vu fin622 Final Term - Quiz No.3
vu fin622 Corporate Finance Quiz
This quiz belongs to book/course code vu fin622 Corporate Finance of vu organization. We have 17 quizzes available related to the book/course Corporate Finance. This quiz has a total of 10 multiple choice questions (MCQs) to prepare and belongs to topic Final Term. NVAEducation wants its users to help them learn in an easy way. For that purpose, you are free to prepare online MCQs and quizzes.
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Question 1: Short-term financing is riskier than long-term financing because:
Short-term interest rates fluctuate; long-term rates do not.
Short-term debt must be refunded more frequently than long-term debt.
Short-term interest rates are usually higher than long-term interest rates.
The amount of money that can be raised by short-term borrowing is much less than the amount that can be raised long-term.
Question 2: Which of the following investment criteria does not take the time value of money into consideration?
Simple payback method
Net present value
Profitability index
Internal rate of return for borrowing projects
Question 4: Which of the following is known as market portfolio?
A portfolio consists of all risk free securities available in the market
A portfolio consists of all securities available in the market
A portfolio consists of securities of the same industry
A portfolio consists of all aggressive securities available in the market
Question 5: Which of the following techniques of stock evaluation considers quantitative factors as well as qualitative factors for valuation?
Technical Analysis
Fundamental Analysis
Constant Growth Model
No Growth Model
Question 6: When the firm considers working capital management, the trade off between risk and return is affected by all of the following except
The pattern of cash borrowing needs of the firm.
The difference between long-term and short-term interest rates.
The ratio of cash to marketable securities.
The debt maturity schedule.
Question 7: All of the following are the disadvantages of a Corporate form of an organization EXCEPT:
Double taxation
Limited liability
Legal restrictions
None of the given options
Question 8: The decision rule for net present value is to:
Accept all projects with cash inflows exceeding initial cost.
Reject all projects with rates of return exceeding the opportunity cost of capital.
Accept all projects with positive net present values.
Reject all projects lasting longer than 10 years.
Question 9: __________ is a technique which indicates how much a project's NPV will change in response to a given change in an input variable, other things held constant.
Break Even Analysis
Degree of Operating Leverage
Sensitivity analysis
Scenario analysis
Question 10: __________ arises due to internal factors.
Hard Rationing
Soft Rationing
Single period rationing
All of the given options
