Question 1

Harris Wholesale Grocery Company has gross sales per year of $7 million and grants credit terms to its customers of 2/5. net 15 As a result. 60% of customers pay on the discount date 20% pay on the net due date, and 20% pay on average 10 days after the due date Assuming that sales are uniform throughout the year and using a 360-day year In the calculation what is the approximate annual amount of discount that Hams customers are allowed to take?

Options :

A : $28,000

B : $84,000

C : $140, 000

D : $210,000

Answer: C

Question 2

IF a company does not have a code of conduct, the company most likely

Options :

A : is missing important guidance on ethical decision making

B : will lack an expressed statement of values regarding ethical behavior

C : can use its statement of values instead to implement ethics in daily decision making

D : must find another way to express its ethical principles

Answer: A

Question 3

Marsalls Products Inc. manufactures and sells two products CD-ROMs and DVD's. The latest forecast on me

products and their costs tor the coming year is shown in the following table.

Note 1: Fixed manufacturing cost of Si.500 000 per year is allocated to products based on the number of

machine hours required to produce the product at a rate of S3 per machine hour

The Manufacturing Team leader just informed the CEO that a fire occurred at one of the manufacturing lines

and that line would be unavailable for the next 12 months. The result is that mere will only be 400 000

machine Hours available The CEO requested the management team to revise the plan for the coming year

based on the new constraint. The Marketing Team leader stated that in order to minimize customer complaints

about the shortage, a minimum of 100,000 units of each product should be produced With the new information

from the Manufacturing and Marketing teams what is the optimal product mix for the coming 12 months''

Assume Marsalls can sell allot its production.

Options :

A : 100,000 CD-ROM-s and 150,000 DVD'[s

B : 120.000 CD-ROM-s 140,000 DVD.

C : 150.000 CD-ROMS and 125.000 DVD

D : 200,000 CD-ROm-s a dn 100,000 DVD

Answer: D

Question 4

The best discount rate to the use for evaluate of investment opportunities is the

Options :

A : opportunity cost of capital

B : risk-free interest rate

C : average market interest rate

D : cost of the company-s debt

Answer: A

Question 5

Plenary Inc specializes in overnight package delivery. Total packages delivered last year were 10 000.000. and this quantity is expected to remain unchanged in the coming year. Unit contribution margin is $4,50 and total fixed costs are S40.000,000. The firm's 300 delivery truck drivers are seeking a S10 000 raise in annual salary In addition to a current base salary of $45 000 per year, the drivers receive a commission of $0 50 per package delivered If the firm grants the $10,000 salary increase to each driver and seeks to maintain the same level of pre-tax operating profit what is the maximum amount of commission the firm can pay its drivers per package delivered?

Options :

A : $0.0

B : $0.20

C : $0.30

D : $0.35

Answer: B

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