0% 0 Finance Quiz 3 1 / 50 In cash flow estimation, depreciation shelters company?s income from_______? Expansion Taxation Discounts Salvages 2 / 50 Double declining balance method and sum of years digits are included in__________? Single methods Double methods Accelerated methods Yearly method 3 / 50 Projects which are mutually exclusive but different on scale of production or time of completion then the__________________? External return method Net future value method Internal return method Net present value of method 4 / 50 Reinvestment risk of bond?s is usually higher on______? Premium bonds Income bonds Callable bonds Default free bonds 5 / 50 A loan that is repaid on monthly, quarterly and annual basis in equal payments is classified as____________? Depreciated loan Amortized loan Repaid payments Appreciated loan 6 / 50 In financial markets, period of maturity more than five years of financial instruments is classified as___________________? Capital term Long-term Short-term Intermediate term 7 / 50 An uncovered cost at start of year is $200, full cash flow during recovery year is $400 and prior years to full recovery is 3 then payback would be__________? 4.5 years 5 years 3.5 years 4 years 8 / 50 A model which makes an assumption about the future growth of dividends is known as: Dividend Price Model All of the given options Dividend Growth Model Dividend Policy Model 9 / 50 According to capital asset pricing model assumptions, quantities of all assets are______________? Given and variable Not given and variable Not given and fixed Given and fixed 10 / 50 High price to earnings ratio shows company?s_________? High risk prospect Low dividends paid High marginal rate High growth prospect 11 / 50 A risk associated with project and way considered by well diversified stockholder is classified as______________? Expected risk Beta risk Industry risk Returning risk 12 / 50 Type of financial security in which firms do not borrow money rather lease their assets is classified as____________________? Leases Preferred stocks Corporate stocks Common stocks 13 / 50 Legal entity separation from its legal owners and managers with help of state laws is classified as____________? Limited corporate business Unlimited corporate business Controlled corporate business Corporation 14 / 50 Which of the following ratios is NOT from the set of Asset Management Ratios? Return on Assets Inventory Turnover Ratio Receivable Turnover Capital Intensity Ratio 15 / 50 An attitude of investor towards dealing with risk determines the____________? Rate of exchange Rate of return Rate of intrinsic stock Rate of extrinsic stock 16 / 50 In capital budgeting, positive net present value results in_________________? Percent economic value added Negative economic value added Zero economic value added Positive economic value added 17 / 50 In weighted average capital, capital structure weights estimation does not rely on value of__________? Book value of equity Stock equity Market value of equity Investors equity 18 / 50 A point where profile of net present value crosses horizontal axis at plotted graph indicates project____________________? Cash flows Internal rate of return External rate of return Costs 19 / 50 Mr. Y and Mr. Z are planning to share their capital to run a business. They are going to employ which of the following type of business? Partnership None of the given options Corporation Sole-proprietorship 20 / 50 How many years will it take to pay off a Rs. 11,000 loan with a Rs. 1,241.08 annual payment and a 5% interest rate? 24 years 6 years 12 years 48 years 21 / 50 Chance of happening any unfavorable event in near future is classified as___________? Event happening Risk Chance Probability 22 / 50 Which of the following refers to the cash flows that result from the firm?s day-to-day activities of producing and selling? Financing Cash Flows Operating Cash Flows Investing Cash Flows All of the given options 23 / 50 Coupon payment of bond which is fixed at time of issuance____________? Becomes stable Becomes change Remains same Becomes low 24 / 50 Portfolio which consists of perfectly positive correlated assets having no effect of___________? Negativity Positivity Correlation Diversification 25 / 50 Bonds issued by corporations and exposed to default risk are classified as_________? Risk bonds Zero risk bonds Corporation bonds Default bonds 26 / 50 Standard Corporation sold fully depreciated equipment for Rs.5,000. This transaction will be reported on the cash flow statement as a(n): Operating activity Financing activity Investing activity None of the given options 27 / 50 The conflict of interest between stockholders and management is known as: Agency problem Agency cost Interest conflict Management conflict 28 / 50 Payback period in which an expected cash flows are discounted with help of project cost of capital is classified as___________________? Discounted cash flows Discounted payback period Discounted rate of return Discounted project cost 29 / 50 If payment of security is paid as $100 at end of year for three years, it is an example of______________? Fixed interval investment Fixed payment investment Lump sum amount Annuity 30 / 50 Forecast by analysts, retention growth model and historical growth rates are methods used for an______________? Estimate future growth Estimate option present value Estimate option future value Estimate growth ratio 31 / 50 Variability for expected returns for projects is classified as___________? Expected risk Returning risk Stand-alone risk Variable risk 32 / 50 All assets are perfectly divisible and liquid in___________? Stock pricing model Cost free pricing model Capital asset pricing model Tax free pricing model 33 / 50 A major facet of financial management involves providing the financing necessary to support: Debts Loans Assets Liabilities 34 / 50 A technique uses in comparative analysis of financial statement is_________? Returning analysis Preference analysis Graphical analysis Common size analysis 35 / 50 Redemption option which protects investors against rise in interest rate is considered as________? Redeemable at finding Redeemable at refund Redeemable at par Redeemable at deferred 36 / 50 Set of projects or set of investments usually maximize firm value is classified as_________? Maximum capital budget Minimum capital budget Greater capital budget Optimal capital budget 37 / 50 Difference between actual return on stock and predicted return is considered as___________? Actual error Prediction error Probability error Random error 38 / 50 A techniques uses to identify financial statements trends are included____________? Common size analysis Returning ratios analysis Percent change analysis Both A and B 39 / 50 Collection of net income, amortization and depreciation is divided by common shares outstanding to calculate______________? Cash flow of financing activities Cash flow per share Cash flow of operations Cash flow of investment 40 / 50 Capital gain expected by stockholders and dividends are included in____________? Cost of equity Investment return Interest rate Debt rate 41 / 50 Payment divided by par value is classified as______________? Divisible payment Par payment Coupon payment Per period payment 42 / 50 In capital budgeting, number of non-normal cash flows have internal rate of returns are____________? Accepted Non-accepted One Multiple 43 / 50 Which of the following strategy belongs to restrictive policy regarding size of investments in current assets? To less short-term debt and more long-term debt To maintain a low ratio of current assets to sales To maintain a high ratio of current assets to sales To more short-term debt and less long-term debt 44 / 50 Maximizing Shareholder wealth: Partially relives the firm?s responsibility towards society None of Them Does not relieve the firm?s responsibility towards society Relieves the firms responsibility towards society 45 / 50 Other factors held constant, greater project liquidity is because of___________? Shorter payback period Greater project return Less project returns Greater payback period 46 / 50 Sum of market risk and diversifiable risk are classified as total risk which is equivalent to_______________? Variance Standard alpha?s Sharpe?s alpha Alpha?s variance 47 / 50 In capital asset pricing model, stock with high standard deviation tend to have________? High variation Low variation High beta Low beta 48 / 50 In capital budgeting, an internal rate of return of project is classified as its__________? Negative rate of return Internal rate of return External rate of return Positive rate of return 49 / 50 Real interest rate and real cash flows do not include_____________? Debt effects Equity effects Opportunity effects Inflation effects 50 / 50 The DuPont Identity tells us that Return on Equity is affected by: financial Leverage (as measured by equity multiplier) The DuPont Identity tells us that Return on Equity is affected by: asset use efficiency (as measured by total assets turnover) all of the given options (a, b and c) Provide Your Information Your score is The average score is 0% LinkedIn Facebook Twitter 0% Restart quiz Send feedback Share on facebook Facebook Share on twitter Twitter Share on whatsapp WhatsApp PrevFinance Quiz 2 Finance Quiz 4Next
