Answer to Question #210541 in Management for Seseth

Question

Question 1

If IBM decides to finance non-current assets with long-term financing and current assets are financed with short-term funds, which approach to short-term financing are they using?

1 The matching approach

2 The aggressive approach

3 The conservative approach

4 The precautionary approach

Question 2

During the 2009/2010 fiscal year, SAB generated sales revenue of R33 billion. SAB decided to invest R330 000 in a fixed account that earns 10% interest. How much will the fixed account be worth in five years’ time?

1 R531 465

2 R337 669

3 R483 153

4 R830 258

Answer 1

1. Conservative approach
2. R483 153