Finance Mcqs Practice Test

Question 1

The graph which is plotted for projected net present value and capital rates is called ___________?

Accepted Answer

D. net present value profile

Question 2

The projects which are mutually exclusive but different on scale of production or time of completion than the _________?

Accepted Answer

B. net present value of method

Question 3

In internal rate of returns, the discount rate which forces the net present values to become zero is classified as ___________?

Accepted Answer

D. internal rate of return

Question 4

In independent projects evaluation, the results of internal rate of return and net present value lead to __________?

Accepted Answer

C. same decisions

Question 5

In capital budgeting, an internal rate of return of the project is classified as its __________?

Accepted Answer

B. internal rate of return

Question 6

Other factors held constant, but the lesser project liquidity is because of __________?

Accepted Answer

B. greater payback period

Question 7

In cash flow analysis, the two projects are compared by using common life, is classified as _________?

Accepted Answer

D. Both B and C

Question 8

An uncovered cost at the start of year is divided by full cash flow during recovery year then added in prior years to full recovery for calculating ____________?

Accepted Answer

C. payback period

Question 9

In capital budgeting, the positive net present value results in _________?

Accepted Answer

B. positive economic value added

Question 10

An uncovered cost at start of year is $200, full cash flow during recovery year is $400 and prior years to full recovery is 3 then payback would be ________?

Accepted Answer

B. 3.5 years

Question 11

The relationship between Economic Value Added (EVA) and the Net Present Value (NPV) is considered as _________?

Accepted Answer

C. direct relationship

Question 12

In the mutually exclusive projects, the project which is selected for comparison with others must have _________?

Accepted Answer

A. higher net present value

Question 13

A project whose cash flows are more than the capital invested for rate of return then the net present value will be _________?

Accepted Answer

A. positive

Question 14

An equity multiplier is multiplied to return on assets to calculate __________?

Accepted Answer

A. return on assets

Question 15

The process of comparing company results with the other leading firms is considered as ___________?

Accepted Answer

C. benchmarking

Question 16

The return on assets is equal 6.7% and equity multiplier is equal to 2.5% then the return on equity will be

Accepted Answer

A. 0.1675

Question 17

The high price to earnings ratio shows companies ____________?

Accepted Answer

C. high growth prospect

Question 18

If the profit margin is equal to 4.5% and the total assets turnover is 1.8% then the return on assets DuPont equation would be _________?

Accepted Answer

B. 0.081

Question 19

The return on assets = 5.5%, Total assets $3,000 and common equity is $1,050 then the return on equity would be _________?

Accepted Answer

B. 0.1571

Question 20

The price earnings ratio and price by cash flow ratio are classified as __________?

Accepted Answer

D. market value ratios