Financial management Archives

21. Firm’s promise to pay and is backed or guaranteed by bank is classified as

customer's acceptance

banker's acceptance

federal acceptance

treasury acceptance

Subscribe on YouTube

bank is classified as" class="read-more button" href="https://exam.pscnotes.com/mcq/firms-promise-to-pay-and-is-backed-or-guaranteed-by-bank-is-classified-as/#more-45932">Detailed Solution

22. Financial securities that can be converted into cash at closing to their book value price are classified as

inventories

short-term investments

cash equivalents

long-term investments

Join Our Telegram Channel

viewBox="0 0 576 512"> Subscribe on YouTube

their book value price are classified as" class="read-more button" href="https://exam.pscnotes.com/mcq/financial-securities-that-can-be-converted-into-cash-at-closing-to-their-book-value-price-are-classified-as/#more-45862">Detailed Solution

23. Operating Leverage is calculated as:

Contribution Ã· EBIT

EBIT Ã· PBT

EBIT Ã· Interest

EBIT Ã· Tax

Join Our Telegram Channel

74.6 75.5c-23.5 6.3-42 24.9-48.3 48.6-11.4 42.9-11.4 132.3-11.4 132.3s0 89.4 11.4 132.3c6.3 23.7 24.8 41.5 48.3 47.8C117.2 448 288 448 288 448s170.8 0 213.4-11.5c23.5-6.3 42-24.2 48.3-47.8 11.4-42.9 11.4-132.3 11.4-132.3s0-89.4-11.4-132.3zm-317.5 213.5V175.2l142.7 81.2-142.7 81.2z"/> Subscribe on YouTube as:" class="read-more button" href="https://exam.pscnotes.com/mcq/operating-leverage-is-calculated-as/#more-45859">Detailed Solution

24. According to traditional approach, the average cost of capital _______________.

Remains constant up to a degree of leverage and rises sharply thereafter with every increase in leverage

Rises constantly with increase in leverage

Decrease up to certain point, remains unchanged for moderate increase in leverage and rises beyond a certain point

Decrease at an increasing rate with increase in leverage

Join Our Telegram Channel

class="read-more-container">Detailed Solution class="screen-reader-text">According to traditional approach, the average cost of capital _______________.

25. 80% of sales of Rs. 10,00,000 of a firm are on credit. It has a receivable turnover of 8. What is the average collection period (360 days a year) and average debtors of the firm?

45 days and Rs. 1,00,000

360 days and Rs. 1,00,000

45 days and Rs. 8,00,000

360 days and Rs. 1,25,000

Detailed Solution80% of sales of Rs.

10,00,000 of a firm are on credit. It has a receivable turnover of 8. What is the average collection period (360 days a year) and average debtors of the firm?

26. Rational traders immediately sell stock when price is

conditional

inefficient portfolio

too low

too high

Subscribe on YouTube

Join Our Telegram Channel

href="https://exam.pscnotes.com/mcq/rational-traders-immediately-sell-stock-when-price-is/#more-45787">Detailed Solution

27. Markowitz’s main contribution to portfolio theory is___________.

that risk is the same for each type of financial asset

that risk is a function of credit, liquidity and market factors

risk is not quantifiable

insight about the relative importance of variances and co variances in determining portfolio risk

Detailed SolutionMarkowitz’s main contribution to portfolio theory is___________.

28. Bond call provision that is not practiced even after several years of issuance is classified as

original provision

deferred call

deferred provision

permanent provision

Join Our Telegram Channel

Subscribe on YouTube

href="https://exam.pscnotes.com/mcq/bond-call-provision-that-is-not-practiced-even-after-several-years-of-issuance-is-classified-as/#more-45786">Detailed Solution