Financial management

[amp_mcq option1=”real returns adjust for inflation and nominal returns do not” option2=”real returns use actual cash flows and nominal returns use expected cash flows” option3=”real returns adjust for commissions and nominal returns do not” option4=”real returns show the highest possible return and nominal returns show the lowest possible return” correct=”option1″]

Detailed SolutionA major difference between real and nominal returns is that_______________.

[amp_mcq option1=”One time compounding” option2=”annual compounding” option3=”semi-annual compounding” option4=”monthly compounding” correct=”option1″]

Detailed SolutionFuture value of interest if it is calculated once a year is classified as

[amp_mcq option1=”yield to maturity” option2=”yield to call” option3=”yield to earning” option4=”yield to investors” correct=”option1″]

Detailed SolutionYield of interest rate which is below than coupon rate, this yield is classified as

[amp_mcq option1=”EBIT” option2=”Interest liability” option3=”Equity dividend” option4=”Tax liability” correct=”option1″]

Detailed SolutionIf a firm has no preference share capital, financial break-even level is defined as equal to:

[amp_mcq option1=”inflation” option2=”negative returns” option3=”interest rates” option4=”tax differences” correct=”option1″]

Detailed SolutionThe return relative solves the problem of______________.

[amp_mcq option1=”equals” option2=”lump sum declines” option3=”rises” option4=”declines” correct=”option3″]

Detailed SolutionPrices of bonds will be increased if interest rates

[amp_mcq option1=”extrinsic rate of return” option2=”intrinsic rate of return” option3=”annual rate of return” option4=”nominal annual rate” correct=”option4″]

Detailed SolutionPeriodic rate if it is multiplied with per year number of compounding periods is called

[amp_mcq option1=”MP of Equity Shares” option2=”Number of Equity Shares” option3=”Face Value of Equity Shares” option4=”None of the above” correct=”option2″]

Detailed SolutionIn order to calculate EPS, Profit after Tax and Preference Dividend is divided by:

[amp_mcq option1=”Leverage” option2=”Hurdle rate” option3=”Risk rate” option4=”Return rate” correct=”option2″]

Detailed SolutionThe company’s cost of capital is called ________.

[amp_mcq option1=”less project return” option2=”greater project return” option3=”shorter payback period” option4=”greater payback period” correct=”option3″]

Detailed SolutionOther factors held constant, greater project liquidity is because of