Business risk can be measured by:
A. Financial leverage
B. Operating leverage
C. Combined leverage
D. None of the above
Select an option to see the answer and solution.
Between two capital plans, if expected EBIT is more than indifference level of EBIT, then:
A. Both plans be rejected
B. Both plans are good
C. One is better than other
D. None of the above
Select an option to see the answer and solution.
Ageing schedule incorporates the relationship between:
A. Creditors and Days Outstanding
B. Debtors and Days Outstanding
C. Average Age of Directors
D. Average Age of All Employees
Select an option to see the answer and solution.
EOQ determines the order size when:
A. Total Order Cost is Minimum
B. Total Number of Order is least
C. Total Inventory Cost is minimum
D. None of the above
Select an option to see the answer and solution.
Which of the following is related to Receivables Management?
A. Cash Budget
B. Economic Order Quantity
C. Ageing Schedule
D. All of the above
Select an option to see the answer and solution.
There is deterioration in the management of working capital of XYZ Ltd. What does it refer to?
A. That the Capital Employed has reduced
B. That the Profitability has gone up
C. That Debtors Collection period has increased
D. That Sales has decreased
Select an option to see the answer and solution.
Financial Break-even level of EBIT is one at which:
A. EPS is one
B. EPS is zero
C. EPS is infinite
D. EPS is negative
Select an option to see the answer and solution.
In order to calculate Weighted Average Cost of weights may be based on:
A. Market Values
B. Target Values
C. Book Values
D. All of the above
Select an option to see the answer and solution.
If the following is an element of dividend policy?
A. Production capacity
B. Change in management
C. Informational content
D. Debt service capacity
Select an option to see the answer and solution.
A short-term lease which is often cancellable is known as:
A. Finance Lease
B. Net Lease
C. Operating Lease
D. Leverage Lease
Select an option to see the answer and solution.
Cost of Capital for Government securities is also known as:
A. Risk-free Rate of Interest
B. Maximum Rate of Return
C. Rate of Interest on Fixed Deposits
D. None of the above
Select an option to see the answer and solution.
Cost of Equity Share Capital is more than cost of debt because:
A. Face value of debentures is more than face value of shares
B. Equity shares have higher risk than debt
C. Equity shares are easily saleable
D. All of the three above
Select an option to see the answer and solution.
80% of sales of Rs. 10,00,000 of a firm are on credit. It has a receivable turnover of 8. What is the average collection period (360 days a year) and average debtors of the firm?
A. 45 days and Rs. 1,00,000
B. 360 days and Rs. 1,00,000
C. 45 days and Rs. 8,00,000
D. 360 days and Rs. 1,25,000
Select an option to see the answer and solution.
Marginal cost of capital is the cost of:
A. Additional Sales
B. Additional Funds
C. Additional Interests
D. None of the above
Select an option to see the answer and solution.
In capital budgeting, the term Capital Rationing implies:
A. That no retained earnings available
B. That limited funds are available for investment
C. That no external funds can be raised
D. That no fresh investment is required in current year
Select an option to see the answer and solution.
Debt Financing is a cheaper source of finance because of:
A. Time Value of Money
B. Rate of Interest
C. Tax-deductibility of Interest
D. Dividends not payable to lenders
Select an option to see the answer and solution.
Payment to creditors is a manifestation of cash held for:
A. Transactionary Motive
B. Precautionary Motive
C. Speculative Motive
D. All of the above
Select an option to see the answer and solution.
Dividend Payout Ratio is:
A. PAT ÷ Capital
B. DPS ÷ EPS
C. Pref. Dividend ÷ PAT
D. Pref. Dividend ÷ Equity Dividend
Select an option to see the answer and solution.
5Cs of the credit does not include:
A. Collateral
B. Character
C. Conditions
D. None of the above
Select an option to see the answer and solution.
Securitization is related to conversion of:
A. Receivables
B. Stock
C. Investments
D. Creditors
Select an option to see the answer and solution.