Classical

Financial Management - Financial Management Multiple Choice Questions

36:  

Assertion (A) : The investors in the capital market have been showing a decisive shift in favour of fixed income instruments.

Reason (R) : The dept. instruments have active secondary market.

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: C

Explanation :


37:  

Return on assets can be computed by

A.

Annual Net Income/Average total Assets

B.

Sales/Cost of Sales x 100

C.

Income/Sales x 100

D.

Sales/Net Income

 
 

Option: A

Explanation :


38:  

Capital Employed is

A.

Cash + Bank

B.

Shareholders Funds + Long Funds

C.

Assets + Cash

D.

Bank

 
 

Option: B

Explanation :


39:  

Which is a capital expenditure?

A.

Research and Development Project

B.

Project Generation

C.

Project Expansion

D.

All of the above

 
 

Option: D

Explanation :


40:  

Which of the following recognises risk in capital budgeting analysis by adjusting estimated cash flows and employs risk-free rate to discount the adjusted cash flows?

A.

Cash

B.

Certainty Equivalent Approach

C.

Pay-back Period

D.

Inventory

 
 

Option: B

Explanation :




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