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# A firm with an operating cycle of 50 days and a cash conversion cycle of 30 days, has an average payment period of . days. -80 B. -20 C. 20 D. 80 2....

1. A firm with an operating cycle of 50 days and a cash conversion cycle of 30 days, has an average payment period of ... days.

A. -80

B. -20

C. 20

D. 80

2. W Ltd. has an average age of inventory of 60 days, an average collection period of 20 days and an average payment period of 30 days. Calculate the firm's cash conversion cycle.

A. 110 days

B. 50 days

C. 70 days

D. 10 days

3. The financial manager is evaluating two new projects. The firm has a cost of capital of 8%. The two projects are expected to have the following cash flows:

Year                  Project A (R)              Project B (R)

1                       -50 000                  -80 000

2                       20 000                   40 000

3                       30 000                   30 000

4                       10 000                   30 000

What is the profitability index for Project A:

A. 1,13

B. 1,04

C. 1,20

D. 0,04

4. P Ltd. is evaluating two mutually exclusive investment projects for the next financial year. The firm's cost of capital is determined at 9%. The information pertaining to the two projects is as follows:

Year     Project X     Project Y

0        (-R80 000)   (-R25 000)

1         R5 000     R5 000

2        R10 000     R5 000

3        R20 000     R5 000

4        R40 000     R5 000

5        R50 000     R5 000

The net present value (NPV) of Project X is ...

A. R4 640,60

B. R10 235,78

C. R9 281,20

D. R50 000,00

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