Reference no: EM132601217

Question 1. Which of the following are Economic variables that help define and explain the discipline of finance?

A. Risk and return

B. Capital structure

C. Inflation

D. All of the above.

Question 2. The most important goal of financial management is:

A. Profit maximisation

B. Matching income and expenditure

C. Using business assets effectively

D. Wealth maximisation.

Question 3. While evaluating capital investment proposals, time value of money is used in which of the following techniques,

A. Payback method

B. Accounting rate of return

C. Net present value

D. None of the above

Question 4. Time value of money is an important finance concept because:

A. It takes risk into account

B. It takes time into account

C. It takes compound interest into account

D. All of the above.

Question 5. One The traditional approach towards the valuation of a company assumes that:

A. The overall capitalization rate holds constant with changes in financial leverage.

B. There is an optimum capital structure.

C. Total risk is not altered by changes in the capital structure.

D. Markets are perfect.

E. None

Question 6. The pay back technique is especially useful during times

A. When the value of money is turbulent

B. When there is no inflation

C. When the economy is growing at a steady rate coupled with minimal inflation.

D. None of the above

Question 7. A capital budgeting technique which does not require the computation of cost of capital for decision making purposes is,

A. Net Present Value method

B. Internal Rate of Return method

C. Modified Internal Rate of Return method

D. Pay back