Finance MCQs

Page No. 33

Rule of 72 as a short cut method is explained by the formula:


a72 divided by the annual interest rate

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bAnnual interest rate dividend by 72

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c72 divided by (annual interest rate multiplied by discount factor)

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dNone of these

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If we were studying a sample of 100 students and their examination performance and if the standard deviation of the list of results was say 14, then we could calculated the standard error by ___________?


aDividing the square root of the number of items in the sample by the mean

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bDividing standard deviation by number of items in the sample

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cDividing the standard deviation by the square root of the number of items in the sample

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dWe cannot calculate standard error on account of inadequacy of information

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If a company revaluates its fixed assets, the current ratio of the company will:


aImprove if assets are revalued upward

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bRemain unaffected

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cImprove if assets are revalued downwards

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dUndergo change only if liabilities are remaining constant

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View Answer Remain unaffected

An Asset is __________?


aSources of funds

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bUse of funds

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cInflow of funds

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dNone of these

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View Answer Use of funds

The effect of purchasing power or inflation on present value is important because _________?


aIt increases the real value of cash flows received in the future

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bIt reduces the real value of cash flows received in the future

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cIt has no effect on real value of cash flow received in the future

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dNone of these

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The formula to calculate the present value of a single cash flow is given by:


aCF1 / (1+r)n

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bC2 / (1+r)

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cC0 + C (1+r)n

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d None of these

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View Answer CF1 / (1+r)n

Choose from the following a symptom which is not relating to “Over Trading”?


aCash shortage

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bLow inventory turnover ratio

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cLow current ratio

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dHigh inventory turnover ratiO

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The Yield to Maturity of a bond is the same as_____________?


aThe present value of the bond

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bThe bonds internal rate of return

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cThe future value of the bond

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dNone of these

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Who of the following make a broader use of accounting information?


aAccountants

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bFinancial Analysts

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cAuditors

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dMarketers

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View Answer Financial Analysts

Which of the following refers to the difference between the sale price and cost of inventory?


aNet loss

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bNet worth

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cMarkup

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dMarkdown

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View Answer Markup

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