Financial management

11. In Net Operating Income Approach, which one of the following is constant?

Cost of Equity
Cost of Debt
WACC & kd
ke and kd

Detailed SolutionIn Net Operating Income Approach, which one of the following is constant?

12. Third step in binomial approach of option pricing is to

equalize beginning price
equalize range of payoffs
equalize domain of payoff
equalize ending price

Detailed SolutionThird step in binomial approach of option pricing is to

13. Which of the following is not true for capital budgeting?

Sunk costs are ignored
Opportunity costs are excluded
Incremental cash flows are considered
Relevant cash flows are considered

Detailed SolutionWhich of the following is not true for capital budgeting?

14. Which of the following methods does a firm resort to avoid dividend payments?

Share splitting
Declaring bonus shares
Rights issue
New issue

Detailed SolutionWhich of the following methods does a firm resort to avoid dividend payments?

15. Financial analysts, working capital means the same thing as __________.

total assets
fixed assets
current assets
current assets minus current Liabilities

Detailed SolutionFinancial analysts, working capital means the same thing as __________.

16. Real rate of return, risk and expected inflation are primary determinants of

minimum rate of return
accepted return
expected return
real risk free rate

Detailed SolutionReal rate of return, risk and expected inflation are primary determinants of

17. Variability for expected returns for projects is classified as

expected risk
stand-alone risk
variable risk
returning risk

Detailed SolutionVariability for expected returns for projects is classified as

18. In capital budgeting, number of non-normal cash flows have internal rate of returns are

one
multiple
accepted
non-accepted

Detailed SolutionIn capital budgeting, number of non-normal cash flows have internal rate of returns are

19. In Capital Budgeting, Sunk cost is excluded because it is:

of small amount
not incremental
not reversible
All of the above

Detailed SolutionIn Capital Budgeting, Sunk cost is excluded because it is:

20. A discount rate which equals to present value of TV to project cost present value is classified as

negative internal rate of return
modified internal rate of return
existed internal rate of return
relative rate of return

Detailed SolutionA discount rate which equals to present value of TV to project cost present value is classified as

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