Question $1$Not yet answeredFlag questionQuestion textHorizontal analysis is primarily used to:Question $1$Answera.Compare financial statements across different companiesb.Analyse financial ratios over multiple time periodsc.Examine financial statement data within a single periodd.Compare line items on financial statements over two or more periodsQuestion $2$Not yet answeredFlag questionQuestion textThe process of allocating funds to long$-$term assets that will generate returns over time is known as:Question $2$Answera.Working capital managementb.Capital budgetingc.Tax planningd.Dividend policyQuestion $3$Not yet answeredFlag questionQuestion textWhich of the following best defines risk in the context of investments?Question $3$Answera.The total value of your investment portfoliob.The chance of making a profitc.The possibility that the actual returns will differ from expected returnsd.The probability of achieving your expected returnQuestion $4$Not yet answeredFlag questionQuestion textThe two well$-$known theories on capital structure areQuestion $4$Answera.Traditional capital structure theory and Market to Market theoryb.Traditional capital structure theory and Miller and Modigliani theoryc.Target and Expected theoryd.Traditional capital structure theory and Traditional Incremental capital structure theoryQuestion $5$Not yet answeredFlag questionQuestion textFinancial management is essential in ensuring a companys liquidity. Which ratio is most used to measure liquidity?Question $5$Answera.Return on equityb.Price$-$to$-$earnings ratioc.Debt$-$to$-$equity ratiod.Current ratioQuestion $6$Not yet answeredFlag questionQuestion textWhich of the following investments is typically considered the least risky?Question $6$Answera.Real estateb.Corporate bondsc.Government treasury bondsd.StocksQuestion $7$Not yet answeredFlag questionQuestion textPluto Ltd sells $200000$ units of an organic fertiliser product to retail stores. The cost to the company is N$$5$ per unit. The cost of processing each order is N$$80$ and the carrying cost is N$$0\mathrm{.}50$ per unit. Using the Economic Order Quantity $($EOQ$)$ model determine what amount the company shoulder order at a time?Question $7$Answera$\mathrm{.}7000$b$\mathrm{.}8000$c$\mathrm{.}2530$d$\mathrm{.}2000$Question $8$Not yet answeredFlag questionQuestion textWhat does a high debt$-$to$-$equity ratio indicate about a company?Question $8$Answera.The company has no long$-$term debtb.The companys stock price is undervaluedc.The company has a low level of financial riskd.The company relies more on debt financingQuestion $9$Not yet answeredFlag questionQuestion textWhich of the following costs not associated with selling on creditQuestion $9$Answera.The administrative costs of managing debtorsb.Cost of the delivery vehiclec.The cost of financing debtorsd.Lawyer collection feesQuestion $10$Not yet answeredFlag questionQuestion textThe cost of equity can be estimated using which of the following models?Question $10$Answera.Dividend Growth Modelb.Arbitrage Pricing Modelc.Discounted Cash Flow Modeld.Black$-$Scholes ModelQuestion $11$Not yet answeredFlag questionQuestion textYou are about to take out a $20-$year home loan with a commercial bank. The loan terms specify the selling price of N$$700000$ for erf $8900$ situated in Windhoek$-$Havana area. The bond registration and transfer costs are N$$15000$ and N$$10000$ respectively. How much is your monthly payment if the interest rate is $11\mathrm{.}75\%$ per annum and the total loan is inclusive legal costs?Question $11$Answera.None of theseb$\mathrm{.}7401$c$\mathrm{.}8501$d$\mathrm{.}7856$Question $12$Not yet answeredFlag questionQuestion textYou are about to take out a $20-$year home loan with a commercial bank. The loan terms specify the selling price of N$$700000$ for erf $8900$ situated in Windhoek$-$Havana area. The bond registration and transfer costs are N$$15000$ and N$$10000$ respectively. How much is your monthly payment including insurances if your monthly mortgage insurance is N$$725$ and property insurance is N$ $120?$Question $12$Answera$\mathrm{.}7945$b$\mathrm{.}8345$c$\mathrm{.}8701$d$.$None of theseQuestion $13$Not yet answeredFlag questionQuestion textWhich financial management decision involves determining the right mix of debt and equity financing?Question $13$Answera.Dividend decisionb.Financing decisionc.Investment decisiond.Working capital decisionQuestion $14$Not yet answeredFlag questionQuestion textWhat is systematic risk?Question $14$Answera.Risk inherent to the entire market or a particular segmentb.Risk that affects only a specific companyc.Risk that can be eliminated through diversificationd.Risk related to bad management decisionsQuestion $15$Not yet answeredFlag questionQuestion textWhat is the relationship between risk and return in investing?Question $15$Answera.Higher risk typically leads to lower returnsb.There is no relationship between risk and returnc.Lower risk guarantees higher returnsd.Higher risk typically leads to higher potential returnsQuestion $16$Answer savedFlag questionQuestion textWhich of the following statements is correct about Traditional capital structure theoryQuestion $16$Answera.Capital $($WACC$)$ is achieved.b$.$Capital structurec.Traditional capital structure theory assumes that the firms cost of capital is dependent on itsd.An optimal capital structure does exist and depends on the level of gearinge.The company cannot maximise shareholders wealth unless the optimal Weighted Average CostQuestion $17$Answer savedFlag questionQuestion textWhich of the following not part of working capitalQuestion $17$Answera.Deferred taxb.Inventoryc.Account receivabled.Income received in advanceClear my choiceQuestion $18$Answer savedFlag questionQuestion textHow is the return on Equity $($ROE$)$ ratio calculated?Question $18$Answera.Shareholders' Equity $/$ Net Incomeb.Total Assets $/$ Shareholders Equityc.Net Income $/$ Shareholders Equityd.Net Income $/$ Total AssetsClear my choiceQuestion $19$Answer savedFlag questionQuestion textWhich of the following is an example of annuity?Question $19$Answera.Transfer costb$.$Bond registration costc$.$Mortgage paymentsd.Monthly income tax payableClear my choiceQuestion $20$Answer savedFlag questionQuestion textWhich of the following is not a key function of financial management?Question $20$Answera.Financing decision$-$makingb.Investment decision$-$makingc.Talent acquisitiond.Financial reporting and analysisClear my choiceQuestion $21$Answer savedFlag questionQuestion textWhat does a high inventory turnover ratio indicate?Question $21$Answera.The company is not selling its inventory quicklyb.The company is efficiently managing and selling its inventoryc.The company has high inventory management costsd$.$The company has excess stock on handQuestion $22$Answer savedFlag questionQuestion textWhich of the following is an internal source of finance?Question $22$Answera.Retained earningsb.Bank loanc.Issuing bondsd.Lease financingClear my choiceQuestion $23$Answer savedFlag questionQuestion textCash conversion cycle is equal to:Question $23$Answera.Inventory period plus Account payable periodb.Operating cycle less Accounts payable periodc.Operating cycle plus Account payable periodd.Inventory period plus Account receivableQuestion $24$Not yet answeredFlag questionQuestion textPluto Ltd sells $200000$ units of an organic fertiliser product to retail stores. The cost to the company is N$$5$ per unit. The cost of processing each order is N$$80$ and the carrying cost is N$$0\mathrm{.}50$ per unit. How many orders will the company place over the year?Question $24$Answera$\mathrm{.}25$b$\mathrm{.}50$c$\mathrm{.}100$d$\mathrm{.}79$Question $25$Not yet answeredFlag questionQuestion textWhich is of the following is a method to reduce unsystematic risk?Question $25$Answera.Buying more of a single stockb.Timing the market for short$-$term gainsc.Investing only in foreign marketsd.Diversifying your portfolio across different assets and industriesQuestion $26$Not yet answeredFlag questionQuestion textWhat is the primary gold of financial management?Question $26$Answera.Maximization of employee satisfactionb.Reducing taxesc.Maximizing shareholder wealthd.Minimizing operational costsQuestion $27$Answer savedFlag questionQuestion textYou are about to take out a $20-$year home loan with a commercial bank. The loan terms specify the selling price of N$$700000$ for erf $8900$ situated in Windhoek$-$Havana area. The bond registration and transfer costs are N$$15000$ and N$$10000$ respectively. What is total home loan amount including legal fees if the bank finance erf $8900?$Question $27$Answera$\mathrm{.}715000$b$\mathrm{.}710000$c$\mathrm{.}700000$d$\mathrm{.}725000$Question $28$Answer savedFlag questionQuestion textWhich of the following statements is correct about time value of money?Question $28$Answera.Time value of money is one of the variables that do not affects the interest rateb.Time value of money is not a financial management conceptc.Mortgage loan amortisations and retirement planning are two cases where time value of money principles is appliedd.Time value of money is only about the future valueQuestion $29$Answer savedFlag questionQuestion textMarket value of a company is equal to:Question $29$Answera.Market value of long $-$term debt $+$ Market value of short$-$term debtb.Market value of equity $+$ Market value of debtc.Market value of equity $+$ Market value of assetsd.Market value of assets $+$ Market value of debtClear my choiceQuestion $30$Answer savedFlag questionQuestion textWhich of the below is not an assumption made by Miller and Modigliani $($M&M theory$)$Question $30$Answera.Investors are rationalb.All investors have the same expectation about the futurec.There are transaction costsd$.$The capital markets are perfectClear my choiceQuestion $31$Answer savedFlag questionQuestion textEquity financing is preferable when a company:Question $31$Answera.Wants to retain full control over decision$-$makingb.Wants to avoid paying regular interestc.Has low risk of defaulting on loan paymentsd.Needs tax benefits from interest paymentsQuestion $32$Answer savedFlag questionQuestion textThe term Capital structure refers to the relationship between:Question $32$Answera.Long term loan, preference share, and equity share capitalb.Current liabilities plus non$-$current liabilitiesc.Sum of all non$-$current assetsd.Finance lease and non$-$current assets