Business Finance - Study Mode
[#591] Which of the following techniques for appraisal of investment proposals are based on time value of money? 1. Accounting rate of return 2. Internal rate of return 3. Profitability index method 4. Earnings per share Select the correct answer:
Correct Answer
(B) Both 2 and 3
[#592] In a traditional approach, which of the following statement is true in the context of the average cost of capital?
Correct Answer
(C) It decreases up to a certain point, remains unchanged for a moderate increase in leverage, and rises beyond a certain point
[#593] Match List-I with List-II and select the correct answer: List-I List-II a. Payback rate of return 1. Discounted cash flow technique b. Internal rate of return 2. Cornpounded values of investments and returns c. Benefit cost ratio 3. Crude method for project evaluation d. Net terminal value method 4. Varying sized projects evaluation
Correct Answer
(B) a-3, b-1, c-4, d-2
[#594] Assertion (A): Arbitrage keeps the cost of capital constant despite change in the capital structure. Reason (R): It ensures compensating inverse change in cost of equity capital with a change in the cost of debt capital.
Correct Answer
(A) (A) and (R) both are true and (R) is the correct explanation of (A)
[#595] Cash flow management involves 1. Lock-box system 2. Marketable securities 3. Playing the float 4. Concentration bank account Select the correct answer:
Correct Answer
(C) 1, 3 and 4