Which of the following options best describes the capital market?
a.It is where long-term securities are exchanged.
b.It is where short-term securities are exchanged.
c.It is where long-term debt securities are bought and sold.
d.It is where short-term debt securities are bought and sold.
Clear my choice
Question 2
n
Question text
Which of the following statements regarding agency problems and costs are correct?
1. An agency problem exists when there is a conflict of interest between a principal and
an agent.
2. An agency cost occurs when firm management avoids risky projects that would
favourably affect the share price because the managers are worried about keeping their
jobs.
3. An agency problem exists when there is a conflict of interest between the
shareholders and the management of a firm.
4. An agency cost occurs when management chooses an action that benefits the
shareholders but reduces management compensation.
a. 1 and 4 only
b. 2 and 3 only
c.1, 2 and 3 only
d.2, 3 and 4 only
Question 3
Question text
Why should financial managers strive to maximise the current value?
a.Maximising the value means that the managers are running the business in the
interest of the shareholders.
b.Maximising the value means that the business can increase the salaries of all
employees.
Classified as Internal use only
, c.Maximising the value means that the business is growing faster in size than its
competitors.
d Maximising the value means that the managers will receive shares of the
corporation as part of their compensation.
Question 4
Question text
Which one of the following statements concerning sole proprietorships is correct?
a.The profit of the owner of a sole proprietorship is taxed twice.
b.The owner of a sole proprietorship shares profits as established by the partnership.
c.The owner of a sole proprietorship may be forced to sell personal assets to pay
company debts.
d.The owner of a sole proprietorship has limited liability, which guarantees that they
cannot lose more than they invested.
Question text
Geomorph Trading management has announced that the company has current assets of
R15 959 and a current ratio of 1,3. The company had cost of goods sold of R10 050 and
a quick ratio of 1,1. What is the company inventory turnover?
a.2,06 times
b.4,09 times
c.4,50 times
d.5,32 times
Question 6
Question text
Last year, Drake’s Bowling Alleys had cost of goods sold of R37 500 and its inventory
turnover was 2,34. The company’s current assets were R46 500 and its current ratio was
2,0. What is the company’s quick ratio?
a.1,24
b.1,31
c.1,45
d.1,52
Clear my choice
Question 7
Question text
Aechimedes Levers' earnings before interest and tax (EBIT) are R3 740. The company’s
times interest earned ratio is 7,50, its tax rate is 35%, and its debt ratio is 40%, with a
total assets value of R30 750. What is the company’s return on equity (ROE)?
Classified as Internal use only
a.It is where long-term securities are exchanged.
b.It is where short-term securities are exchanged.
c.It is where long-term debt securities are bought and sold.
d.It is where short-term debt securities are bought and sold.
Clear my choice
Question 2
n
Question text
Which of the following statements regarding agency problems and costs are correct?
1. An agency problem exists when there is a conflict of interest between a principal and
an agent.
2. An agency cost occurs when firm management avoids risky projects that would
favourably affect the share price because the managers are worried about keeping their
jobs.
3. An agency problem exists when there is a conflict of interest between the
shareholders and the management of a firm.
4. An agency cost occurs when management chooses an action that benefits the
shareholders but reduces management compensation.
a. 1 and 4 only
b. 2 and 3 only
c.1, 2 and 3 only
d.2, 3 and 4 only
Question 3
Question text
Why should financial managers strive to maximise the current value?
a.Maximising the value means that the managers are running the business in the
interest of the shareholders.
b.Maximising the value means that the business can increase the salaries of all
employees.
Classified as Internal use only
, c.Maximising the value means that the business is growing faster in size than its
competitors.
d Maximising the value means that the managers will receive shares of the
corporation as part of their compensation.
Question 4
Question text
Which one of the following statements concerning sole proprietorships is correct?
a.The profit of the owner of a sole proprietorship is taxed twice.
b.The owner of a sole proprietorship shares profits as established by the partnership.
c.The owner of a sole proprietorship may be forced to sell personal assets to pay
company debts.
d.The owner of a sole proprietorship has limited liability, which guarantees that they
cannot lose more than they invested.
Question text
Geomorph Trading management has announced that the company has current assets of
R15 959 and a current ratio of 1,3. The company had cost of goods sold of R10 050 and
a quick ratio of 1,1. What is the company inventory turnover?
a.2,06 times
b.4,09 times
c.4,50 times
d.5,32 times
Question 6
Question text
Last year, Drake’s Bowling Alleys had cost of goods sold of R37 500 and its inventory
turnover was 2,34. The company’s current assets were R46 500 and its current ratio was
2,0. What is the company’s quick ratio?
a.1,24
b.1,31
c.1,45
d.1,52
Clear my choice
Question 7
Question text
Aechimedes Levers' earnings before interest and tax (EBIT) are R3 740. The company’s
times interest earned ratio is 7,50, its tax rate is 35%, and its debt ratio is 40%, with a
total assets value of R30 750. What is the company’s return on equity (ROE)?
Classified as Internal use only
