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MGT201 MCQ2 from Quiz Solved 1

MGT201 Solved MCQ2 from Quiz


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Why companies invest in projects with negative NPV?

Select correct option:

 

Because there is hidden value in each project

 

Because there may be chance of rapid growth

 

Because they have invested a lot

 

All of the given options

 

Question # 2 of 10 ( Start time: 04:05:43 PM ) Total M - 1

To increase a given future value, the discount rate should be adjusted __________.

Select correct option:

 

Upward

 

Downward

 

First upward and then downward

 

None of the given options

 

Question # 3 of 10 ( Start time: 04:06:35 PM ) Total M - 1

In 2 years you are to receive Rs.10,000. If the interest rate were to suddenly decrease, the present value of that future amount to you would __________.

Select correct option:

 

Fall

 

Rise

 

Remain unchanged

 

Incomplete information

 

 

Question # 4 of 10 ( Start time: 04:07:25 PM ) Total M - 1

A 5-year annuity due has periodic cash flows of Rs.100 each year. If the interest rate is 8 percent, the present value of this annuity is closest to which of the following equations?

Select correct option:

 

(Rs.100)(PVIFA at 8% for 4 periods) + Rs.100

 

(Rs.100)(PVIFA at 8% for 4 periods)(1.08)

 

(Rs.100)(PVIFA at 8% for 6 periods) - Rs.100

 

Can not be found from the given information

 

 

Question # 5 of 10 ( Start time: 04:08:40 PM ) Total M - 1

At the termination of project, which of the following needs to be considered relating to project assets?

Select correct option:

 

Salvage value

 

Book value

 

Intrinsic value

 

Fair value

 

Question # 6 of 10 ( Start time: 04:09:27 PM ) Total M - 1

What is the long-run objective of financial management?

Select correct option:

 

Maximize earnings per share

 

Maximize the value of the firm's common stock

 

Maximize return on investment

 

Maximize market share

 

Question # 7 of 10 ( Start time: 04:09:56 PM ) Total M - 1

What is potentially the biggest advantage of a small partnership over a sole proprietorship?

Select correct option:

 

Unlimited liability

 

Single tax filing

 

Difficult ownership resale

 

Raising capital

 

Question # 8 of 10 ( Start time: 04:10:16 PM ) Total M - 1

Which of the following effects price of the bond?

Select correct option:

 

Market interest rate

 

Required rate of return

 

Interest rate risk

 

All of the given options

 

 

uestion # 9 of 10 ( Start time: 04:10:31 PM ) Total M - 1

An annuity due is always worth _____ a comparable annuity.

Select correct option:

 

Less than

 

More than

 

Equal to

 

Can not be found from the given information

 

Question # 10 of 10 ( Start time: 04:10:53 PM ) Total M - 1

A capital budgeting technique through which discount rate equates the present value of the future net cash flows from an investment project with the project’s initial cash outflow is known as:

Select correct option:

 

Payback period

 

Internal rate of return

 

Net present value

 

Profitability index

 

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