Financial management

31. Present value of future cash flows is divided by an initial cost of project to calculate

negative index
exchange index
project index
profitability index

Detailed SolutionPresent value of future cash flows is divided by an initial cost of project to calculate

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32. Re-order level is ____________than safety level.

higher
lower
medium
fixed

Detailed SolutionRe-order level is ____________than safety level.

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33. Basic objective of diversification is:

Increasing Return
Maximising Return
Decreasing Risk
Maximizing Risk

Detailed SolutionBasic objective of diversification is:

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34. Under trading means.

Having low amount of working capital
High turnover of working capital
Sales are less compared to assets employed
Low turnover of working capital

Detailed SolutionUnder trading means.

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35. Trading on Equity is:

Always beneficial
May be beneficial
Never beneficial
None of the above

Detailed SolutionTrading on Equity is:

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36. Cash flow which starts negative then positive than again positive cash flow is classified as

normal costs
non-normal costs
non-normal cash flow
normal cash flow

Detailed SolutionCash flow which starts negative then positive than again positive cash flow is classified as

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37. Which of the following is a measure of Debt Service capacity of a firm?

Current Ratio
Acid Test Ratio
Interest Coverage Ratio
Debtors Turnover

Detailed SolutionWhich of the following is a measure of Debt Service capacity of a firm?

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38. Collection of net income, amortization and depreciation is divided by common shares outstanding to calculate

cash flow of financing activities
cash flow per share
cash flow of investment
cash flow of operations

Detailed SolutionCollection of net income, amortization and depreciation is divided by common shares outstanding to calculate

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39. FL is zero if:

EBIT = Interest
EBIT = Zero
EBIT = Fixed Cost
EBIT = Pref. Dividend

Detailed SolutionFL is zero if:

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40. Ratio of Net Income to Number of Equity Shares known as:

Price Earnings Ratio
Net Profit Ratio
Earnings per Share
Dividend per Share

Detailed SolutionRatio of Net Income to Number of Equity Shares known as:

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