Financial Management Online Test

_____ is the variability of possible outcomes from a given investment.
Variance
Risk
Return
Beta
Because investors dislike uncertainty, they will require _____ rates of return from risky investments.
None of the above
The same
Lower
Higher
The benefits attributed to an investment project are:
After tax operating benefits
Tax shield benefits of depreciation
Both 1 and 2 are correct
Rate of return less than the cost of capital
When a firm places a budgetary constraint on the projects it invests in, this is called:
None of the above
Cash budgeting
Working capital management
Capital rationing
According to reinvestment rate assumption, which method of capital budgeting assumes cash flows are reinvested at the project’s rate of return?
None of the above
Internal rate of return
Net present value
Payback period
If two projects are independent, that means that_______
None of the above
Both 1 and 2
You should analyze the projects independently
Selection of one precludes selection of the other
Which of the following capital budgeting methods measures how long it takes to recover the initial investment in a project?
None of the above
Internal rate of return
Net present value
Payback period
Which of the following capital budgeting methods is most theoretically correct?
None of the above
Internal rate of return
Net present value
Payback period
Which of the following capital budgeting methods states the return of a project as a percentage?
None of the above
Internal rate of return
Net present value
Payback period
Since capital budgeting uses cash flows instead of accounting flows, the financial manager must add back ______ to the analysis.
Depreciation
Investments
The cost of accounts payable
The cost of fixed assets
_____ Focuses on long-term decision-making regarding the acquisition of projects.
None of the above
Cash budget
Capital budgeting
Working capital management
Firms that have high price/earning ratios are generally:
None of the above
Equally risk as firms with all firms
Les risky than firms with low price/earning ratios
Riskier than firms with low price/earning ratios
A low price/earning ratio usually means that a firm:
Is doomed in the market place
Is a mature firm
Has positive expectations for the future
Is a growth stock
A high price/earnings ratio usually indicates that a firm is a:
Constant security
Convertible security
Growth stock
Value stock
Common stock that has no growth in dividend is valued as if it were:
None of the above
An option
A bond
Preferred stock
One characteristic of preferred stock is that:
All of the above
It pays a fixed dividend payment
It is a hybrid security with characteristics of both common stock and debt
It has maturity date
As time to maturity draws near, a bond’s value approaches:
None of the above
The coupon payment
Par
Zero
An annuity is
A series of equal and non- consecutive payments
A series of equal and consecutive payment
A series of unequal but consecutive payments
More than one payment
If you have Rs. 1000 and you plan to save it for 4 years with an interest rate of 10%, what is the future value of your saving?
Cannot be determined
Rs.1331.00
Rs.1000.00
Rs.1464.00
Time value of money is an important finance concept because:
All of the above
It takes compound interest into account
It takes time into account
It takes risk into account
The present value of a rupee to be received in the future is:
None of the above
Less than a rupee
Equal to a rupee
More than a rupee
The future value of a rupee that you invest today is:
None of the above
Less than a rupee
Equal to a rupee
More than a rupee
The future value of an annuity is:
None of the above
More than each annuity payment
Equal to each annuity payment
Less than each annuity payment
The concept of present value and future value are:
Inversely related to each other
Proportionately related to each other
Not related to each other
Directly related to each other
If you win the lottery and you choose to have your proceeds distributed to you over a twenty- year period, which calculation would you use to calculate the worth of those proceeds to you today?
Present value of an annuity
Present value of a lump sum
Future value of an annuity
Future value of a lump sum
Description:

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Discussion

pooja

nice and helpful test to do a quick revision of basics

1655 days 22 hours 31 minutes ago

anurag sharma

Lucid and Informative.

1737 days 17 hours 41 minutes ago

Kalyan Sarkar
Psychological interventions in Mathematics Study
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