Financial Management - Study Mode

[#246] If an investor is attempting to buy a stock that is very volatile, it would be best to use___________.
Correct Answer

(B) limit order

Explanation

Solution: If an investor is attempting to buy a stock that is very volatile, it would be best to use limit order.

[#247] Net working capital refers to.
Correct Answer

(B) current assets minus current liabilities

Explanation

Solution: Net working capital refers to current assets minus current liabilities. Working capital, also known as net working capital (NWC), is the difference between a company's current assets, such as cash, accounts receivable (customers' unpaid bills) and inventories of raw materials and finished goods, and its current liabilities, such as accounts payable.

[#248] The constant growth model of equity valuation assumes that _____________.
Correct Answer

(B) the dividends paid by the company grow at a constant rate of growth

Explanation

Solution: The constant growth model of equity valuation assumes that the dividends paid by the company grow at a constant rate of growth.

[#249] Free cash flow is Rs 15000 and net investment in operating capital is Rs 9000 then net operating profit after taxes will be
Correct Answer

(A) Rs 24,000.00

Explanation

Solution: Net operating profit after tax = Free cash flow + Net investment in operating capital = 15000 + 9000 = Rs. 24000.

[#250] In cash flow estimation, depreciation is considered as
Correct Answer

(B) noncash charge

Explanation

Solution: In cash flow estimation, depreciation is considered as noncash charge. A company will take a non-cash charge against non-cash items on the balance sheet, such as depreciation, amortization, and depletion. These charges are typically made when something unusual happens, often outside the control of the company.