11221. The formula to calculate the present value of a single cash flow is given by:
✅ A. CF1 / (1+r)n
Option A : CF1 / (1+r)n Option B : C2 / (1+r) Option C : C0 + C (1+r)n Option D : None of these Option E : Correct Answer : CF1 / (1+r)n Read more
Management Sciences MCQs – Page 562
11222. The effect of purchasing power or inflation on present value is important because _________?
✅ B. It reduces the real value of cash flows received in the future
Option A : It increases the real value of cash flows received in the future Option B : It reduces the real value of cash flows received in the future Option C : It has no effect on real value of cash flow received in the future Option D : None of these Option E : Correct Answer : It… Read more
11223. An Asset is __________?
✅ B. Use of funds
Option A : Sources of funds Option B : Use of funds Option C : Inflow of funds Option D : None of these Option E : Correct Answer : Use of funds Read more
11224. If a company revaluates its fixed assets, the current ratio of the company will:
✅ B. Remain unaffected
Option A : Improve if assets are revalued upward Option B : Remain unaffected Option C : Improve if assets are revalued downwards Option D : Undergo change only if liabilities are remaining constant Option E : Correct Answer : Remain unaffected Read more
11225. If we were studying a sample of 100 students and their examination performance and if the standard deviation of the list of results was say 14, then we could calculated the standard error by ___________?
✅ D. We cannot calculate standard error on account of inadequacy of information
Option A : Dividing the square root of the number of items in the sample by the mean Option B : Dividing standard deviation by number of items in the sample Option C : Dividing the standard deviation by the square root of the number of items in the sample Option D : We cannot calculate standard error on account… Read more
11226. Which of the following statement is TRUE regarding debt?
✅
Option A : Debt is an ownership interest in the firm. Option B : Unpaid debt can result in bankruptcy or financial failur Option C : Debt provides the voting rights to the bondholders. Option D : Corporations payment of interest on debt is fully taxable. Option E : Correct Answer : Unpaid debt can result in bankruptcy or financial… Read more
11227. A firm reports total liabilities of Rs. 300,000 and owners equity of Rs. 500,000. What would be the total worth of the firms assets?
✅ C. Rs. 800,000
Option A : Rs. 300,000 Option B : Rs. 500,000 Option C : Rs. 800,000 Option D : Rs. 1100,000 Option E : Correct Answer : Rs. 800,000 Read more
11228. Which of the following measure reveals how much profit a company generates with the money shareholders have invested?
✅ C. Return on Equity
Option A : Profit Margin Option B : Return on Assets Option C : Return on Equity Option D : Debt-Equity Ratio Option E : Correct Answer : Return on Equity Read more
11229. The most important item that can be extracted from financial statements is the actual ________ of the firm.
✅ B. Cash Flow
Option A : Net Working Capital Option B : Cash Flow Option C : Net Present Value Option D : None of the given options Option E : Correct Answer : Cash Flow Read more
11230. A firm has paid out Rs. 150,000 as dividends from its net income of Rs. 250,000. What is the retention ratio for the firm?
✅ C. 40%
Option A : 12% Option B : 25% Option C : 40% Option D : 60% Option E : Correct Answer : 40% Read more
11231. Which of the following ratios is NOT from the set of Asset Management Ratios?
✅ C. Capital Intensity Ratio
Option A : Inventory Turnover Ratio Option B : Receivable Turnover Option C : Capital Intensity Ratio Option D : Return on Assets Option E : Correct Answer : Capital Intensity Ratio Read more
11232. Which of the following statement about bond ratings is TRUE?
✅ C. Bond ratings represent an independent assessment of the credit-worthiness of bonds.
Option A : Bond ratings are typically paid for by a companys bondholders. Option B : Bond ratings are based solely on information acquired from sources other than the bond issuer. Option C : Bond ratings represent an independent assessment of the credit-worthiness of bonds. Option D : None of the given options Option E : Correct Answer : Bond… Read more
11233. If you plan to save Rs. 5,000 with a bank at an interest rate of 8%, what will be the worth of your amount after 4 years if interest is compounded annually?
✅ D. Rs. 6,802
Option A : Rs. 5,400 Option B : Rs. 5,900 Option C : Rs. 6,600 Option D : Rs. 6,802 Option E : Correct Answer : Rs. 6,802 Read more
11234. Which one of the following terms refers to the risk arises for bond owners from fluctuating interest rates?
✅ B. Interest Rate Risk
Option A : Fluctuations Risk Option B : Interest Rate Risk Option C : Real-Time Risk Option D : Inflation Risk Option E : Correct Answer : Interest Rate Risk Read more
11235. Which of the following set of ratios relates the market price of the firms common stock to selected financial statement items?
✅ D. Market Value Ratios
Option A : Liquidity Ratios Option B : Leverage Ratios Option C : Profitability Ratios Option D : Market Value Ratios Option E : Correct Answer : Market Value Ratios Read more
11236. If a firm uses cash to purchase inventory, its quick ratio will?
✅ B. Decrease
Option A : Increase Option B : Decrease Option C : Remain unaffected Option D : Become zero Option E : Correct Answer : Decrease Read more
11237. Standard Corporation sold fully depreciated equipment for Rs.5,000. This transaction will be reported on the cash flow statement as a(n):
✅ B. Investing activity
Option A : Operating activity Option B : Investing activity Option C : Financing activity Option D : None of the given options Option E : Correct Answer : Investing activity Read more
11238. Which of the following ratios are particularly interesting to short term creditors?
✅ A. Liquidity Ratios
Option A : Liquidity Ratios Option B : Long-term Solvency Ratios Option C : Profitability Ratios Option D : Market Value Ratios Option E : Correct Answer : Liquidity Ratios Read more
11239. Mr. Y and Mr. Z are planning to share their capital to run a business. They are going to employ which of the following type of business?
✅ B. Partnership
Option A : Sole-proprietorship Option B : Partnership Option C : Corporation Option D : None of the given options Option E : Correct Answer : Partnership Read more
11240. Which of the following item provides the important function of shielding part of income from taxes?
✅ D. Depreciation
Option A : Inventory Option B : Supplies Option C : Machinery Option D : Depreciation Option E : Correct Answer : Depreciation Read more