Financial management

1. An analysis and estimation of cash flows include

input data and key output
depreciation schedule
net salvage values
all of above

Detailed SolutionAn analysis and estimation of cash flows include

2. Financial break-even level of EBIT is:

Intercept at Y-axis
Intercept at X-axis
Slope of EBIT-EPS line
None of the above

Detailed SolutionFinancial break-even level of EBIT is:

3. Which of the following is/are false regarding capital structure theory as stated by Miller and Modigliani? 1) If agency costs are considered, the expected agency costs increases as the debt-equity ratio decreases. 2) With the given assumptions, there is no optimal capital structure. 3) In the presence of taxes, the market value of the firm decreases by the tax shield of debt

Only 1st statement
Only 2nd statement
Both 1st and 3rd statements
All the three statements.

Detailed SolutionWhich of the following is/are false regarding capital structure theory as stated by Miller and Modigliani? 1) If agency costs are considered, the expected agency costs increases as the debt-equity ratio decreases. 2) With the given assumptions, there is no optimal capital structure. 3) In the presence of taxes, the market value of the firm decreases by the tax shield of debt

4. Cash discount terms offered by trade creditors never be accepted because:

Benefit in very small
Cost is very high
No sense to pay earlier
None of the above

Detailed SolutionCash discount terms offered by trade creditors never be accepted because:

5. Portfolio weights are found by_________________.

dividing standard deviation by expected value
calculating the percentage each asset is to the total portfolio value
calculating the return of each asset to total portfolio return
dividing expected value by the standard deviation

Detailed SolutionPortfolio weights are found by_________________.

6. Value of stock is Rs 400 and required rate of return is 20% then preferred dividend would be

Rs 80.00
Rs 8,000.00
Rs 20.00
Rs 50.00

Detailed SolutionValue of stock is Rs 400 and required rate of return is 20% then preferred dividend would be

7. What is the most appropriate goal of the firm?

Shareholder wealth maximization
Profit maximization
Stakeholder maximization
EPS maximization

Detailed SolutionWhat is the most appropriate goal of the firm?

8. An outstanding bonds are also classified as

standing bonds
outdated bonds
dated bonds
seasoned bonds

Detailed SolutionAn outstanding bonds are also classified as

9. Good inventory management is good ________ management.

financial
Marketing
stock
purchasing

Detailed SolutionGood inventory management is good ________ management.

10. An inventory recording in balance sheet includes

First in first out
Last in first out
last in last out
Both A and B

Detailed SolutionAn inventory recording in balance sheet includes

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