Financial management

1. If the Money Discount Rate is 19% and Inflation Rate is 12%, then the Real Discount Rate is:

7%
5%
5.70%
6.25%

Detailed SolutionIf the Money Discount Rate is 19% and Inflation Rate is 12%, then the Real Discount Rate is:

2. Cost of money is affected by factors which includes

production opportunities
risk
all of above
inflation

Detailed SolutionCost of money is affected by factors which includes

3. Cost of capital is the ______ rate of return expected by the investor.

minimum
maximum
expected
marginal

Detailed SolutionCost of capital is the ______ rate of return expected by the investor.

4. Current option price is added to present value of portfolio for calculating

future value of portfolio
current value of stock
future value of stock
present value of portfolio

Detailed SolutionCurrent option price is added to present value of portfolio for calculating

5. Which is the most expensive source of funds?

New Equity Shares
New Preference Shares
New Debts
Retained Earnings

Detailed SolutionWhich is the most expensive source of funds?

6. Securities future value is Rs 1,000,000 and present value of securities is Rs 500,000 with an interest rate of 4.5%, ‘N’ will be

16.7473 years
0.0304 months
15.7473 years
0.7575 years

Detailed SolutionSecurities future value is Rs 1,000,000 and present value of securities is Rs 500,000 with an interest rate of 4.5%, ‘N’ will be

7. Which of the following characteristics are true, with reference to preference capital?

Preference dividend is not tax deductible
The claim of preference shareholders is prior to the claim of equity shareholders
Preference shareholders are not the owners of the concern
All of the above

Detailed SolutionWhich of the following characteristics are true, with reference to preference capital?

8. Weighted average of probabilities is classified as

average rate of return
expected rate of return
past rate of return
weighted rate of return

Detailed SolutionWeighted average of probabilities is classified as

9. Bad debt cost is not borne by factor in case of:

Pure Factoring
Without Recourse Factoring
With Recourse Factoring
None of the above

Detailed SolutionBad debt cost is not borne by factor in case of:

10. Left side of balance sheet states the

appreciated earnings
liabilities
assets
stocks earnings

Detailed SolutionLeft side of balance sheet states the

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