Classical

Financial Management - Financial Management Objective Questions

21:  

The cost of depreciation funds is calculated according to

A.

Opportunity Cost Theory

B.

Flow

C.

Accounting Theory

D.

Reserve Theory

 
 

Option: A

Explanation :

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22:  

"Capital budgeting is long term planning for making and financing proposed capital outlays." Who said?

A.

Charles T. Horngreen

B.

Lynch

C.

J. Betty

D.

Philippatos

 
 

Option: A

Explanation :

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23:  

Which is the formula of Gordon's Model of dividend policy?

A.

P = E(1 – b)/Ke – br

B.

P = Ke/1 - b

C.

P = E(1 – b)/Ke

D.

P = Ke/100 (1 – b)

 
 

Option: A

Explanation :

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24:  

Match the following

List-I (Type of Value)  List-II (Features of Value)

(A) Market Value             1. Price which is present in market

(B) Intrinsic Value           2. Cost Price

(C) Liquidation Value       3. Value at wind up

(D) Salvage Value           4. Net Assets

                                      5. Scrap Value

A.

(A) (B) (C) (D)

1    4    3    2

B.

(A) (B) (C) (D)

1    2    3    4

C.

(A) (B) (C) (D)

1    3    2    4

D.

(A) (B) (C) (D)

1    4    3    5

 
 

Option: D

Explanation :

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25:  

Assertion (A) : The liability of share holders in a private limited company is limited to the amount

Reason (R) : The number of share holders of a private limited company is limited to fifty

A.

Both A and R are true and R is the correct explanation of A

B.

Both A and R are true but R is not a correct explanation of A

C.

A is true but R is false

D.

A is false but R is true

 
 

Option: B

Explanation :

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