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Q1: Given the following table that presents the solution for a queuing problem with a constant service rate, what percentage of available service time is actually used
assignment mcq0.217
0.643
0.321
0.179

View Answer

Answer: None of these

Q2: Given the following table that presents the solution for a queuing problem with a constant service rate, the probability that the server is idle is
assignment mcq

View Answer

Answer: 0.286

Q3: When determining the arrival rate (λ) and the service rate (μ), the___must be used

View Answer

Answer: same time period

Q4: The following data consists of a matrix of transition probabilities (P) of three competing companies, the initial market share state &pie;(1), and the equilibrium probability states. Assume that each state represents a firm (Company 1, Company 2, and Company 3, respectively) and the transition probabilities represent changes from one month to the next
assignment mcq
The market share of Company 1 in the next period is

View Answer

Answer: 0.47

Q5: If the process standard deviation is difficult to compute, we calculate the upper control limit for an &xbar; as___

View Answer

Answer: assignment mcq

Q6: What is the critical path for the project described by this table? assignment mcq

View Answer

Answer: A,D,G

Q7: A manager runs off to lunch but leaves a preference matrix for you to evaluate. Which alternative, A, B, C, or D is the best option? assignment mcq

View Answer

Answer: Alternative A

Q8: The drive-up window for a fast-food operation was being studied using simulation to determine a variety of operating characteristics. As part of the study, data was collected on order processing time as given in the following table. Using the first two digits of the random numbers (RN), determine the processing time (in minutes) that would be used to simulate the processing time for the fifth sample.assignment mcq

View Answer

Answer: 2

Q9: The drive-up window for a fast-food operation was being studied using simulation to determine a variety of operating characteristics. As part of the study, data was collected on order processing time as given in the following table. Using the first two digits of the random numbers (RN), determine the expected waiting time for a customer to receive an order for a ten-sample simulation. assignment mcq

View Answer

Answer: 1.7

Q10: The drive-up window for a fast-food operation was being studied using simulation to determine a variety of operating characteristics. As part of the study, data was collected on customer arrival time as given in the following table. Using expected-value calculations, determine the expected time between customer arrivals.assignment mcq

View Answer

Answer: 2.35

Q11: A process operator decides to apply statistical process control so she collects five samples and records the data shown in the table. What are the upper and lower control limits for the X-bar chart. assignment mcq

View Answer

Answer: UCL=12.61, LCL=12.27Used the A2 value for n=4

Q12: A process uses four machines called A, B, C, and D to produce their two products called X and M. Product X sells for $10 and product M sells for $15. The table shows how long each product is processed on each machine. Each machine is available for 8 hours per day and the company has demand for 15 Xs and 20 Ms. What is the best product mix for the company?assignment mcq

View Answer

Answer: 15X and 16.5 M

Q13: The Jacobs Ladder Company produces a ladder in an assembly line process that is represented by the given precedence chart. The daily available production time is 7 hours (eight-hour workday less 1 hour of setup and break time). The average daily demand is seventy (70) units. What is the cycle time for this assembly line in minutes per unit?assignment mcq

View Answer

Answer: 6

Q14: Balance this line to achieve maximum output in an eight hour day.assignment mcq

View Answer

Answer: 22 per cent

Q15: A dry-cleaning firm has decided to operate stores in five neighborhoods in which a market analysis has determined the demand level. Its strategy is to establish a centralized plant to process the cleaning and pressing. The stores will serve as collection and distribution points and as locations at which other personal services activities will be offered. Given the following relative map grid points and demand levels, locate a starting point for the location of the plant. assignment mcq

View Answer

Answer: 3.1, 2.7

Q16: A dry-cleaning firm has decided to operate stores in five neighborhoods in which a market analysis has determined the demand levels. Its strategy is to investigate the best site to expand into a centralized plant to process the cleaning and pressing. The other stores will serve as collection and distribution points and as locations at which other personal services activities will be offered. Given the following relative map grid points and demand levels, identify the best store location to serve as the site of the plant. Assume that site A is not appropriate for expansion.assignment mcq

View Answer

Answer: C

Q17: A dry-cleaning firm has decided to operate stores in five neighborhoods in which a market analysis has determined the demand level. Its strategy is to investigate the best site to expand into a centralized plant to process the cleaning and pressing. It has completed a qualitative assessment and wants to supplement its analysis by rating a series of conditions for each site. Given the following preference matrix, identify the preferred site for the plant.assignment mcq

View Answer

Answer: D

Q18: A manufacturer with four production locations wishes to minimize the shipping cost to their four warehouses. The supply from each factory and the demand of each warehouse are shown in the table along with the cost to ship one unit from each factory to each warehouse. assignment mcqWhat is the lowest total cost for the factories to supply the warehouses?

View Answer

Answer: USD3700

Q19: A medium-sized office has standardized on a common model of laser printer. Toner for the printers requires 120 units per year. Order cost is $35.00 and the lead time is two days. The annual number of working days is 250. Inventory holding costs are 25 percent of the value of the toner cartridges. The local supply store will provide the following quantity discount. assignment mcq What is the EOQ at the base purchase price of $59?

View Answer

Answer: 24

Q20: The street vendors for the Barons baseball park use data available from the team’s public relations (PR) office as a general guide for sales volume. Historical data shows the following demand pattern. assignment mcq One vendor of bags of peanuts has product costs of $1.25 per bag. The price is $3.75. Salvage value is $.50 and there is no provision for loss sales. What volume of peanuts should the vendor be prepared to sell?

View Answer

Answer: 36

Q21: Linear regression was used to develop the slope and intercept values for a forecast equation in Y (sales volume) and X (customer traffic) using the data below (sales in million dollars; customers in thousands). Forecast the sales volume when the customer level is 22. a= -0.158; b= 0.131
assignment mcq

View Answer

Answer: 2.71

Q22: Dave’s Bar-B-Q operated a mobile kitchen that serviced construction sites, office buildings, and public parks. Beginning in June, snow cones were added to the menu. The weekly sales figures for the previous year are given in the following chart. Use exponential smoothing, a smoothing coefficient of 0.3, to forecast demand for the third week of June.
assignment mcq

View Answer

Answer: 5.1

Q23: Four jobs were queued at a workstation with the listed profiles. Using the first come, first served priority-sequencing rule, determine the average flow time for the current group of jobs.assignment mcq

View Answer

Answer: 17.375

Q24: Four jobs were queued at a workstation with the listed profiles. Using the critical-ratio-priority sequencing rule, determine the average past-due time for the current workstation assignment mcq

View Answer

Answer: 8.4

Q25: All jobs shown in the table must be processed first on Machine 1 and then on Machine 2 before they are completed. What is the minimum makespan for these jobs? assignment mcq

View Answer

Answer: 60

Q26: A company proposed an investment in capital equipment of $14,500 with a hurdle rate of 16%. Their analysis of the investment produced the following total cash flow in the indicated years.
assignment mcq
When does payback occur?

View Answer

Answer: During 2007

Q27: A company proposed an investment in capital equipment of $14,500 with a hurdle rate of 15%. Their analysis of the investment produced the following total cash flow in the indicated years.
assignment mcq
What is the Net Present Value of the project?

View Answer

Answer: $7,884

Q28: A company proposed an investment in capital equipment of $14,500 with a hurdle rate of 15%. Its analysis of the investment produced the following total cash flow in the indicated years.
assignment mcq
What is the Internal Rate of Return of the project? (Select an appropriate range of discount rates.)

View Answer

Answer: Correct Answer: >= 34%

Q29: The table contains information for sampling plans with n=50. What is the producer’s risk for c=2 if the AQL=.01?
assignment mcq

View Answer

Answer: .014

Q30: What is the highest AOQ of these three sampling plans if the proportion defective in the lot is 0.03?
assignment mcq

View Answer

Answer: .0281

Q31: A local lottery outlet wanted to determine the hourly work standard for processing the selections for the weekly game. The time study method was used and 15 observations of a four-step process produced the following data. Determine the number of samples that must be taken based on the “Insert Form” step. (Assume a precision of 4% and a desired confidence of 95%.)
assignment mcq

View Answer

Answer: 30

Q32: Assume that the completed study at the lottery outlet resulted in the listed select times and rating factors. All transaction steps are needed for every cycle. Determine the normal time for the complete cycle (NTC) in seconds.
assignment mcq

View Answer

Answer: 19.64

Q33: Which one of the following describes the correct sequence of stages of an accounting information system?
assignment mcq

View Answer

Answer: Correct choice – C

Q34: Onsider the following statements:
Management accounting reports are always specific-purpose reports and never general-purpose reports
Management accounting reports are subject to regulations imposed by the accounting profession
What is the validity of each statement?
assignment mcq

View Answer

Answer: D: Both statements are false. Management accounting reports can be both general-purpose and specific-purpose reports. They are not subject to regulation by the accounting profession. Therefore D is the correct answer.

Q35: Which one of the following is the balance sheet equation?

View Answer

Answer: Capital + Liabilities = AssetsThe assets are the resources of the business and the capital plus liabilities represents the claims on those resources (from the owners and from outside parties).

Q36: Which one of the following statements correctly describes the effect of a transaction on the balance sheet?
A The purchase of a motor van for cash £10,000 will increase the assets (motor van) by £10,000 and decrease capital by £10,000
B The payment of a payable £3,000 will decrease the claims (payables) by £3,000 and decrease capital by £3,000
C Goods purchased on credit £2,000 will increase inventories by £2,000 and increase claims (trade payables) by £2,000
D A trade receivable who pays an amount owed £1,000, will result in an increase in sales revenue by £1,000 and an increase in cash by £1,000

View Answer

Answer: C

Q37: Which one of the following statements best describes the purpose of a balance sheet?
The purpose of the balance sheet is to reveal:
assignment mcq

View Answer

Answer: CThe assets of the business (which are those resources held that meet certain criteria) are set out along with the claims against those assets.

Q38: Which one of the following best describes a non-current asset?
An asset:
A that is held for a fixed term
B that is held within the business on a continuing basis with the intention of generating wealth
C that has a physical substance
D is physically fixed, like a building

View Answer

Answer: BA non-current asset is held within the business on a continuing basis with the intention of generating wealth rather than resale.

Q39: Al. E Tosis had began a business with £95,000 capital invested. During the year, he withdrew £15,000 in cash and £5,000 in goods for his own use. At the end of the first year he had a capital balance of £85,000. What was the profit/loss for the year?

View Answer

Answer: Profit £10,000The profit/loss for the period is calculated as follows: assignment mcq

Q40: The following is a list of assets and claims for a business at the end of the second year’s trading.
assignment mcq

View Answer

Answer: £280,000The owner’s capital is calculated as follows:assignment mcq

Q41: Which is the correct order of assets and claims when using the vertical (or narrative) format for the balance sheet?
assignment mcq

View Answer

Answer: AThe narrative format reflects the equation: Non-current assets + (Current assets – Current liabilities) – Long term liabilities = Capital.

Q42: A street vendor sells a magazine at the corner of a local high street for £2 a copy that cost £1 a copy from the magazine publisher. The vendor began the day with 20 magazines and £10 in cash. By the end of the day, he had sold 18 magazines and purchased, for cash, a further 15 magazines for the following day.
What is the difference (in £s) between the profit for the day and the cash held at the end of the day?

View Answer

Answer: £13The profit per magazine is £1 (£2 – £1) as 18 magazines were sold the profit is £18 (£1 x 18). The cash held at the end of the day is:assignment mcq

Q43: A business began the financial year with rent payable outstanding of £300. During the year, the business paid £3,200 in rent and at the end of the year the business had paid £500 rent in advance.
What was the rent payable expense for the year?

View Answer

Answer: £2,400 assignment mcq

Q44: Which one of the following best describes an expense?

View Answer

Answer: a trading event that causes a reduction in capital

Q45: A business begins the year with opening inventories of £14,560. During the year it purchases goods for £73,820 and sells goods for £89,630. The business makes a uniform 20 per cent gross profit on sales revenue. What is the closing inventories for the year?

View Answer

Answer: £16,676 assignment mcq

Q46: What is the validity of the following statements?
The total profits of a business over the life of a non-current asset are not affected by the choice of depreciation method
The total profits of a business over its life are not affected by the choice of inventories valuation method

View Answer

Answer: Both statement – True – True.

Q47: Consider the following two statements:
1. The market value of a share is known as the par value
2. The face value of a share is known as the nominal value
What is the validity of each statement?

View Answer

Answer: False – True

Q48: During the financial year, Modbury Ltd had the following increases in reserves:
£500,000 from a revaluation of freehold premises
£800,000 in share premium
£400,000 from trading profit retained
Which of these are increases in revenue reserves?

View Answer

Answer: 3 onlyA revenue reserve arises as a result of a realised profit. A capital reserve arises as a result of the revaluation of non-current assets or the issue of shares above their nominal value.

Q49: Consider the following statements:
The following gains may legally be withdrawn from the company by shareholders:
1. gains that arise from the upward revaluation of non-current assets
2. realised gains that arise from the sale of non-current assets
What is the validity of each statement?

View Answer

Answer: False – True

Q50: Which one of the following is correct? Accounting Standards are created by:

View Answer

Answer: the shareholders

Q51: Which one of the following is correct? The law imposes a legal obligation to maintain appropriate accounting records for a company on:

View Answer

Answer: the directors

Q52: Consider the following statements:
1. Preference shares are a more risky form of investment than ordinary shares
2. Preference shares are a more risky form of investment than loan capital
What is the validity of each statement?

View Answer

Answer: False – True

Q53: The financial statements of Tamerton plc for the most recent year indicated the following:
a bonus issue of shares
a transfer of trading profit to reserves
an increase in the revaluation reserve for non-current assets
a rights issue of shares
Which of the above involved a movement of cash?

View Answer

Answer: 4 only

Q54: Consider the following statements.
1. Reserves represent a cash balance which has been retained within a company
2. A bonus issue will increase the wealth of existing shareholders
What is the validity of each statement?

View Answer

Answer: False – False

Q55: The following is a list of financial events and their effect on profit and cash.
assignment mcq

View Answer

Answer: 2 and 4

Q56: The following is a list of financial events and their effect on profit and cash.
assignment mcq

View Answer

Answer: 2 and 3

Q57: Which one of the following is the correct order for presenting the three sources (uses) of cash in the cash flow statement?

View Answer

Answer: Cash flows from operating activitiesCash flows from investing activitiesCash flows from financing activities

Q58: The following information relates to a retail business for last year:
– £000
Dividend paid during the year 60
Net profit after interest, before taxation 180
Inventories held at the start of the year 50
Trade payables at the end of the year 70
Interest paid during the year 8
Depreciation charge for the year 20
Interest expense for the year 12
Trade payables at the start of the year 75
Corporation tax charge for the year 36
Corporation tax paid during the year 28
Inventories held at the end of the year 80
What is the amount of the cash flows from operating activities?

View Answer

Answer: £81,000

Q59: The following items were shown under the following headings in the draft cash flow statement for last year. Which one of these is not a correct match?

ItemHeading
A. Receipt from disposal of a non-current assetCash flows from financing activities
B. Corporation tax paidCash flows from operating activities
C. Dividends paid on ordinary sharesCash flows from operating activities
D. Repayment of loan capitalCash flows from financing activities

View Answer

Answer: Correct Answer: AReceipts from disposal of non-current assets should be shown under ‘cash flows from investing activities’, the other three items are correctly matched to the heading.

Q60: Which one of the following items should be shown under the heading ‘cash flows from financing activities’ in the cash flow statement?

View Answer

Answer: Repayment of debentures

Q61: Ermington plc, a business with no borrowings and which does not pay dividends, reported the following information relating to the most recent financial year:
£m
Corporation tax paid 15
Corporation tax charge 20
Depreciation 120
Cash flows from operating activities 195
Increase in inventories 30
Decrease in trade receivables 40
Increase in trade payables 25
What is the net profit before taxation?

View Answer

Answer: £175m assignment mcq

Q62: When using the indirect method to determine cash flows from operations, which one of the following measures of profit is normally used?

View Answer

Answer: Net profit after interest, before tax

Q63: The following information relates to a retail business for last year:
– £000
Net profit after interest, before taxation 130
Corporation tax charged for the year 55
Corporation tax paid during the year 40
Dividends paid during the year 20
Inventories held at the start of the year 70
Trade payables at the start of the year 55
Inventories held at the end of the year 60
Trade payables at the end of the year 75
Interest paid during the year 15
Interest expense for the year 12
Depreciation expense for the year 25
What is the cash flows from operating activities?

View Answer

Answer: £122,000

Q64: A summary of last year’s annual financial report for a business is as follows:
assignment mcq
What is the net profit margin ratio?

View Answer

Answer: 16.7% assignment mcq

Q65: A summary of last year’s annual financial report for a business is as follows:
assignment mcq
What is the average settlement period for receivables (in months)?

View Answer

Answer: 2.97

Q66: A summary of last year’s annual financial report for a business is as follows:
assignment mcq
What is the acid test ratio?

View Answer

Answer: 1.67:1

Q67: A summary of last year’s annual financial report for a business is as follows:
assignment mcq
What is the interest cover ratio?

View Answer

Answer: 8.0 times

Q68: The following are extracts from the profit and loss account for last year and balance sheet at the end of last year of Jacob plc:
assignment mcq
What is the return on capital employed?

View Answer

Answer: 22.6% assignment mcq

Q69: The following are extracts from the profit and loss account for last year and balance sheet at the end of last year of Jacob plc:
assignment mcq
What is the return on ordinary shareholders’ funds?

View Answer

Answer: 23.4% assignment mcq

Q70: The gross profit margin ratio of Penguin Products Ltd is higher this year than it was last year. Which one of the following factors could not be true of this year relative to last year

View Answer

Answer: A decrease in sales revenue and an increase in cost of sales.

Q71: Solar plc is a Stock Exchange listed business. Today the business’s share price rose. What effect will this have on its price/earnings ratio (P/E) and its dividend yield ratio (DY)?

View Answer

Answer: P/E—————DYIncrease———Decrease

Q72: Aziz Ltd has accounting ratios as follows:
sales revenue to total assets less current liabilties 1.7 times
working capital to non-current assets 75%
current ratio 2.1 : 1
If sales revenue totals £630,000, what will be the value of the current liabilities, to the nearest £?

View Answer

Answer: £144,592

Q73: Which of the following is the correct description of the break-even point?

View Answer

Answer: Where total revenue equals total fixed and variable costs

Q74: A. Choudray (Engineering) Ltd makes a product that is sold for £53 a unit and has the following costs per unit:
assignment mcq
The labour cost includes three hours charge for assemblers who are paid £6 an hour. The business is considering sub-contracting the assembly work as demand for the product outstrips the ability of the business to assemble the parts that are produced to make the product.
What is the maximum price that the business should be prepared to pay to have one unit of the product assembled?

View Answer

Answer: £37

Q75: Which of the following best describes a fixed cost?

View Answer

Answer: A cost that is unaffected by the level of output

Q76: Lim Ltd makes two products – Knick and Knack. Details of each product are shown below:
assignment mcq
The variable material costs consist entirely of material Delta. Each Knick uses 6 kgs and each Knack uses 5 kgs of Delta. This material is in short supply.
The business cannot vary the selling price of Knicks.
At what price must the business sell Knacks to ensure that each product uses Delta equally profitably?

View Answer

Answer: £41

Q77: avy Ltd owns a laser-cutting machine that is used exclusively for the manufacture of Product P100. The product details are shown below:
assignment mcq
The machine takes two hours to complete each product and is used to full capacity. The business has the opportunity to buy Product P100 from another business and, if it decides to do this, it will use the machine to produce Product P300. Details of this product are as follows:
assignment mcq
This product will take one hour to produce using the laser-cutting machine. What is the maximum price per unit that Tavy Ltd should pay to buy Product P100 from another business?

View Answer

Answer: £35

Q78: Which one of the following best describes the margin of safety?

View Answer

Answer: The extent to which the total sales revenue exceeds the total fixed and variable costs

Q79: M.Omran Ltd offers four different products to its customers. Details (per unit) are set out below:
assignment mcq
The business can make and sell as many of each product as is possible. However, machine availability limits the ability of the business to produce the products. Which product should the business produce in order to maximise profits?

View Answer

Answer: Economy

Q80: Which one of the following statements is correct? A variable cost is one which:

View Answer

Answer: is constant per unit of output irrespective of the level of output

Q81: For which one of the following uses is full costing most appropriate?

View Answer

Answer: Income measurement

Q82: Consider the following statements:
1. Direct costs always vary with the level of output
2. Indirect costs are always fixed and do not vary with output
What is the validity of each statement?

View Answer

Answer: False – False

Q83: Consider the following statements.
Total costs represent the sum of:
1. fixed and variable costs
2. direct and indirect costs
What is the validity of each statement?

View Answer

Answer: False – False

Q84: A business produces shampoo for dogs. Last month it produced 5,400 litres of the product. Details relating to the product are as follows:
assignment mcq
The business could let the premises in which the product is made to another business and receive a monthly rent of £2,000. What is the conventionally-calculated full cost of producing a litre of the product?

View Answer

Answer: £2.81

Q85: Consider the following two statements:
1. Indirect costs are also known as “overheads”
2. Overheads are also known as common costs
What is the validity of each statement?

View Answer

Answer: Correct – True

Q86: Lanning Ltd operates a lawn maintenance service for those occupying houses in Totnes. The business incurred the following costs during the most recent month:
———– £
Depreciation – lawn mowers 1,200
Wages of gardeners 1,800
Wages of foreman 700
Fertiliser 400
Rent of office and storage sheds 1,000
What are the total direct costs for the month for the purpose of calculating the cost of doing a job for a particular customer?

View Answer

Answer: £2,200

Q87: Lanning Ltd operates a lawn maintenance service for those occupying houses in Totnes. The business expects to incur the following costs during the next month:
assignment mcq
What are the total direct costs for the month for the purpose of calculating the cost of business operations?

View Answer

Answer: £6,140

Q88: Consider the following statements:
1. The overhead recovery rate used can affect the amount of overheads charged to a particular job.
2. The overhead recovery rate used can affect the total overheads to be apportioned between jobs.
What is the validity of each statement?

View Answer

Answer: True – False

Q89: Consider the following statements:
1. Job costing is a form of full costing
2. Batch costing is a form of full costing
What is the validity of each statement?

View Answer

Answer: True – True

Q90: Saltram plc had the following budget and actual figures for Product ZN6 during April.
assignment mcq
1. What is the sales price variance for Product ZN6 for the month of April?
2. What is the sales volume variance for Product ZN6 for the month of April?
3. What is the materials usage variance for Product ZN6 for the month of April?
4. What is the materials price variance for Product ZN6 for the month of April?
5. What is the direct labour efficiency variance for the month of April?
6. What is the direct labour rate variance for the month of April?
7. Which one of the following could not explain an adverse sales volume variance?
8. Which one of the following could not explain an adverse direct materials usage variance?
9. Which one of the following could not explain an adverse labour efficiency variance?
10.Which one of the following could not explain an adverse labour rate variance?

View Answer

Answer: A1. £5,000 favourableassignment mcqA2. £4,500 favourableassignment mcqA3. £10,500 adverseThe direct material usage variance is [(25,000 – 28,000) x £3.50] = £10,500. It is adverse as the variance reduces profit.A4. £800 adverseThe materials price variance is [(28,000 x £3.50) – £98,800] = £800. It is an adverse variance because it reduces profit.A5. £3,000 adverseThe direct labour efficiency variance is [(12,500 – 13,000) x £6] = £3,000. It is an adverse variance because it has an adverse effect on profit.A6. £13,000 favourableThe direct labour rate variance is [(13,000 x £6) – £65,000] = £13,000. It is a favourable variance as it increases profit.A7. Excess inventories holdingsA8. A deterioration in expected market conditions leading to lower salesA9. An increase in the hourly labour rateA10.An unanticipated change in market conditions for the goods produced

Q91: Which one of the following is true of the internal rate of return (IRR) approach to assessing investments?

View Answer

Answer: Use of IRR can be problematical when finance costs are changing from year to year.

Q92: Lister Ltd is assessing an investment project which will involve an initial outlay which will give rise to perpetual annual cash flows, receivable at the end of each year, of £2.4 million. These cash inflows have a present value of £16 million. This will give a positive net present value of £2 million.
What are the net initial outlay and the internal rate of return of the project?

View Answer

Answer: Intial Outlay (£14m) and IRR (17%)

Q93: Shah Ltd usually orders one of its inventory lines in batches of 500. The business is considering changing this to batches of 600, though the rate of usage of the inventories is not expected to alter.

The increase in the batch size would affect the annual inventories holding cost (HC) and the total annual cost of placing orders (OC) as follows:

View Answer

Answer: SC————OCincrease———decrease

Q94: Chin Ltd has both a current ratio and an acid test ratio of about 1.1 : 1. With which one of the following businesses is Chin Ltd most likely to be involved?

View Answer

Answer: Hairdressing

Q95: Antonin plc has a fairly large long-term loan commitment. The business has tended to be a fairly prompt payer of its trade payables, despite the fact that none of them offers a discount for prompt payment. The business now plans to slow its rate of paying trade payables and to use the funds released to pay off some of its long-term loans. What would the likely effects of this action be on the level of net profit and the quick assets ratio?

View Answer

Answer: Net profit————Acid test Ratioincrease—————decrease

Q96: The standard inventories model for bought-in stock is given as:
assignment mcq
What does w represent?

View Answer

Answer: The most economical size of purchase order

Q97: Which one of the following potential costs is minimised by holding very small levels of inventories

View Answer

Answer: High obsolescence cost

Q98: Which one of the following potential costs is minimised by holding very small levels of cash?

View Answer

Answer: Cost of loss of purchasing power due to inflation

Q99: Mozar plc, an all-equity financed business, currently has 20 million ordinary shares of £0.25 each. These are quoted at £1.70 each. The business is about to announce a three-for-ten rights issue at £1.20 each.
What will be the theoretical value of the right to buy one of the new shares?

View Answer

Answer: £0.38 assignment mcq

Q100: When setting the issue price for a rights issue of ordinary shares, which one of the following is a significant factor

View Answer

Answer: The need to make sure that the issue price stays below the market price until the issue takes place