B&a - MCQ
B&a - MCQ
B&a - MCQ
3. Assume the total expense for your current year in college equals $20,000. Approximately how much
would your parents have needed to invest 21 years ago in an account paying 8% compounded annually to
cover this amount?
A) $ 952
B) $1,600
C) $1,728
D) $3,973
4. How much will accumulate in an account with an initial deposit of $100, and which earns 10% interest
compounded quarterly for three years?
A) $107.69
B) $133.10
C) $134.49
D) $313.84
5. How much must be invested today in order to generate a five-year annuity of $1,000 per year, with the
first payment one year from today, at an interest rate of 12%?
A) $3,604,78
B) $3,746.25
C) $4,037.35
D) $4,604.78
26. ABC Ltd. has a Current Ratio of 1.5: 1 and Net Current Assets of Rs. 5,00,000. What are the Current
Assets?
A. Rs. 5,00,000
B. Rs. 10,00,000
C. Rs. 15,00,000
D. Rs.25,00,000
27.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
28. Which of the following does not help to increase Current Ratio?
A. Issue of Debentures to buy Stock
B. Issue of Debentures to pay Creditors
C. Sale of Investment to pay Creditors
D Avail Bank Overdraft to buy Machine
a) A unit of money obtained today is worth more than a unit of money obtained in future
b) A unit of money obtained today is worth less than a unit of money obtained in future
34. Time value of money supports the comparison of cash flows recorded at different time period by
35. If the nominal rate of interest is 10% per annum and there is quarterly compounding, the effective
rate of interest will be:
36. Relationship between annual nominal rate of interest and annual effective rate of interest, if
frequency of compounding is greater than one:
a) Rs 19500
b) Rs 19400
c) Rs 19310
d) None of the above
38. If nominal rate of return is 10% per annum and annual effective rate of interest is 10.25% per
annum, determine the frequency of compounding:
a) 1
b) 2
c) 3
d) None of the above
39. Present value tables for annuity cannot be straight away applied to varied stream of cash flows.
a) True
b) False
a) Discounting technique
b) Compounding technique
c) Either a or b
d) None of the above
b) the book value of the firm's assets less the book value of its liabilities.
43. What are the earnings per share (EPS) for a company that earned $100,000 last year in after-tax
profits, has 200,000 common shares outstanding and $1.2 million in retained earning at the year end?
a) $100,000
b) $6.00
c) $0.50
d) $6.50
b) manager; owner
c) accountant; bondholder
d) shareholder; bondholder
47. The decision function of financial management can be broken down into the decisions.
a) financing and investment
48. The controller's responsibilities are primarily in nature, while the treasurer's responsibilities are
primarily related to .
a) operational; financial management
49. In the US, the has been given the power to adopt auditing, quality control, ethics, and
disclosure standards for public companies and their auditors as well as investigate and discipline those
involved.
a) American Institute of Certified Public Accountants (AICPA)
50. A company's is (are) potentially the most effective instrument of good corporate governance.
b) board of directors
51. Which of the following is NOT one of the three main types of decision facing the financing manager
in a company?
A Dividend decision
B Investment decision
C Economic decision
D Financing decision
52. Which of the following are the 3 key areas covered by financial management decisions?
1 Investment
2 Cash flow
3 Finance
4 Dividend
A 1, 2 and 3
B 2, 3 and 4
C 1, 3 and 4
D 1, 2 and 4
53. Which of the following statements concerning financial management are correct?
A 1 and 2 only
B 1 and 3 only
C 2 and 3 only
D 1, 2 and 3
57. In relation to the financial management of a company, which of the following provides the best
definition of a firm’s primary financial objective?
A 1 and 4 only
B 3 and 5 only
C 2, 3 and 5 only
D 1, 2, 3 and 4 only
59. If the nominal rate of interest is 10% per annum and there is semi annual compounding, the
effective rate of interest will be:
a) A unit of money obtained today is worth more than a unit of money obtained in future
b) A unit of money obtained today is worth less than a unit of money obtained in future
c) There is no difference in the value of money obtained today and tomorrow
d) None of the above