Financial management

31. First step in calculation of net present value is to find out

present value of equity
future value of equity
present value cash flow
future value of cash flow

Detailed SolutionFirst step in calculation of net present value is to find out

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32. Rate of interest which is usually discussed by investors whenever rate of return is discussed is classified as

yield to maturity
yield to return
yield to earning
yield to investors

Detailed SolutionRate of interest which is usually discussed by investors whenever rate of return is discussed is classified as

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33. The material wealth of a society is equal to the sum of _________.

all financial assets
all real assets
all financial and real assets
all physical assets

Detailed SolutionThe material wealth of a society is equal to the sum of _________.

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34. Markets which deal with buying and selling of bonds, mortgages, notes and stocks are considered as

financial instruments
financial asset markets
physical asset markets
easy markets

Detailed SolutionMarkets which deal with buying and selling of bonds, mortgages, notes and stocks are considered as

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35. Which of the following techniques of project appraisal does not consider the time value of money?

Benefit cost ratio
Net present value
Internal rate of return
Accounting Rate of Return

Detailed SolutionWhich of the following techniques of project appraisal does not consider the time value of money?

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36. Lottery payoffs and payment for rental apartments are examples of

lump sum amount
deferred annuity
annuity due
payment fixed series

Detailed SolutionLottery payoffs and payment for rental apartments are examples of

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37. Long-term equity anticipation security is usually classified as

short-term options
long-term options
short money options
yearly call

Detailed SolutionLong-term equity anticipation security is usually classified as

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38. Operating leverage = ______.

contribution / EBIT
contribution / EBT
contribution / total expenses
contribution / operating PBT

Detailed SolutionOperating leverage = ______.

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39. MM Model of Dividend irrelevance uses arbitrage between:

Dividend and Bonus
Dividend and Capital Issue
Profit and Investment
None of the above

Detailed SolutionMM Model of Dividend irrelevance uses arbitrage between:

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40. If a firm has a DOL of 2.8, it means:

If sales increase by 2.8%, the EBIT will increase by 1%
If EBIT increase by 2.896, the EPS will increase by 1%
If sales rise by 1%, EBIT will rise by 2.8%
None of the above

Detailed SolutionIf a firm has a DOL of 2.8, it means:

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