FIN2601 EXAMPACK

FIN2601 EXAMPACK MUST READ!! SUCCESS! SECTION A: MULTIPLE-CHOICE QUESTIONS 1) The key aspects of financial planning process are? 1. cash planning and profit planning 2. cash planning and financing 3. investment planning and profit planning 4. cash planning and investment planning 2) Making financing decisions include all the following EXCEPT 1. Deciding which individual short-term sources are best at a given point in time 2. Deciding which individual long-term sources are best at a given point in time. 3. analysing the quarterly budget and performance reports 4. determining the appropriate mix of short-term and long-term financing 3) The following information is available for PTF Ltd Sales R300 000 Earnings after interest and tax R150 000 Preference dividends due R 20 000 Preference shares issued R 5 000 Ordinary shares issued R 13 000 Given this information, PTF Ltd’s earnings per share (eps) will be closest to? 1. R26 2. R10 3. R30 4. R60 pg. 3 4) At the end of 2015, Moscow Industries reported retained earnings of R775 000 and it had R367 500 worth of net income during the year. The previous year the company had reported R455 000 in retained earnings. If the company purchased no shares during 2007, how much dividends did it pay during 2015 1. R 47 500 2. R 47 381 3. R 52 500 4. R 55 125 5) A firm with sales of R1 000 000, net profit after taxes of R52 250, total assets of R1 200 000 and total liabilities of R450 000 has a return on equity of? 1. 20% 2. 4% 3. 3% 4. 7 6) Which one of the following statements is correct? 1. A reduction in inventories held will have no effect on the current ratio 2. If a firm increase its sales while holding inventories constant, then its inventory turnover will increase if all other factors are held constant. 3. An increase in inventories will have no effect on the current ratio. 4. A reduction in inventory turnover will generally lead to an increase in the return on equity (ROE) 7) In the DuPont formula, the return on total assets is equal to 1. (net profit margin) x (total asset turnover) 2. (return on equity) x (financial leverage multiplier) 3. (net profit margin) x (fixed asset turnover)