MGT201 Solved MCQ3 from 2011

MGT201 Solved MCQ3

The objective of financial management is to maximize                    wealth. Select correct option:

Stakeholders Shareholders Bondholders Directors

Where there is a single period capital rationing, what the most sensible way of making investment decisions?

Select correct option:

Choose all projects with a positive NPV

Group projects together to allocate the funds available and select the group of projects with the highest NPV

Choose the project with the highest NPV

Calculate IRR and select the projects with the highest IRRs

The logic behind

is that instead of looking at net cash flows you look at cash inflows

and outflows separately for each point in time. Select correct option:

IRR MIRR PV NPV

The RBS pays 5.60%, compounded daily (based on 360 days), on a 9-month certificate of deposit, if you deposit Rs.20, 000 you would expect to earn around                                            in interest.

Select correct option: Rs.840

Rs.858

Rs.1,032

Rs.1,121

{ [ 1 + (.056/360) ] ^ [270] - 1 } = .042891 or 4.2891%. Thus, $20,000 (.042891) = $857.82.

Who determines the market price of a share of common stock?

Select correct option:

The board of directors of the firm

The stock exchange on which the stock is listed

The president of the company

Individuals buying and selling the

At the termination of the project, which of the following needs to be considered relating to project assets?

Select correct option:

Salvage value Book value Intrinsic value Fair value

With continuous compounding at 8 percent for 20 years, what is the approximate future value of an Rs. 20,000 initial investment?

Select correct option: Rs.52,000

Rs.93,219

Rs.99,061

Rs.915,240

Amount = P*(1+i/n)^n

                                                                                                                  

To increase a given future value, the discount rate should be adjusted                     . Select correct option:

Upward

Downward

First upward and then downward

None of the given options

What is a legal agreement, also called the deed of trust, between the corporation issuing bonds and the bondholders that establish the terms of the bond issue?

Select correct option:

Indenture Debenture Bond

Bond trustee