current assets were R48 935 000, current liabilities R36 002 000, inventory R2 494 000, total liabilities R86 385 000, total assets R109 022 000, net income R13 425 000, gross profit R43 785 000 and total revenue R95 758 000; for 31 December 2008, current assets were R49 004 000, current liabilities R42 435 000, inventory R2 701 000, total liabilities R96 058 000, total assets R109 524 000, net income R12 334 000, gross profit R45 661 000 and total revenue R103 630 000. Which motive implies that a business must be able to take advantage of good opportunities when they arise?

  102. Oct/Nov 2013, Q461 mark · multiple choice

    This part of the paper deals with Financial management (14 objective questions, each worth one mark). Candidates are told to use two discounting-factor tables wherever needed in this section. The present-value discounting factors are: for 1 period, 0,9524 at 5%, 0,9091 at 10%, 0,8696 at 15%; for 2 periods, 0,9070 at 5%, 0,8264 at 10%, 0,7561 at 15%; for 3 periods, 0,8638 at 5%, 0,7513 at 10%, 0,6575 at 15%; for 4 periods, 0,8227 at 5%, 0,6830 at 10%, 0,5718 at 15%; for 5 periods, 0,7835 at 5%, 0,6209 at 10%, 0,4972 at 15%. The future-value discounting factors are: for 1 period, 1,0500 at 5%, 1,1000 at 10%, 1,1500 at 15%; for 2 periods, 1,1025 at 5%, 1,2100 at 10%, 1,3225 at 15%; for 3 periods, 1,1576 at 5%, 1,3310 at 10%, 1,5209 at 15%; for 4 periods, 1,2155 at 5%, 1,4641 at 10%, 1,7490 at 15%; for 5 periods, 1,2763 at 5%, 1,6105 at 10%, 2,0114 at 15%. Questions 55 and 56 are also based on extracts from IBM's financial statements (case study 10, Business Cases): for the year ended 31 December 2010, current assets were R48 116 000, current liabilities R40 562 000, inventory R2 450 000, total liabilities R90 405 000, total assets R113 452 000, net income R14 833 000, gross profit R46 014 000 and total revenue R99 870 000; for 31 December 2009, current assets were R48 935 000, current liabilities R36 002 000, inventory R2 494 000, total liabilities R86 385 000, total assets R109 022 000, net income R13 425 000, gross profit R43 785 000 and total revenue R95 758 000; for 31 December 2008, current assets were R49 004 000, current liabilities R42 435 000, inventory R2 701 000, total liabilities R96 058 000, total assets R109 524 000, net income R12 334 000, gross profit R45 661 000 and total revenue R103 630 000. What is the long-term objective of financial management?

  103. Oct/Nov 2013, Q471 mark · multiple choice

    This part of the paper deals with Financial management (14 objective questions, each worth one mark). Candidates are told to use two discounting-factor tables wherever needed in this section. The present-value discounting factors are: for 1 period, 0,9524 at 5%, 0,9091 at 10%, 0,8696 at 15%; for 2 periods, 0,9070 at 5%, 0,8264 at 10%, 0,7561 at 15%; for 3 periods, 0,8638 at 5%, 0,7513 at 10%, 0,6575 at 15%; for 4 periods, 0,8227 at 5%, 0,6830 at 10%, 0,5718 at 15%; for 5 periods, 0,7835 at 5%, 0,6209 at 10%, 0,4972 at 15%. The future-value discounting factors are: for 1 period, 1,0500 at 5%, 1,1000 at 10%, 1,1500 at 15%; for 2 periods, 1,1025 at 5%, 1,2100 at 10%, 1,3225 at 15%; for 3 periods, 1,1576 at 5%, 1,3310 at 10%, 1,5209 at 15%; for 4 periods, 1,2155 at 5%, 1,4641 at 10%, 1,7490 at 15%; for 5 periods, 1,2763 at 5%, 1,6105 at 10%, 2,0114 at 15%. Questions 55 and 56 are also based on extracts from IBM's financial statements (case study 10, Business Cases): for the year ended 31 December 2010, current assets were R48 116 000, current liabilities R40 562 000, inventory R2 450 000, total liabilities R90 405 000, total assets R113 452 000, net income R14 833 000, gross profit R46 014 000 and total revenue R99 870 000; for 31 December 2009, current assets were R48 935 000, current liabilities R36 002 000, inventory R2 494 000, total liabilities R86 385 000, total assets R109 022 000, net income R13 425 000, gross profit R43 785 000 and total revenue R95 758 000; for 31 December 2008, current assets were R49 004 000, current liabilities R42 435 000, inventory R2 701 000, total liabilities R96 058 000, total assets R109 524 000, net income R12 334 000, gross profit R45 661 000 and total revenue R103 630 000. Using the following figures, calculate the gearing ratio: gross profit R3 500; owners' equity R8 500; current assets R5 500; debt R5 000; current liabilities R2 500.

  104. Oct/Nov 2013, Q481 mark · multiple choice

    This part of the paper deals with Financial management (14 objective questions, each worth one mark). Candidates are told to use two discounting-factor tables wherever needed in this section. The present-value discounting factors are: for 1 period, 0,9524 at 5%, 0,9091 at 10%, 0,8696 at 15%; for 2 periods, 0,9070 at 5%, 0,8264 at 10%, 0,7561 at 15%; for 3 periods, 0,8638 at 5%, 0,7513 at 10%, 0,6575 at 15%; for 4 periods, 0,8227 at 5%, 0,6830 at 10%, 0,5718 at 15%; for 5 periods, 0,7835 at 5%, 0,6209 at 10%, 0,4972 at 15%. The future-value discounting factors are: for 1 period, 1,0500 at 5%, 1,1000 at 10%, 1,1500 at 15%; for 2 periods, 1,1025 at 5%, 1,2100 at 10%, 1,3225 at 15%; for 3 periods, 1,1576 at 5%, 1,3310 at 10%, 1,5209 at 15%; for 4 periods, 1,2155 at 5%, 1,4641 at 10%, 1,7490 at 15%; for 5 periods, 1,2763 at 5%, 1,6105 at 10%, 2,0114 at 15%. Questions 55 and 56 are also based on extracts from IBM's financial statements (case study 10, Business Cases): for the year ended 31 December 2010, current assets were R48 116 000, current liabilities R40 562 000, inventory R2 450 000, total liabilities R90 405 000, total assets R113 452 000, net income R14 833 000, gross profit R46 014 000 and total revenue R99 870 000; for 31 December 2009, current assets were R48 935 000, current liabilities R36 002 000, inventory R2 494 000, total liabilities R86 385 000, total assets R109 022 000, net income R13 425 000, gross profit R43 785 000 and total revenue R95 758 000; for 31 December 2008, current assets were R49 004 000, current liabilities R42 435 000, inventory R2 701 000, total liabilities R96 058 000, total assets R109 524 000, net income R12 334 000, gross profit R45 661 000 and total revenue R103 630 000. Worthswool Ltd has a current ratio of 4,2:1. What does this figure mean?

  105. Oct/Nov 2013, Q491 mark · multiple choice

    This part of the paper deals with Financial management (14 objective questions, each worth one mark). Candidates are told to use two discounting-factor tables wherever needed in this section. The present-value discounting factors are: for 1 period, 0,9524 at 5%, 0,9091 at 10%, 0,8696 at 15%; for 2 periods, 0,9070 at 5%, 0,8264 at 10%, 0,7561 at 15%; for 3 periods, 0,8638 at 5%, 0,7513 at 10%, 0,6575 at 15%; for 4 periods, 0,8227 at 5%, 0,6830 at 10%, 0,5718 at 15%; for 5 periods, 0,7835 at 5%, 0,6209 at 10%, 0,4972 at 15%. The future-value discounting factors are: for 1 period, 1,0500 at 5%, 1,1000 at 10%, 1,1500 at 15%; for 2 periods, 1,1025 at 5%, 1,2100 at 10%, 1,3225 at 15%; for 3 periods, 1,1576 at 5%, 1,3310 at 10%, 1,5209 at 15%; for 4 periods, 1,2155 at 5%, 1,4641 at 10%, 1,7490 at 15%; for 5 periods, 1,2763 at 5%, 1,6105 at 10%, 2,0114 at 15%. Questions 55 and 56 are also based on extracts from IBM's financial statements (case study 10, Business Cases): for the year ended 31 December 2010, current assets were R48 116 000, current liabilities R40 562 000, inventory R2 450 000, total liabilities R90 405 000, total assets R113 452 000, net income R14 833 000, gross profit R46 014 000 and total revenue R99 870 000; for 31 December 2009, current assets were R48 935 000, current liabilities R36 002 000, inventory R2 494 000, total liabilities R86 385 000, total assets R109 022 000, net income R13 425 000, gross profit R43 785 000 and total revenue R95 758 000; for 31 December 2008, current assets were R49 004 000, current liabilities R42 435 000, inventory R2 701 000, total liabilities R96 058 000, total assets R109 524 000, net income R12 334 000, gross profit R45 661 000 and total revenue R103 630 000. John owns a fruit and vegetable distribution company. He has just purchased a new warehouse and is unsure how much cash he should keep available. If he holds too little cash, what cost implication will this have for his business?

  106. Oct/Nov 2013, Q501 mark · multiple choice

    This part of the paper deals with Financial management (14 objective questions, each worth one mark). Candidates are told to use two discounting-factor tables wherever needed in this section. The present-value discounting factors are: for 1 period, 0,9524 at 5%, 0,9091 at 10%, 0,8696 at 15%; for 2 periods, 0,9070 at 5%, 0,8264 at 10%, 0,7561 at 15%; for 3 periods, 0,8638 at 5%, 0,7513 at 10%, 0,6575 at 15%; for 4 periods, 0,8227 at 5%, 0,6830 at 10%, 0,5718 at 15%; for 5 periods, 0,7835 at 5%, 0,6209 at 10%, 0,4972 at 15%. The future-value discounting factors are: for 1 period, 1,0500 at 5%, 1,1000 at 10%, 1,1500 at 15%; for 2 periods, 1,1025 at 5%, 1,2100 at 10%, 1,3225 at 15%; for 3 periods, 1,1576 at 5%, 1,3310 at 10%, 1,5209 at 15%; for 4 periods, 1,2155 at 5%, 1,4641 at 10%, 1,7490 at 15%; for 5 periods, 1,2763 at 5%, 1,6105 at 10%, 2,0114 at 15%. Questions 55 and 56 are also based on extracts from IBM's financial statements (case study 10, Business Cases): for the year ended 31 December 2010, current assets were R48 116 000, current liabilities R40 562 000, inventory R2 450 000, total liabilities R90 405 000, total assets R113 452 000, net income R14 833 000, gross profit R46 014 000 and total revenue R99 870 000; for 31 December 2009, current assets were R48 935 000, current liabilities R36 002 000, inventory R2 494 000, total liabilities R86 385 000, total assets R109 022 000, net income R13 425 000, gross profit R43 785 000 and total revenue R95 758 000; for 31 December 2008, current assets were R49 004 000, current liabilities R42 435 000, inventory R2 701 000, total liabilities R96 058 000, total assets R109 524 000, net income R12 334 000, gross profit R45 661 000 and total revenue R103 630 000. On 1 January 2007 Ricardo deposits R5 000 into a savings account earning a return of 10% per annum. On 1 January 2009 he adds a further R2 000 to that same account. On 31 December 2009 he closes the account and reinvests the full proceeds into a new account on 1 January 2010, this time earning a return of 15% per annum. How much money will Ricardo have in the account by 31 December 2011?

  107. Oct/Nov 2013, Q511 mark · multiple choice

    This part of the paper deals with Financial management (14 objective questions, each worth one mark). Candidates are told to use two discounting-factor tables wherever needed in this section. The present-value discounting factors are: for 1 period, 0,9524 at 5%, 0,9091 at 10%, 0,8696 at 15%; for 2 periods, 0,9070 at 5%, 0,8264 at 10%, 0,7561 at 15%; for 3 periods, 0,8638 at 5%, 0,7513 at 10%, 0,6575 at 15%; for 4 periods, 0,8227 at 5%, 0,6830 at 10%, 0,5718 at 15%; for 5 periods, 0,7835 at 5%, 0,6209 at 10%, 0,4972 at 15%. The future-value discounting factors are: for 1 period, 1,0500 at 5%, 1,1000 at 10%, 1,1500 at 15%; for 2 periods, 1,1025 at 5%, 1,2100 at 10%, 1,3225 at 15%; for 3 periods, 1,1576 at 5%, 1,3310 at 10%, 1,5209 at 15%; for 4 periods, 1,2155 at 5%, 1,4641 at 10%, 1,7490 at 15%; for 5 periods, 1,2763 at 5%, 1,6105 at 10%, 2,0114 at 15%. Questions 55 and 56 are also based on extracts from IBM's financial statements (case study 10, Business Cases): for the year ended 31 December 2010, current assets were R48 116 000, current liabilities R40 562 000, inventory R2 450 000, total liabilities R90 405 000, total assets R113 452 000, net income R14 833 000, gross profit R46 014 000 and total revenue R99 870 000; for 31 December 2009, current assets were R48 935 000, current liabilities R36 002 000, inventory R2 494 000, total liabilities R86 385 000, total assets R109 022 000, net income R13 425 000, gross profit R43 785 000 and total revenue R95 758 000; for 31 December 2008, current assets were R49 004 000, current liabilities R42 435 000, inventory R2 701 000, total liabilities R96 058 000, total assets R109 524 000, net income R12 334 000, gross profit R45 661 000 and total revenue R103 630 000. Fill in the blank: ____ is the ability of a business to meet its short-term obligations as they fall due.

  108. Oct/Nov 2013, Q521 mark · multiple choice

    This part of the paper deals with Financial management (14 objective questions, each worth one mark). Candidates are told to use two discounting-factor tables wherever needed in this section. The present-value discounting factors are: for 1 period, 0,9524 at 5%, 0,9091 at 10%, 0,8696 at 15%; for 2 periods, 0,9070 at 5%, 0,8264 at 10%, 0,7561 at 15%; for 3 periods, 0,8638 at 5%, 0,7513 at 10%, 0,6575 at 15%; for 4 periods, 0,8227 at 5%, 0,6830 at 10%, 0,5718 at 15%; for 5 periods, 0,7835 at 5%, 0,6209 at 10%, 0,4972 at 15%. The future-value discounting factors are: for 1 period, 1,0500 at 5%, 1,1000 at 10%, 1,1500 at 15%; for 2 periods, 1,1025 at 5%, 1,2100 at 10%, 1,3225 at 15%; for 3 periods, 1,1576 at 5%, 1,3310 at 10%, 1,5209 at 15%; for 4 periods, 1,2155 at 5%, 1,4641 at 10%, 1,7490 at 15%; for 5 periods, 1,2763 at 5%, 1,6105 at 10%, 2,0114 at 15%. Questions 55 and 56 are also based on extracts from IBM's financial statements (case study 10, Business Cases): for the year ended 31 December 2010, current assets were R48 116 000, current liabilities R40 562 000, inventory R2 450 000, total liabilities R90 405 000, total assets R113 452 000, net income R14 833 000, gross profit R46 014 000 and total revenue R99 870 000; for 31 December 2009, current assets were R48 935 000, current liabilities R36 002 000, inventory R2 494 000, total liabilities R86 385 000, total assets R109 022 000, net income R13 425 000, gross profit R43 785 000 and total revenue R95 758 000; for 31 December 2008, current assets were R49 004 000, current liabilities R42 435 000, inventory R2 701 000, total liabilities R96 058 000, total assets R109 524 000, net income R12 334 000, gross profit R45 661 000 and total revenue R103 630 000. Sound financial decision-making requires weighing up the total costs against the total benefits of a decision. Which principle does this describe?

  109. Oct/Nov 2013, Q531 mark · multiple choice

    This part of the paper deals with Financial management (14 objective questions, each worth one mark). Candidates are told to use two discounting-factor tables wherever needed in this section. The present-value discounting factors are: for 1 period, 0,9524 at 5%, 0,9091 at 10%, 0,8696 at 15%; for 2 periods, 0,9070 at 5%, 0,8264 at 10%, 0,7561 at 15%; for 3 periods, 0,8638 at 5%, 0,7513 at 10%, 0,6575 at 15%; for 4 periods, 0,8227 at 5%, 0,6830 at 10%, 0,5718 at 15%; for 5 periods, 0,7835 at 5%, 0,6209 at 10%, 0,4972 at 15%. The future-value discounting factors are: for 1 period, 1,0500 at 5%, 1,1000 at 10%, 1,1500 at 15%; for 2 periods, 1,1025 at 5%, 1,2100 at 10%, 1,3225 at 15%; for 3 periods, 1,1576 at 5%, 1,3310 at 10%, 1,5209 at 15%; for 4 periods, 1,2155 at 5%, 1,4641 at 10%, 1,7490 at 15%; for 5 periods, 1,2763 at 5%, 1,6105 at 10%, 2,0114 at 15%. Questions 55 and 56 are also based on extracts from IBM's financial statements (case study 10, Business Cases): for the year ended 31 December 2010, current assets were R48 116 000, current liabilities R40 562 000, inventory R2 450 000, total liabilities R90 405 000, total assets R113 452 000, net income R14 833 000, gross profit R46 014 000 and total revenue R99 870 000; for 31 December 2009, current assets were R48 935 000, current liabilities R36 002 000, inventory R2 494 000, total liabilities R86 385 000, total assets R109 022 000, net income R13 425 000, gross profit R43 785 000 and total revenue R95 758 000; for 31 December 2008, current assets were R49 004 000, current liabilities R42 435 000, inventory R2 701 000, total liabilities R96 058 000, total assets R109 524 000, net income R12 334 000, gross profit R45 661 000 and total revenue R103 630 000. In capital investment decisions, the cost of capital acts as a benchmark for which of the following?

  110. Oct/Nov 2013, Q541 mark · multiple choice

    This part of the paper deals with Financial management (14 objective questions, each worth one mark). Candidates are told to use two discounting-factor tables wherever needed in this section. The present-value discounting factors are: for 1 period, 0,9524 at 5%, 0,9091 at 10%, 0,8696 at 15%; for 2 periods, 0,9070 at 5%, 0,8264 at 10%, 0,7561 at 15%; for 3 periods, 0,8638 at 5%, 0,7513 at 10%, 0,6575 at 15%; for 4 periods, 0,8227 at 5%, 0,6830 at 10%, 0,5718 at 15%; for 5 periods, 0,7835 at 5%, 0,6209 at 10%, 0,4972 at 15%. The future-value discounting factors are: for 1 period, 1,0500 at 5%, 1,1000 at 10%, 1,1500 at 15%; for 2 periods, 1,1025 at 5%, 1,2100 at 10%, 1,3225 at 15%; for 3 periods, 1,1576 at 5%, 1,3310 at 10%, 1,5209 at 15%; for 4 periods, 1,2155 at 5%, 1,4641 at 10%, 1,7490 at 15%; for 5 periods, 1,2763 at 5%, 1,6105 at 10%, 2,0114 at 15%. Questions 55 and 56 are also based on extracts from IBM's financial statements (case study 10, Business Cases): for the year ended 31 December 2010, current assets were R48 116 000, current liabilities R40 562 000, inventory R2 450 000, total liabilities R90 405 000, total assets R113 452 000, net income R14 833 000, gross profit R46 014 000 and total revenue R99 870 000; for 31 December 2009, current assets were R48 935 000, current liabilities R36 002 000, inventory R2 494 000, total liabilities R86 385 000, total assets R109 022 000, net income R13 425 000, gross profit R43 785 000 and total revenue R95 758 000; for 31 December 2008, current assets were R49 004 000, current liabilities R42 435 000, inventory R2 701 000, total liabilities R96 058 000, total assets R109 524 000, net income R12 334 000, gross profit R45 661 000 and total revenue R103 630 000. Which approach to short-term financing matches the period for which finance is obtained with the expected lifespan of the asset it funds?

  111. Oct/Nov 2013, Q551 mark · multiple choice

    This part of the paper deals with Financial management (14 objective questions, each worth one mark). Candidates are told to use two discounting-factor tables wherever needed in this section. The present-value discounting factors are: for 1 period, 0,9524 at 5%, 0,9091 at 10%, 0,8696 at 15%; for 2 periods, 0,9070 at 5%, 0,8264 at 10%, 0,7561 at 15%; for 3 periods, 0,8638 at 5%, 0,7513 at 10%, 0,6575 at 15%; for 4 periods, 0,8227 at 5%, 0,6830 at 10%, 0,5718 at 15%; for 5 periods, 0,7835 at 5%, 0,6209 at 10%, 0,4972 at 15%. The future-value discounting factors are: for 1 period, 1,0500 at 5%, 1,1000 at 10%, 1,1500 at 15%; for 2 periods, 1,1025 at 5%, 1,2100 at 10%, 1,3225 at 15%; for 3 periods, 1,1576 at 5%, 1,3310 at 10%, 1,5209 at 15%; for 4 periods, 1,2155 at 5%, 1,4641 at 10%, 1,7490 at 15%; for 5 periods, 1,2763 at 5%, 1,6105 at 10%, 2,0114 at 15%. Questions 55 and 56 are also based on extracts from IBM's financial statements (case study 10, Business Cases): for the year ended 31 December 2010, current assets were R48 116 000, current liabilities R40 562 000, inventory R2 450 000, total liabilities R90 405 000, total assets R113 452 000, net income R14 833 000, gross profit R46 014 000 and total revenue R99 870 000; for 31 December 2009, current assets were R48 935 000, current liabilities R36 002 000, inventory R2 494 000, total liabilities R86 385 000, total assets R109 022 000, net income R13 425 000, gross profit R43 785 000 and total revenue R95 758 000; for 31 December 2008, current assets were R49 004 000, current liabilities R42 435 000, inventory R2 701 000, total liabilities R96 058 000, total assets R109 524 000, net income R12 334 000, gross profit R45 661 000 and total revenue R103 630 000. Using IBM's financial statement figures for 31 December 2010 (current assets R48 116 000, current liabilities R40 562 000 and inventory R2 450 000), calculate IBM's acid-test ratio for 2010.

  112. Oct/Nov 2013, Q561 mark · multiple choice

    This part of the paper deals with Financial management (14 objective questions, each worth one mark). Candidates are told to use two discounting-factor tables wherever needed in this section. The present-value discounting factors are: for 1 period, 0,9524 at 5%, 0,9091 at 10%, 0,8696 at 15%; for 2 periods, 0,9070 at 5%, 0,8264 at 10%, 0,7561 at 15%; for 3 periods, 0,8638 at 5%, 0,7513 at 10%, 0,6575 at 15%; for 4 periods, 0,8227 at 5%, 0,6830 at 10%, 0,5718 at 15%; for 5 periods, 0,7835 at 5%, 0,6209 at 10%, 0,4972 at 15%. The future-value discounting factors are: for 1 period, 1,0500 at 5%, 1,1000 at 10%, 1,1500 at 15%; for 2 periods, 1,1025 at 5%, 1,2100 at 10%, 1,3225 at 15%; for 3 periods, 1,1576 at 5%, 1,3310 at 10%, 1,5209 at 15%; for 4 periods, 1,2155 at 5%, 1,4641 at 10%, 1,7490 at 15%; for 5 periods, 1,2763 at 5%, 1,6105 at 10%, 2,0114 at 15%. Questions 55 and 56 are also based on extracts from IBM's financial statements (case study 10, Business Cases): for the year ended 31 December 2010, current assets were R48 116 000, current liabilities R40 562 000, inventory R2 450 000, total liabilities R90 405 000, total assets R113 452 000, net income R14 833 000, gross profit R46 014 000 and total revenue R99 870 000; for 31 December 2009, current assets were R48 935 000, current liabilities R36 002 000, inventory R2 494 000, total liabilities R86 385 000, total assets R109 022 000, net income R13 425 000, gross profit R43 785 000 and total revenue R95 758 000; for 31 December 2008, current assets were R49 004 000, current liabilities R42 435 000, inventory R2 701 000, total liabilities R96 058 000, total assets R109 524 000, net income R12 334 000, gross profit R45 661 000 and total revenue R103 630 000. Using IBM's financial statement figures for 31 December 2008 (current assets R49 004 000 and current liabilities R42 435 000), calculate IBM's current ratio for 2008.

The full Spot Map and the marks by year.