ACC501 Business Finance Solved MCQ's For MID & Final EXAMS Mega File (part 2)

82. Which of the following set of ratios is used to assess a business's ability to generate earnings as compared to its expenses and other relevant costs incurred during a specific period of time?

Select correct option:

Liquidity Ratios

Leverage Ratios Profitability Ratios Market Value Ratios

83. A company having a current ratio of 1 will have                net working capital.

Select correct option:

Positive Negative zero

None of the given options

  

84. which of the following is not a form of business organization

Select correct option: sole proprietorship partnership

joint stock company

cooperative Society

85. Which of the following ratios are intended to address the firm’s financial

leverage?

Select correct option:

Liquidity Ratios

Long-term Solvency Ratios Asset Management Ratios Profitability Ratios

86. The accounting definition of income is:

Select correct option:

Income = Current Assets - Current Liabilities

Income = Fixed Assets - Current Assets

Income = Revenues - Current Liabilities

Income = Revenues - Expenses

87. Which of the following item(s) is(are) not included while calculating

Operating Cash Flows? Select correct option: Depreciation

Interest

Expenses related to firm’s financing of its assets

All of the given options

88. Suppose market value exceeds book value by Rs. 250,000. What will be the

after-tax proceeds if there is a tax rate of 34 percent ?

Select correct option:

  

Rs. 105,600

Rs. 148,500

Rs. 165,000

Rs. 225,000

Solution=250000*34%=85000

250,000-85000=165000

89. When a corporation wishes to borrow from public on a long-term basis, it

does so by issuing or selling:

Select correct option:

Debt securities or bonds lec 17

Common Stocks

Preferred Stock

All of the given options

90. In which type of market, used securities are traded?

Select correct option: Primary market

Secondary market

Tertiary market

None of the given options

91. Who of the following make a broader use of accounting information?

Select correct option:

Accountants

Financial Analysts lec 2

Auditors

Marketers

92. Which of the following is (are) a non-cash item(s) ?

Select correct option: Revenue

Expenses

  

ACC501 Business Finance Solved MCQ's For MID & Final EXAMS Mega File (part1)

ACC501 Solved MCQ's For MID & Final Exam

1. Which of the following is an example of positive covenant?

Select correct option:

Maintaining firm’s working capital at or above some specified minimum level

Furnishing audited financial statements periodically to the lender

Maintaining any collateral or security in good condition

Restricting selling or leasing assets wrong question option d is negative and all is positive example

Wrong, wrong, wrong question it is unfair discipline

2. AST Company’s debt-to-total assets ratio is 0.45. What is its debt -to-equity ratio?

Select correct option:

0.101

0.220

0.667

0.818

Reference:(1-0.45=0.55)

=0.45/0.55=0.818

3. What amount a borrower would pay at the end of fourth year with a 4-year,

12%, interest-only loan of Rs. 8,000?

Select correct option:

Rs. 1,360

Rs. 2,000

Rs. 5,625

Rs. 8,960

Reference: 8000*12/100=8960

4. What will be the price per share if there is a current dividend of Rs. 4.75, required rate of return of 12% and growth rate of 5%?

Select correct option:

Rs. 30.19

Rs. 43.52

Rs. 56.53

Rs. 71.25

Reference: D*1+g/r-g

4.75*(1+0.5/4.75-0.5)=71.25

5. A given rate is quoted as 9 percent APR, but the EAR is 9.38 percent. What

is the compounding period? Select correct option: Semiannually

Quarterly

Monthly Daily Reference:(1+APR/m)^m-1

PR=9

M=30

(1+9/30)^30-1=9.38

6. Mr. Aslam owns 100 shares of a company and there are four directors to be elected. How much votes Mr. Aslamwould have as per cumulative voting

procedure?

Select correct option:

100 votes

200 votes

300 votes

400 votes

Reference: 100*4=400

7. SNT Corporation has policy of paying a Rs. 6 per share dividend every year.

If this policy is to continue indefinitely, what will be the value of a share of stock at a 15%required rate of return?

Select correct option:

Rs. 30

Rs. 40

Rs. 50

Rs. 60

Reference: 6/0.15=40