QUESTION

40

Choose

the correct statement below:

a.   

The

holding company will add a value (advantage) of R20 000 by pooling cash from

its subsidiary accounts.

b.   

The

interest earned by pooling cash from the three subsidiaries' accounts equals R42

000.

c.    

The pooling of cash to the central master account will

save R16 000 that could have been lost if pooling had not been done.

d.   

The net pooling by the central treasury of Exotic

Spice Ltd will earn the company a collective interest of R36 000.

QUESTION

39

Which of the following

figures represents the balance of the master account if the central 

a.   

b.   

c.    

d.    surplus cash balance of R1 100 000

FOR

QUESTIONS  38 TO 40, REFER TO THE

FOLLOWING INFORMATION:

Exotic Spices Ltd is a holding company that sells a

variety of spices in South Africa. The company has three subsidiaries, one in

Limpopo Province, the second in Gauteng Province, and the third in KZN Province,

with its headquarters in Midrand. Each of its subsidiaries has an individual

bank account with different banks, and each subsidiary can finance its deficits

with an overdraft facility at a rate of 7% and invest the surplus cash, which

will earn the company a 4% interest.

The subsidiaries’ bank accounts reflect the following

balances:

Limpopo subsidiary, a debit balance of R500 000.

Gauteng subsidiary, a credit balance of R400 00000.

KZN subsidiary, a debit balance of -R200 000.

The

Master account has a debit balance R400 000

Required:

You are required to answer questions 39 to 40 after

preparing two schedules: The first one must indicate what will happen with the

bank balances of each subsidiary if the holding company in Midrand decides not

to pool cash from the three subsidiaries to a central master account, and the

second schedule must reflect the net results of physical cash sweeping to the

central master account.

QUESTION 38

Suppose Exotic Spice Ltd does not

arrange for cash pooling, and every subsidiary handles its cash separately with

its own bank. The net or combined interest amount payable/earned by the three

subsidiaries equals…

a.   

b.   

c.    

d.   

QUESTION 37

Fruits (Pty) Ltd will pay …

interest if it

1. R5

   101.90

2. R5

   231.93

3. R5

   602.10

4. R6

   041.70

QUESTION 36

Which one of the following values

represents the ending cash flow for July?

a.    R133 959

b.    R188 659

c.     R201 819

QUESTION 35

Which one of the following values

represents the ending cash flow for June?

a.    R500 000

b.    -R540 000

c.     R600 000

d.   

QUESTION 34

The total cash in/out flow for

the Months of June, July, and August is equal to 

1. R540 000,-R1

   180 000, and R673 959

2. R540 000,-

   R1 100 000, and R660 621

3. R580 000,

   -R1180 000, and R660 243

4. R580 000,

   -R1 100 000, and R680 890

QUESTION 33

The total cash disbursements for

the Months of June, July, and August are equal to …

a.   

b.   

c.    

d.   

QUESTION 32

The total of the added variable costs for

the Months of June, July, and August is

1. R500 000
2. R600 000
3. R700 000
4. R800 000

QUESTION 31

The total cash receipts for June,

July, and August are equal to …

1. R850 000,

   R890 000, and R680 000

2. R890 000,

   R890 000, and R640 000

3. R920 000,

   R960 000, and R610 000

4. R940 000,

   R960 000, and R640 000