Financial management

[amp_mcq option1=”Current liability” option2=”Net liability” option3=”Total payable” option4=”Total liability” correct=”option1″]

Detailed SolutionNet working capital is the excess of current asset over ____________.

[amp_mcq option1=”tendency coefficient” option2=”variable coefficient” option3=”correlation coefficient” option4=”double coefficient” correct=”option3″]

Detailed SolutionTendency of measuring correlation of two variables is classified as

[amp_mcq option1=”portfolio risk” option2=”systematic risk” option3=”unsystematic risk” option4=”total risk” correct=”option3″]

Detailed SolutionThis type of risk is avoidable through proper diversification.

[amp_mcq option1=”0.55″ option2=”1.45″ option3=”1.82″ option4=”0.45″ correct=”option1″]

Detailed SolutionIf payout ratio is 0.45 then retention ratio will be

[amp_mcq option1=”Sales increases” option2=”Sales decreases” option3=”Both A and B” option4=”None of A and B” correct=”option2″]

Detailed SolutionOperating leverage works when:

[amp_mcq option1=”Measures financial risk of the firm” option2=”Is zero at financial break-even point” option3=”Increases as EBIT increases” option4=”Both a and b” correct=”option2″]

Detailed SolutionThe Degree of Financial Leverage (DFL)

[amp_mcq option1=”Increase in Costs of Goods Sold” option2=”If Increase in Expense” option3=”Increase in Dividend” option4=”Decrease in Sales” correct=”option2″]

Detailed SolutionGross Profit Ratio for a firm remains same but the Net Profit Ratio is decreasing. The reason for such behaviour could be:

[amp_mcq option1=”higher market risk” option2=”higher dividend” option3=”lower dividend” option4=”lower market risk” correct=”option1″]

Detailed SolutionIn arbitrage pricing theory, higher required rate of return is usually paid on stock

[amp_mcq option1=”Rs 996,000,000.00″ option2=”Rs 995,000,000.00″ option3=”Rs 992,000,000.00″ option4=”Rs 991,000,000.00″ correct=”option1″]

Detailed SolutionIf common shares outstanding are 50,000,000 and book value per share is Rs 19.92 then total common equity will be

[amp_mcq option1=”Market Price and Replacement Cost” option2=”Cost and Net Realizable Value” option3=”Cost and Sales Value” option4=”Sales Value and Profit” correct=”option2″]

Detailed SolutionInventory is generally valued as lower of: