Financial Management - Study Mode

[#841] Initial cost is Rs 5000 and probability index is 3.2 then present value of cash flows is
Correct Answer

(B) Rs 16,000.00

Explanation

Solution: Present value of cash flow = Initial cost × Profitability index = 5000 × 3.2 = Rs. 16000.

[#842] A project which have one series of cash inflows and results in one or more cash outflows is classified as
Correct Answer

(B) normal cash flows

Explanation

Solution: A project which have one series of cash inflows and results in one or more cash outflows is classified as normal cash flows. Normal cash flow is the cash flow stream that comprises of initial investment outlay and then positive net cash flow throughout the project life. It is also called conventional cash flow stream.

[#843] In which of the following sections of a balance sheet are "Inventories" listed?
Correct Answer

(A) Current assets

Explanation

Solution: In Current assets sections of a balance sheet are "Inventories" are listed. Inventory is commonly thought of as the finished goods a company accumulates before selling them to end users.

[#844] ________ decision relates to the determination of total amount of assets to be held in the firm.
Correct Answer

(B) Investment

Explanation

Solution: Investment decision begins with a determination of the total amount of assets needed to be held by the firm. In other words, investment decision relates to the selection of assets, on which a firm will invest funds.

[#845] The key item for investors on the income statement is______________.
Correct Answer

(D) after-tax net income

Explanation

Solution: The key item for investors on the income statement is after-tax net income. Net income after taxes (NIAT) is simply the net income of a business less all taxes. It is the sum of all revenues minus all expenses, including cost of goods sold, depreciation, interest, and taxes.