SHOW YOUR CALCULATIONS 1. Choose which one of the following financial instruments generally provides the largest source

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SHOW YOUR CALCULATIONS
1. Choose which one of the following financial instrumentsgenerally provides the largest source of short-term credit forsmall firms?
A. Notes payable
B. Commercial paper.
C. Trade credit.
D. Accruals
2. AXN Sdn Bhd needs to raise RM1, 000,000 in short-term loanfor five months. loan from OCBC bank at discounted interest rate of12% per annum and a 20% compensating balance. The present accountbalance in the company is RM 100,000. Compute the effective cost offinancing
A. 16%
B. 14.12%
C. 42.12%
D. 16.92%
3. AXN Sdn bhd needs to raise RM1, 000,000 in short-term loanfor five months. a commercial paper with a face value of RM 100,000each at 12% per annum. The issuing cost is RM3,000 per paper.Compute the effective cost of financing
A. 20.87%
. 29.23%
C. 13.04%
D. 11.49%%
4. Issue a 10% RM100 par value of the preferred share .Thecurrent market price of the preferred share is RM80 per share. Thefloatation cost is at 5% of the par value . Calculate the cost offinancing
A. 14.93%
B. 13.33%
C. 13.16%
D. 10.53%
5. Issue a RM 1,000 par value bonds that pays 9% annual interestand matures in 5 years. The market value of the bond is RM 950, andthe floatation cost is 10% of the market value. Calculate the costof financing assuming the tax rate of the company is 25%.
A. 13.67%
B. 13.14%
C. 10%
D. 9.6 %
6. What is the component cost of common shares for a shareselling for RM70, which currently pays a dividend of RM 8, with anexpected constant growth rate of 6% and flotation costs of 5% ofthe selling price?
A. 18.8%
B. 13%
C. 18%
D. 16%
7. The mixture of long-term debt, preferred shares, and commonequity used to finance a business is called
A. financial structure.
B. permanent assets.
C. spontaneous liabilities.
D. capital structure.
8. A project whose acceptance requires the acceptance of one ormore alternative projects is referred to as __________.
A. mutually exclusive projects
B. independent projects
C. a dependent project
D. None of the above
9. Glade Berhad estimated that its inventory requirement fornext year is 100,000 units. The Purchase price is RM5 per unit andthe inventory will be delivered two weeks after placing the order.Historically, the carrying cost per unit is 10% of the purchaseprice of the goods and the cost per order is RM35. orders must beplaced in multiple of 100 units and the desired safety stock is1500 units. (assume there are 50 weeks in a year). Determine theEOQ level.
A. 3741.66
B. 3750
C. 3800
D. 3600
10. Based on Question 10 , calculate the Total InventoryCosts
A. RM 2620.83
B. RM 2625
C. RM 2621.05
D. RM 2622.22