Multiple Choice Questions (MCQs)
Which of the following statement measures performance over a specific period of time?
Which of the following is subcategory (ies) of finance department?
Which one of the following typically applies to preferred stock but not to common stock?
The principal amount of a bond at issue is called:
Which of the following is the most significant financial advantage of corporate form?
Which of the following measures the present value of an investment per dollar invested?
Time trend analysis of financial statements is used to compare the performance of firm with:
Business Finance addresses which of the following?
The most common application of term "Finance" involves raising money to acquire _________.
Head of Treasury department reports to whom?
Which one of the following formula will be used to calculate profit margin ratio?
Which of the following refers to the cash flows that result from the firm’s day-to-day activities of producing and selling?
A given rate is quoted as 9 percent APR, but the EAR is 9.38 percent. What is the compounding period?
JJ Inc. has a 4 percent return on total assets of Rs. 500,000 and a net profit margin of 5 percent. Total sales for JJ Inc. would be :
Net Income after taxation differs from Net Cash Flow from operations because:
In which of the following form of business "All business income is not considered as personal income"?
Which of the following is the amount of cash we would get if we actually sell an asset?
Which of the following equation best represents Net Working Capital?
Mr. A has just recently started a business by investing a capital of Rs. 500,000. He will be the only owner of the business and also enjoy all the profits of the business. Which type of business is being employed by Mr. A?
Which of the following issue is NOT covered by "Investment" area of finance?
If a firm uses cash to purchase inventory, its current ratio will:
Agency problems can be controlled by which of the way?
Sumi Inc. has just paid a dividend of Rs. 7 per share. The dividend of this company grows at a steady rate of 5% per year. What will be the dividend in 5 years?
The value of net working capital will be greater than zero when:
The process of determining the present value of a payment or a stream of payments that is to be received in the future is known as:
The preferred stock of a company currently sells for Rs. 25 per share. The annual dividend of Rs. 2.50 is fixed. Assuming a constant dividend forever, what is the rate of return on this stock?
In how many years, an amount will be doubled at a discount rate of 8 percent?
Which of the following terms refers to the use of debt financing?
When a corporation wishes to borrow from public on a long-term basis, it does so by issuing or selling:
If a firm’s debt ratio is 45%, this means _______ of the firm’s assets are financed by equity financing.
Balance sheet for a company reports current assets of Rs. 700,000 and current liabilities of Rs. 460,000. What would be the Current Ratio for the company if there is an inventory level of Rs. 120,000?
What will be the coupon value of a Rs. 1,000 face-value bond with a 10% coupon rate?
The most important item that can be extracted from financial statements is the actual ________ of the firm.
Time value of money is an important finance concept because:
Which of the following has "Limited liability" for business debts?
Standard Corporation sold fully depreciated equipment for Rs. 5,000. This transaction will be reported on the cash flow statement as a(n):
Period costs include which of the following?
During the accounting period, sales revenue is Rs. 25,000 and accounts receivable increases by Rs. 8,000. What will be the amount of cash received from customers for the period?
Who of the following make a broader use of accounting information?
Which of the following form of business organization is least regulated?
Mr. Ali has an opprtunity to invest Rs. 45,000 in a local bank at 13% compound interest rate for 6 years. What amount he will receive after 6 years?
All of the followings are tax admissible items EXCEPT:
Which of the given is correct?
Between the two identical bonds having different coupon, the price of the ________ bond will change less than that of ________ bond.
Which of the following set of ratios is used to assess a business's ability to generate earnings as compared to its expenses and other relevant costs incurred during a specific period of time?
In which type of market, new securities are traded?
All else equal, the market value of a corporate bond is always inversely related to its:
In which of the following tax system, a tax payer is charged uniformly for all levels of his taxable income?
Finance is vital for which of the following business activity (activities)?
A business owned by a single person is known as:
Product costs include which of the following?
Decisions about “how to raise money” and “what to do with it” are part of which of the following?
Cash flow to the creditors can be calculated by using which one of the following expressions?
What will be the value of a Rs. 1,000 face-value bond with an 8% coupon rate at 8% required rate of return?
Mr. Ahmed wants to receive Rs. 1,800 forever at the end of each year. What will be the present value of this series of cash flow if rate of interest is 10%?
Which of the following best represents the term "Financing"?
Which of the given is (are) major difference(s) between net income and cash flow of the company?
Which of the following measure reveals how much profit a company generates with the money shareholders have invested?
A firm reports total liabilities of Rs. 300,000 and owner‟s equity of Rs. 500,000.What would be the total worth of the firm‟s assets?
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 bank offers simple interest?
Which of the following diffulty(ies) is(are) faced while valuing a common stock?
In which form of business organizations, owners have limited liability?
The conflict of interest between stockholders and management is known as:
Which of the following is a non-cash item?
Which of the following comes under the head of discounted cash flow criteria for capital budgeting decisions?
XYZ Company has a ROE of 12 percent and a dividend payout ratio of 40 percent. What is the firm’s maximum sustainable rate of growth?
Which of the following item provides the important function of shielding part of income from taxes?
Which of the following ratio is a way to measure a company's performance?
A ________ is an agent who arranges security transactions among investors.
In which type of business, all owners share in gains and losses and all have unlimited liability for all business debts?
Standard Company had net sales of Rs. 750,000 over the past year. During that time, average receivables were Rs. 150,000. Assuming a 365-day year, what was the average collection period?
A ________ covenant limits or prohibits actions that company might take.
All of the following are the features of privately placed bonds EXCEPT:
Which of the following ratios is NOT from the set of Asset Management Ratios?
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