RESTRICTED USE
LA TROBE UNIVERSITY
SPECIAL EXAMINATION
SEMESTER TWO EXAMINATION PERIOD
2017 – S2 – 2
Student ID: Seat Number:
Subject Code: BUS1AFB Paper No: 1
Subject Name: Accoun)ng and Finance for Business
Paper Name: Special Examina)on
Reading Time: 15 minutes
Wri)ng Time: 90 minutes
No. of Pages (including cover sheet): 17
OFFICE USE ONLY (FACULTY/SCHOOL STAFF):
CAMPUS AW BE BU MI SH
ALLOWABLE MATERIALS
Numbe
rdescription
01 Programmable or non-programmable calculator permitted.
18
Students from non-English speaking backgrounds can bring
unmarked, non-electronic translation dictionaries into the
examination
54 Prescribed text – must be unmarked except of highlighting and
underlining and unmarked paper tabs.
92 Students may make notes during reading time (not on multiple
choice answer sheets)
INSTRUCTIONS TO CANDIDATES
1. You must answer ALL questions on the Answer Sheet provided.
2. Ensure that you provide all details requested on the Answer Sheet.
3. The prescribed text referred to under 54 above is: Hancock, P. et al. (2016) Accounting and
Finance for Business. (editions 1 or 2) Compiled by La Trobe Business School. Cengage
Learning
1
This paper MUST NOT BE REMOVED from the examina)on venue
2
1. Which of the following IS an operating cash ow?
(A) Depreciation.
(B) Dividends.
(C) Receipts from customers.
(D) Capital Gain.
2. Which of the following IS an investing cash ow?
(A) Issuance of shares.
(B) Capital expenditure on property, plant and equipment.
(C) Increased borrowings.
(D) Payments to suppliers.
3. Which of the following is NOT a ,nancing cash ow?
(A) Issuance of shares.
(B) Purchase of a business.
(C) Increased borrowings.
(D) Dividends.
4. The rating given to individual bonds reects the _____________ of the bond issuer.
(A) restrictive covenants.
(B) <nancial return.
(C) bond duration.
(D) likelihood of default.
5. Beta is a measurement of:
(A) non-systematic risk.
(B) market risk.
(C) the equity risk premium.
(D) business risk.
6. An interest rate, which compounds annually:
(A) Will generate a higher future value than an interest rate, which compounds monthly.
(B) Will generate the same future value than an interest rate, which compounds monthly.
(C) Will generate a lower future value than an interest rate, which compounds monthly.
(D) Has a higher e7ective rate of interest than an interest rate, which compounds monthly.
7. Solvency refers to the ability of a business organisation to:
(A) Earn a high rate of pro,t.
(B) Meet its short–term ,nancial obligations.
(C) Meet its long-term <nancial obliga)ons.
(D) Meet its short-term obligations from its cash and near cash assets.
8. Liquidity refers to the ability of a business to:
(A) Generate a pro,t.
(B) Meet its short-term <nancial obliga)ons.
(C) Raise capital by issuing shares to investors.
(D) Meet its long-term ,nancial obligations.
9. Which of the following is NOT a liability?
(A) Borrowings.
(B) A loan to directors of the <rm.
(C) Tax payables.
(D) Short term debt.
Questions continue overleaf
10. Which of the following is NOT an asset?
(A) Property, plant and equipment.
(B) Trade payables.
(C) Trade receivables.
(D) Cash equivalents.
Questions continue overleaf
Case Study 1:
11. If Martin accepts Option A for 3 years, how much will he have saved at the end of 3
years?
(A) $105,000
(B) $115,763
(C) $86,384
(D) $115,000
12. If Martin accepts Option B for 3 years, how much will he have saved at the end of 3
years?
(A) $102,500
(B) $86,230
(C) $115,969
FACTS SET
Martin Johnson has just inherited $100,000 and was considering several savings plans.
Op)on A: Invest the sum in a ,xed term deposit account, offering a ,xed rate
of 5% per annum, compounding annually.
Op)on B: Investment the sum in a ,xed term deposit account, o7ering a ,xed
rate of 5% compounding semi-annually.
Op)on C: Invest the sum in a ,xed term deposit, o7ering a ,xed simple rate of
5% per annum.
This fact set relates to ques)ons 11 – 15
