Finance Management & Corporate Finance Quiz Set 8

1. All of the following influence capital budgeting cash flows EXCEPT:

Correct! Wrong!

2. The estimated benefits from a project are expressed as cash flows instead of income flows because?

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3. A capital investment is one that?

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4. A profitability index of .85 for a project means that:

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5. Which of the following statements is correct?

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6. A project's profitability index is equal to the ratio of the of a project's future cash flows to the project's.

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7. The discount rate at which two projects have identical is referred to as Fisher's rate of intersection?

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8. Two mutually exclusive investment proposals have "scale differences" (i.e., the cost of the projects differ. Ranking these projects on the basis of IRR, NPV, and PI methods give contradictory results?

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9. Preferred shareholders claims on assets and income of a firm come those of creditors those of common shareholders.

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10. You are considering two mutually exclusive investment proposals; project A and project B. B's expected value of net present value is Rs. 1,000 less than that for A and A has less dispersion. On the basis of risk and return, you would say that?

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11. To increase a given present value, the discount rate should be adjusted?

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12. In finance, "working capital" means the same thing as?

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13. Which of the following would be consistent with a more aggressive approach to financing working capital?

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14. Which asset-liability combination would most likely result in the firm's having the greatest risk of technical insolvency?

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15. Which of the following illustrates the use of a hedging (or matching) approach to financing?

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16. In deciding the appropriate level of current assets for the firm, management is confronted with?

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17. Varies inversely with profitability?

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18. Spontaneous financing includes?

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19. Permanent working capital?

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20. Financing a long-lived asset with short-term financing would be?

Correct! Wrong!

Finance Management & Corporate Finance Quiz Set 8
Below 12 is not good, 13-16 need some improvement, 16+ excellent

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