Financial Management MCQ - Financial Management Section 2

31 Which method of capital budgeting called the benefit cash ratio?

A
Payback period
B
Net present value
C
Payout period
D
Profitability Index Number

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Correct AnswerOption D

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32 If cash inflows are not uniform, the calculation of the pay-back period takes a

A
Common Profit
B
Favorable Position
C
Cumulative Form
D
All of the above

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Correct AnswerOption C

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33 The investment proposal with the greatest relative risk would have

A
the highest standard deviation of net present value.
B
the highest coefficient of variation of net present value.
C
the highest expected value of net present value.
D
the lowest opportunity loss likelihood.

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Correct AnswerOption B

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34 Degree of Financial leverage is

A
Profit/Sales x Capital
B
Percentages change in EPS or EBIT/percentage changes in EBIT - Interest
C
Sales/Fixed Assets
D
EBIT/100 x Sales

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Correct AnswerOption B

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35 The "information effect" refers to the notion that

A
a corporation's actions may convey information about its future prospects.
B
management is reluctant to provide financial information that is not required by law.
C
agents incur costs in trying to obtain information.
D
the financial manager should attempt to manage sensitive information about the firm.

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Correct AnswerOption A

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