ACCA FM — Financial Management Practice Exam 6

Section A

GlobalVax is a non-governmental organization (NGO) dedicated to distributing vaccines in emerging markets. Unlike a commercial tech startup, GlobalVax does not aim to maximize shareholder wealth.

Which of the following best describes the primary financial management objective of GlobalVax?

Section A

QuantumCore, a domestic quantum computing startup, relies heavily on imported rare-earth metals. The government has recently implemented a contractionary monetary policy to combat high inflation.

Which of the following is the most likely direct impact of this macroeconomic policy on QuantumCore?

Section A

VertiFarm Co operates a network of urban vertical farms. It is experiencing cash flow difficulties due to slow-paying supermarket clients. The finance director is considering either factoring or invoice discounting.

Which of the following statements correctly distinguishes between factoring and invoice discounting?

Section A

DeepSea Minerals PLC is evaluating two mutually exclusive underwater extraction machines with different useful lives. Machine X costs $400,000, has a 3-year life, and an NPV of costs of $520,000. Machine Y costs $550,000, has a 5-year life, and an NPV of costs of $710,000. The company's cost of capital is 10%.

What is the Equivalent Annual Cost (EAC) of Machine Y? (Annuity factor for 10% at 5 years is 3.791)

Section A

A municipal water desalination plant is seeking to raise capital in compliance with Islamic finance principles. They wish to issue financial instruments that represent an ownership interest in the underlying desalination assets, generating a return from the asset's performance rather than paying interest.

Which Islamic finance instrument is being described?