Which of the following sources of funds has an Implicit Cost of Capital?
A. Equity Share Capital
B. Preference Share Capital
C. Debentures
D. Retained earnings
Select an option to see the answer and solution.
A firm has inventory turnover of 6 and cost of goods sold is Rs. 7,50,000. With better inventory management, the inventory turnover is increased to 10. This would result in:
A. Increase in inventory by Rs. 50,000
B. Decrease in inventory by Rs. 50,000
C. Decrease in cost of goods sold
D. Increase in cost of goods sold
Select an option to see the answer and solution.
Risk in Capital budgeting is same as:
A. Uncertainty of Cash flows
B. Probability of Cash flows
C. Certainty of Cash flows
D. Variability of Cash flows
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Which of the following is not followed in capital budgeting?
A. Cash flows Principle
B. Interest Exclusion Principle
C. Accrual Principle
D. Post-tax Principle
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ABC Analysis is used in:
A. Inventory Management
B. Receivables Management
C. Accounting Policies
D. Corporate Governance
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Which of the following generally not result in increase in total dividend liability?
A. Share-split
B. Right Issue
C. Bonus Issue
D. All of the above
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Concept of Maximum Permissible Bank finance was introduced by:
A. Kannan Committee
B. Chore Committee
C. Nayak Committee
D. Tandon Committee
Select an option to see the answer and solution.
Dividend Distribution Tax is payable by:
A. Shareholders to Government
B. Shareholders to Company
C. Company to Government
D. Holding to Subsidiary Company
Select an option to see the answer and solution.
Which of the following does not effect cash flows proposal?
A. Salvage Value
B. Depreciation Amount
C. Tax Rate Change
D. Method of Project Financing
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In Certainty-equivalent approach, adjusted cash flows are discounted at:
A. Accounting Rate of Return
B. Internal Rate of Return
C. Hurdle Rate
D. Risk-free Rate
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Financial Leverage measures relationship between:
A. EBIT and PBT
B. EBIT and EPS
C. Sales and PBT
D. Sales and EPS
Select an option to see the answer and solution.
In case of divisible projects, which of the following can be used to attain maximum NPV?
A. Feasibility Set Approach
B. Internal Rate of Return
C. Profitability Index Approach
D. Any of the above
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Inventory Turnover measures the relationship of inventory with:
A. Average Sales
B. Cost of Goods Sold
C. Total Purchases
D. Total Assets
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Minimum Rate of Return that a firm must earn in order to satisfy its investors, is also known as:
A. Average Return on Investment
B. Weighted Average Cost of Capital
C. Net Profit Ratio
D. Average Cost of borrowing
Select an option to see the answer and solution.
Capital Budgeting deals with:
A. Long-term Decisions
B. Short-term Decisions
C. Both A and B
D. Neither A nor B
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Which element of the basic NPV equation is adjusted by the RADR?
A. Denominator
B. Numerator
C. Both A and B
D. None of these
Select an option to see the answer and solution.
Which of the following statements is correct?
A. A Higher Receivable Turnover is not desirable
B. Interest Coverage Ratio depends upon Tax Rate
C. Increase in Net Profit Ratio means increase in Sales
D. Lower Debt-Equity Ratio means lower Financial Risk
Select an option to see the answer and solution.
The Real Cashflows must be discounted to get the present value at a rate equal to:
A. Money Discount Rate
B. Inflation Rate
C. Real Discount Rate
D. Risk free rate of interest
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If a firm has no debt, which one is correct?
A. OL is one
B. FL is one
C. OL is zero
D. FL is zero
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Financial decision involves:
A. Investment, financing and dividend decision
B. Investment, financing and sales decision
C. Financing, dividend and cash decision
D. None of these
Select an option to see the answer and solution.