Saturday

November 1, 2014

November 1, 2014

Posted by **zeeshan** on Wednesday, August 4, 2010 at 12:41pm.

If sales revenue was Rs. 100,000, accounts receivable decreased by Rs. 4,000, and inventory increased by Rs. 3,000, cash received from customers would be:

a)Rs. 107,000

b)Rs. 104,000

c)Rs. 101,000

d)Rs. 93,000

Question No 2:

Kamran just won a lottery and want to put some money away so that he will have Rs. 75,000 for his child s school education 18 years from now. He can earn 7.5 percent compounded annually. How much does he need to invest today?

Rs. 15,763

Rs. 17,271

Rs. 18,980

Rs. 20,404

Question No 3:

What amount a borrower would pay at the end of second year with a 4-year, 12%,interest-only loan of Rs. 3,000?

Rs. 360

Rs. 2,000

Rs. 3,000

Rs. 3,360

Question No 4:

Which of the following short-term rating by PACRA denotes an inadequate

capacity to ensure timely repayment?

A

B

C

D

Question No: 5

Which one of the following statements is INCORRECT regarding zero coupon bonds?

a)Zero coupon bonds pay no interest at all.

b)Zero coupon bonds are offered at a price that is much lower than its stated value.

c)The issuer of a zero coupon bond deducts interest every year because interest is actually paid every year.

d)The issuer of a zero coupon bond deducts interest every year even though interest is not actually paid every year.

Question No 6:

A project whose acceptance prevents the acceptance of one or more alternative projects is referred to as:

A mutually exclusive project

An independent project

A dependent project

A contingent project

Question No: 7

Mr. A, as a financial consultant, has prepared a feasibility report of a project for XYZ Company that the company is planning to undertake. He has suggested that the project is feasible. The consultancy fee paid to Mr. A will be considered as:

Sunk cost

Opportunity cost

Both sunk cost and opportunity cost

Neither sunk cost nor opportunity cost

Question No: 8

Which one of the following is TRUE about the difference between debt and common stock?

Debt is ownership but equity is not

Creditors have voting power while stockholders do not

Interest payments are promised while dividend payments are not

Both stockholders and bondholders have voting privileges

Question No: 9

Which one of the following typically applies to preferred stock but not to common stock?

Dividend yield

Cumulative dividends

Voting rights

Tax deductible dividends

Question No: 10

Which of the following statement is INCORRECT regarding Average Accounting Return?

AAR is a rate that makes the NPV equal to zero

AAR is a measure of accounting profit relative to book value

An investment is acceptable if its AAR is greater than a benchmark AAR

None of the given options

Question No: 11

According to 2nd M&M proposition, cost of equity does NOT depend upon which of the following ?

The required return of firm s assets

The firm s cost of debt

The firm s stockholders

The firm s debt-equity ratio

Question No: 12

Which of the following terms refer to the difference between the current assets and the current liabilities ?

Net difference

Net working capital

Current ratio

Net available capital

Question No: 13

What will be the risk premium for a stock that has an expected return rate of 15%

and a risk-free rate of 9% ?

6 %

9 %

15 %

24 %

Question No: 14

The MC Inc. purchased a share of common stock exactly one year ago for Rs. 45.During the past year the common stock paid an annual dividend of Rs. 2.40. The firm sold the stock today for Rs. 80. What is the rate of return the firm has

earned?

5.3%

194.2%

83.11%

94.2%

Question No: 15

Market value exceeds book value by Rs. 150,000. What will be the after-tax

proceeds if there is a tax rate of 35 percent ?

Rs. 97,500

Rs. 105,600

Rs. 115,000

Rs. 150,000

Question No: 16

The cost of common equity for a firm is:

The required rate of return on the company's stock

The yield to maturity on the bond

The risk-free rate

The market risk premium

Question No: 17

The book value of a system is Rs. 30,220 at the end of year 4 of its life. What will

be the total after-tax cash flow from sale if we sell this system for Rs. 15,000 at

this time? (Tax rate is 35%)

Rs. 15,000

Rs. 15,220

Rs. 20,327

Rs. 45,220

Question No: 18

Four years ago, Mr. Ajmal purchased a car for Rs. 300,000. Now he wants to sell his car. Based on historical averages, his car worth 25% of the purchase price and he sells his car at this price. What would be his tax liability if the depreciation schedule shows a book value of Rs. 27,250 for the car ? (Tax rate is 35%)

Rs. 14,875.75

Rs. 16,712.50

Rs. 25,000.00

Rs. 62,500.25

Question No: 19

Miss Nadia purchased a car for Rs. 500,000. Based on historical averages, this car

is worth 30% of the purchase price now and it is being sold at this price. What is

the car s market value ?

Rs. 51,875

Rs. 112,500

Rs. 150,000

Rs. 350,000

Question No: 20

Leverage is considered beneficial when company s EBIT is relatively

_____________.

High

Low

Zero

None of the given options

**Answer this Question**

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