Financial Management

491. The basic objective of Tandon Committee recommendations is that the dependence of'industry on bank should gradually

  1. Increase
  2. Remain Stable
  3. Decrease
  4. None of the above
Correct answer: (C)
Decrease

492. Under the provisions of AS-19 'Leases', a leased asset is shown is the balance sheet of

  1. Manufacturer
  2. Lessor
  3. Lessee
  4. Financing bank
Correct answer: (C)
Lessee

493. For a lesser, a lease is a

  1. Investment decision
  2. Financing decision
  3. Dividend decision
  4. None of the above
Correct answer: (A)
Investment decision

494. Financial decision involve;

  1. Investment, financing and dividend decision
  2. Investment, financing and sales decision
  3. Financing, dividend and cash decision
  4. None of these
Correct answer: (A)
Investment, financing and dividend decision

495. Ratio of Net Income to Number of Equity Shares known as:

  1. Price Earnings Ratio
  2. Net Profit Ratio
  3. Earnings per Share
  4. Dividend per Share
Correct answer: (C)
Earnings per Share

496. Which of the following statements is correct?

  1. A Higher Receivable Turnover is not desirable
  2. Interest Coverage Ratio depends upon Tax Rate
  3. Increase in Net Profit Ratio means increase in Sales
  4. Lower Debt-Equity Ratio means lower Financial Risk
Correct answer: (D)
Lower Debt-Equity Ratio means lower Financial Risk

497. Capital Budgeting deals with:

  1. Long-term Decisions
  2. Short-term Decisions
  3. Both (a) and (b)
  4. Neither (a) nor (b)
Correct answer: (A)
Long-term Decisions

498. Capital Budgeting Decisions are based on:

  1. Incremental Profit
  2. Incremental Cash Flows
  3. Incremental Assets
  4. Incremental Capital
Correct answer: (B)
Incremental Cash Flows

499. Evaluation of Capital Budgeting Proposals is based on Cash Flows because:

  1. Cash Flows are easy to calculate
  2. Cash Flows are suggested by SEBI
  3. Cash is more important than profit
  4. None of the above
Correct answer: (C)
Cash is more important than profit

500. Profitability Index, when applied to Divisible Projects, impliedly assumes that:

  1. Project cannot be taken in parts
  2. NPV is linearly proportionate to part of the project taken up
  3. NPV is additive in nature
  4. Both (b) and (c)
Correct answer: (D)
Both (b) and (c)
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