BP Mock Quiz

What is the primary purpose of investment appraisal?

• To ensure immediate consumption opportunities

• To evaluate the benefits of current consumption

• To maximize current consumption without regard for the future

• To determine the worthiness of sacrificing current consumption for future possibilities

A company is considering an investment with an initial outlay of Rs 100, 000. The net annual cash inflows for the next 10 years will be 9,500 per annum. Find the payback period?

• 10yrs and 6 months

• 5yrs

• 11 yrs

• none

What is the formula for calculating Administration cost ratio?

• Administration costs / Net Sales

• Sales / Revenue

• initial investment / Annual cash inflows

• None of the above

Following figures have been extracted from the Income Statement of Alpha ltd. Calculate the cost of goods sales (£)

Net Sales 650,000

Cost of sales 422,500

Administration costs 26,000

Selling and distribution costs 39,000

• 65%

• 20,000

• 5%

• Not possible

Following figures have been extracted from the Income Statement of Alpha ltd. Calculate the administration costs ratio and Selling and distribution costs ratio. (£)

Net Sales 650,000

Cost of sales 422,500

Administration costs 26,000

Selling and distribution costs 39,000

Type your answers

What is the primary purpose of investment appraisal?

• To ensure immediate consumption opportunities

• To determine the worthiness of sacrificing current consumption for future possibilities

• To evaluate the benefits of current consumption

• To maximize current consumption without regard for the future

Contribution to Sales Ratio =

• Selling Price per Unit / Contribution per Unit

• Contribution per Unit / Selling Price per Unit

• Gross profit/ Sales

• Net profit x sales

LMN Hardware Store is seeking a loan to renovate its premises. The bank requests a

detailed balance sheet to calculate the current ratio. LMN's balance sheet includes the

following figures:

Cash: £25,000

Accounts Receivable: £12,000

Inventory: £7,000

Stock Investments: £1,500

Current Liabilities: £40,000

Calculate the current ratio for LMN Hardware Store.

• 1.14

• 25,000

• 2.01

• 20

Current Ratio = ?

• Sales x profit

• Current Assets / Current Liabilities

• Revenue - Asset

• Current liabilities/ Sales

Starlight Boutique is seeking a loan to renovate its store interior. The bank requires a

detailed balance sheet to determine the quick ratio. Starlight Boutique's balance sheet

provides the following figures:

Cash: £12,000

Accounts Receivable: £9,000

Inventory: £7,000

Stock Investments: £1,500

Current Liabilities: £18,000

Calculate the Quick retio

• 1.25

• 0.001

• 25

• 25,000