Contribution margin ratio of the company: (0.60*0.50)+(0.40*0.60) = 0.54

Overall break-even sales: $540,000/0.54 = $1,000,000

Break-even sales for gloves: $1,000,000*0.60 = $600,000

E(R_A)=R_F+B(E(R_M)-R_F) will give the expected return of asset A (R_A) given the expected market return (E(R_M)) and risk-free return (R_F). Thus:

12=6+(10-6)B

6=4B

1.5=B

Quick Ratio, Or Acid Test provides a severe test of immediate liquidity, revealing a company’s ability to meet sudden demands upon liquid current assets.

quick ratio= current assets - inventories / short-term debt

= $100.000 - $ 30.000 / $70.000 = 1

The Capital Market Line (CML) is the line that connects the risk-free asset with the market portfolio, where the line is just tangent to the efficient frontier on an expected return/ standard deviation graph.

times financial expenses earned= (net income before taxes and financial expense)/financial expenses

Thus for 2014; times financial expenses earned=(18000+3600+2400)/2400=24000/2400=10

Expected return of a portfolio is simply the weighted average of the returns of securities.

Value= Div0 /r

= 10/0.08 = $125

Even during periods where the company loses money, the companies may strategically decide to distribute dividends (as long as they have cash and sufficient retained earnings from the past) in order to satisfy the expectations of their shareholders and
manage their position in the market.

The important factors in determining the amount of the working capital are:

Length of period of manufacture

Volume of business

The proportion of the cost of raw materials to total cost

Use of manual labor or mechanization

Inventory level for raw materials of finished goods

Turnover of working capital

Terms of credit

Short term financing options

Seasonality of product demand

Price level changes

The sales budget is the core of the overall budgeting efforts within an organization.

Semistrong form of the EMH states that all publicly available information is fully reflected in prices. If semistrong form efficiency holds, it should not be possible for investors using publicly available information to obtain consistent excess profits.

Correction of Deviations is the final step of financial control process. The steps stated in choices A to D are steps in financial control but the one in E is a part of cash budget preperation.

The gross working capital refers to the total current asset holdings of a company which can be converted into cash in less than a year time. The current assets include but are not limited to cash, cash in banks, marketable securities, receivables with a term less than 1 year which are mainly from clients, but also from others, inventory of raw materials, work-in-progress, finished goods, and prepayments received.

Factoring : Factoring entails the sale of accounts receivable to another firm, called the factor, who then collects payment from the customer. Through factoring, a business can shift the costs of collection and the risk of nonpayment to a third party. In a factoring arrangement, a company and the factor work out a credit limit and average collection period for each customer. As the company makes new sales to a customer, it provides an invoice to the factor. The customer pays the factor directly, and the factor then pays the company based on the agreed upon average collection period, less a slight discount that covers the factor’s collection costs and credit risk. The correct answer is B. 

Transparency is not a dimension of working capital management.

A Bond is a security that contractually obligates the issuer to make fixed coupon payments at fixed intervals plus it also pays out the face value of the bond at maturity together with the last coupon payment. The correct answer is A.

The operational peculiarities of a company and the cost accounting structure determine the coverage and reliability of a financial planning system. The required data mainly includes Breakeven Analysis, Ratio Analysis and the Investment Projects Evaluations. Therefore, the correct option is B

Upward sloping yield curve implies that short-term interest rates will increase in the future.

Weak form of the EMH states that all information contained in past prices is fully reflected in prices. If weak-form efficiency holds, it should not be possible for investors using information from past price changes to obtain consistent excess profits. Chartists and other technical analysts are engaging in useless activities.