- A proposal requires a cash outflow of Rs.18,500 and is expected to generate cash inflows of Rs.8,000, Rs.6,000, Rs.4,000, Rs.2,000 and Rs.2,000 over next 5 years respectively. The payback period is
(a) 4 Years
(b) 3.25 Years
(c) 3.50 Years
(d) 4.25 Years - Match List – I with List-II.
List -I (Concept) List II (Meaning) A. Exchange Rate I. It refers to the price of one unit of foreign currency in terms of some units of home currency B. Forward market II. It is the process of making risk less profits by exploiting price differences of assets in different market. C. Arbitrage III. Where transactions are entered into for settlement on a future date D. Direct Quotation IV. It is a price of one unit of a currency in terms of some units of another currency Choose the correct answer from the options given below:
(a) A-IV, B-III, C-II, D-I
(b) A-III, B-IV, C-II, D-I
(c) A-I, B-II, C-III, D-IV
(d) A-I, B-III, C-II, D-IV - Identify correct statements from the following regarding Time Value of money.
A. The interest which may be earned/saved on the money held at present underlines the concept of time value of money.
B. The money which is receivable at present has less value than the money receivable in future.
C. The relationship that exists between the value of money receivable at present and the value of money receivable in future is referred as time value of the money.
D. Value of money receivable at present = value of money receivable in future – Time value of money
E. Future value of money is the value of money held presently at some given future time at a given rate of Interest.
Choose the correct answer from the options given below:
(a) B and D Only
(b) A, C and E Only
(c) B, C and D Only
(d) C, D and E Only - Which of the following points are considered as factors determining working capital of a firm?
A. Basic nature of Business
B. Business cycle fluctuations
C. Credit Policy of the firm
D. Long term source of finance
E. Employee Skills
Choose the correct answer from the options given below
(a) A, B and D Only
(b) B, C and D Only
(c) A, B and C Only
(d) D and E Only - Beta Company Lid issued 10% perpetual debt of Rs.1,00,000. The company’s tax rate is 50%.
Determine the cost of capital (before tax as well as after tax) assuming the debt is issued at 10 percent premium.
(a) Before tax cost = 9.09% and after tax cost = 4.54%
(b) Before tax cost = 4.54% and after tax cost = 9 %
(c) Before tax cost = 9.90% and after tax cost = 4.
(d) Before tax cost = 10.09% and after tax cost = 5.54% - ‘Which one of the following refers to the firms investment in the current assets?
(a) Gross Working Capital
(b) Net Working Capital
(c) Gross Current liabilities
(d) Operating cycle - Which one of the following refers to the composition of long term funds such as debentures, long term borrowing, prefersnce shares, equity shares in the capitalization of a company?
(a) Cost of capital
(b) Capital budgeting
(c) Working Capital
(d) Capital structure - Arrange the following g steps in logical sequence regarding how to compute Net Present Value (NPV).
A. Calculate Net Present Value (NPV) i.e. Present Value of all cash inflows – present value of all cash outflows
B. Calculate all the cash outflows associated with the project
C. Calculate all the cash inflows associated with the project
D. Calculate the present value of all cash inflows associated with the project
E. Calculate the present value of all cash outflows associated with the project
Choose the correct answer from the options given below:
(a) A, B, C, E, D
(b) B, C, E, D, A
(c) A, C, B, E, D
(d) A, C, B, D, E
Answer Key
| 1 (b) | 2 (a) | 3 (b) | 4 (c) | 5 (a) |
| 6 (a) | 7 (d) | 8 (b) |