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Wednesday, April 17, 2013

MGT201 Solved Quiz 2 2011


MGT201


Why companies invest in projects with negative NPV?
Select correct option:
Because there is hidden value in each project Because there may be chance of rapid growth Because they have invested a lot
All of the given options


Question # 2 of 10 ( Start time: 04:05:43 PM ) Total Marks: 1
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


Question # 3 of 10 ( Start time: 04:06:35 PM ) Total Marks: 1
In 2 years you are to receive Rs.10,000. If the interest rate were to suddenly decrease, the present value of that future amount to you would                                      .
Select correct option:
Fall

Rise

Remain unchanged

Incomplete information



Question # 4 of 10 ( Start time: 04:07:25 PM ) Total Marks: 1
A 5-year annuity due has periodic cash flows of Rs.100 each year. If the interest rate is 8 percent, the present value of this annuity is closest to which of the following equations?
Select correct option:
(Rs.100)(PVIFA at 8% for 4 periods) + Rs.100 (Rs.100)(PVIFA at 8% for 4 periods)(1.08) (Rs.100)(PVIFA at 8% for 6 periods) - Rs.100
Can not be found from the given information


Question # 5 of 10 ( Start time: 04:08:40 PM ) Total Marks: 1
At the termination of project, which of the following needs to be considered relating to project assets?
Select correct option:
Salvage value Book value Intrinsic value Fair value

Question # 6 of 10 ( Start time: 04:09:27 PM ) Total Marks: 1
What is the long-run objective of financial management?
Select correct option:
Maximize earnings per share

Maximize the value of the firm's common stock

Maximize return on investment

Maximize market share


Question # 7 of 10 ( Start time: 04:09:56 PM ) Total Marks: 1
What is potentially the biggest advantage of a small partnership over a sole proprietorship?
Select correct option:
Unlimited liability

Single tax filing

Difficult ownership resale

Raising capital


Question # 8 of 10 ( Start time: 04:10:16 PM ) Total Marks: 1
Which of the following effects price of the bond?
Select correct option:
Market interest rate Required rate of return Interest rate risk
All of the given options


Question # 9 of 10 ( Start time: 04:10:31 PM ) Total Marks: 1
An annuity due is always worth          a comparable annuity.
Select correct option:
Less than More than Equal to
Can not be found from the given information


Question # 10 of 10 ( Start time: 04:10:53 PM ) Total Marks: 1
A capital budgeting technique through which discount rate equates the present value of the future net cash flows from an investment project with the project’s initial cash outflow is known as:
Select correct option:
Payback period Internal rate of return Net present value Profitability index


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