The following forecasts and estimations should be made in order to prepare the proforma financial reports:

• Sales, direct materials, direct labor and manufacturing overhead budgets,

• The forecasted sales, management expenses budget,

• Existing funding structure,

• The ownership structure,

• The volume and amount of direct materials,

• The volume and amount of finished products,

• The existing amount of fixed assets,

• The receivables and payables,

• The sales and proceeds,

• Non operating and extraordinary expenses,

• Operating expenses,

• Net profit.

The cash budgets ensure the availability of cash in the required time and in the required amount to with the most favorable funding costs. Additionally, it helps to utilize the cash in the most effective manner. In order to serve for those purposes, the cash budgets should be prepared in short periods, even daily when the cash management is critical. The basic aims to prepare the cash budgets are: 

• To make available the required amount of cash for the realization of planned activities,
• To determine the cash shortfall and/or excess,
• To coordinate the cash management for working capital, sales, liabilities and procurements,
• To define the funding sources when necessary,
• To plan an effective collection policy,
• To stipulate the availability of cash for investments,
• To define the minimum acceptable cash amount,
• To enable the control of cash inflows and outflows.

Therefore, the correct option is A.

• Time: As a means of survival in the market place, timing and availability of the required funds is critical.
• Investment: Although working capital management focuses on short-term asset and
liabilities, the relevant decisions indirectly determines the available funding for  investments.
• Credibility: Working capital management has great significance for all companies, but it is more critical for smaller companies which have more restricted funding capabilities. .
• Growth: The availability of funds contributes to the activity level in the short- run and potential growth by realizing investments in the long-run.

A possible security bug in the SWIFT payment system will create losses for almost all companies. The consequences of this risk make it a systematic risk. The other risks given in A, B, C and D are unsystematic risks that affects a limited number of companies.  

The main source of financing secured internally has been by means of Accruals. The major accrual items are wages and taxes which in turn create obligations to payments to the employees and to the government.

A,B,D,E are amongst of factors

Accounts payable belongs to current liabilities.

A bond is a debt security that contractually obligates the issuer to make fixed coupon payments at fixed intervals for a fixed amount of time plus it also pays out the face value of the bond at maturity together with the last coupon payment. The total annual coupon payments are equal to the coupon rate multiplied by the face value of the bond. The coupon payments may be split into more than one payment per year.

Unsystematic risk can be reduced through diversification whereas systematic risk cannot.

In any given period, unexpected returns may be negative or positive, however, on average they should be zero.

Aims stated in I, II and III are related to cash budgets, but aim IV is related to direct materials cost budget.

The secondary goal of a sales budget can be determined as a guide for  preparation of the working capital and investment budgets, to determine the raw materials, production equipment and labor requirements, to help to the preparation of funding plans and its revisions.

Economic order quantity is calculated by the formula

where D=usage inventories in units 

H=buying cost per order

S=carrying cost per unit.

Thus EOQ=sqroot(2*9*4/2)=sqroot(36)=6

Working capital management has the following four dimensions:

• Time
• Investment
• Credibility
• Growth

The sales should contain the following information derived from the market research and sales expectations:

• The alternatives of sale on account credit terms including term and interest and the collection policy ,

• The specific market for each product and service,

• The after sales service and the service providers’ responsibility,

• In the case of new market penetration and product development, the relevant strategies containing the targeted sales volume and its’ effects on the prices,

• The expenditures required to apply the sales budget and funding sources,

• The inflation expectations and pricing policy

Inventory management aims to keep the inventories on optimal level, without stockouts and excesses, by organizing, holding and replenishments for each item.

The components given in B, C, D and E are current liabilities. However, option A is one of the current assets. The correct answer is A. 

Companies do not hold cash for manipulation. All others are motives for holding cash.

Stock ownership provides rights to vote, to receive dividends, to share in the residual in case of dissolution and a preemptive right to prevent undesired reduction of ownership share. Therefore, the correct option is D.

There exist three special purpose methods to analyze the determinants of sales to make more realistic sales forecasts. The first one is industry analysis in which the individual company sales forecast is based on total industry sales. In the product analysis method, the focus is on individual product demand. It is also possible for some special sectors such as component manufacturing to use the forecast of the clients’ demand forecasts and this method is named as latest use method. Therefore, the correct option is C.