Financial management

31. One reason for the declining importance of pension funds is the_______________.

decrease in pension benefits for workers
downsizing of US companies
large number of conversions into self-directed plans
increasing number of federal regulations that restrict pension fund portfolios

Detailed SolutionOne reason for the declining importance of pension funds is the_______________.

32. Which combination is generally good for firms?

High OL, High FL
Low OL, Low FL
High OL, Low FL
None of these

Detailed SolutionWhich combination is generally good for firms?

33. Net worth is also called

asset net of liabilities
liabilities net of assets
earnings net on assets
liabilities net of earnings

Detailed SolutionNet worth is also called

34. Market value of option which is out-of-money is

greater than zero
equal to zero
lesser than zero
equal to one

Detailed SolutionMarket value of option which is out-of-money is

35. Inventory holding cost may include:

Material purchase cost
Penalty charge for default
Interest on loan
None of the above

Detailed SolutionInventory holding cost may include:

36. Financial decision involves:

Investment, financing and dividend decision
Investment, financing and sales decision
Financing, dividend and cash decision
None of these

Detailed SolutionFinancial decision involves:

37. What are the factors which make debentures attractive to investors?

They enjoy a high order of priority in the event of liquidation
Stable rate of return
No risk
All of the above

Detailed SolutionWhat are the factors which make debentures attractive to investors?

38. There is deterioration in the management of working capital of XYZ Ltd. What does it refer to?

That the Capital Employed has reduced
That the Profitability has gone up
That Debtors Collection period has increased
That Sales has decreased

Detailed SolutionThere is deterioration in the management of working capital of XYZ Ltd. What does it refer to?

39. Net operating profit after taxes is Rs 4500, net investment in operating capital is Rs 8500 and then free cash flow would be

-Rs 4,000.00
Rs 4,000.00
-Rs 18,000.00
Rs 18,000.00

Detailed SolutionNet operating profit after taxes is Rs 4500, net investment in operating capital is Rs 8500 and then free cash flow would be

40. In cash flow estimation, depreciation is considered as

cash charge
noncash charge
cash flow discounts
net salvage discount

Detailed SolutionIn cash flow estimation, depreciation is considered as

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