Financial management

21. Ageing schedule incorporates the relationship between:

Creditors and Days Outstanding
Debtors and Days Outstanding
Average Age of Directors
Average Age of All Employees

Detailed SolutionAgeing schedule incorporates the relationship between:

22. Suppliers and Creditors of a firm are interested in:

Profitability Position
Liquidity Position
Market Share Position
Debt Position

Detailed SolutionSuppliers and Creditors of a firm are interested in:

23. In cash flow estimation and risk analysis, real rate will be equal to nominal rate if there is

no inflation
high inflation
no transactions
no acceleration

Detailed SolutionIn cash flow estimation and risk analysis, real rate will be equal to nominal rate if there is

24. According to Fama French Three-Factor model, market value of company equity is used to calculate

size of portfolio
size of industry
size of market
size of company

Detailed SolutionAccording to Fama French Three-Factor model, market value of company equity is used to calculate

25. Price of an outstanding bond decreases when market rate is

increased
decreased
earned
never changed

Detailed SolutionPrice of an outstanding bond decreases when market rate is

26. Characteristic of corporation that it can continue its work even owners are decreased can be classified as

limited life
unlimited life
corporate life
deceased partnership

Detailed SolutionCharacteristic of corporation that it can continue its work even owners are decreased can be classified as

27. The overall capitalization rate and the cost of debt remain constant for all degrees of leverage. This is pronounced by __________.

Traditional approach
Net operating income approach
Net income approach
MM approach

Detailed SolutionThe overall capitalization rate and the cost of debt remain constant for all degrees of leverage. This is pronounced by __________.

28. The value of EBIT at which EPS is equal to zero is known as ____________.

Break-even point
Financial break-even point
Operating break-even point
Overall break-even point

Detailed SolutionThe value of EBIT at which EPS is equal to zero is known as ____________.

29. Weighted average cost of debt, preferred stock and common equity is classified as

cost of salvage
cost of interest
cost of taxation
cost of capital

Detailed SolutionWeighted average cost of debt, preferred stock and common equity is classified as

30. Financial security which is tax exempted and issues by state governments to individuals is classified as

U.S treasury bonds
mortgages
municipal bonds
corporate bonds

Detailed SolutionFinancial security which is tax exempted and issues by state governments to individuals is classified as

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