ACC501 – MF-2010
The value of net working capital will be equal to zero when:
Current Assets > Current Liabilities
Current Assets < Current Liabilities
Current Assets = Current Liabilities
None of the given options
Selected information from AST Company's accounting records is as follows:
o Cash paid to retired common shares Rs. 12,000
o Proceeds from issuance of preferred shares Rs. 15,000
o Cash dividends paid Rs. 5,000
o Proceeds from sale of equipment Rs. 15,000
On its cash flow statement for the year, AST Company should report net cash flow from investing activities as:
Rs. 3,000 net cash inflow
Rs. 8,000 net cash outflow
Rs. 15,000 net cash inflow
Rs. 25,000 net cash inflow
What would happen to current ratio if a firm sells some merchandise at a price greater than cost?
It would rise
It would fall
It would first rise then fall
It would remain unaffected
Malik Inc. has Rs. 200,000 shares of stock outstanding. The firm has an EBIT of Rs. 1 million and interest paid of Rs. 100,000. The tax rate is 34%. What is the Malik’s earning per share?
Rs. 1.65
Rs. 2.97
Rs. 3.30
Rs. 5.00
ROE = ____________________
ROA x Equity Multiplier
ROA x ( 1 + Debt-Equity Ratio)
Profit Margin x Total Assets Turnover x Equity Multiplier
All of the given options
Rule of 72 tells that how long it will take to get our investment __________.
Halved
Doubled
Tripled
Zero
How many Rs. 50 annual payments must be invested at 10% to accumulate Rs. 6,710.50?
14
28
56
7
Which one of the following terms refers to the use of debt financing?
Operating Leverage
Financial Leverage
Manufacturing Leverage
None of the given options
You own a bond that promises to pay the holder Rs. 100 annually forever. You plan to sell the bond three years from now. If similar investments yield 6 percent at that time, what will be the worth of bond?
Rs. 1,789.42
Rs. 1,958.20
Rs. 1,333.34
Rs. 1,666.67
When the market's required rate of return for a particular bond is much less than its coupon rate, the bond is selling at:
Premium
Discount
Par
Cannot be determined without more information
Which of the following refers to that part of the indenture or loan agreement that limits certain actions a company might wish to take during the term of the loan?
Repayment
Seniority
Call provision
Protective covenants
Treasury notes and bonds are examples of which of the following types of bonds?
Government bonds
Zero coupon bonds
Floating-rate bonds
Euro bonds
Which of the following bonds can be swapped for a fixed number of shares at anytime before maturity at the holder’s option?
Income bonds
Convertible bonds
Put bonds
Euro bonds
Which of the following is(are) the component(s) of nominal rate according to Fisher’s Effect?
Real rate on investment
Compensation for the decrease in value of original investment because of inflation
Compensation for the decrease in value of income earned on investment due to inflation
All of the given options
Which of the following issue is NOT covered by the “Investment” area of finance?
Best mixture of financial investment
International aspects of corporate finance
Associated risks and rewards
Pricing financial assets
Which of the following is NOT dealt by a treasurer under the head of a CFO?
Cash Management
Capital Expenditure
Financial Planning
Tax Management
Which of the following is NOT dealt by a controller under the head of a CFO?
Tax Management
Data Processing
Credit Management
Financial Accounting
A company has a current ratio of 1.31 times. From this information, we can say:
The company has more current assets than current liabilities
The company has a Rs. 1.31 in current assets for every Rs. 1 in current liabilities
The company has its current liabilities covered 1.31 times over its current assets
All of the given options
Mr. Nadeem will begin to receive cash flows of Rs. 250 per year three years from now. These cash flows will continue forever. If the discount rate is 8 percent, what is the present value? 3
What are the basic three determinants of term structure? 3
A company has a total debt ratio of 0.70. What is its debt-equity ratio? What is its equity multiplier? 5
What are the external and internal uses of financial statements information? 5
What do you mean by protective covenant? Describe its classifications with examples. 5
