FINANCIAL MANAGEMENT(UPGRD)ALL IN

CREATED BY:ANONYMOUS

Question text

Fama’s French Bakery has a return on assets (ROA) of 10 percent and a return on equity (ROE) of
14 percent. If equity is equal to 100,000. What is the value of total assets?

Select one:

1,400,000
1,400
140,000
14,000
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The correct answer is: 140,000

Question 2
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Minden Co has current assets that consist of cash: 20,000, receivables: 70,000 and inventory:
90,000. Current liabilities are 75,000. The quick ratio is

Select one:
2.2
3.2
2

1.2
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The correct answer is: 1.2

Question 3
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The current assets and current liabilities of FPL company is 25 and 25 respectively. Reviewing the
past transactions the company purchased merchandise worth 5 and it was immediately paid.
However, it was discovered that this transaction was mistakenly recorded as a purchase on
account. After adjusting the errors, what is the the current ratio?

Select one:
a. 0.5
b. 0.4
c. 0.75

d. 1
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The correct answer is: 1

Question 4
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FPL Co. Statement of Financial Position has Total Assets worth 100,000 wherein 60,000 is non-
current. It also has Total Liabilities worth 200,000 wherein 80,000 is non-current. It was found out
that there was an unrecorded depreciation worth 20,000 and unrecorded purchase of merchandise
on account worth 15,000. What is the current ratio?

Select one:
0.41

0.56
0.50
0.26
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The correct answer is: 0.41

Question 5
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The Merriam Company has determined that its return on equity is 15 percent. Management is
interested in the various components that went into this calculation. You are given the following
information: (total debt)/(total assets) = 0.35 and total assets = 1,000,000. What is the net income?

Select one:

a. 97,500
b. 428,571
c. 23,333
d. 52,500
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The correct answer is: 97,500

Question 6
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FPL Company has cash and cash equivalents worth 10,000; equipment worth 20,000; accounts
receivable worth 15,000; notes receivable worth 12,000 ; accounts payable worth 10,000 and notes
payable worth 5,000 maturing after one month. What is the current ratio?

Select one:
2.47
2.5
1.67
3.7
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The correct answer is: 1.67

Question 7
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Fana’s American Bakery has a return on assets (ROA) of 10 percent and a return on equity (ROE) of
14 percent. If total assets is 100,000, what is the value of its total equity?

Select one:
1,400,000
71,429
7,143

14,000
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The correct answer is: 71,429

Question 8
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Shepherd Enterprises has a debt-to-equity ratio of 40 percent. The company’s total assets is equal
to Php 800 million. What is the value of the company's total liabilities?
Select one:

Php 458,428,472
Php 2,400,000,000
Php 228,571,429
Php 320,000,000
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The correct answer is: Php 228,571,429

Question 9
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Its objective is to provide information about the financial position and the financial performance and
cash flows of an entity that is useful to a wide range of users in making economic decisions

Select one:
a. Statement of Operational Performance

b. Financial Statements
c. Statement Corporate Taxes
d. Fund Flow Statement
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The correct answer is: Financial Statements

Question 10
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In this type of analysis you may compare figures from several years, so you are comparing the
amounts in each account from the past up to the present.

Select one:
vertical analysis
external audit

horizontal analysis
internal analysis
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The correct answer is: horizontal analysis

Question 11
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Minden Co has current assets that consist of cash: Php20,000, receivables: Php70,000 and
inventory: Php90,000. Current liabilities are Php75,000. The current ratio is:

Select one:

2.4
3.2
2
2.2
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The correct answer is: 2.4

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Question text

This analysis is usually used to understand operational performance of the entity to help in making
their business decisions.

Select one:
External Audit
Internal Analysis

External Analysis
Overall Analysis
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The correct answer is: Internal Analysis

Question 13
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Current assets divided by current liabilities is the definition of the:

Select one:
Earnings per share
Debt ratio
Quick ratio

Current ratio
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The correct answer is: Current ratio

Question 14
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Question text

Lone Star Plastics has the following data:

Gross Sales 100,000
Gross profit margin 6.0% Tax rate 40%
What is Lone Star’s net income after taxes?

Select one:
4,500
12,000
24,000

3,600
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The correct answer is: 3,600

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Return on equity is directly affected by

Select one:
net income and equity
number of shares and liabilities and non-accountable transactions

total assets and non-financial transactions

net income, number of shares and dividends
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The correct answer is: net income and equity

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Return on sales, return on assets and return on equity are examples of

Select one:
activity ratios

profitability ratios
leverage ratios
liquidity ratios
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The correct answer is: profitability ratios

Question 17
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The receivables turnover ratio is defined as

Select one:
receivables plus bad debt allowances
receivables divided by sales
sales divided by receivables

none of these
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The correct answer is: sales divided by receivables

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Ratios that measure the ability of the company to pay its short-term debts are called:

Select one:
profitability ratios

liquidity ratios
leverage ratios
activity ratios
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The correct answer is: liquidity ratios

Question 19
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The quick ratio is defined as:

Select one:
assets less inventory, divided by total liabilities
current assets less inventory, less prepaid expenses. The resulting amount will then be divided by

current liabilities
current assets divided by total debt
current assets divided by current liabilities
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The correct answer is: current assets less inventory, less prepaid expenses. The resulting amount
will then be divided by current liabilities
Question 20
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Total asset turnover, receivables turnover and inventory turnover ratios measure

Select one:
efficacy
profitability
liquidity

efficiency
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The correct answer is: efficiency

Question 1
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This is concerned with the increase in revenue and decrease in costs and expenses

Select one:
Expense minimization
Wealth maximization

Profit maximization
Revenue maximization
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The correct answer is: Profit maximization

Question 2
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Which statement is false

Select one:
Financial decision will affect the entire business operation because decisions have indirect

relationship with the various department functions.

Effective financial management helps you promote and mobilize individual and corporate savings
With the help of strong financial control devices such as budgetary control, ratio analysis and cost
volume profit analysis, financial management can improve the profitability position of the business
Financial management is essential in the business especially in the corporate sectors.
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The correct answer is: Financial decision will affect the entire business operation because decisions
have indirect relationship with the various department functions.

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Identify what is being described. The company had a net profit after taxes worth Php 1,000,000.
The board and the management decided not to distribute dividends to shareholders instead, it
retained its earnings for the year so that the business can have resources for future use.

Select one:
Increasing the value of the firm
Improvement of profitability
Proper use of funds
Savings Promotion
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The correct answer is: Increasing the value of the firm

Question 4
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This is concerned with the acquisition, financing, and management of assets with some overall goal
in mind. Its decision function includes areas such as investment, financing, and asset management
decisions

Select one:

Financial Management
Financial Accounting
Financial Concern
Managerial Accounting
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The correct answer is: Financial Management

Question 5
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What is the ultimate objective of Financial Management?

Select one:
Expense minimization
Wealth maximization
Revenue maximization

Profit maximization
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The correct answer is: Wealth maximization

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Identify the function being described: The board of directors and finance manager decided to offer
stocks to the public so that they can have the resources for business expansion.

Select one:
Acquiring necessary capital

Increasing the value of the firm

Interrelation with other departments
Savings Promotion
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The correct answer is: Acquiring necessary capital

Question 7
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Which of the following statements is true?

Select one:
One of the benefits of being a financial manager is that you can get funds in the business entity
without prior approval.
All of the statements are correct.
The finance manager must posses knowledge in the areas of accounting, finance, economics and

management.
A financial manager just delegates the responsibilities to his people and just wait for the results.
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The correct answer is: The finance manager must posses knowledge in the areas of accounting,
finance, economics and management.

Question 8
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Which is not a function of financial management?

Select one:
Forecasting Financial Requirements

Personnel Management
Cash Management
Acquiring Necessary Capital
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The correct answer is: Personnel Management

Question 9
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Which statement is false

Select one:

Savings are possible only when the business has higher expenses than its revenues.
The ultimate aim of most businesses is to achieve the maximum amount of profit leading to the
maximization of the wealth of the investors.
Financial management is very important in the field of increasing the wealth of the investors and the
business.
With the help of strong financial control devices such as budgetary control, ratio analysis and cost
volume profit analysis, financial management can improve the profitability position of the business
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The correct answer is: Savings are possible only when the business has higher expenses than its
revenues.

Question 10
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Which is not included in the group

Select one:
Cash Management
Forecasting Financial Requirements

Savings Promotion
Interrelation with Other Departments
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The correct answer is: Savings Promotion

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Question text

Selzer Inc. has a net profit after taxes worth 62,195. It has a total assets worth 3 million, with a
debt-to-equity ratio of 0.64. What is the firm’s return on equity (ROE)?

Select one:
71.0%

33.4%
7.1%
3.4%
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The correct answer is: 3.4%

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Stennett Corp.’s CFO has proposed that the company made a new debt and used the proceeds to
buy equipment. Which of the following is likely to occur if this proposal is adopted?

Select one:
Inventory turnover will increase.
Income will decline.
Return on Assets (ROA) will decline.

Gross profit margin will increase.

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The correct answer is: Return on Assets (ROA) will decline.

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Amazona company wants to increase its debt to total assets ratio, which of the following activities
could make this possible?

Select one:
Buy merchandise on account
Buy equipment for manufacturing purposes
Receive donation

Make a loan
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The correct answer is: Make a loan

Question 4
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Lancaster Co. and York Co. have the same value of return on assets (ROA). What will happen if
Lancaster Co. adjusts its accounting records for the disposal of unusable equipment at a loss?

Select one:
Lancaster Co.'s profit margin will be lower than York Co.
Lancaster's ROA will increase.
York Co's ROA will decrease.

Lancaster Co.'s ROA will be lower than York Co.

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The correct answer is: Lancaster Co.'s ROA will be lower than York Co.

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A firm has a profit margin of 15 percent on sales of 20,000,000. If the firm has debt of 7,500,000
and total assets of 22,500,000 what is the firm’s ROA?

Select one:
13.3%
8.4%

10.9%
12.0%
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The correct answer is: 13.3%

Question 6
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Company A’s ROE is 20 percent, while Company B’s ROE is 15 percent. Which of the following
statements can be true?

Select one:
Company A and Company B have equal amount of Equity.

None of these
Company A and company B have equal amount of Assets
Company A and Company B have the same amount of Liability.
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The correct answer is: Company A and Company B have equal amount of Equity.
Question 7
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Which of the following can increase net profit margin?

Select one:
Sell merchandise with 20% mark-up from the original price
none of these
Buy merchandise
Sell merchandise with 20% discount
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The correct answer is: Sell merchandise with 20% mark-up from the original price

Question 8
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Sexy Corporation’s current ratio is 0.5, while Coke Company’s current ratio is 1.5. Both firms want to
“window dress” their coming end-of-year financial statements. As part of its window dressing
strategy, each firm will double its current liabilities by adding short-term debt and placing the funds
obtained in the cash account. Which of the statements below best describes the actual results of
these transactions?

Select one:

The current ratios of both firms will be decreased.

Only Sexy Corporation’s current ratio will be increased.
The transactions will have no effect on the current ratios.
The current ratios of both firms will be increased.
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The correct answer is: Only Sexy Corporation’s current ratio will be increased.

Question 9
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All else being equal, which of the following will increase a company’s current ratio?

Select one:

None of the statements can increase the current ratio

An increase in net fixed assets.
An increase in accounts receivable.
An increase in accounts payable.
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The correct answer is: An increase in accounts receivable.

Question 10
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Which of the following alternatives could potentially increase current ratio?

Select one:
Retired damaged equipment.

none of these
Bought merchandise using cash available.
Bought merchandise on account
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The correct answer is: Bought merchandise on account

Analyze the given choices and identify which one is not included when these finances will be
classified on the basis of source of generation.

Select one:
a. Debentures
b. Public Deposits
c. Loans
d. Retained Earnings
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Correct
Marks for this submission: 1.00/1.00. Accounting for previous tries, this
gives 0.00/1.00.

Question 2
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This fund is used for daily operations

Select one:
a. Variable Capital
b. Fixed Capital
c. Working capital
d. Semi-variable Capital
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Marks for this submission: 1.00/1.00.

Question 3
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This type financing borrows money with interest from financial institutions such as banks and credit-
unions.

Select one:
a. Mixed Financing
b. Security Financing
c. Loan Financing
d. Internal financing
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Correct
Marks for this submission: 1.00/1.00.

Question 4
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These are funds that are required to purchase fixed assets such as land, building, plant, machinery,
furniture and fixtures.

Select one:
a. Variable Capital
b. Semi-variable Capital
c. Fixed Capital
d. Working capital
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Marks for this submission: 1.00/1.00.
Question 5
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Which is considered as medium-term source finance?

Select one:
a. FPL Co. Loaned an amount payable in 2 years.
b. Mr. P made a written promise to pay to Mr B the ammount of 1,000,000 within 1 medium year.
c. FPL Co. had a net income after taxes worth 10,000,000. It decided to distribute 4,000,000 as
dividends and retained 6,000,000 for future business use.
d. FPL Co. made trade credit from ABC Co. This is because the company has no enough resources
to pay the amount immediately.
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Marks for this submission: 1.00/1.00.

Question 6
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This is a form of financing which is mobilized through the issuance of securities such as shares and
debenture

Select one:
a. Loan Financing
b. Mixed Financing
c. Internal financing
d. Security Financing
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Correct
Marks for this submission: 1.00/1.00.

Question 7
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Which is an example of owner's financing?

Select one:
a. lease financing
b. debentures
c. commercial papers
d. Retained Earnings
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Correct
Marks for this submission: 1.00/1.00. Accounting for previous tries, this
gives 0.67/1.00.

Question 8
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Which of the following is not a classification of funds on the basis of period?

Select one:
a. medium-term sources
b. External Sources
c. Long term sources
d. Short term sources
Feedback

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Marks for this submission: 1.00/1.00.

Question 9
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In this type of financing, the business entity which has already operated may get funds internally
from depreciation funds and retained earnings.

Select one:
a. Loan Financing
b. Security Financing
c. Internal financing
d. Mixed Financing
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Correct
Marks for this submission: 1.00/1.00.

Question 10
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Which is an example of borrowed funds?

Select one:
a. none of these
b. retained earnings
c. debentures
d. equity shares
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Marks for this submission: 1.00/1.00. Accounting for previous tries, this
gives 0.67/1.00.

Question 1
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This is the after tax cost of long-term funds through borrowing.

Select one:
a. Total return
b. Cost of debt
c. Return on debt
d. Cost of capital

Question 2
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This is the required return on investment of the preferred shareholders of the company.

Select one:
a. Cost of capital
b. Cost of preference share
c. Return on Investment
d. Return on Preference share
Question 3
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This is the mix or proportion of a firm’s permanent long-term financing represented by debt,
preferred stock, and common stock equity.

Select one:
Retained earnings
Equity and Debt
Investment Mix
Capital Structure

Question 4
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This is a metric that measures the degree to which a company uses fixed income securities such as
debt and preferred equity.

Select one:
a. Degree of Financial Leverage
b. Leverage
c. Combined Degree of Leverage
d. Degree of Operating Leverage

Question 5
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Which of the following does not belong to the group?

Select one:
a. Earning price approach
b. dividend price plus growth approach
c. dividend price minus growth approach
d. dividend price approach

Question 6
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This is the use of various financial instruments or borrowed capital, such as margin, to increase the
potential return of an investment.

Select one:
a. efficiency
b. efficacy
c. leverage
d. capital efficiency

Question 7
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Question text

This is a measurement of the degree to which a firm or project incurs a combination of fixed and
variable costs

Select one:
a. Combined Degree of Leverage
b. Degree of Operating Leverage
c. Leverage
d. Degree of Financial Leverage

Question 8
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This is the required rate of return on the various types of financing.

Select one:
a. Cost of capital
b. Total return
c. Cost of debt
d. Return on debt

Question 9
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This is the required return on investment of the common shareholders of the company.

Select one:
a. Return on common share
b. Return on Equity
c. Cost of Equity
d. Return on Investment

Question 10
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This is the required return on investment of the lenders of a company.

Select one:
a. Cost of debt
b. Total return
c. Cost of capital
d. Return on debt

Question 1
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Which of the following is not considered a capital component for the purpose of calculating the
weighted average cost of capital (WACC) as it applies to capital budgeting?

Select one:
a. Common Stock
b. Long-term debt
c. preferred Stock
d. Accruals

Question 2
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FPL Company plans to make Php50,000 loan with Php7,000 annual interest. If the cost incurred
related to this instrument is Php2,000 and the total tax rate is 30%, what is the cost of debt?

Select one:
a. 10.21%
b. 10.00%
c. 9.80%
d. 4.38%

Question 3
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This policy is usually used when the companies are facing constraints of earnings and unsuccessful
business operation

Select one:
a. Unstable Policy
b. Irregular Dividend Policy
c. Regular Dividend policy
d. Stable Dividend Policy

Question 4
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A corporation is issuing 10% common stock that should be sold for Php 15 each. The business will
incur flotation costs of Php 2 per share. With growth rate of 5% What is the cost of capital?

Select one:
a. 13.08%
b. 13.54%
c. 4.12%
d. 61.54%

Question 5
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This is the credit extended by

one trader to another for the purchase
of goods and services

Select one:
a. notes
b. trade credit
c. bank loans
d. debentures

Question 6
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If you have a financial source that is required to be paid within ten years, this describes

Select one:
a. Medium-term source
b. Long-term source
c. Perpetual source
d. Short-term source

Question 7
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Which does not belong to the group?

Select one:
a. retained earnings
b. preference shares
c. trade credit
d. Commercial papers

Question 8
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These are source of finances are those which are required for a period of more than five years.

Select one:
a. Medium-term
b. Short-term
c. Long-term
d. Perpetual

Question 9
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The objective of having a good _____________________ is to maximize the value of the firm and
minimize the overall cost of capital.

Select one:
a. Operations
b. Business
c. Income
d. Capital structure

Question 10
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Which of the following does not belong to the group?

Select one:
a. Intermediate Approach
b. Modigliani and Miller Approach
c. net operating income approach
d. Net Income approach

Question 11
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If you have a financial source that is required to be paid within four years, you have a

Select one:
a. Perpetual source
b. Long-term source
c. Medium-term source
d. Short-term source

Question 12
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Which does not belong to the classification of the sources of financing?

Select one:
a. based on interest
b. based on period
c. based on ownership
d. based on the source of generation

Question 13
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These funds are obtained from banks and credit unions

Select one:
a. Owner's funds
b. Short-term source
c. borrowed funds
d. Long-term source

Question 14
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This determines the amount of profit to be distributed among shareholders and amount of profit to
be treated as retained earnings for financing its long term growth

Select one:
a. Income Distribution Ratio
b. Share Issuance Policy
c. Net income sharing
d. Dividend Policy

Question 15
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Question text

Given:
Debt= 1,000,000 ; Common Shares = 10,000,000 ; Preference Shares = 5,000,000
Cost of Debt = 10% ; Cost of Preference Shares = 5% ; Cost of Equity = 3%

Find WACC

Select one:
a. 750,000
b. 650,000
c. 1,050,000
d. 1,250,000

Question 16
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These are sources of finances which have a required of payment for a period not exceeding one
year.

Select one:
a. Long-term
b. Short-term
c. Perpetual
d. Medium-term

Question 17
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A corporation is issuing 10% common stock that should be sold for Php 15 each. The business will
incur flotation costs of Php 5 per share. What is the cost of equity?

Select one:
a. 33.3%
b. 15%
c. 10%
d. 3%

Question 18
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In this approach, the mix of debt and equity capital can increase the value of the firm by reducing
overall cost of capital up to certain level of debt.

Select one:
a. net operating income approach
b. Net Income approach
c. Modigliani and Miller Approach
d. Intermediate Approach

Question 19
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FLP Company has 1000 existing common shares. The market value of the share is Php 90 and the
net earnings is Php 1,000. What is the cost of Capital assuming that the new shares will be issued
at market price?

Select one:
a. 0.11%
b. 1.11%
c. 11.11%
d. 0.01%

Question 20
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According to this approach, the mix of debt and equity capital can increase the value of the firm by
reducing overall cost of capital up to certain level of debt.

Select one:
a. Traditional Approach
b. Medieval Approach
c. Classical Approach
d. Modern Approach

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Examples of this outlay are the purchase of fixed assets such as land and building, plant and
machinery, expenses relating to improvement or renovation these fixed assets and costs incurred for
the research and development projects

Select one:
a. Fixed Assets
b. Working Capital
c. Working Assets
d. Fixed capital
Check

Question 2
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This is a decision support tool that uses a tree-like graph or model of decisions and their possible
consequences, including chance event outcomes, resource costs, and utility.

Select one:
a. Decision Tree Analysis
b. Financial Tree Diagram
c. Tree of Chances Analysis
d. Financial Tree Analysis
Check

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This is a statistical measure of the variability of a distribution around its mean. It is the square root
of the variance.

Select one:
a. Standard deviation
b. Squared variance analysis
c. Expected value
d. Financial Tree Analysis
 Check

Question 4
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Which of the following has a wrong order based on the discussion in capital budgeting process

Select one:
a. Identification of Proposals - Evaluation - Final Approval
b. Evaluation - Implementing - Performance Review
c. Matching of Proposals- Performance Review - Final Approval
d. Screening pf Proposals - Fixing Properties- Performance review
Check

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This type of decision making applies when the projects proposed are independent from each other.
The acceptance or rejection of one proposal does not affect the decision on the other proposals.

Select one:
a. Mutually Exclusive
b. Accept-Reject
c. Capital Rationing
d. none of the above
Check
Question 6
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These proposals are those that compete with other. Therefore, the acceptance of one proposal will
exclude the acceptance of the other proposals.

Select one:
a. none of the above
b. Capital Rationing
c. Mutually Exclusive
d. Accept-Reject
Check

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Which of the following has a wrong order based on the discussion in capital budgeting process

Select one:
a. Final Approval - Implementing - Fixing Properties
b. Matching of Proposals - Final Approval - Performance Review
c. Identification of Proposals - Evaluation - Final Approval
d. Evaluation - Implementing - Performance Review
Check

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Which is not a part of capital budgeting process?

Select one:
a. Observation of proposal making
b. Screening proposals
c. Fixing property
d. Performance Review
Check

Question 9
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This is the process in which a business determines and evaluates potential expenses or investments
that are large in nature.

Select one:
a. Investment-expense Analysis
b. Monetary Management
c. Capital Budgeting
d. Financial Capital
Check

Question 10
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Which of the following has a wrong order based on the discussion in capital budgeting process

Select one:
a. Identification of Proposals - Screening of Proposals - Evaluation
b. Identification of Proposals - Evaluation - Final Approval
c. Evaluation - Implementing - Performance Review
d. Matching of Proposals- Performance Review - Final Approval
Check

Which is not a motive of holding cash?

Select one:
a. Precautionary motive
b. Speculative motive
c. Transaction motive
d. Auto Motive

Question 2
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This is the capital invested in total current assets of the business concern.

Select one:
a. Net Woking Capital
b. Financial casipal
c. Gross Working Capital
d. Fixed Capital

Question 3
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FPL Company has a total Assets worth 400,000 of which 250,000 are non current the company also
has 200,000 total liabilities of which 150,000 are long term debts. What is the gross working capital?

Select one:
a. 100,000
b. 150,000
c. 200,000
d. 300,000

Question 4
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This refers to the level of inventory at which the total cost of inventory comprising ordering cost and
carrying cost.

Select one:
a. Standard deviation
b. Economic Order Quantity (EOQ)
c. Cost Variance Analysis
d. ABC Analysis

Question 5
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This is a measure of both a company's efficiency and its short-term financial health.

Select one:
a. Fixed Capital
b. Financial Capital
c. Net Capital
d. Working Capital

Question 6
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FPL Company has a net working capital of 100,000 and the company has 200,000 total liabilities of
which 150,000 are long term debts. What is the gross capital?

Select one:
a. 200,000
b. 300,000
c. 150,000answer
d. 250,000

Question 7
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Question text

FPL company has machineries and equipment worth 150,000, land and building for business
1,000,000, Cash 150,000, Inventories 30,000 and accounts receivables 50,000. He also owes
200,000 to a bank. How much is the gross working capital?

Select one:
a. Php 1,180,000
b. Php 1,380,000
c. Php 380,000answer
d. Php 230,000

Question 8
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FPL Company owes Php20,000 to supplier A, Php30,000 to Supplier B, 50,000 to Supplier C and a
long term bonds payable 10,000. After struggling in its operations, the company ended up having
Php20,000 cash on hand, Php30,000 worth inventories, Php40,000 Accounts receivable and
equipment worth Php50,000. What is the net working capital?

Select one:
a. Php 70,000
b. Php 30,000
c. Php 40,000
d. none of these

Question 9
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FPL Company has a gross working capital of 100,000 and the company has 200,000 total liabilities
of which 150,000 are long term debts. What is the net capital?

Select one:
a. 100,000
b. 50,000
c. 150,000
d. 250,000

Question 10
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FPL Company has a gross working capital of 100,000 and the company has 200,000 total liabilities
of which 150,000 are long term debts. What is the total current assets?

Select one:
a. 100,000
b. 150,000
c. 50,000
d. 250,000 answer

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This is also known as the benefit-cost ratio of a project.

Select one:
Post-Payback Profitability
Net Present Value
Internal Rate of Return
Profitability Ratio
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Question 2
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This is the time required to recover the initial investment in a project.

Select one:
Post-Payback Profitability
Internal Rate of Return
Payback Period
Accounting Rate of Return
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Question 3
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FPL Company has a total Assets worth 400,000 of which 250,000 are non current the company also
has 200,000 total liabilities of which 150,000 are long term debts. What is the net working capital?

Select one:
200,000
100,000
300,000
150,000
Feedback

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Question 4
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This refers to a situation in which possible future events can have reasonable probabilities assigned
while uncertainty refers to situations in which there is no viable method of assigning probabilities to
future random events.

Select one:
Capital
Probability
Risk
Luck
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Question 5
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Which is not an objective of inventory management?

Select one:
To avoid under stock of inventory and to let the entity have over stocks
To meet the seasonal demand of the products
To ensure the level and site of inventories required
To achieve efficient and smooth production process
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Question 6
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This one measures and considers the cash inflows earned after pay-back period.

Select one:
Net Present Value
Accounting Rate of Return
Post-Payback Profitability
Internal Rate of Return
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Question 7
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This is essentially an accounting strategy with a focus on the maintenance of a sufficient balance
between a company’s current assets and liabilities

Select one:
Working Capital
Property Maintenance
Working Capital Management
Capital Budgeting
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Question 8
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Which is not an objective of inventory management?

Select one:
To maintain optimum inventory to minimize the profitability
To avoid both over stock and under stock of inventory
To meet the seasonal demand of the products
To achieve efficient and smooth production process
Feedback

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gives 0.67/1.00.

Question 9
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Question text

This is the discount rate that equates the present value of the expected net cash flows with the
initial cash outflow

Select one:
Post-Payback Profitability
Net Present Value
Internal Rate of Return
Payback Period
Feedback

Correct
Marks for this submission: 1.00/1.00.

Question 10
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These are goods which have not yet been committed to production in a manufacturing business
concern

Select one:
Goods in Transit
Work in Progress
Finished Goods
Raw materials
Feedback

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Question 11
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This is the excess capital over the minimum amount of working capital that must be maintained.

Select one:
Net Working Capital
Gross Working Capital
Temporary Working Capital
Permanent Working Capital
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Question 12
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This includes materials which have been put into production process but have not yet been
completed

Select one:
Work in Progress
Raw Materials
Finished Goods
Goods in Transit
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Question 13
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This is the rise in inflation that leads to reduction in the purchasing power which influences only few
people to invest due to Interest Rate Risk which is nothing but the variability of return of the
investment due to oscillation of interest rates due to deflationary and inflationary pressures.

Select one:
Inflation Risk
Business Risk
Financial Risk
Market Risk
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Question 14
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The difference between the present value of cash inflows and the present value of cash outflows.

Select one:
Post-Payback Profitability
Net Present Value
Internal Rate of Return
Payback Period
Feedback
Correct
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Question 15
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This is the amount of profit, or return, that an individual can expect based on an investment made.

Select one:
Internal Rate of Return
Post-Payback Profitability
Payback Period
Accounting Rate of Return
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Question 16
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This refers to the variability of returns due to fluctuations in the securities market which is more
particularly to equities market

Select one:
Business Risk
Inflation Risk
Market Risk
Financial Risk
Feedback

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Question 17
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This is the minimum amount of capital that must be maintained

Select one:
Permanent Working Capital
Gross Working Capital
Temporary Working Capital
Net Working Capital
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Question 18
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In this decision type of decision making, there are more than one proposal to be chosen however
the firm has limited funds so that’s why they must ration these project proposals. Usually, they
select a group of projects that yield the highest total return given such limited funds.

Select one:
Accept-Reject
Capital Rationing
none of the above
Mutually Exclusive
Feedback

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Question 19
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Which does not belong to the group?

Select one:
Work in progress
Finished Goods
Goods in transit
Raw Materials
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Question 20
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This is the completed products and is already final output of the production process

Select one:
Goods in transit
Work in progress
Finished Goods
Raw materials
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Question 1
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This is the money provided by investors to startup firms and small businesses with perceived long-
term growth potential

Select one:

a. merchant banking

b. venture capital

c. factoring

d. mutual fund

Feedback

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Question 2
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 Flag question

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This is an industry for borrowers with a limited or tainted credit history.

Select one:

a. International Finance

b. Business Finance

c. Special Finance

d. Personal Finance

Feedback

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Question 3
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This is an investment vehicle for investors who pool their savings for investing in diversified portfolio
of securities with the aim of attractive yields and appreciation in their value.

Select one:

a. mutual fund
b. venture capital

c. factoring

d. merchant banking

Feedback

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Question 4
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It is contractual agreement between the owner of the assets and user of the assets for a specific
period by a periodical rent.

Select one:

a. factoring

b. mutual fund

c. lease

d. venture capital

Feedback

Correct

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Question 5
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Which of the following is not a form of special financing?

Select one:

a. Factoring

b. Mutual Funding

c. Merchant banking

d. Online Bankng

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Question 6
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This is one of the fee based financial services which includes underwriting, consultancy and other
allied services to the business concern.

Select one:

a. venture capital
b. factoring

c. merchant banking

d. mutual fund

Feedback

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Question 7
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This is the selling of accounts receivable at a discount to a third-party funding source to raise
capital.

Select one:

a. mutual fund

b. lease financing

c. factoring

d. merchant banking

Feedback

Correct

Marks for this submission: 1.00/1.00.

Question 8
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Which statement is false?

Select one:

a. Lease may be defined as a contractual arrangement in which a party owning an asset provides
the asset for use to another, the right to use the assets to the user over a certain period of time, for
consideration in form of periodic payment, with or without a further payment.

b. Foreign direct investment can provide the receiving firm with the investment, new technologies,
capital, processes, products, organizational and management technologies which can help in
economic development

c. A Factoring portfolio is structured and maintained to match the investment objectives stated in its
prospectus.

d. Mutual funds are operated by money managers, who invest the fund's capital and attempt to
produce capital gains and income for the fund's investors

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Question 9
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This is an investment made by a company from one country into a company from another country.

Select one:

a. International Funding

b. mutual fund

c. Foreign Direct Investment

d. Public-private Partnerships

Feedback

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Question 10
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Which statement is false?

Select one:

a. Lease may be defined as a contractual arrangement wherein the lessor makes periodic payment
to the lessee.

b. Merchant banking is basically a service banking which provides non financial services such as
issue management, portfolio management, asset management, underwriting of new issues, to act as
registrar, share transfer agents, trustees, provide leasing and project consultation.

c. In foreign direct investment, institutions invest in equities listed on the national stock exchange

d. Factoring is financing method in which a business owner sells accounts receivable at a discount
to a third-party funding source to raise capital.
Feedback

Correct

Marks for this submission: 1.00/1.00. Accounting for previous tries, this gives 0.00/1.00.