Ace - AI Tutor
Ask Our Educators
Textbooks
My Library
Flashcards
Scribe - AI Notes
Notes & Exams
Download App
Neo Neoentle

Neo N.

Divider

Questions asked

INSTANT ANSWER

Assuming that the building met the reclassification requirements on 1 February 2024, what are the accounting journal entries that would be processed on this date? If the cost of the building was R1000 000 with a carrying amount of R591 667 and a fair value less cost of disposal of R500 000. A. Dr Non- current Asset held for sale: Office building at carrying amount R500 000 and Cr Office building at carrying amount R591 667 B. Dr impairment loss at the date of reclassification R91 667 and Cr Accumulated impairment loss R91 667. C. Dr Non- current Asset held for sale: Office building at fair value R500 000 and Cr the Office building at carrying amount R591 667 D. Dr non-current asset held for sale at Fair value less cost to sell R500 000; Accumulated depreciation R408 333; Cr Cost of the office building R1000 000 and Dr the resulting impairment loss R91 667.

View Answer
 divider
ANSWERED

Shu Naito verified

Numerade educator

If the risk of a company increases the following will happen: a. The earnings yield will increase. b. The PE ratio will increase. c. The earnings per share will decrease. d. None of the options.

View Answer
 divider
ANSWERED

Shu Naito verified

Numerade educator

The following statement on the financing decision are provided: a) Equity finance and debt finance are the two main types of finance available to a company b) Short-term requirements do not have an impact on the decisions of how a company should be financed. c) Debentures, mortgage bonds, non-distributable reserves, long-term loans, lease finance and any form of long-term finance that does not have an option to convert to ordinary shares are sources of debt finance. d) The owners of shares in a company are the providers of equity finance. e) Equity funding includes ordinary issued share capital, distributable and non-distributable reserves and retained earnings. Which of the statement provided above are FALSE? a. Options (b) and (c) b. Options (a) and (e) c. Options (b), (c) and (e) d. Options (a), (b) and (c)

View Answer
 divider
ANSWERED

Yujie Wang verified

Numerade educator

Which of the following statement(s) is (are) incorrect? a) “Replacement projects” is when the acceptance of one project does not affect the decision whether to accept or reject another project. b) Projects are mutually exclusive when only one of the projects can be accepted. c) Capital budgeting is the main tool managers use to evaluate investments and make important financing decisions for the business. d) A divisible project must be implemented in full (i.e., the whole project) at the same time. Choose the CORRECT combination: a. Options (c) and (d) b. Options (a) and (b) c. Option (d) only d. Options (a), (c) and (d)

View Answer
 divider
ANSWERED

Shu Naito verified

Numerade educator

Consider the following statements: a) The number of days between the receipt of material and the actual cash payment made to the supplier is called the raw material time lag. b) Net working capital is a financial indicator to gauge the liquidity of a business. c) Management has no influence on tax payable on profits. d) When a company makes an investment in inventory and debtors in return for increased cash flow from the extra sales, the granting of credit is viewed as an investment decision e) The duration of the cash cycle can be reduced by an increase in inventory turnover. Choose the correct option: a. Statements (c), (d) and (e) b. Statements (b), (c), (d) and (e) c. Statements (b), (d) and (e) d. Statements (a) and (b)

View Answer
 divider
ANSWERED

Shu Naito verified

Numerade educator

Regarding working capital, which of the following statements are NOT ACCURATE? a) Net working capital is inventory, plus trade receivables, plus cash and minus trade payables b) A company can shorten its operating cycle by ensuring that its suppliers are paid early all the time, leading to potential discounts from the suppliers. c) Net working capital also refers to net current assets. d) Negative working capital indicates poor management of working capital of the company. e) Negative working capital means that the company is insolvent, as it is not able to meet its short-term obligations. Choose the CORRECT combination. a. Option (a), (b), (d) and (e) b. Option (c) and (d) c. Option (b), (c) and (d) d. Option (a), (b) and (e)

View Answer
 divider
ANSWERED

Sanchit Jain verified

Numerade educator

__________________ is the manager’s obligation to perform certain tasks and to achieve certain outcomes. Which word should be added in the blank space to make the sentence complete? a. Empowerment b. Responsibility c. Authority d. Expert power

View Answer
 divider
ANSWERED

Sanchit Jain verified

Numerade educator

Dudablo has 10 million ordinary issued shares with a current market price of R60. Dudablo is contemplating to take an investment project which requires an initial cash outflow of R90 million. The IRR of the project is equal to the Dudablo’s cost of capital. What will Dudablo’s share price be if capital markets fully reflect the value of undertaking the project? a. R40 b. R20 c. R60 d. R69

View Answer
 divider
ANSWERED

Shu Naito verified

Numerade educator

Company A currently have debt to the value of R3 million. The equity value is R3 750 000. They want to invest in a new capital project to the value of R2 500 000. The targeted capital structure they are working towards is 50% debt, 50% equity. How will the amount of R2 500 000 be financed for the company to meet the targeted capital structure? a. Equity to the value of R875 000 and debt to the value of R1 625 000 b. R1 1000 000 debt finance and R1 400 000 equity finance c. R875 00 debt finance and R1 625 000 equity finance d. Equity finance to the value of R1 625 000 and debt finance to the value of R875 000.

View Answer
 divider
ANSWERED

Shu Naito verified

Numerade educator

The following net present value (NPV) is presented to you. Assume all calculations were done correctly: Year 0 Year 1 Year 2 Year 3 Year 4 Year 5 Cost (20 500 000) Working capital (1 670 000) 1 670 000 Operational costs (1 300 000) (1 300 000) (1 300 000) (1 300 000) (1 300 000) Sales income 5 796 000 6 143 760 6 512 386 6 903 129 7 317 316 (22 170 000) 4 496 000 4 843 760 5 212 386 5 603 129 7 694 439 The weighted average cost of capital of the company is 7%. The current JIBAT rate is 10% and cost of equity will be 9%. The company tax rate is 28%. What is the NPV of this project? a. (R1 563 246) b. R142 877 c. (R977 789) d. R271 913

View Answer
 divider