Financial Management

561. EOQ is the quantity that minimizes

  1. Total Ordering Cost
  2. Total Inventory Cost
  3. Total Interest Cost
  4. Safety Stock Level
Correct answer: (A)
Total Ordering Cost

562. EOQ determines the order size when

  1. Total Order cost is Minimum
  2. Total Number of order is least
  3. Total inventory costs are minimum
  4. None of the above
Correct answer: (C)
Total inventory costs are minimum

563. Which of the following is not a standard method of inventory valuation?

  1. First in First out
  2. Standard Cost
  3. Average Pricing
  4. Realizable Value
Correct answer: (C)
Average Pricing

564. Which of the following is not a spontaneous source of short-term funds?

  1. Trade credit
  2. Accrued expenses
  3. Provision for dividend
  4. All of the above
Correct answer: (C)
Provision for dividend

565. In lease system, interest is calculated on

  1. Cash down payment
  2. Cash price outstanding
  3. Hire purchase price
  4. None of the above
Correct answer: (B)
Cash price outstanding

566. Lease which includes a third party (a lender) is known as

  1. Sale and leaseback
  2. Direct Lease
  3. Inverse Lease
  4. Leveraged Lease
Correct answer: (D)
Leveraged Lease

567. In Risk-Adjusted Discount Rate method, the normal rate of discount is:

  1. Increased
  2. Decreased
  3. Unchanged
  4. None of the above
Correct answer: (A)
Increased

568. The term 'EVA' is used for:

  1. Extra Value Analysis
  2. Economic Value Added
  3. Expected Value Analysis
  4. Engineering Value Analysis
Correct answer: (B)
Economic Value Added

569. Suppliers and Creditors of a firm are interested in

  1. Profitability Position
  2. Liquidity Position
  3. Market Share Position
  4. Debt Position
Correct answer: (B)
Liquidity Position

570. Capital Budgeting Decisions are:

  1. Reversible
  2. Irreversible
  3. Unimportant
  4. All of the above
Correct answer: (B)
Irreversible
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