Financial Management - Study Mode

[#206] A lease which is generally not cancellable and covers full economic life of the asset is known as:
Correct Answer

(C) Finance Lease

[#207] Which of the following represents passive dividend policy?
Correct Answer

(C) that dividend is paid after retaining profits for reinvestment

[#208] Out of the following, what is not true in respect of factoring?
Correct Answer

(C) Factor provides cost free finance to seller

[#209] Which is not a service of a factor?
Correct Answer

(D) None of the above

[#210] Cash flow which starts negative then positive than again positive cash flow is classified as
Correct Answer

(C) non-normal cash flow

Explanation

Solution: Cash flow which starts negative then positive than again positive cash flow is classified as non-normal cash flow. Non-normal cash flow stream (also called unconventional cash flow) is a pattern of cash flows in which the direction of cash flows changes more than once. It is also termed as unconventional cash flow.