Reference no: EM132704824

Questions -

Q1) You are saving for an overseas holiday in two years, which will cost $15,000. How much do you need to deposit in an account paying an interest rate of 6% p.a., compounded monthly, in order to have enough money to pay for the holiday?

Q2) A boutique vineyard operating in South Australia had a long-term debt of $2,000,000. After discussions with their lender, it was agreed that the lender would receive $2,000,000 of ordinary shares to extinguish the long-term debt. How would this transaction impact on the Statement of Cash Flows?

a. No impact on the Statement of Cash Flows

b. Increase cash flow by $2,000,000 for financing activities

c. Increase cash flow by $2,000,000 for investing activities

d. Decrease cash by $2,000,000

e. Increase cash by $2,000,000

Q3) Which of the following will result in an increase in the value of the equity of a firm?

a. Impairment

b. Asset revaluation

c. Receipt of cash from customer who previously purchased goods on credit

d. Depreciation

e. Taxation

Q4) There are many advantages associated with a shorter inventory turnover period. Which of the following is not one?

a. It reduces the physical space needed to store inventory

b. It reduces the cost of inventory as management can purchase in bulk

c. It reduces the likelihood that inventory will become obsolescent

d. It reduces the amount of funds tied up in inventory, so these can be used elsewhere in the business