What happens to a firm’s quick ratio if it uses cash to buy inventory?
Correct answer C. Decrease
Subject / 495 questions
Finance MCQs
Page 22 of Finance multiple-choice questions with answers. Tap an option to check yourself.
Page 22 of 25
Which group of ratios relates the market price of a firm’s common stock to selected financial statement items?
Correct answer D. Market value ratios
Which term describes the risk bond owners face from fluctuating interest rates?
Correct answer D. Interest rate risk
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How many years will it take to repay a Rs. 11,000 loan with annual payments of Rs. 1,241.08 at 5% interest?
Correct answer C. 12 years
What does the retention ratio measure?
Correct answer D. Dividend policy
In which type of business do all owners share profits and losses and have unlimited liability for all business debts?
Correct answer B. General Partnership
Which areas does business finance deal with?
Correct answer D. All of the given options
Which of the following areas is NOT addressed by business finance?
Correct answer D. None of the given options
For two otherwise identical bonds with different maturities, the price of the ____ bond will change less than that of the ____ bond. Which pair fills the blanks?
Correct answer C. short-term; long-term
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In which type of annuity do cash flows occur at the start of each period?
Correct answer A. Annuity due
You need Rs. 10,000 to buy a new television. If you invest Rs. 6,000 at 5 percent compounded annually, how long must you wait before you can buy it?
Correct answer C. 10.51 years
What is the process of finding the present value of a payment, or a stream of payments, to be received in the future called?
Correct answer A. Discounting
Which item serves the important function of shielding part of income from tax?
Correct answer B. Depreciation
In which form of business do owners have limited liability?
Correct answer C. Joint stock company
You win a prize and can take Rs. 1,000 today or Rs. 1,050 in one year. If you can earn 5 per cent on your money, which do you prefer and why?
Correct answer B. Either, because both options are of equal value
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Which special type of annuity has cash flows that continue forever?
Correct answer A. Perpetuity
On which equation is the balance sheet based?
Correct answer D. Assets = Liabilities + Stockholder’s equity
Which ratios are designed to measure a firm’s financial leverage?
Correct answer B. Long-term Solvency Ratios
Which form of business organisation is the least regulated?
Correct answer C. Sole proprietorship
What is the conflict of interest between shareholders and management known as?
Correct answer D. Agency problem