Q601
Open questionOnce we define working capital as current assets, it can be further classified according to
Select an option to see the answer and solution.
Commerce · all questionsBusiness Finance
Business Finance
practice.
Practice every MCQ with options. Use Show answers when you want the correct option and solution.
703
Questions
31/36
Page
Pick an option on a question to see the right answer and solution.
Q602
Open questionIndicate the incorrect statement
(i) Credit risk is a loss on account of a default of repayment of a loan.
(ii) Liquidity risk is the risk on account of the mismatches of cash inflow and outflow in a firm.
(iii) Basic risk is the risk in a firm owing to the differences in the index to which financial assets and liabilities are tied up.
(iv) Hedging risk for a long position is accomplished by taking a short position and vice versa.
(i) Credit risk is a loss on account of a default of repayment of a loan.
(ii) Liquidity risk is the risk on account of the mismatches of cash inflow and outflow in a firm.
(iii) Basic risk is the risk in a firm owing to the differences in the index to which financial assets and liabilities are tied up.
(iv) Hedging risk for a long position is accomplished by taking a short position and vice versa.
Select an option to see the answer and solution.
Q603
Open questionWhich technique is common used to estimate the cash flow in multinational capital budgeting?
Select an option to see the answer and solution.
Q604
Open questionWhich of the following is not a type of financial lease arrangement?
Select an option to see the answer and solution.
Q605
Open questionInterim cash inflows are reinvested at a rate of return equal to the internal rate of return is the built-in-mechanism for
Select an option to see the answer and solution.
Q606
Open questionHedging in the futures market
Select an option to see the answer and solution.
Q607
Open questionWhen interest rates fall, a bank perfectly hedging its portfolio of treasury secure futures market
Select an option to see the answer and solution.
Q608
Open questionA profitability index (PI) of .95 for a project means
Select an option to see the answer and solution.
Q609
Open questionWhich of the following is false? Companies repurchase their own shares:
Select an option to see the answer and solution.
Q610
Open questionArrange the following in chronological order about the events of operating cycle.
1. Conversion of accounts receivable into cash.
2. Conversion of finished goods into accounts receivable.
3. Conversion of raw materials into work-in-process.
4. Conversion of work-in-process into finished goods.
1. Conversion of accounts receivable into cash.
2. Conversion of finished goods into accounts receivable.
3. Conversion of raw materials into work-in-process.
4. Conversion of work-in-process into finished goods.
Select an option to see the answer and solution.
Q611
Open questionDebt financing is a cheaper source of finance because of
Select an option to see the answer and solution.
Q612
Open questionWhich of the following is not included in the assumptions on which Myron Gordon proposed a model on stock valuation?
Select an option to see the answer and solution.
Q613
Open questionUnder the terms of finance lease
Select an option to see the answer and solution.
Q614
Open questionThe potential effect of exchange rate fluctuations on FDI is expressed as
Select an option to see the answer and solution.
Q615
Open questionWe should keep our savings with banks because
Select an option to see the answer and solution.
Q616
Open questionGovernment grants are generally offered to businesses in
Select an option to see the answer and solution.
Q617
Open questionThe capital budgeting technique that explicitly incorporates an estimated interest rate into its basic computations is the
Select an option to see the answer and solution.
Q618
Open questionWhich of the following can be defined as the prominent sources of variable working capital?
(i) Trade creditors
(ii) Bank loan
(iii) Commercial Papers
(iv) Depreciation
(v) Tax liabilities
(i) Trade creditors
(ii) Bank loan
(iii) Commercial Papers
(iv) Depreciation
(v) Tax liabilities
Select an option to see the answer and solution.
Q619
Open questionWhich of the following can be defined as the variability of return on stocks or portfolios, not explained by general market movement. It is avoidable through diversification.
Select an option to see the answer and solution.
Q620
Open questionCapital market line is
Select an option to see the answer and solution.