finance MCQs – Page 11

Practise multiple-choice questions from finance for competitive examinations and subject revision. Review each marked answer and report any item that may be outdated or unclear.

finance Mcqs
201. Average Accounting Return is a measure of accounting profit relative to:
comments icon0

A. Cost

B. Intrinsic value

C. Market value

D. Book value
202. Formula such as net income available for common stockholders divided by total assets is used to calculate__________________________?
comments icon0

A. Return on debt

B. Return on sales

C. Return on total equity

D. Return on total assets
203. In estimating value of cash flows, compounded future value is classified as its__________?
comments icon0
A. Terminal value

B. Existed value

C. Relative value

D. Quit value

204. In cash flow estimation, depreciation shelters companys income from_______?
comments icon0
A. Taxation

B. Expansion

C. Salvages

D. Discounts

205. Current option price is added to present value of portfolio for calculating_________?
comments icon0

A. Future value of portfolio

B. Future value of stock

C. Present value of portfolio

D. Current value of stock
206. If two independent projects having hurdle rate, then both projects should________?
comments icon0

A. Have capital acceptance

B. Not be accepted

C. Have return rate acceptance

D. Be accepted
207. Which of the following costs are reported on the income statement as the cost of goods sold?
comments icon0
A. Product cost

B. Period cost

C. Both product cost and period cost

D. Neither product cost nor period cost

208. A portion of profits, which a company retains itself for further expansion, is known as:
comments icon0

A. Dividends

B. Retained Earnings

C. None of the given options

D. Capital Gain

209. An equity multiplier is multiplied to return on assets to calculate_________?
comments icon0

A. Return on multiplier

B. Return on turnover

C. Return on stock

D. Return on assets
210. Situation in which firm limits expenditures on capital is classified as________?
comments icon0

A. Optimal rationing

B. Capital rationing

C. Transaction rationing

D. Marginal rationing

211. Coupon rate of bond is also called____________?
comments icon0

A. Nominal rate

B. Premium rate

C. Quoted rate

D. Both a and c
212. If we were studying a sample of 100 students and their examination performance and if the standard deviation of the list of results was say 14, then we could calculated the standard error by ___________?
comments icon0

A. Dividing standard deviation by number of items in the sample

B. Dividing the standard deviation by the square root of the number of items in the sample

C. We cannot calculate standard error on account of inadequacy of information

D. Dividing the square root of the number of items in the sample by the mean

213. Value generally promises to pay at maturity date and a firm borrows is considered as bonds__________?
comments icon0
A. Par value

B. State value

C. Bond value

D. Per value

214. Maximizing Shareholder wealth:
comments icon0

A. None of Them

B. Relieves the firms responsibility towards society

C. Does not relieve the firms responsibility towards society

D. Partially relives the firms responsibility towards society

215. Agency theory suggests that managers(the agents), particularly those of large , publically-owned firms, may have different objectives from those of the:
comments icon0
A. Shareholders

B. Employees

C. Workers

D. Subordinates

216. Process in which managers of company identify projects to add value is classified as__________?
comments icon0
A. Capital budgeting

B. Book value budgeting

C. Cost budgeting

D. Equity budgeting

217. Which of the following item provides the important function of shielding part of income from taxes?
comments icon0
A. Depreciation

B. Inventory

C. Supplies

D. Machinery

218. Notes, mortgages, bonds, stocks, treasury bills and consumer loans are classified as______________?
comments icon0

A. Primary assets

B. Financial instruments

C. Capital assets

D. Competitive instruments

219. Weighted average cost of debt, preferred stock and common equity is classified as_____________?
comments icon0

A. Cost of salvage

B. Cost of interest

C. Cost of capital

D. Cost of taxation

220. Which of the following measure reveals how much profit a company generates with the money shareholders have invested?
comments icon0
A. Return on Equity

B. Profit Margin

C. Debt-Equity Ratio

D. Return on Assets