BC070400023 : Muhammad Umair
Quiz Start Time: 10:13 AM
Time Left 38
sec(s)
Question # 1 of 15 ( Start time: 10:13:51 AM ) Total Marks: 1
All of the following are the financial statements used for the purpose of reporting and analysis
EXCEPT:

Select correct option:
Balance Sheet
Income Statement
Cash budget
Statement of Retained Earnings
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BC070400023 : Muhammad Umair
Quiz Start Time: 10:13 AM
Time Left 73
sec(s)
Question # 2 of 15 ( Start time: 10:15:06 AM ) Total Marks: 1
When the zero coupon bond approaches to its maturity, the market value of the bond approaches
to which of the following?
Select correct option:
Intrinsic value
Book value
Par value
Historic cost
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BC070400023 : Muhammad Umair
Quiz Start Time: 10:13 AM
Time Left 41
sec(s)
Question # 3 of 15 ( Start time: 10:16:31 AM ) Total Marks: 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
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BC070400023 : Muhammad Umair
Quiz Start Time: 10:13 AM
Time Left 34
sec(s)
Question # 4 of 15 ( Start time: 10:17:38 AM ) Total Marks: 1
Which of the following is the main objective of ‘Economics’?
Select correct option:
Profit maximization
Maximization of shareholders w ealth
Collection of accurate, systematic, and timely
financial data
All of the given options
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BC070400023 : Muhammad Umair
Quiz Start Time: 10:13 AM
Time Left 57
sec(s)
Question # 5 of 15 ( Start time: 10:18:44 AM ) Total Marks: 1
Which of the following would be considered a cash-flow item from an "investing" activity?
Select correct option:
Cash outflow to the government for taxes
Cash outflow to shareholders as dividends
Cash outflow to lenders as interest
Cash outflow to purchase bonds issued by another
company
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BC070400023 : Muhammad Umair
Quiz Start Time: 10:13 AM
Time Left 73
sec(s)
Question # 6 of 15 ( Start time: 10:19:29 AM ) Total Marks: 1
If Net Present Value technique is used, what is the ranking criterion for projects?
Select correct option:
Choose the highest NPV
Choose the low est NPV
Choose the project w ith longest term
Choose the project w ith shortest term
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BC070400023 : Muhammad Umair
Quiz Start Time: 10:13 AM
Time Left 35
sec(s)
Question # 7 of 15 ( Start time: 10:19:54 AM ) Total Marks: 1
The current yield on a bond is equal to ________.
Select correct option:
Annual interest divided by the current market price
The yield to maturity
Annual interest divided by the par value
The internal rate of return
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BC070400023 : Muhammad Umair
Quiz Start Time: 10:13 AM
Time Left 89
sec(s)
Question # 8 of 15 ( Start time: 10:21:21 AM ) Total Marks: 1
What is the present value of Rs.8,000 to be paid at the end of three years if interest rate is 11%?
Select correct option:
Rs.6,015
Rs.4,872
Rs.6,725
Rs.1,842
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BC070400023 : Muhammad Umair
Quiz Start Time: 10:13 AM
Time Left 77
sec(s)
Question # 9 of 15 ( Start time: 10:22:44 AM ) Total Marks: 1
An investment proposal should be judged in whether or not it provides:
Select correct option:
A return equal to the return require by the investor
A return more than required by investor
A return less than required by investor
A return equal to or more than required by investor
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BC070400023 : Muhammad Umair
Quiz Start Time: 10:13 AM
Time Left 89
sec(s)
Question # 10 of 15 ( Start time: 10:24:09 AM ) Total Marks: 1
What is the most important criteria in capital budgeting?
Select correct option:
Return on investment
Profitability index
Net present value
Pay back period
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BC070400023 : Muhammad Umair
Time Left 89
sec(s)
Quiz Start Time: 10:13 AM
Question # 11 of 15 ( Start time: 10:24:38 AM ) Total Marks: 1
How can a company improve (lower) its debt-to-total asset ratio?
Select correct option:
By borrow ing more
By shifting short-term to long-term debt
By shifting long-term to short-term debt
By selling common stock
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BC070400023 : Muhammad Umair
Quiz Start Time: 10:13 AM
Time Left 62
sec(s)
Question # 12 of 15 ( Start time: 10:26:05 AM ) Total Marks: 1
MIRR (discount rate) equates which of the following?
Select correct option:
Future value of cash inflow s to the present value of
cash outflow s
Future value of cash flow s to the present value of
cash flow s
Future value of all cash flow s to zero
Present value of all cash flow s to zero
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BC070400023 : Muhammad Umair
Quiz Start Time: 10:13 AM
Time Left 89
sec(s)
Question # 13 of 15 ( Start time: 10:27:32 AM ) Total Marks: 1
Which one of the following selects the combination of investment proposals that will provide
the greatest increase in the value of the firm within the budget ceiling constraint?
Select correct option:
Cash budgeting
Capital budgeting
Capital rationing
Capital expenditure
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BC070400023 : Muhammad Umair
Quiz Start Time: 10:13 AM
Time Left 82
sec(s)
Question # 14 of 15 ( Start time: 10:29:09 AM ) Total Marks: 1
What is the additional amount a borrower must pay to lender to compensate for assuming the
risk associated with non-payment?
Select correct option:
Default risk premium
Sovereign Risk Premium
Market risk premium
Maturity risk premium
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BC070400023 : Muhammad Umair
Quiz Start Time: 10:13 AM
Time Left 89
sec(s)
Question # 15 of 15 ( Start time: 10:30:36 AM ) Total Marks: 1
Which of the following would be considered a cash-flow item from an "operating" activity?
Select correct option:
Cash outflow to the government for taxes
Cash outflow to shareholders as dividends
Cash inflow to the firm from selling new common
equity shares
Cash outflow to purchase bonds issued by another
company
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Quiz Start Time: 05:31 PM
Time Left 38
sec(s)
Question # 1 of 15 ( Start time: 05:31:55 PM ) Total Marks: 1
Which of the following is the general assumption of Percent of Sales Forecasting?
Select correct option:
Current Assets usually grow in proportion to Revenues
Current Assets usually grow in proportion to Expenses
Current Assets usually grow in proportion to Liabilities
Current Assets usually grow in proportion to Sales
Quiz Start Time: 05:31 PM
Time Left 89
sec(s)
Question # 2 of 15 ( Start time: 05:33:20 PM ) Total Marks: 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
Quiz Start Time: 05:31 PM
Time Left 89
sec(s)
Question # 3 of 15 ( Start time: 05:33:59 PM ) Total Marks: 1
Effective interest rate is different from nominal rate of interest because:
Select correct option:
Nominal interest rate ignores compounding
Nominal interest rate includes frequency of compounding
Periodic interest rate ignores the effect of inflation
All of the given options
Quiz Start Time: 05:31 PM
Time Left 89
sec(s)
Question # 4 of 15 ( Start time: 05:35:22 PM ) Total Marks: 1
What is a legal agreement, also called the deed of trust, between the corporation issuing bonds and the bondholders that establish
the terms of the bond issue?
Select correct option:
Indenture
Debenture
Bond
Bond trustee
Quiz Start Time: 05:31 PM
Time Left 89
sec(s)
Question # 5 of 15 ( Start time: 05:36:28 PM ) Total Marks: 1
All of the following are the reasons for Uncertain NPV calculations EXCEPT:
Select correct option:
Estimated discount rate does not change with the markets
Estimated Life of project is doubtful
Annual after-tax cash flows are difficult to estimate
Timing of cash flows is not exactly predictable
Quiz Start Time: 05:31 PM
Time Left 90
sec(s)
Question # 6 of 15 ( Start time: 05:37:36 PM ) Total Marks: 1
Which of the following would generally have unlimited liability?
Select correct option:
A limited partner in a partnership
A shareholder in a corporation
The owner of a sole proprietorship
A member in a limited liability company (LLC)
Quiz Start Time: 05:31 PM
Time Left 88
sec(s)
Question # 7 of 15 ( Start time: 05:38:38 PM ) Total Marks: 1
Why we need Capital rationing? (
Select correct option:
Because, there are not enough positive NPV projects
Because, companies do not always have access to all of the funds they could make use of
Because, managers find it difficult to decide how to fund projects
Because, banks require very high returns on projects
Quiz Start Time: 05:31 PM
Time Left 89
sec(s)
Question # 8 of 15 ( Start time: 05:39:53 PM ) Total Marks: 1
What is the present value of Rs. 3,500,000 to be paid at the end of 50 years if the correct risk adjusted interest rate is 18%?
Select correct option:
Rs.105,000
Rs.1,500,000
Rs.3975,000
Rs. 350,000
Quiz Start Time: 05:31 PM
Time Left 89
sec(s)
Question # 9 of 15 ( Start time: 05:41:20 PM ) Total Marks: 1
When the zero coupon bond approaches to its maturity, the market value of the bond approaches to which of the following?
Select correct option:
Intrinsic value
Book value
Par value
Historic cost
Quiz Start Time: 05:31 PM
Time Left 90
sec(s)
Question # 10 of 15 ( Start time: 05:41:27 PM ) Total Marks: 1
Which of the following would be considered a cash-flow item from an "operating" activity?
Select correct option:
Cash outflow to the government for taxes
Cash outflow to shareholders as dividends
Cash inflow to the firm from selling new common equity shares
Cash outflow to purchase bonds issued by another company
Quiz Start Time: 05:31 PM
Time Left 90
sec(s)
Question # 11 of 15 ( Start time: 05:42:22 PM ) Total Marks: 1
Which of the following refers to the risk associated with interest rate uncertainty?
Select correct option:
Default risk premium
Sovereign Risk Premium
Market risk premium
Maturity risk premium
Quiz Start Time: 05:31 PM
Time Left 90
sec(s)
Question # 12 of 15 ( Start time: 05:42:35 PM ) Total Marks: 1
Which of the following refers to a highly competitive market where good business ideas are taken up immediately?
Select correct option:
Capital market
Efficient market
Money market
Real asset market
Quiz Start Time: 05:31 PM
Time Left 89
sec(s)
Question # 13 of 15 ( Start time: 05:42:58 PM ) Total Marks: 1
What is the most important criteria in capital budgeting?
Select correct option:
Return on investment
Profitability index
Net present value
Pay back period
Quiz Start Time: 05:31 PM
Time Left 90
sec(s)
Question # 14 of 15 ( Start time: 05:43:23 PM ) Total Marks: 1
Which of the following statements (in general) is correct?
Select correct option:
A low receivables turnover is desirable
The lower the total debt-to-equity ratio, the lower the financial risk for a firm
An increase in net profit margin with no change in sales or assets means a weaker ROI
The higher the tax rate for a firm, the lower the interest coverage ratio
Quiz Start Time: 05:31 PM
Time Left 89
sec(s)
Question # 15 of 15 ( Start time: 05:44:06 PM ) Total Marks: 1
What should be the focal point of financial management in a firm?
Select correct option:
The number and types of products or services provided by the firm
The minimization of the amount of taxes paid by the firm
The creation of value for shareholders
The dollars profits earned by the firm
Quiz Start Time: 03:50 PM
Time Left
89
sec(s)
Question # 1 of 15 ( Start time: 03:50:04 PM ) Total Marks: 1
An investment proposal should be judged in whether or not it provides:
Select correct option:
A return equal to the return require by the investor
A return more than required by investor
A return less than required by investor
A return equal to or more than required by investor
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Quiz Start Time: 03:50 PM
Time Left
90
sec(s)
Question # 2 of 15 ( Start time: 03:50:34 PM ) Total Marks: 1
Which of the following refers to the risk associated with interest rate uncertainty?
Select correct option:
Default risk premium
Sovereign Risk Premium
Market risk premium
Maturity risk premium
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Quiz Start Time: 03:50 PM
Time Left
89
sec(s)
Question # 3 of 15 ( Start time: 03:51:28 PM ) Total Marks: 1
The return in excess to risk free rate that investors require for bearing the market risk is known
as:
Select correct option:
Default risk premium
Sovereign Risk Premium
Market risk premium
Maturity risk premium
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Quiz Start Time: 03:50 PM
Time Left
89
sec(s)
Question # 4 of 15 ( Start time: 03:52:55 PM ) Total Marks: 1
If we were to increase ABC company cost of equity assumption, what would we expect to
happen to the present value of all future cash flows?
Select correct option:
An increase
A decrease
No change
Incomplete information
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Quiz Start Time: 03:50 PM
Time Left
88
sec(s)
Question # 5 of 15 ( Start time: 03:53:41 PM ) Total Marks: 1
When the zero coupon bond approaches to its maturity, the market value of the bond approaches
to which of the following?
Select correct option:
Intrinsic value
Book value
Par value
Historic cost
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Quiz Start Time: 03:50 PM
Time Left
89
sec(s)
Question # 6 of 15 ( Start time: 03:53:57 PM ) Total Marks: 1
The DuPont Approach breaks down the earning power on shareholders' book value (ROE) as
follows: ROE = __________.
Select correct option:
Net prof it margin × Total asset turnover × Equity
multiplier
Total asset turnover × Gross prof it margin × Debt
ratio
Total asset turnover × Net prof it margin
Total asset turnover × Gross prof it margin × Equity
multiplier
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Quiz Start Time: 03:50 PM
Time Left
88
sec(s)
Question # 7 of 15 ( Start time: 03:55:27 PM ) Total Marks: 1
Which of the following affects price of the bond?
Select correct option:
Market interest rate
Required rate of return
Interest rate risk
All of the given options
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Quiz Start Time: 03:50 PM
Time Left
88
sec(s)
Question # 8 of 15 ( Start time: 03:55:50 PM ) Total Marks: 1
Which of the following is FALSE about Perpetuity?
Select correct option:
It is a series of cash f low s
Cash f low s occur for a specif ic time period
Its cash f low s are identical
None of the given options
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Quiz Start Time: 03:50 PM
Time Left
89
sec(s)
Question # 9 of 15 ( Start time: 03:56:37 PM ) Total Marks: 1
The statement of cash flows reports a firm's cash flows segregated into which of the following
categorical order?
Select correct option:
Operating, investing, and f inancing
Investing, operating, and f inancing
Financing, operating and investing
Financing, investing, and operating
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Quiz Start Time: 03:50 PM
Time Left
88
sec(s)
Question # 10 of 15 ( Start time: 03:58:04 PM ) Total Marks: 1
Who determine the market price of a share of common stock?
Select correct option:
The board of directors of the f irm
The stock exchange on w hich the stock is listed
The president of the company
Individuals buying and selling the stock
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Quiz Start Time: 03:50 PM
Time Left
89
sec(s)
Question # 11 of 15 ( Start time: 03:59:33 PM ) Total Marks: 1
What should be the focal point of financial management in a firm?
Select correct option:
The number and types of products or services
provided by the f irm
The minimization of the amount of taxes paid by the
f irm
The creation of value for shareholders
The dollars prof its earned by the f irm
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Quiz Start Time: 03:50 PM
Time Left
90
sec(s)
Question # 12 of 15 ( Start time: 03:59:59 PM ) Total Marks: 1
Which of the following is NOT true regarding an ordinary annuity?
Select correct option:
It is a series of equal cash f low s
Cash f low s occur for a specif ic time period
Payments are made at the start of each period
It is also know n as deferred annuity
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Quiz Start Time: 03:50 PM
Time Left
90
sec(s)
Question # 13 of 15 ( Start time: 04:00:21 PM ) Total Marks: 1
Which of the following is similar between Return on investment and Payback period techniques
of Capital budgeting?
Select correct option:
Involvement of interest rate w hile making
calculations
Do not account for time value of money
Tricky and complicated methods
All of the given options
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Quiz Start Time: 03:50 PM
Time Left
89
sec(s)
Question # 14 of 15 ( Start time: 04:01:32 PM ) Total Marks: 1
Companies and individuals running different types of businesses have to make the choices of
the asset according to which of the following?
Select correct option:
Life span of the project
Cost of the capital
Return on asset
None of the given options
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Quiz Start Time: 03:50 PM
Time Left
90
sec(s)
Question # 15 of 15 ( Start time: 04:02:01 PM ) Total Marks: 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
Prof itability index
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