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Which of the following statements are correct?
GHJ makes large export sales to customers in Country A, whose currency fluctuates significantly against GHJ's home currency. GHJ also makes large purchases from suppliers in Country A. All of these transactions are in Country A's currency. GHJ's Treasurer does not actively hedge currency risks because there is a natural...
Which of the following statements are correct?
Which of the following statements are correct?A . It is always possible to remove all risks when undertaking large projects.B . If a project has high risks it should always be accepted as the rewards will always be high.C . If a project has low risks it will usually have...
Which of the following internal controls should be put in place to try and prevent further bad debts?
Company M has lost 25% of its revenue in the last three months due to bad debts. One of the receivables written off was from a long standing customer and the other three were from new customers. The management accountant has warned the sales team that the company cannot survive...
Which TWO of the following statements reflect an appropriate response by the board of directors to this report?
The internal audit department has just completed an investigation into the HR department's procedures relating to new staff appointments The head of HR is unhappy with the draft report prepared by the lead internal auditor The report lists several cases in which appointments were made despite the fact that one...
Which of the following factors strengthens the case that T has been incompetent?
T is an accountant who has been accused of professional incompetence T agreed to advise a client on currency management and the client lost a great deal of money when a large foreign currency trade receivable declined in value without having been hedged. Which of the following factors strengthens the...
What is the NPV of continuing with this project?
A project has been evaluated on the basis that it will cost $22 million and will have a net present value of $4.3 million The project has commenced and $5 million of the $22 million has been invested. A problem has been discovered that will cost an additional $4.5 million...
Using interest rate parity theory, what GBP/USD spot rate would you expect to see in six months' time?
The long-term prospects for interest rates in the UK and the USA are 2% and 6% per annum respectively. The GBP/USD spot rate is currently GBP/USD1.71. Using interest rate parity theory, what GBP/USD spot rate would you expect to see in six months' time?A . GBP/USD = 1.74B . GBP/USD...
Which of the following is most likely to explain the decision to choose model X over model Y?
K has several subsidiary companies. The directors of K's subsidiaries are paid an annual b onus based upon their particular subsidiary's reported profits. The directors of one of K's subsidiaries are considering the choice between two models of a machine. Which of the following is most likely to explain the...
Why might the directors be reluctant?
The board of OKN is considering an investment opportunity that will require the company to borrow a large amount in month 10 of the current financial year and to invest it immediately in property, plant and equipment. This investment has a positive net present value that justifies the risk, but...
Which of the following is the most likely explanation for the third-party owner's refusal to assist JNH's Head of Security?
JNH is a major corporation that stores its customer database in the Cloud JNH has suffered a data breach that has led to customer credit card details being made available for sale on the internet JNH's Head of Security wishes to analyse network traffic at the cloud-based server in order...
