During an accounting period, sales revenue is Rs. 25,000 and accounts receivable rise by Rs. 8,000. How much cash was received from customers?
Correct answer A. Rs. 17,000
Subject / 495 questions
Finance MCQs
Page 23 of Finance multiple-choice questions with answers. Tap an option to check yourself.
Page 23 of 25
What is a series of equal cash flows occurring at the end of each period for a fixed number of periods called?
Correct answer C. Ordinary annuity
Which of the following is not a strength of IRR?
Correct answer D. Ideal to rank the mutually exclusive investments
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What is a valuation model that makes an assumption about the future growth of dividends called?
Correct answer A. Dividend Growth Model
What term describes the most valuable alternative given up when a particular investment is undertaken?
Correct answer A. Opportunity cost
What is the use of personal borrowing to change the degree of financial leverage called?
Correct answer C. Homemade leverage
Which term refers to the extent to which fixed-income securities, such as debt and preferred stock, are used in a firm’s capital structure?
Correct answer A. Financial risk
Which is the cheapest source of financing available to a firm?
Correct answer A. Trade credit
Average accounting return measures accounting profit relative to what?
Correct answer C. Book value
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Under the profitability index (PI) rule, an investment should be accepted if the index is greater than what value?
Correct answer C. 1
When the real interest rate is high, what tends to happen to all interest rates?
Correct answer B. Higher
Which statement about compound interest is CORRECT?
Correct answer C. It earns profit not only on principal but also on interest.
Which strategy reflects a restrictive policy on the size of investment in current assets?
Correct answer C. Maintaining a low ratio of current assets to sales
If a bond sells at a discount, which relationship holds true?
Correct answer A. Bond Price < Par Value and YTM > coupon rate
What is a collection of assets such as shares and bonds held by an investor called?
Correct answer C. Portfolio
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What overall return must a firm earn on its existing assets to maintain the value of its stock?
Correct answer C. WACC (Weighted Average Cost of Capital)
What is a series of equal cash flows occurring at the end of each period for a fixed number of periods called?
Correct answer B. An ordinary annuity
According to the DuPont identity, which factors affect return on equity?
Correct answer D. All of the given options (A, B and C)
What is a standardised financial statement called that shows every item as a percentage of a total?
Correct answer D. A common-size statement
What is the process of planning and managing a firm’s long-term investments called?
Correct answer C. Capital Budgeting