Financial management Archives - Page 2 of 112 - MCQ and Quiz for Exams

11. Money market funds were a financial innovation partly inspired to circumvent __________.

Regulation Q, which is no longer in existence

Regulation M

Regulation D

Regulation B, which is still in existence

Detailed SolutionMoney market funds were a financial innovation partly inspired to circumvent __________.

12. Which of the following is not true with reference capital budgeting?

Capital budgeting is related to asset replacement decisions

Cost of capital is equal to minimum required return

Existing investment in a project is not treated as sunk cost

Timing of cash flows is relevant

Detailed SolutionWhich of the following is not true with reference capital budgeting?

13. Securitization is related to conversion of:

Receivables

Stock

Investments

Creditors

Detailed SolutionSecuritization is related to conversion of:

14. Retention ratio is 0.55 and return on equity is 12.5% then growth retention model would be

11.95%

6.88%

13.05%

22.72%

Detailed SolutionRetention ratio is 0.55 and return on equity is 12.5% then growth retention model would be

15. In weighted average cost of capital, cost of capital which is risk adjusted and developed for each category of

”long-term

”industry

projects” option3=”divisional projects” option4=”short-term projects” correct=”option1″]

Detailed SolutionIn weighted average cost of capital, cost of capital which is risk adjusted and developed for each category of

16. Which of the following is not normally one of the reasons for a change in an investor’s circumstances?

Change in market conditions

Change in legal considerations

Change in time horizon

Change in tax circumstances

Detailed SolutionWhich of the following is not normally one of the reasons for a change in an investor’s circumstances?

17. According to top rating agencies S&P triple-A and double-A rating bonds are classified as an

extremely discounted

extremely safe

extremely risky

extremely inflated

Detailed SolutionAccording to top rating agencies S&P triple-A and double-A rating bonds are classified as an

18. Which element of the basic NPV equation is adjusted by the RADR?

Denominator

Numerator

Both A and B

None of these

Detailed SolutionWhich element of the basic NPV equation is adjusted by the RADR?

19. Noncash revenues and noncash charges if it subtracted from net income is equal to

free cash flow

retained cash flow

net cash flow

financing cash flow

Detailed SolutionNoncash revenues and noncash charges if it subtracted from net income is equal to

20. To whom does the Treasurer most likely report?

Chief Financial Officer

Vice President of Operations

Chief Executive Officer

Board of Directors

Detailed SolutionTo whom does the Treasurer most likely report?

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