STDFM class test

Current liabilities are debts that have to be paid ________

• in the next 12 months

• in the next 5 years or more

• in order to buy a current asset

• to buy more working capital

Permanent working capital

• varies with seasonal needs.

• includes fixed assets.

• is the amount of current assets required to meet a firm's long-term minimum needs.

• includes accounts payable.

What are the motives to hold cash related to the day-to-day operations of the business?

• Speculative Motive

• Transactional Motive

• Precautionary Motive

• None

Standard Deviation represents

• Return

• Portfolio

• Risk

• Investment

KSK Limited provides the following information about its cash management system. The annual yield on marketable securities is 15 percent. The fixed cost of per transaction of marketable securities transaction is Rs. 2000. The standard deviation of the change in daily cash balance is Rs.5,000.  The minimum cash balance is Rs.50,000.

Calculate return point

• 93814

• 94814

• 95814

• 50000

KSK Limited provides the following information about its cash management system. The annual yield on marketable securities is 15 percent. The fixed cost of per transaction of marketable securities transaction is Rs. 2000. The standard deviation of the change in daily cash balance is Rs.5,000.  The minimum cash balance is Rs.50,000.

Calculate Upper limit

• 184442

• 183112

• 185341

• 18932

Find out the optimum cash balance using Baumol's Model?

Annual cash needed Rs 48,00,000 • Transaction cost Rs. 2500 • Interest rate 9%

• 163299

• 154300

• 516398

• 693299

 

A company has prepared the following projections for a year

Sales 21000 units

Selling Price per unit Rs.40

Variable Costs per unit Rs.25

Total Costs per unit Rs.35

Credit period allowed One month

the Co. proposes to increase the credit period allowed to its customers from one month to two months .it is envisaged that the change in policy as above will increase the sales by 8%. The co. desires a return of 25% on its investment.

Average cost of debtors according to current policy

• 51250

• 61250

• 68250

• 129500

 

A company has prepared the following projections for a year

Sales 21000 units

Selling Price per unit Rs.40

Variable Costs per unit Rs.25

Total Costs per unit Rs.35

Credit period allowed One month

the Co. proposes to increase the credit period allowed to its customers from one month to two months .it is envisaged that the change in policy as above will increase the sales by 8%. The co. desires a return of 25% on its investment.

Average cost of debtors according to Proposed policy

• 61250

• 51250

• 129500

• 68250

What is the most economical number of units to order?

Annual requirement = 48,000 units

Ordering cost = $9 per order

Carrying cost = 15% of per-unit cost

Per unit cost = $4 per unit

• 1500 units

• 1200 units

• 3000 units

• 1800 units