Finance MCQs

Page No. 39

Which of the following is the overall return the firm must earn on its existing assets to maintain the value of the stock?


aIRR (Internal Rate of Return)


bMIRR (Modified Internal Rate of Return)


c WACC (Weighted Average Cost of Capital)


dAAR (Average Accounting Return)



A series of constant cash flows that occur at the end of each period for some fixed number of periods is ____________ .


aan ordinary annuity


b annuity due


cmultiple cash flows


dperpetuity


View Answer an ordinary annuity

The DuPont Identity tells us that Return on Equity is affected by:


aThe DuPont Identity tells us that Return on Equity is affected by:


basset use efficiency (as measured by total assets turnover)


c financial Leverage (as measured by equity multiplier)


d all of the given options (a, b and c)



A standardized financial statement presenting all items of the statement as a percentage of total is:


aa common-size statement


ban income statemen


ca cash flow statement


da balance sheet



Which of the following is the process of planning and managing a firm‟s long-term investments?


aCapital Structuring


bCapital Rationing


cCapital Budgeting


dWorking Capital Management


View Answer Capital Budgeting

The principal amount of a bond at issue is called____________?


aPar value


bCoupon value


cPresent value of an annuity


dPresent value of a lump sum


View Answer Par value

The difference between current assets and current liabilities is known as____________?


aSurplus Asset


bShort-term Ratio


cWorking Capital


dCurrent Ratio


View Answer Working Capital

Which of the following equation is known as Cash Flow (CF) identity?


aCF from Assets = CF to Creditors – CF to Stockholder


bCF from Assets = CF to Stockholders – CF to Creditors


cCF to Stockholders = CF to Creditors + CF from Assets


d CF from Assets = CF to Creditors + CF to Stockholder



Which of the following set of ratios is used to assess a business’s ability to generate earnings as compared to its expenses and other relevant costs incurred during a specific period of time?


aLiquidity Ratios


bLeverage Ratios


c Profitability Ratios


dMarket Value Ratios



Which of the following is measured by profit margin?


aOperating efficiency


bAsset use efficiency


cFinancial policy


dDividend policy


View Answer Operating efficiency

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