Financial management

11. The market value of the firm is the result of __________.

dividend decisions
working capital decisions
capital budgeting decisions
trade-off between cost and risk

Detailed SolutionThe market value of the firm is the result of __________.

12. An investment outlay cash flow is Rs 4000, operating cash flow is Rs 1000 and salvage cash flow is Rs 5000 then free cash flow would be

Rs 10,000.00
Rs 8,000.00
Rs 0.00
none of above

Detailed SolutionAn investment outlay cash flow is Rs 4000, operating cash flow is Rs 1000 and salvage cash flow is Rs 5000 then free cash flow would be

13. If security pays Rs 5,000 in 20 years with 7% annual interest rate, PV of security by using formula is

Rs 1,290.10
Rs 1,292.10
Rs 1,295.10
Rs 1,297.10

Detailed SolutionIf security pays Rs 5,000 in 20 years with 7% annual interest rate, PV of security by using formula is

14. Life that maximizes net present value of an asset is classified as

minimum life
present value life
economic life
transaction life

Detailed SolutionLife that maximizes net present value of an asset is classified as

15. Process of Financial Planning ends with:

Preparation of projected statements
Preparation of actual statements
Comparison of actual with projected
Ordering the employees that projected figures come true

Detailed SolutionProcess of Financial Planning ends with:

16. Future value of annuity FVA(due) is, if deposited value is Rs 100 and earn 5% every year of total three years will be

Rs 99.49
Rs 318.25
Rs 315.25
Rs 331.01

Detailed SolutionFuture value of annuity FVA(due) is, if deposited value is Rs 100 and earn 5% every year of total three years will be

17. In expected rate of return for constant growth, an expected total rate of return must be

less than expected yield on dividend
greater than expected yield on dividend
equal to expected yield on dividend
equal to one

Detailed SolutionIn expected rate of return for constant growth, an expected total rate of return must be

18. If a preferred stock issue is cumulative, this means____________.

dividends are paid at the end of the year
dividends is legally binding on the corporation
unpaid dividends will be paid in the future
unpaid dividends are never repaid

Detailed SolutionIf a preferred stock issue is cumulative, this means____________.

19. Which of the following is not true for a Lease decision for the lessee?

Helps in project selection
Helps in project financing
Helps in project location
All of the above

Detailed SolutionWhich of the following is not true for a Lease decision for the lessee?

20. Current option is Rs 700 and current value of stock in portfolio is Rs 1400 then present value of portfolio will be

-Rs 700.00
Rs 2,100.00
Rs 700.00
Rs 2,000.00

Detailed SolutionCurrent option is Rs 700 and current value of stock in portfolio is Rs 1400 then present value of portfolio will be

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