MGT201 online quiz fall 2010 November 11th

[IQ-test]

Quiz Start Time: 05:31 PM
Time Left 38
sec(s)
Question # 1 of 15 ( Start time: 05:31:55 PM ) Total Marks: 1
Which of the following is the general assumption of Percent of Sales Forecasting?
Select correct option:
Current Assets usually grow in proportion to Revenues
Current Assets usually grow in proportion to Expenses
Current Assets usually grow in proportion to Liabilities
Current Assets usually grow in proportion to Sales






Quiz Start Time: 05:31 PM
Time Left 89
sec(s)
Question # 2 of 15 ( Start time: 05:33:20 PM ) Total Marks: 1
In 2 years you are to receive Rs.10,000. If the interest rate were to suddenly decrease, the present value of that future amount to you would __________.
Select correct option:
Fall
Rise
Remain unchanged
Incomplete information






Quiz Start Time: 05:31 PM
Time Left 89
sec(s)
Question # 3 of 15 ( Start time: 05:33:59 PM ) Total Marks: 1
Effective interest rate is different from nominal rate of interest because:
Select correct option:
Nominal interest rate ignores compounding
Nominal interest rate includes frequency of compounding
Periodic interest rate ignores the effect of inflation
All of the given options






Quiz Start Time: 05:31 PM
Time Left 89
sec(s)
Question # 4 of 15 ( Start time: 05:35:22 PM ) Total Marks: 1
What is a legal agreement, also called the deed of trust, between the corporation issuing bonds and the bondholders that establish the terms of the bond issue?
Select correct option:
Indenture
Debenture
Bond
Bond trustee






Quiz Start Time: 05:31 PM
Time Left 89
sec(s)
Question # 5 of 15 ( Start time: 05:36:28 PM ) Total Marks: 1
All of the following are the reasons for Uncertain NPV calculations EXCEPT:
Select correct option:
Estimated discount rate does not change with the markets
Estimated Life of project is doubtful
Annual after-tax cash flows are difficult to estimate
Timing of cash flows is not exactly predictable






Quiz Start Time: 05:31 PM
Time Left 90
sec(s)
Question # 6 of 15 ( Start time: 05:37:36 PM ) Total Marks: 1
Which of the following would generally have unlimited liability?
Select correct option:
A limited partner in a partnership
A shareholder in a corporation
The owner of a sole proprietorship
A member in a limited liability company (LLC)






Quiz Start Time: 05:31 PM
Time Left 88
sec(s)
Question # 7 of 15 ( Start time: 05:38:38 PM ) Total Marks: 1
Why we need Capital rationing? (
Select correct option:
Because, there are not enough positive NPV projects
Because, companies do not always have access to all of the funds they could make use of
Because, managers find it difficult to decide how to fund projects
Because, banks require very high returns on projects






Quiz Start Time: 05:31 PM
Time Left 89
sec(s)
Question # 8 of 15 ( Start time: 05:39:53 PM ) Total Marks: 1
What is the present value of Rs. 3,500,000 to be paid at the end of 50 years if the correct risk adjusted interest rate is 18%?
Select correct option:
Rs.105,000
Rs.1,500,000
Rs.3975,000
Rs. 350,000






Quiz Start Time: 05:31 PM
Time Left 89
sec(s)
Question # 9 of 15 ( Start time: 05:41:20 PM ) Total Marks: 1
When the zero coupon bond approaches to its maturity, the market value of the bond approaches to which of the following?
Select correct option:
Intrinsic value
Book value
Par value
Historic cost






Quiz Start Time: 05:31 PM
Time Left 90
sec(s)
Question # 10 of 15 ( Start time: 05:41:27 PM ) Total Marks: 1
Which of the following would be considered a cash-flow item from an "operating" activity?
Select correct option:
Cash outflow to the government for taxes
Cash outflow to shareholders as dividends
Cash inflow to the firm from selling new common equity shares
Cash outflow to purchase bonds issued by another company






Quiz Start Time: 05:31 PM
Time Left 90
sec(s)
Question # 11 of 15 ( Start time: 05:42:22 PM ) Total Marks: 1
Which of the following refers to the risk associated with interest rate uncertainty?
Select correct option:
Default risk premium
Sovereign Risk Premium
Market risk premium
Maturity risk premium






Quiz Start Time: 05:31 PM
Time Left 90
sec(s)
Question # 12 of 15 ( Start time: 05:42:35 PM ) Total Marks: 1
Which of the following refers to a highly competitive market where good business ideas are taken up immediately?
Select correct option:
Capital market
Efficient market
Money market
Real asset market






Quiz Start Time: 05:31 PM
Time Left 89
sec(s)
Question # 13 of 15 ( Start time: 05:42:58 PM ) Total Marks: 1
What is the most important criteria in capital budgeting?
Select correct option:
Return on investment
Profitability index
Net present value
Pay back period






Quiz Start Time: 05:31 PM
Time Left 90
sec(s)
Question # 14 of 15 ( Start time: 05:43:23 PM ) Total Marks: 1
Which of the following statements (in general) is correct?
Select correct option:
A low receivables turnover is desirable
The lower the total debt-to-equity ratio, the lower the financial risk for a firm
An increase in net profit margin with no change in sales or assets means a weaker ROI
The higher the tax rate for a firm, the lower the interest coverage ratio






Quiz Start Time: 05:31 PM
Time Left 89
sec(s)
Question # 15 of 15 ( Start time: 05:44:06 PM ) Total Marks: 1
What should be the focal point of financial management in a firm?
Select correct option:
The number and types of products or services provided by the firm
The minimization of the amount of taxes paid by the firm
The creation of value for shareholders
The dollars profits earned by the firm