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FIN3702 EXAM PACK 2023
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FIN3702 EXAM PACK 2023
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FIN3702 EXAM PACK 2023[School]
[Course title]
,
,
, FIN3702
CONFIDENTIAL January/February 2022
SECTION A: MULTIPLE-CHOICE QUESTIONS [30 MARKS]
1. All the following are inflows of cash EXCEPT …
1. a decrease in accounts receivable.
2. net profits after tax.
3. dividends.
4. an increase in accruals.
2. All the following are operating cash flows EXCEPT ...
1. net profit/earnings after taxes.
2. an increase or decrease in current liabilities.
3. an increase or decrease in non-current assets.
4. a depreciation expense.
3. First National Bank Ltd has offered Junior the following alternatives in response
to the R75 000 one-year loan application he made to the bank.
• Alternative 1: 7% discount interest, with a 10% compensating balance.
• Alternative 2: 8% simple interest with interest paid monthly.
What will be the effective annual rate if Junior chooses to take the cheaper alternative?
1. 7.23%
2. 7.67%
3. 8.00%
4. 8.30%
4. If a firm increases its current assets relative to its total assets, it …
1. increases return and reduces risk.
2. increases return and increases risk.
3. reduces return and increases risk.
4. reduces return and reduces risk.
5. A firm has just ended the calendar year by making a sale in the amount of R200
000 of merchandise purchased during the year at a total cost of R150 500.
Although this firm paid in full for the merchandise purchased during the year, it
has yet to collect at year end from the customer. One possible problem this firm
may face is ….
1. low profitability.
2. insolvency.
3. inability to receive credit.
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