Interactive workbook: Multiple-choice-questions 1.2

. Your Premier League football team is considering an investment in a new defender for the coming season. The team's defence has suffered some instability in recent years with several players consistently suffering minor but disruptive injuries which have unbalanced the side and led to the defence conceding unnecessary goals. Which one of the following factors will be most material to you in assessing potential new defenders?

Number of career goals scored.

Sponsorships by sporting goods firms.

Number of injuries suffered in career so far.

Charitable and community activities undertaken outside football.

. Your firm is considering taking on a new customer who will pay for goods on credit (goods will be delivered to the customer who will then pay for those goods at some point in the future). Which one of the following pieces of information would be most material to your decision on whether to take on this new credit customer or not?

The volume of sales to the new customer.

The value of sales to the new customer in £s.

The new customer has asked for 60 days credit (i.e. the new customer will pay for goods received 60 days after they have been delivered). This is twice the company's usual credit terms, which are 30 days.

Credit reports indicate that the new customer has a bad credit rating and is known to be a bad payer, often taking up to 150 days to pay their trading debts if they pay at all.

. Your oil company has discovered a new source of oil. Test drilling is complete and discussions have turned to developing the new well on a commercial basis. Acquiring the necessary equipment to extract the oil and building roads and other required infrastructure has an estimated cost to the company of £50m. Which one of the following factors will be the most material in deciding whether to undertake the £50m investment or not?

Current and future global oil demand.

The number of barrels of oil in the well.

The availability of labour locally.

Current and future oil prices.

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