MAC3702/QB001/4/2021
QB001/4/2021
Question Bank
Application of Financial Management
Techniques
MAC3702
Semesters 1 and 2
Department of Management Accounting
This question bank is only available in English.
These questions must be used to improve examination technique and topic
understanding.
, MAC3702/QB001
INTRODUCTION
Dear Student,
Attached please find practice questions with their suggested solutions. We suggest that you
do work through these questions as if under exam conditions, making use of the allocated
marks and time as guidelines. Only once you have completed the integrated questions, you
should compare your answer to the suggested solutions. Your answers to these practice
questions must not be submitted to Unisa, it is purely for self-assessment purposes.
These integrated questions will indicate to you the standard required of you in the exam and
will help you to identify areas of weaknesses that you must pay attention to. Please note that
the questions in the exam will never look exactly the same as any other question, however,
the principles always stay the same.
Please refer to additional practice questions and the question bank posted on myUnisa under
“Additional resources” for more practice questions. Below we have also provided frequently
asked questions (FAQs), especially concerning the exam.
2
, MAC3702/QB001
FREQUENTLY ASKED QUESTIONS
1. Can I expect to see identical examination questions as included in previous exam papers or
other questions included in the assignment questions or in other tutorial letters?
No. You will not get questions that you have seen before, although the exam paper will test the
same principles as the questions included in past papers, practice case studies, assignment
questions and the study guide. The principles will be tested on a level that is acceptable for
third year students. Please work through all the examples and questions referenced in the
tutorial letters, assignment questions and the solutions, case studies, additional practice
questions and the question bank (all available on myUnisa). Once working through all these
different examples you will get an understanding of the different methods as to how the
principles can be tested.
2. Which topics are examinable?
All topics are examinable and you should refer to your tutorial letters as well as the MAC3702
Managerial Finance 8th Edition Study Outline file (under Additional Resources/Managerial
Finance 8th Edition FAQ and Explanation) which highlight key areas to focus on and sections
that are excluded from the MAC3702. You are encouraged to attempt all the assignments on
your own and well in advance to prepare you for the examination.
3. Do I only need to focus on the information included in the MAC3702 study guides and tutorial
letters or do I also need to have knowledge of MAC2602?
In your tutorial letters of MAC3702, we refer to assumed prior knowledge and we refer you to
the study guide of MAC2602. If you have not done this specific module (MAC2602) but an
equivalent one, please make sure that you make use of the study material available on the
website relating to MAC2602.
4. Will I receive a formula sheet or do I need to know my formulas?
Only certain formulas may be provided to you should they be tested in the exam.
These formulas include the following:
1. Formulas to calculate the beta coefficient
2. Covariance and standard deviation
3. Portfolio variance based on the correlation coefficient
4. Correlation coefficient
NB. You still need to know all other formulas by heart.
5. What is the examination format of the tests and year end examination for MAC3702?
The MAC3702 examination will be out of 100 marks (3-hour duration). The paper may consist
of two questions or just one question, and in both instances the paper will comprise of all the
topics covered in the MAC3702 syllabus.
3
, MAC3702/QB001
6. Do I need to write out the formula (for ratio calculation) or can I substitute my amounts directly
into the formula to save time?
Writing down the formula and substituting the components / elements will enable the marker to
follow your thought process and may lead to conceptual / principle marks when applicable.
However, it should be noted that no marks are awarded for simply providing the formula.
7. When computing ratios, should we use the average or closing balances if using balance
sheet accounts?
ONLY when the question specifically states that average balances should be used. In all other
instances use the CLOSING BALANCES. You are encouraged to know how to apply both
methods. It should also be noted that when computing ratios, book values must be used instead
of market values, unless specifically instructed to or if the ratio formula requires a market value.
8. In the examination, will we be given specific ratios to compute or will we be required to
compute all ratios under a particular category (e.g. Profitability, Capital Structure/Solvency or
Liquidity)?
You will be asked specific ratios that you need to compute and these will cover different
categories as outlined in your textbook. However, students may be required to compute ratios
under a particular category in an assignment or an FI concession assessment. You are advised
to study all ratios covered in the textbook and know the formulas off by heart. Cash flow related
ratios are not covered in MAC3702 syllabus.
9. When commenting on ratios, are there marks allocated for stating that there was an
increase/decrease between two different periods?
No. Marks are only awarded if relevant comment is provided over and above simply stating
there was an increase or decrease. You are advised to study the REQUIRED carefully to
understand whether you need to provide reasons for the increase or if you are required to
generally comment on the ratios. Remember to apply your comment to the scenario and not to
simply “dump” generic statements.
10. What should be included in the debt balance of the debt : equity ratio?
The debt (or interest bearing debt) balance should include all the interest bearing debt
balances (this includes both the long- and short term portions of long term loans). Bank
overdraft is usually not included in the debt balance as the bank overdraft is normally used to
finance working capital shortfalls, unless the scenario / information depicts the overdraft to be
of a permanent nature.
11. Are preference shares to be classified as equity or liability?
For simplicity, in MAC3702 the distinguishing factor is whether the preference shares are
redeemable or irredeemable. Redeemable preference shares are classified as a long-term
liability and irredeemable (or non-redeemable) preference shares fall under equity.
4
QB001/4/2021
Question Bank
Application of Financial Management
Techniques
MAC3702
Semesters 1 and 2
Department of Management Accounting
This question bank is only available in English.
These questions must be used to improve examination technique and topic
understanding.
, MAC3702/QB001
INTRODUCTION
Dear Student,
Attached please find practice questions with their suggested solutions. We suggest that you
do work through these questions as if under exam conditions, making use of the allocated
marks and time as guidelines. Only once you have completed the integrated questions, you
should compare your answer to the suggested solutions. Your answers to these practice
questions must not be submitted to Unisa, it is purely for self-assessment purposes.
These integrated questions will indicate to you the standard required of you in the exam and
will help you to identify areas of weaknesses that you must pay attention to. Please note that
the questions in the exam will never look exactly the same as any other question, however,
the principles always stay the same.
Please refer to additional practice questions and the question bank posted on myUnisa under
“Additional resources” for more practice questions. Below we have also provided frequently
asked questions (FAQs), especially concerning the exam.
2
, MAC3702/QB001
FREQUENTLY ASKED QUESTIONS
1. Can I expect to see identical examination questions as included in previous exam papers or
other questions included in the assignment questions or in other tutorial letters?
No. You will not get questions that you have seen before, although the exam paper will test the
same principles as the questions included in past papers, practice case studies, assignment
questions and the study guide. The principles will be tested on a level that is acceptable for
third year students. Please work through all the examples and questions referenced in the
tutorial letters, assignment questions and the solutions, case studies, additional practice
questions and the question bank (all available on myUnisa). Once working through all these
different examples you will get an understanding of the different methods as to how the
principles can be tested.
2. Which topics are examinable?
All topics are examinable and you should refer to your tutorial letters as well as the MAC3702
Managerial Finance 8th Edition Study Outline file (under Additional Resources/Managerial
Finance 8th Edition FAQ and Explanation) which highlight key areas to focus on and sections
that are excluded from the MAC3702. You are encouraged to attempt all the assignments on
your own and well in advance to prepare you for the examination.
3. Do I only need to focus on the information included in the MAC3702 study guides and tutorial
letters or do I also need to have knowledge of MAC2602?
In your tutorial letters of MAC3702, we refer to assumed prior knowledge and we refer you to
the study guide of MAC2602. If you have not done this specific module (MAC2602) but an
equivalent one, please make sure that you make use of the study material available on the
website relating to MAC2602.
4. Will I receive a formula sheet or do I need to know my formulas?
Only certain formulas may be provided to you should they be tested in the exam.
These formulas include the following:
1. Formulas to calculate the beta coefficient
2. Covariance and standard deviation
3. Portfolio variance based on the correlation coefficient
4. Correlation coefficient
NB. You still need to know all other formulas by heart.
5. What is the examination format of the tests and year end examination for MAC3702?
The MAC3702 examination will be out of 100 marks (3-hour duration). The paper may consist
of two questions or just one question, and in both instances the paper will comprise of all the
topics covered in the MAC3702 syllabus.
3
, MAC3702/QB001
6. Do I need to write out the formula (for ratio calculation) or can I substitute my amounts directly
into the formula to save time?
Writing down the formula and substituting the components / elements will enable the marker to
follow your thought process and may lead to conceptual / principle marks when applicable.
However, it should be noted that no marks are awarded for simply providing the formula.
7. When computing ratios, should we use the average or closing balances if using balance
sheet accounts?
ONLY when the question specifically states that average balances should be used. In all other
instances use the CLOSING BALANCES. You are encouraged to know how to apply both
methods. It should also be noted that when computing ratios, book values must be used instead
of market values, unless specifically instructed to or if the ratio formula requires a market value.
8. In the examination, will we be given specific ratios to compute or will we be required to
compute all ratios under a particular category (e.g. Profitability, Capital Structure/Solvency or
Liquidity)?
You will be asked specific ratios that you need to compute and these will cover different
categories as outlined in your textbook. However, students may be required to compute ratios
under a particular category in an assignment or an FI concession assessment. You are advised
to study all ratios covered in the textbook and know the formulas off by heart. Cash flow related
ratios are not covered in MAC3702 syllabus.
9. When commenting on ratios, are there marks allocated for stating that there was an
increase/decrease between two different periods?
No. Marks are only awarded if relevant comment is provided over and above simply stating
there was an increase or decrease. You are advised to study the REQUIRED carefully to
understand whether you need to provide reasons for the increase or if you are required to
generally comment on the ratios. Remember to apply your comment to the scenario and not to
simply “dump” generic statements.
10. What should be included in the debt balance of the debt : equity ratio?
The debt (or interest bearing debt) balance should include all the interest bearing debt
balances (this includes both the long- and short term portions of long term loans). Bank
overdraft is usually not included in the debt balance as the bank overdraft is normally used to
finance working capital shortfalls, unless the scenario / information depicts the overdraft to be
of a permanent nature.
11. Are preference shares to be classified as equity or liability?
For simplicity, in MAC3702 the distinguishing factor is whether the preference shares are
redeemable or irredeemable. Redeemable preference shares are classified as a long-term
liability and irredeemable (or non-redeemable) preference shares fall under equity.
4
