Financial Management
311. The cash purchase of another company may best be viewed as:
- a necessary growth strategy
- a capital budgeting problem
- a cash budgeting problem
- an undesirable alternative
Correct answer: (B)
a capital budgeting problem
312. The main factor influencing foreign exchange rates is:
- the supply and demand relationship
- domestic policies
- foreign government policies
- banking activities
Correct answer: (A)
the supply and demand relationship
313. The appropriate objective of an enterprise is;
- Maximisation of sale
- Maximisation of owners wealth
- Maximisation of profits.
- None of these
Correct answer: (B)
Maximisation of owners wealth
314. Return on Investment may be improved by:
- Increasing Turnover
- Reducing Expenses
- Increasing Capital Utilization
- All of the above
Correct answer: (D)
All of the above
315. A firm has Capital of 10,00,000; Sales of 5,00,000; Gross Profit of. 2,00,000 and Expenses of. 1,00,000. What is the Net Profit Ratio?
- 20%
- 50%
- 10%
- 40%
Correct answer: (A)
20%
316. Which of the following helps analysing return to equity Shareholders?
- Return on Assets
- Earnings Per Share
- Net Profit Ratio
- Return on Investment
Correct answer: (B)
Earnings Per Share
317. Which of the following is not used in Capital Budgeting?
- Time Value of Money
- Sensitivity Analysis
- Net Assets Method
- Cash Flows
Correct answer: (C)
Net Assets Method
318. Which of the following does not effect cash flows proposal?
- Salvage Value
- Depreciation Amount
- Tax Rate Change
- Method of Project Financing
Correct answer: (D)
Method of Project Financing
319. Which of the following is not applied in capital budgeting?
- Cash flows be calculated in incremental terms
- All costs and benefits are measured on cash basis
- All accrued costs and revenues be incorporated
- All benefits are measured on after-tax basis
Correct answer: (C)
All accrued costs and revenues be incorporated
320. In capital budgeting, the term Capital Rationing implies:
- That no retained earnings available
- That limited funds are available for investment
- That no external funds can be raised
- That no fresh investment is required in current year
Correct answer: (B)
That limited funds are available for investment