.
Question No: 1
( Marks: 1 )
- Please choose one
The Ratios showing the ability of a firm to pay its bills in
short-run are called:
► Leverage Ratios
► Liquidity Ratios
► Profitability Ratios
► Market Value Ratios
Question No: 2
( Marks: 1 )
- Please choose one
Evaluating the size, timing and risk of future cash flows is the
essence of :
► Capital Budgeting
► Capital Structure
► Inventory Control
► None of the given options
Question No: 3
( Marks: 1 )
- Please choose one
Sumi Corporation is dealing in furniture industry. It has an
equity multiplier of 1.78
times. The debt to equity ratio would be:
► 0.38 times
► 0.58 times
► 0.78 times
► 0.98 times
Question No: 4
( Marks: 1 )
- Please choose one
________________ involves the sale of used securities from one
investor to another.
► Primary Market
► Secondary Market
.
► Tertiary Market
► None of the given options
.
Question No: 5
( Marks: 1 )
- Please choose one
SNT Corporation paid Rs. 28,900 as tax in 2006. If the tax rate
was 34%, what was the
taxable income of the corporation during 2006?
► Rs. 90,000
► Rs. 85,000
► Rs. 65,000
► Rs. 77,000
Question No: 6
( Marks: 1 )
- Please choose one
______________ pays no coupon at all and is offered at a price
that is much lower than its
stated value.
► Government Bond
► Floating Rate Bond
► Zero Growth Bond
► None of the given options
Question No: 7
( Marks: 1 )
- Please choose one
Which of the following statement provides a financial summary of
the firm’s operating
results during a specified period.
► Balance Sheet
► Income Statement
► Cash Flow Statement
► Retained Earning Statement
Question No: 8
( Marks: 1 )
- Please choose one
Depreciation expense does not reflect a cash outflow but still
shown as an expense on the
.
income statement to serve as a:
► Cash inflow
.
► Cash outflow
► Tax Shield
► Interest Shield
Question No: 9
( Marks: 1 )
- Please choose one
Investors demand extra yield on a taxable bond as a compensation
for the unfavorable tax
treatment, known as:
► Taxability premium
► Inflation premium
► Interest Rate Risk Premium
► None of the given options
Question No: 10
( Marks: 1 )
- Please choose one
If you invest Rs. 150 in a bank on an interest rate of 14%. How
much will you have in
your account after 5 years ?
► Rs. 78
► Rs.163
► Rs. 207
► Rs. 289
Question No: 11
( Marks: 1 )
- Please choose one
A series of constant, or level, cash flows that occur at the end
of each period for some
fixed number of periods is called Perpetuity.
► True
► False
Question No: 12
( Marks: 1 )
- Please choose one
A dollar in hand today is worth more than a dollar promised at
some time in future.
.
► True
► False
.
Question No: 13
( Marks: 1 )
- Please choose one
Profit Margin is calculated by dividing Net Income over Sales.
► True
► False
Question No: 14
( Marks: 1 )
- Please choose one
While making Common Size Statements, Balance sheet items are shown
as a percentage
of total liabilities.
► True
► False
Question No: 15
( Marks: 1 )
- Please choose one
Present value of all the cash inflows can be calculated by
compounding each cash flow
separately.
► True
► False
Question No: 16
( Marks: 5 )
Cash Flows for a project are given below:
Compute the Future Value of cash flow stream of project at the end
of year 5 with a
compound annual interest rate of 14%.
Question No: 17
( Marks: 5 )
.
Period Cash Flows
1 Rs.8,000
2 Rs.12,000
3 Rs.20,000
4 Rs.35,000
5 Rs.40,000
Explain the difference between Simple Interest & Compound
Interest with the help of
example.
Question No: 18
( Marks: 5 )
.
Bond Par Value
(Rs.)
Coupon Rate
(%)
Years to Maturity
(Years)
Req. Stated
Return (%)
A 1,000 7 12 8
B 500 12 15 10
C 100 16 20 12
A company has total annual sales (25% on cash basis) of
Rs.3,000,000 and a gross profit
margin of 20 %. Its current assets are Rs. 500,000; current
liabilities are Rs. 340,000;
inventories are Rs. 260,000; and cash is Rs. 60,000.
Calculate:
(a) How much average inventory should be carried if management wants
the inventory
turnover to be 5 times? and
(b) How rapidly (in how many days) must accounts receivable be collected
if
management wants to have an average of Rs.240,000 invested in
receivables? (Assume a
365-day year.)
Question No: 19
( Marks: 10 )
ST manufacturing company is offering the following bonds for
issue. Calculate the value
of each bond.
Note :
>> In case of Bond A, interest payments are made annually
>> In case of Bond B, interest payments are made semi-annually
>> In case of Bond C, interest payments are made quarterly
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