finance

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Low price for earning ratio is result of

Low price for earning ratio is result of
  • A. low risky firms
  • B. high risky firms
  • C. low dividends paid
  • D. high marginal rate
  • Correct Answer: Option A

Net income available to stockholders is $150 and total assets are $2,100 then return on total assets would be

Net income available to stockholders is $150 and total assets are $2,100 then return on total assets would be
  • A. 0.07%
  • B. 7.14%
  • C. 0.05 times
  • D. 7.15 times
  • Correct Answer: Option B

Profit margin multiply assets turnover multiply equity multiplier is used to calculate

Profit margin multiply assets turnover multiply equity multiplier is used to calculate
  • A. return on turnover
  • B. return on stock
  • C. return on assets
  • D. return on equity
  • Correct Answer: Option D

Return on assets = 5.5%, Total assets $3,000 and common equity $1,050 then return on equity would be

Return on assets = 5.5%, Total assets $3,000 and common equity $1,050 then return on equity would be
  • A. $22,275
  • B. 15.71%
  • C. 1.93%
  • D. 1.925 times
  • Correct Answer: Option B

An equity multiplier is multiplied to return on assets to calculate

An equity multiplier is multiplied to return on assets to calculate
  • A. return on assets
  • B. return on multiplier
  • C. return on turnover
  • D. return on stock
  • Correct Answer: Option A

In capital budgeting, positive net present value results in

In capital budgeting, positive net present value results in
  • A. negative economic value added
  • B. positive economic value added
  • C. zero economic value added
  • D. percent economic value added
  • Correct Answer: Option B

An initial cost is $6000 and probability index is 5.6 then present value of cash flows will be

An initial cost is $6000 and probability index is 5.6 then present value of cash flows will be
  • A. $25,000
  • B. $28,000
  • C. $33,600
  • D. $30,000
  • Correct Answer: Option C

A type of project whose cash flows would not depend on each other is classified as

A type of project whose cash flows would not depend on each other is classified as
  • A. project net gain
  • B. independent projects
  • C. dependent projects
  • D. net value projects
  • Correct Answer: Option B

In independent projects evaluation, results of internal rate of return and net present value lead to

In independent projects evaluation, results of internal rate of return and net present value lead to
  • A. cash flow decision
  • B. cost decision
  • C. same decisions
  • D. different decisions
  • Correct Answer: Option C

* set of projects or set of investments usually maximize firm value is classified as

* set of projects or set of investments usually maximize firm value is classified as
  • A. optimal capital budget
  • B. minimum capital budget
  • C. maximum capital budget
  • D. greater capital budget
  • Correct Answer: Option A

In capital budgeting, a negative net present value results in

In capital budgeting, a negative net present value results in
  • A. zero economic value added
  • B. percent economic value added
  • C. negative economic value added
  • D. positive economic value added
  • Correct Answer: Option C

An uncovered cost at start of year is $300, full cash flow during recovery year is $650 and prior years to full recovery is 4 then payback would be

An uncovered cost at start of year is $300, full cash flow during recovery year is $650 and prior years to full recovery is 4 then payback would be
  • A. 3.46 years
  • B. 2.46 years
  • C. 5.46 years
  • D. 4.46 years
  • Correct Answer: Option D

In calculation of internal rate of return, an assumption states that received cash flow from project must

In calculation of internal rate of return, an assumption states that received cash flow from project must
  • A. be reinvested
  • B. not be reinvested
  • C. be earned
  • D. not be earned
  • Correct Answer: Option A

A project which have one series of cash inflows and results in one or more cash outflows is classified as

A project which have one series of cash inflows and results in one or more cash outflows is classified as
  • A. abnormal costs
  • B. normal cash flows
  • C. abnormal cash flow
  • D. normal costs
  • Correct Answer: Option B

Situation in which one project is accepted while rejecting another project in comparison is classified as

Situation in which one project is accepted while rejecting another project in comparison is classified as
  • A. present value consent
  • B. mutually exclusive
  • C. mutual project
  • D. mutual consent
  • Correct Answer: Option B

In capital budgeting, two projects who have cost of capital as 12% is classified as

In capital budgeting, two projects who have cost of capital as 12% is classified as
  • A. hurdle rate
  • B. capital rate
  • C. return rate
  • D. budgeting rate
  • Correct Answer: Option A

Bonds issued by corporations and exposed to default risk are classified as

Bonds issued by corporations and exposed to default risk are classified as
  • A. corporation bonds
  • B. default bonds
  • C. risk bonds
  • D. zero risk bonds
  • Correct Answer: Option A

Bonds issued by government and backed by U.S government are classified as

Bonds issued by government and backed by U.S government are classified as
  • A. issued security
  • B. treasury bonds
  • C. U.S bonds
  • D. return security
  • Correct Answer: Option B

Value generally promises to pay at maturity date and a firm borrows is considered as bonds

Value generally promises to pay at maturity date and a firm borrows is considered as bonds
  • A. bond value
  • B. per value
  • C. state value
  • D. par value
  • Correct Answer: Option D

Bonds having zero default risk are classified as

Bonds having zero default risk are classified as
  • A. U.S bonds
  • B. return security
  • C. issued security
  • D. treasury bonds
  • Correct Answer: Option D
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