Virtual Uni ACC501 MCQs

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The process of planning and managing a firm’s long-term investments is called : ► Planning Process ► Capital Structure ► Capital Budgeting ► Managing Process

Question No: 2 ( Marks: 1 ) - Please choose one

Return on Equity (ROE) = _________ x Total Assets Turnover x Equity Multiplier ► Profit Margin ► Total Sales ► Net Income ► Total Equity

Question No: 3 ( Marks: 1 ) - Please choose one

If a bank loans out Rs. 10,000 for 90 days at 8% simple interest, the Present Value (PV) will be : ► Rs. 9,105 ► Rs. 9,807 ► Rs. 10,325 ► Rs. 10,765

Question No: 4 ( Marks: 1 ) - Please choose one

The ____________ is the rate where NPV (Net Present Value) equals to zero. ► WACC (Weighted Average Cost of Capital) ► IRR (Internal Rate of Return) ► MIRR (Modified Internal Rate of Return) ► AAR (Average Accounting Return)

Question No: 5 ( Marks: 1 ) - Please choose one

______________ is adopted to permit minority participation. ► Cumulative Voting ► Straight Voting ► Proxy Voting ► Staggering

Question No: 6 ( Marks: 1 ) - Please choose one

Which one of the following statements projects future years’ operations in a summarized format ? ► Income Statement ► Cash Flow Statement ► Pro Forma Financial Statement ► None of the given options

Question No: 7 ( Marks: 1 ) - Please choose one

The direct and indirect costs associated with going bankrupt or experiencing financial distress, are known as : ► Direct Bankruptcy Costs ► Indirect Bankruptcy Costs ► Financial Distress Costs ► All of the given options

Question No: 8 ( Marks: 1 ) - Please choose one

Suppose you bought 1,500 shares of a corporation at Rs. 25 each. After a year, you received Rs. 3,000 (Rs. 2 per share) in dividends. The dividend yield will be : ► 5.00 % ► 8.00% ► 10.00% ► 12.00%

Question No: 9 ( Marks: 1 ) - Please choose one

You earn a 7% real return. If the inflation rate is 5 percent, what is your nominal return ? ► 8.96 % ► 9.05 % ► 11.65 % ► 12.35%

Question No: 10 ( Marks: 1 ) - Please choose one

The projected cash flows from a project are : Years Cash flows 1 Rs. 100 2 Rs. 300 3 Rs. 600 4 Rs. 800 The project costs Rs. 1,000. What would be the payback period for the project ? ► 2.00 Years ► 2.67 Years ► 3.00 Years ► 3.67 Years

Question No: 11 ( Marks: 1 ) - Please choose one

Sole Proprietorship is a business created as a distinct legal entity owned by one or more individuals or entities. ► True ► False

Question No: 12 ( Marks: 1 ) - Please choose one

The term discounting is associated with Future Value concept whereas the term compounding is associated with Present Value concept. ► True ► False

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