Financial management

21. Cash Discount term 3/15, net 40 means:

3% discount if payment in 15 days, otherwise full payment in 40 days
15% discount if payment in 3 days, otherwise full payment 40 days
3% interest if payment made in 40 days and 15% interest thereafter
None of the above

Detailed SolutionCash Discount term 3/15, net 40 means:

22. Which of the following is not true of cash budget?

Cash budget indicates timings of short-term borrowing
Cash budget is based on accrual concept
Cash budget is based on cash flow concept
Repayment of principal amount of law is shown in cash budget

Detailed SolutionWhich of the following is not true of cash budget?

23. An expected final stock price is Rs 45 and an original investment is Rs 25 then an expected capital gain will be

Rs 75.00
-Rs 75.00
-Rs 20.00
Rs 20.00

Detailed SolutionAn expected final stock price is Rs 45 and an original investment is Rs 25 then an expected capital gain will be

24. Coupon rate of bond is also called

nominal rate
premium rate
quoted rate
both a and c

Detailed SolutionCoupon rate of bond is also called

25. Which of the following is not an assumption in the Miller & Modigliani approach?

There are no transaction costs
Securities are infinitely divisible
Investors have homogeneous expectations
All the firms pay tax on their income at the same rate

Detailed SolutionWhich of the following is not an assumption in the Miller & Modigliani approach?

26. Value of stock as concluded with help of analysis by particular investor is classified as

particular value
intrinsic value
fundamental value
Both B and C

Detailed SolutionValue of stock as concluded with help of analysis by particular investor is classified as

27. Markets dealing loans of autos, education, vacations and appliances are considered as

consumer credit loans
commercial markets
residential markets
mortgage markets

Detailed SolutionMarkets dealing loans of autos, education, vacations and appliances are considered as

28. The volume of sales is influenced by ____ of a firm.

finance policy
credit policy
profit policy
fund policy

Detailed SolutionThe volume of sales is influenced by ____ of a firm.

29. Market risk premium is 8% and risk free return is 7% then market required return would be

15.00%
1.00%
5.60%
1.14%

Detailed SolutionMarket risk premium is 8% and risk free return is 7% then market required return would be

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

Rs 315.25
Rs 331.01
Rs 99.49
Rs 318.25

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

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