Financial Management
571. Financial Break-even level of EBIT is one at which:
- EPS is one
- EPS is zero
- EPS is Infinite
- EPS is Negative
Correct answer: (B)
EPS is zero
572. NOI Approach advocates that the degree of debt financing is:
- Relevant
- May be relevant
- Irrelevant
- May be irrelevant
Correct answer: (C)
Irrelevant
573. The aftertax cost of debt is expressed:
- Kd = Y/k(1-T)
- Kd = Y(1-T)
- K = (1-t)/Y
- K = Y
Correct answer: (B)
Kd = Y(1-T)
574. The formula for the Capital Asset Pricing Model (CAPM) is:
- Kj = Rf + β (Rf – Rm)
- Kj = Rf + β (Rm – Rf)
- K = R + β (R – M)
- K = R + β (R – R)
Correct answer: (B)
Kj = Rf + β (Rm – Rf)
575. ______________ is concerned with the acquisition, financing and management of assets with some overall goal in mind.
- Financial Management
- Profit Maximisation
- Agency Theory
- Social Responsibility
Correct answer: (A)
Financial Management
576. Balance Sheet shows the:
- Profit earned by the business
- Total capital employed
- Financial position of the business
- Trading results of the business
Correct answer: (C)
Financial position of the business
577. Financial management deals with two things:
- Operations management and procurement
- Warehousing and managing a company's finances
- Raising money and managing a company's finances
- Marketing and production management
Correct answer: (C)
Raising money and managing a company's finances
578. A company's ability to meet its short-term financial obligations is referred to as:
- Stability
- Efficiency
- Effectiveness
- Liquidity
- Profitability
Correct answer: (D)
Liquidity
579. A company's ______________ is its merchandise, raw materials, and products waiting to be sold.
- Inventory
- Liquidity
- Accounts Receivable
- Accounts Payable
- Owners' Equity
Correct answer: (A)
Inventory
580. Which of the following selections correctly matches the financial statement with its description?
- Income statement/tells how much a firm is making or losing
- Income statement/depicts the structure of a firm's assets and liabilities
- Balance sheet/tells how much a firm is making or losing
- Statement of cash flows/depicts the structure of a firm's assets and liabilities
Correct answer: (A)
Income statement/tells how much a firm is making or losing