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


bAnnual interest rate dividend by 72


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


dNone of these



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


bDividing standard deviation by number of items in the sample


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


dWe cannot calculate standard error on account of inadequacy of information



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


aImprove if assets are revalued upward


bRemain unaffected


cImprove if assets are revalued downwards


dUndergo change only if liabilities are remaining constant


View Answer Remain unaffected

An Asset is __________?


aSources of funds


bUse of funds


cInflow of funds


dNone of these


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


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


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


dNone of these



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


aCF1 / (1+r)n


bC2 / (1+r)


cC0 + C (1+r)n


d None of these


View Answer CF1 / (1+r)n

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


aCash shortage


bLow inventory turnover ratio


cLow current ratio


dHigh inventory turnover ratiO



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


aThe present value of the bond


bThe bonds internal rate of return


cThe future value of the bond


dNone of these



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


aAccountants


bFinancial Analysts


cAuditors


dMarketers


View Answer Financial Analysts

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


aNet loss


bNet worth


cMarkup


dMarkdown


View Answer Markup

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