Phase Test Revision 2

QUESTION 1

Working Capital Management is an important part of a business’ operation. Explain the

components of Working Capital and highlight TWO (2) ways each will be managed.

QUESTION 2

Sam has an amount RM150,000 to be placed in a bank to earn interest.

a) Calculate the amount of interest annually if the bank offers 5% simple interest.
b) Calculate the amount of interest accumulated in year 5 if the bank offers 4% interest
compounded annually.
c) Calculate the amount in the account after 6 years based on interest in a)
d) Calculate the difference in interest after 6 years between interest a) and b)

QUESTION 3

Equity and Debt financing are different in nature.

Explain the characteristics of Equity Financing and Debt Financing with reference to the risk
involved by the company and the Financing Provider.

QUESTION 4

Define and explain the usage of the Cash Conversion Cycle and how it is different from the
Operating Cycle. Include components of a Cash Conversion Cycle and how they are calculated
in your answer.