Finance MCQs

Page No. 23

Set of rules made by corporation founders such as directors election procedure are classified as_________?


aStock laws

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bBy laws

✓


cLiability laws

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dCorporate laws

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View Answer By laws

Price per share is $30 and an earnings per share is $3.5 then price for earnings ratio would be___________?


a8.57 times

✓


b8.57%

✖


c0.11 times

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d11%

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View Answer 8.57 times

A technique uses in comparative analysis of financial statement is_________?


aGraphical analysis

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bPreference analysis

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cCommon size analysis

✓


dReturning analysis

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View Answer Common size analysis

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


a0.07%

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b7.14%

✓


c0.05 times

✖


d7.15 times

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View Answer 7.14%

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


a $22,275

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b15.71%

✓


c1.93%

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d1.925 times

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View Answer 15.71%

High price to earnings ratio shows company’s_________?


aLow dividends paid

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bHigh risk prospect

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c High growth prospect

✓


dHigh marginal rate

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In internal rate of returns, discount rate which forces net present values to become zero is classified as__________?


aPositive rate of return

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bNegative rate of return

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cExternal rate of return

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dInternal rate of return

✓



Set of projects or set of investments usually maximize firm value is classified as_________?


aOptimal capital budget

✓


b Minimum capital budget

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cMaximum capital budget

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dGreater capital budget

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Modified rate of return and modified internal rate of return with exceed cost of capital if net present value is____________?


aPositive

✓


bNegative

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cZero

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dOne

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View Answer Positive

In capital budgeting, a negative net present value result in______________?


aZero economic value added

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b Percent economic value added

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c Negative economic value added

✓


dPositive economic value added

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