Question 1:
A sportsware manufacturer sells tennis rackets for $90 each. Variable costs are $50 per unit. Fixed costs are $15,000 (excluding depreciation). Its only depreicable asset is a machine with a value of $110,000, a useful life of 6 years and a salvage value of 30,000. What is the accounting break-even? Ignore taxes
(a) 708
(b) 564
(c) 1080
(d) 956
Question 2:
If the sportsware manufacturer in the previous question expects sales of 1200, what is its profit to the nearest thousand
(a) $5,000
(b) $10,000
(c) $15,000
(d) $20,000
(e) $25,000
Question 7: A company had the following ratios in years 2008 and 2009:
Ratio Name 2008 2009
Current Ratio 0.5 0.5
Acid ratio 0.3 0.4
What caused the acid ratio to increase while the current ratio remained the same?
(a) An increase in cash
(b) The creation of prepayments
(c) An increase in inventory
(d) A decrease in Inventory
Question 8:
Which of the following is not a ratio used to address the profitability of the firm?
(a) Return on Assets
(b) Return on Equity
(c) Interest Cover
(d) Gross Profit Margin
Question 9:
On the cash flow statement the payment of a dividend would be classified under
(a) Operating activities
(b) Investing activities
(c) Financing activities
(d) Neither
Question 10: Which of the following is not a Current Asset:
(a) Inventory
(b) Property expected to be sold in the next twelve months
(c) Accrued wages
(d) Accounts receivable
Question 2: Which of the following is not a characteristic of an asset
(a) It is owned by the company
(b) Provides future economic benefits
(c) Capable of reliable measurement
(d) Arises as a result of a past event