Financial Management - Practice Test

[#431] Two mutually exclusive projects with different economic lives can be compared on the basis of:

(A) Internal Rate of Return

(B) Profitability Index

(C) Net Present Value

(D) Equivalent Annuity Value

Correct Answer

(D) Equivalent Annuity Value

[#432] Which of the following is true?

(A) Retained earnings are cost free

(B) External Equity is cheaper than Internal Equity

(C) Retained Earnings are cheaper than External Equity

(D) Retained Earnings are costlier than External Equity

(E) Under Traditional Approach, overall cost of capital remains same

(F) Under NI Approach, overall cost of capital remains same

(G) Under NOI Approach, overall cost of capital remains same

(H) None of the above

Correct Answer

(C) Retained Earnings are cheaper than External Equity
(G) Under NOI Approach, overall cost of capital remains same

[#433] Higher OL is related to the use of higher:

(A) Debt

(B) Equity

(C) Fixed Cost

(D) Variable Cost

Correct Answer

(C) Fixed Cost

[#434] One difference between Operating and Financial lease is:

(A) There is often an option to buy in operating lease

(B) There is often a call option in financial lease

(C) An operating lease is generally cancellable by lease

(D) A financial lease in generally cancellable by lease

Correct Answer

(C) An operating lease is generally cancellable by lease

[#435] System of procuring goods when required, is known as:

(A) Free on Board (FOB)

(B) Always Butter Control (ABC)

(C) Jest in Time (JIT)

(D) Economic Order Quantity

Correct Answer

(C) Jest in Time (JIT)

Financial Management - Study Mode

[#431] Two mutually exclusive projects with different economic lives can be compared on the basis of:

Correct Answer

[#432] Which of the following is true?

Correct Answer

[#433] Higher OL is related to the use of higher:

Correct Answer

[#434] One difference between Operating and Financial lease is:

Correct Answer

[#435] System of procuring goods when required, is known as:

Correct Answer