In finance, "working capital" means the same thing as
A. Total assets
B. Fixed assets
C. Current assets
D. Current assets minus current liabilities.
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The Debt-Equity ratio of a Company_______________.
A. Measure its financial leverage
B. Does not affect the Earnings per share
C. Affects the dividend decision of the company
D. None of the above.
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Which of the following is not related to overall market variability?
A. Financial risk
B. Interest rate risk
C. Purchasing power risk
D. Market risk
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In proper capital budgeting analysis we evaluate incremental
A. accounting income
B. cash flow
C. earnings
D. operating profit
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Which of the following statement are true in respect of working capital?
A. Gross Working Capital is the sum of the total current assets
B. Net working capital represents current assets - current liablities
C. Net working capital can be negative
D. All the above
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The probability of bankrupt is higher.
A. for a levered firm than an unlevered firm
B. for an unlevered firm than a levered firm
C. only levered firm
D. only unlevered firm
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Which of the following statement is true if the Net Present Value (NPV) of a positive?
A. The IRR must be greater than 0.
B. The discount rate exceeds the cost of capital.
C. The profitability index equals 1
D. Accepting the project has an indeterminate effect on shareholders
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If interest rates rose, you would expect ____________ to also rise.
A. business risk
B. financial risk
C. liquidity risk
D. inflation risk
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All of the following influence capital budgeting cash flows EXCEPT.
A. accelerated depreciation
B. salvage value
C. tax rate changes
D. method of project financing used
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Financial management is indispensable in any organization as it helps in______________.
A. taking sound financial decisions
B. proper use and allocation
C. improving the profitability of funds
D. all the above
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This type of risk is avoidable through proper diversification.
A. portfolio risk
B. systematic risk
C. unsystematic risk
D. total risk
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Financial analysts, working capital means the same thing as __________.
A. total assets
B. fixed assets
C. current assets
D. current assets minus current Liabilities
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Which of the following is a basic principle of finance as it relates to the management of working capital?
A. Profitability varies inversely with risk
B. Liquidity moves together with risk
C. Profitability moves together with risk
D. Profitability moves together with liquidity
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The return relative solves the problem of______________.
A. inflation
B. negative returns
C. interest rates
D. tax differences
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If the Dow Jones Industrials had a price appreciation of 6 percent one year and yet Total return for the year was 11 percent; the difference would be due to___________.
A. the tax treatment of capital gains
B. the cumulative wealth effect
C. dividends
D. profits
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Shareholder wealth in a firm is represented by___________.
A. the number of people employed in the firm
B. the book value of the firm's assets less the book value of its liabilities
C. the amount of salary paid to its employees
D. the market price per share of the firms common stock
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In order to determine the compound growth rate of an investment over some period, an investor would calculate the_____________.
A. arithmetic mean
B. geometric mean
C. calculus mean
D. arithmetic median
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Net present value is a popular method which falls
A. With in non- discount cash flow method
B. With in discount cash flow method
C. Equal With in non- discount cash flow method
D. No discount cash flow
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A major difference between real and nominal returns is that_______________.
A. real returns adjust for inflation and nominal returns do not
B. real returns use actual cash flows and nominal returns use expected cash flows
C. real returns adjust for commissions and nominal returns do not
D. real returns show the highest possible return and nominal returns show the lowest possible return
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When most people refer to the mean, they are referring to the______________.
A. median
B. arithmetic mean
C. geometric mean
D. cumulative mean
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