Finance Management Series-8 Quiz - All India Job Alerts

The Main purpose of this Online Quiz, You can check your Finance Management series -8 Knowledge Yourself

About the Quiz:

The Mock test only 10 questions.

There is no time limit.

You can prepare Competitive exams Etc.,

MCQs with only one valid answer.

Outcome of the Quiz:

This mock test How much did you know about finances Management Series-8 quiz.

Created on November 30, 2020 By

wefru

Finance Series 8

CHECK YOUR SKILLS BRODLY

1 / 10

71. The credit policy of Spurling Products is "1.5/10, net 35." At present 30% of the customers take the discount, 62% pay within the net period, and the rest pay within 45 days of invoice. What would receivables be if all customers took the cash discount?
.

Lower than the present level.

No change from the present level.

Higher than the present level.

Unable to determine without more information

2 / 10

72. An increase in the firm's receivable turnover ratio means that:

it is collecting credit sales more quickly than before.

cash sales have decreased.

it has initiated more liberal credit terms.

inventories have increased.

3 / 10

73. A single, overall cost of capital is often used to evaluate projects because:

it avoids the problem of computing the required rate of return for each investment proposal.

it acknowledges that most new investment projects offer about the same expected return.

it acknowledges that most new investment projects have about the same degree of risk.

it is the only way to measure a firm's required return.

4 / 10

74. The cost of equity capital is all of the following EXCEPT:

the minimum rate that a firm should earn on the equity-financed part of an investment.

a return on the equity-financed portion of an investment that, at worst, leaves the market price of the stock unchanged.

by far the most difficult component cost to estimate.

generally lower than the before-tax cost of debt.

5 / 10

75. In calculating the proportional amount of equity financing employed by a firm, we should use:

the book value of the firm.

the common stock equity account on the firm's balance sheet.

the current market price per share of common stock times the number of shares outstanding.

the sum of common stock and preferred stock on the balance sheet

6 / 10

76. In calculating the costs of the individual components of a firm's financing, the corporate tax rate is important to which of the following component cost formulas?

common stock.

debt

preferred stock.

none of the above.

7 / 10

77. The common stock of a company must provide a higher expected return than the debt of the same company because

there is less demand for stock than for bonds.

there is greater demand for stock than for bonds.

there is more systematic risk involved for the common stock.

there is a market premium required for bonds.

8 / 10

78. A quick approximation of the typical firm's cost of equity may be calculated by

adding a 5 percent risk premium to the firm's before-tax cost of debt

adding a 5 percent risk premium to the firm's after-tax cost of debt

subtracting a 5 percent risk discount from the firm's before-tax cost of debt.

subtracting a 5 percent risk discount from the firm's after-tax cost of debt.

9 / 10

79. Market values are often used in computing the weighted average cost of capital because

this is the simplest way to do the calculation.

this is consistent with the goal of maximizing shareholder value.

this is required in the U.S. by the Securities and Exchange Commission

this is a very common mistake.

10 / 10

80. Rank in ascending order (i.e., 1 = lowest, while 3 = highest) the likely after-tax component costs of a Company's long-term financing.

1 = bonds; 2 = common stock; 3 = preferred stock.

1 = bonds; 2 = preferred stock; 3 = common stock.

1 = common stock; 2 = preferred stock; 3 = bonds.

1 = preferred stock; 2 = common stock; 3 = bonds

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