Finance MCQs

Page No. 31

Process of comparing company results with other leading firms is considered as____________?


aComparison

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bAnalysis

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cBench marking

✓


dReturn analysis

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View Answer Bench marking

High price to earning ratio shows company’s_____________?


aLow dividends paid

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bHigh risk prospect

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cHigh growth prospect

✓


dHigh marginal rate

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Price earning ratio and price by cash flow ratio are classified as___________?


aMarginal ratios

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bEquity ratios

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cReturn ratios

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dMarket value ratios

✓


View Answer Market value ratios

In capital budgeting, term of bond which has great sensitivity to interest rates is______________?


aLong-term bonds

✓


bShort-term bonds

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cInternal term bonds

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dExternal term bonds

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View Answer Long-term bonds

An equation in which total assets are multiplied to profit margin is classified as_____________?


aDu DuPont equation

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bTurnover equation

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cPreference equation

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dCommon equation

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View Answer Du DuPont equation

Ratios which relate firm’s stock to its book value per share, cash flow and earnings are classified as_________?


aReturn ratios

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bMarket value ratios

✓


cMarginal ratios

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dEquity ratios

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View Answer Market value ratios

Payback period in which an expected cash flows are discounted with help of project cost of capital is classified as___________________?


aDiscounted payback period

✓


bDiscounted rate of return

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cDiscounted cash flows

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dDiscounted project cost

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Profit margin multiply assets turnover multiply equity multiplier is used to calculate____________?


aReturn on turnover

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bReturn on stock

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cReturn on assets

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dReturn on equity

✓


View Answer Return on equity

A point where profile of net present value crosses horizontal axis at plotted graph indicates project____________________?


aCosts

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bCash flows

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c Internal rate of return

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dExternal rate of return

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Company low earning power and high interest cost cause financial changes which have_____________?


aHigh return on equity

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bHigh return on assets

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cLow return on assets

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dLow return on equity

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View Answer High return on assets

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