CFO Test

Where can information about the total interest accrued during the reporting period of one year be found?

You have $50,000 for a down payment on the purchase of a new office building, but your accountant recommends you put this money into a term deposit until you are ready to purchase next year. Your bank is offering 12-month fixed term deposits with an annual interest rate of 3.0%, paid at maturity.

How much will you have for your down payment if you cash in your term deposit at maturity?

A wholesale tuna market is obtaining tuna from both domestic and foreign suppliers. Pricing is set based on supply and local demand.

Which events would trigger an increase in the amount, measured in tons, of tuna being traded at the market?

Read the statement below and fill in the blanks with the correct answers.

Liquidity ratios indicate an enterprise's ability to pay _________________________ while solvency ratios indicate an enterprise's ability to pay _________________________. If we see that the Quick Ratio is ____________________ over time and the Current Liquidity Ratio is ____________________ over time, we can conclude that the company’s ability to pay short-term debt is probably improving.

DEF Limited, a company that specializes in high-end audio components, is planning to expand into a new market by investing in a new production line. That investment consists of $100,000 received from a five-year loan and $50,000 of DEF’s own cash. DEF’s management has decided to use the straight-line depreciation method over a 10-year period, and the salvage (residual) value of the production line is zero.

What is the increase to DEF’s fixed assets when the production line is put into operation?

(Round your answer to whole dollars.)

Ariana is producing organic blueberry jam from her small garden. Producing the first jar is expensive ($8.00) because she needs time to get set up. With every additional jar of jam, the cost decreases, all the way to $2.00 for the 7th-11th jars. But if she wants to produce more than 11 jars, Ariana needs to invest more money into organic fertilizer, which in turn increases the cost of jars after the 11th. She has never succeeded in producing more than 25 jars in total. Ariana tracked the estimated cost of every jar she has produced:

A merchant offers to pay $5.10 per jar for as many jars as Ariana can produce.

For this price, how many jars should she produce in order to maximize her profit?

Study the balance sheet information for Carlton Corporation in 2015 in the image below.

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What is the value of the Current Asset Turnover Ratio for Carlton Corporation in 2015?

(Round your answer to two decimal places.)

The housing market is overheating, labor unions are protesting against sky-high house prices, the central bank is worried that further increases in household mortgage debt threaten the nation’s financial stability, and politicians are being pressured to help their electoral bases.

Which measures should work in favor of lowering the sale prices of houses?

As a manager, it is your responsibility to review the quarterly expense reports submitted by members of your team. Each member of the team is allowed to expense $20,000 annually for work-related travel expenses.

It is now the halfway point in the year, and you need to review the travel expenses claimed so far:

If each employee's costs continue at their current rate, which employees, if any, will go over budget with their travel expenses in the second half of the year?

At your local office supply store, you see a group of chairs that all look almost exactly like your broken desk chair:

• The BenzerCo chair is offered at 25% off its list price of $200.
• The Lilijet chair sells for $220 but has a promotional rebate of $60.
• The Torpa chair is on clearance, so it comes with a 40% discount off its regular price of $245.

Study the balance sheet for Edampilz in 2017 in the image below.

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What is the value of the Debt Ratio for Edampilz in 2017?

(Round your answer to two decimal places.)