MCQOPTIONS
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MCQOPTIONS
This section includes 2436 Mcqs, each offering curated multiple-choice questions to sharpen your Commerce knowledge and support exam preparation. Choose a topic below to get started.
| 701. |
In independent projects evaluation, results of internal rate of return and net present value lead to |
| A. | ash flow decision |
| B. | ost decision |
| C. | ame decisions |
| D. | ifferent decisions |
| Answer» D. ifferent decisions | |
| 702. |
In capital budgeting, an internal rate of return of project is classified as its |
| A. | xternal rate of return |
| B. | nternal rate of return |
| C. | ositive rate of return |
| D. | egative rate of return |
| Answer» C. ositive rate of return | |
| 703. |
Other factors held constant, but lesser project liquidity is because of |
| A. | horter payback period |
| B. | reater payback period |
| C. | ess project return |
| D. | reater project return |
| Answer» C. ess project return | |
| 704. |
In pure play method, a company can calculate its own cost of capital with help of averaging an |
| A. | ther company capital policy |
| B. | ther company beta |
| C. | ther company cost |
| D. | ther division cost |
| Answer» C. ther company cost | |
| 705. |
Dividend per share is Rs 15 and sell it for Rs 120 and floatation cost is Rs 3.0 then component cost of preferred stock will be |
| A. | 2.82 times |
| B. | .1282 times |
| C. | 2.82% |
| D. | s 12.82 |
| Answer» D. s 12.82 | |
| 706. |
Cost of equity which is raised by reinvesting earnings internally must be higher than the |
| A. | ost of initial offering |
| B. | ost of new common equity |
| C. | ost of preferred equity |
| D. | ost of floatation |
| Answer» C. ost of preferred equity | |
| 707. |
Rate of required return by debt holders is used for estimation the |
| A. | ost of debt |
| B. | ost of equity |
| C. | ost of internal capital |
| D. | ost of reserve assets |
| Answer» B. ost of equity | |
| 708. |
Type of variability in which a project contributes in return of company is considered as |
| A. | ariable risk |
| B. | ithin firm risk |
| C. | orporate risk |
| D. | oth B and C |
| Answer» E. | |
| 709. |
Risk free rate is subtracted from expected market return is considered as |
| A. | ountry risk |
| B. | iversifiable risk |
| C. | quity risk premium |
| D. | arket risk premium |
| Answer» D. arket risk premium | |
| 710. |
Special situation in which large projects are financed by with and securities claims on project's cash flow is classified as |
| A. | laimed securities |
| B. | roject financing |
| C. | tock financing |
| D. | nterest cost |
| Answer» C. tock financing | |
| 711. |
Cost which is used to calculate weighted average cost of capital is classified as |
| A. | eighted cost of capital |
| B. | omponent cost of preferred stock |
| C. | ransaction cost of preferred stock |
| D. | inancing of preferred stock |
| Answer» C. ransaction cost of preferred stock | |
| 712. |
In weighted average cost of capital, capital components are funds that usually offer by |
| A. | tock market |
| B. | nvestors |
| C. | apitalist |
| D. | xchange index |
| Answer» C. apitalist | |
| 713. |
Cash outflows are costs of project and are represented by |
| A. | egative numbers |
| B. | ositive numbers |
| C. | urdle number |
| D. | elative number |
| Answer» B. ositive numbers | |
| 714. |
If two independent projects having hurdle rate then both projects should |
| A. | e accepted |
| B. | ot be accepted |
| C. | ave capital acceptance |
| D. | ave return rate acceptance |
| Answer» B. ot be accepted | |
| 715. |
In retention growth model, payout ratio is subtracted from one to calculate |
| A. | resent value ratio |
| B. | uture value ratio |
| C. | etention ratio |
| D. | rowth ratio |
| Answer» D. rowth ratio | |
| 716. |
In weighted average cost of capital, cost of capital which is risk adjusted and developed for each category of |
| A. | ong-term projects |
| B. | ndustry [industrial] projects |
| C. | ivisional projects |
| D. | hort-term projects |
| Answer» C. ivisional projects | |
| 717. |
Historical growth rates, analysis forecasts and retention growth model are approaches to estimate |
| A. | resent value of gain |
| B. | rowth rate |
| C. | rowth gain |
| D. | iscounted gain |
| Answer» C. rowth gain | |
| 718. |
Situation in which one project is accepted while rejecting another project in comparison is classified as |
| A. | resent value consent |
| B. | utually exclusive |
| C. | utual project |
| D. | utual consent |
| Answer» C. utual project | |
| 719. |
First step in calculation of net present value is to find out |
| A. | resent value of equity |
| B. | uture value of equity |
| C. | resent value cash flow |
| D. | uture value of cash flow |
| Answer» D. uture value of cash flow | |
| 720. |
Cash flows occurring with more than one change in sign of cash flow are classified as |
| A. | on-normal cash flow |
| B. | ormal cash flow |
| C. | ormal costs |
| D. | on-normal costs |
| Answer» B. ormal cash flow | |
| 721. |
Initial cost is Rs 5000 and probability index is 3.2 then present value of cash flows is |
| A. | s 8,200.00 |
| B. | s 16,000.00 |
| C. | s 10,000.00 |
| D. | s 1,562.50 |
| Answer» C. s 10,000.00 | |
| 722. |
Situation in which firm limits expenditures on capital is classified as |
| A. | ptimal rationing |
| B. | apital rationing |
| C. | arginal rationing |
| D. | ransaction rationing |
| Answer» C. arginal rationing | |
| 723. |
In calculation of internal rate of return, an assumption states that received cash flow from project must |
| A. | e reinvested |
| B. | ot be reinvested |
| C. | e earned |
| D. | ot be earned |
| Answer» B. ot be reinvested | |
| 724. |
Other factors held constant, greater project liquidity is because of |
| A. | ess project return |
| B. | reater project return |
| C. | horter payback period |
| D. | reater payback period |
| Answer» D. reater payback period | |
| 725. |
Profitability index in capital budgeting is used for |
| A. | egative projects |
| B. | elative projects |
| C. | valuate projects |
| D. | arned projects |
| Answer» D. arned projects | |
| 726. |
Premium which is considered as difference of expected return on common stock and current yield on Treasury bonds is called |
| A. | urrent risk premium |
| B. | ast risk premium |
| C. | eta premium |
| D. | xpected premium |
| Answer» B. ast risk premium | |
| 727. |
Forecast by analysts, retention growth model and historical growth rates are methods used for an |
| A. | stimate future growth |
| B. | stimate option future value |
| C. | stimate option present value |
| D. | stimate growth ratio |
| Answer» B. stimate option future value | |
| 728. |
Bond yield is 12% and bond risk premium is 4.5% then cost of common stock would be |
| A. | 7.50% |
| B. | .50% |
| C. | 6.50% |
| D. | .67% |
| Answer» D. .67% | |
| 729. |
Procedure of finding present values in time value of money is classified as |
| A. | ompounding |
| B. | iscounting |
| C. | oney value |
| D. | tock value |
| Answer» C. oney value | |
| 730. |
Paid dividends to common stockholders Rs 67,600,000 and common shares outstanding 55,000,000 then dividend per share will be |
| A. | s 1.23 |
| B. | s 0.81 |
| C. | s 2.12 |
| D. | s 2.78 |
| Answer» B. s 0.81 | |
| 731. |
A stock which is hybrid and works as a cross between debt and common stock is considered as |
| A. | ybrid stock |
| B. | ommon liabilities |
| C. | ebt liabilities |
| D. | referred stock |
| Answer» E. | |
| 732. |
An uncovered cost at start of year is Rs 300, full cash flow during recovery year is Rs 650 and prior years to full recovery is 4 then payback would be |
| A. | .46 years |
| B. | .46 years |
| C. | .46 years |
| D. | .46 years |
| Answer» E. | |
| 733. |
A discount rate which equals to present value of TV to project cost present value is classified as |
| A. | egative internal rate of return |
| B. | odified internal rate of return |
| C. | xisted internal rate of return |
| D. | elative rate of return |
| Answer» C. xisted internal rate of return | |
| 734. |
Process in which managers of company identify projects to add value is classified as |
| A. | apital budgeting |
| B. | ost budgeting |
| C. | ook value budgeting |
| D. | quity budgeting |
| Answer» B. ost budgeting | |
| 735. |
In weighted average cost of capital, a company can affect its capital cost through |
| A. | olicy of capital structure |
| B. | olicy of dividends |
| C. | olicy of investment |
| D. | ll of above |
| Answer» E. | |
| 736. |
Cost of common stock is 14% and bond risk premium is 9% then bond yield will be |
| A. | .56% |
| B. | .00% |
| C. | 3.00% |
| D. | 4.28% |
| Answer» C. 3.00% | |
| 737. |
During planning period, a marginal cost for raising a new debt is classified as |
| A. | ebt cost |
| B. | elevant cost |
| C. | orrowing cost |
| D. | mbedded cost |
| Answer» C. orrowing cost | |
| 738. |
Net income and depreciation is Rs 313,650,000 and common shares outstanding are 55,000,000 then cash flow per share would be |
| A. | s 5.70 |
| B. | s 6.70 |
| C. | s 7.70 |
| D. | s 8.70 |
| Answer» B. s 6.70 | |
| 739. |
Periodic rate if it is multiplied with per year number of compounding periods is called |
| A. | xtrinsic rate of return |
| B. | ntrinsic rate of return |
| C. | nnual rate of return |
| D. | ominal annual rate |
| Answer» E. | |
| 740. |
An annuity with an extended life is classified as |
| A. | xtended life |
| B. | erpetuity |
| C. | eferred perpetuity |
| D. | ue perpetuity |
| Answer» C. eferred perpetuity | |
| 741. |
In calculation of time, value of money, ''N ''represents |
| A. | umber of payment periods |
| B. | umber of investment |
| C. | umber of instalments |
| D. | umber of premium received |
| Answer» B. umber of investment | |
| 742. |
rate which is divided by compounding periods to calculate periodic rate must be |
| A. | nnuity return |
| B. | eferred annuity return |
| C. | ominal rate |
| D. | emi-annual discount rate |
| Answer» D. emi-annual discount rate | |
| 743. |
Total amount of depreciation charged on long term assets is classified as |
| A. | ccumulated depreciation |
| B. | epleted depreciation |
| C. | ccumulated appreciation |
| D. | ccumulated appreciation schedule |
| Answer» B. epleted depreciation | |
| 744. |
Rate charged by bank 12.5% on credit loans and 3% semi-annually on instalment loans is considered as |
| A. | eriodic rate |
| B. | erpetuity rate of return |
| C. | nnual rate |
| D. | nnuity rate of return |
| Answer» B. erpetuity rate of return | |
| 745. |
Claim against assets are represented by |
| A. | aved earning |
| B. | etained earnings |
| C. | aintained earnings |
| D. | aving account earning |
| Answer» C. aintained earnings | |
| 746. |
In time value of money, periodic rate is |
| A. | ot shown on timeline |
| B. | hown on timeline |
| C. | ultiplied on timeline |
| D. | ivided on timeline |
| Answer» C. ultiplied on timeline | |
| 747. |
Until word of preferred is used, an equity in balance sheet is treated as |
| A. | ommon equity |
| B. | referred equity |
| C. | ue equity |
| D. | ommon perpetuity |
| Answer» B. referred equity | |
| 748. |
An earning before interest, taxes, depreciation and amortization are calculated by |
| A. | ubtracting operating cost from net sales |
| B. | ubtracting net sales from operating costs |
| C. | dding operating cost and net sales |
| D. | dding interest and taxes |
| Answer» B. ubtracting net sales from operating costs | |
| 749. |
Payment if it is divided with interest rate will be formula of |
| A. | uture value of perpetuity |
| B. | resent value of perpetuity |
| C. | ue perpetuity |
| D. | eferred perpetuity |
| Answer» C. ue perpetuity | |
| 750. |
Total common equity divided by common shares outstanding which is used to calculate |
| A. | ook value of share |
| B. | arket value of shares |
| C. | arning per share |
| D. | ividends per share |
| Answer» B. arket value of shares | |