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1. What does a factoring company inancer a. Intangible assets b. Inventories c. Trade receivables 2. Which of the following is NOT a compulsory investment? sources tung a. Removing pollution from the production facilities b. Constructing a new plant c. Spending money on safety equipment 3. Funds produced by investors (shareholders and lenders) are considered of financing 4. Shareholders have two types of rights and specific rights 5. What must the NPV be for a capital project to be favourable? a. More than the return on assets b. Positive c. Negative 6. What does the net present value calculation NOT take into consideration? a. Cash outflows b. Cash inflows c. The level of risk 7. The principle is the process that relates financial needs to financing requirements in terms of length of time (e.g., mortgage used to finance a house). Focus 20 8. What financing options are NOT offered by chartered banks? Voice Sensitivity Editor Reuse File a. Lines of credit b. Single loans c. Factoring loans 9. How can non-current assets be financed? a. Through confirming institutions b. Through factoring companies c. Through retained earnings 10. When does the cash outflow usually take place for a capital project? a. During the second year of operation when the payout is earned. b. During the last year when the payout is made C At year zero when the payout is made 11. risk has to do with the uncertainty inherent in projecting the level of revenue and profit 12. What does the discounted payback method calculate? 13. Which of the following is a financial need? a. Revolving credit b. Inventories c. Bond payable 14. How is economic value added (EVA) calculated? a. By subtracting dividends from the net operating profit after taxes b. By subtracting dividends from the net operating profit before taxes C. By subtracting cost of capital from the net operating profit after taxes 15. What is the ultimate reason for injecting funds into capital projects? a. To reduce the amount of income taxes. b. To improve the return on investment C. To maintain the level of expenses 16. financing is considered funds provided to a business by its owners. 17. What term refers to supplier credit? a. Trade credit b. Revolving credit C. Inventory credit d. Investment credit 18. Which of following statement is true? a. The weighed average cost of capital can be compared to the price earnings ratio. b. The weigthed average cost of capital can be compared to ROA to ensure that the return generated from a particular investment justifies the cost and risk c. The weigthed average cost of capital can be compared to share capital d. The weigthed average cost of financing calculation includes accounts such as non-current assets. 74. Sale and leaseback is an arrangement made by someone to sell an asset to a lessee, than leases it

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