Fin 3702 - Study guides, Class notes & Summaries

Sales forecast → production plans → estimation of costs (labour, fixed costs) → pro forma statements → cash budget 2 4 Depreciation is a noncash item 3 2 Trade and other payables and accruals. 4 1 An increase in CA increase NWC, thereby reducing the risk of technical insolvency. 5 1 If a firm uses an aggressive financing strategy, it increases return and increases risk. 6 2 Produce low-cost short cycle goods. 7 3 OC = AAI + ACP AAI = OC - ACP = 120 -40 =...

FIN3702 Assignment 2 Semester 2 2022 FIN3702 Assignment 2 Semester 2 2022

FIN 3701 MAY/JUNE 2013 section A Q1 2 initial investment Cost (200 000) Net working capital 5000 Inventory 3000 Receivables 2000 Payables 4000 Accruals 6000 Initial investments Q2 3 OCF = NOPAT + depreciation NOPAT = revenue 30000 Operating cost 13000  Marketing cost are irrelevant Depreciation 40000 EBIT 23000 Tax 3090 6900 NOPAT 16100 OCF = 16100 + 40000 =23900 Q4 2 NB: for a replacement decision you must use incremental operating cash flow i.e. OCF truck --- OCF van...

QUESTION 1 The cost of giving up a cash discount under the terms 5/20 net 120 assuming a 365-day year is … 1. 15.00%. 2. 15.80%. 3. 18.94%. 4. 19.21%. The correct answer is option 4. 19.21% Cost of giving up a cash discount = = = 19.21% Gitman et al 2010, chapter 15:607 Gitman et al 2014, chapter 16:625 3 QUESTION 2 A firm has actual sales in November of R1 000 and projected sales in December and January of R3 000 and R4 000 respectively. The firm makes 15...

QUESTION 1 The cost of giving up a cash discount under the terms 5/20 net 120 assuming a 365-day year is … 1. 15.00%. 2. 15.80%. 3. 18.94%. 4. 19.21%. The correct answer is option 4. 19.21% Cost of giving up a cash discount = = = 19.21% Gitman et al 2010, chapter 15:607 Gitman et al 2014, chapter 16:625 3 QUESTION 2 A firm has actual sales in November of R1 000 and projected sales in December and January of R3 000 and R4 000 respectively. The firm makes 15...

Question 1 The correct option is 4. A firm with highly unpredictable sales revenue would best choose … financing strategy in order to minimise risk. 1. a seasonal 2. the trade-off 3. the aggressive 4. the conservative Principles of Managerial Finance, 12e (Gitman) - Chapter 14 – Working Capital Management Question 2 The correct option is 2. Once sales are forecasted, … must be generated in order to estimate a variety of operating costs. 1. a cash budget 2. a production plan ...

Question 1 The correct option is 4. A firm with highly unpredictable sales revenue would best choose … financing strategy in order to minimise risk. 1. a seasonal 2. the trade-off 3. the aggressive 4. the conservative Principles of Managerial Finance, 12e (Gitman) - Chapter 14 – Working Capital Management Question 2 The correct option is 2. Once sales are forecasted, … must be generated in order to estimate a variety of operating costs. 1. a cash budget 2. a production plan ...

QUESTION 1 Three important line items on the statement of cash flows that must be obtained from the income statement include all of the following EXCEPT … 1. interest expenses. 2. net profit after taxes. 3. depreciation and any non-cash charges. 4. cash dividends paid on both preference and ordinary shares. . QUESTION 2 Which one of the following will increase the balance on the cash flow statement of the firm? 1. Sale of stock on credit 2. Loan repayment to banks 3. Debtors payin...