Finance Mcqs

The process of determining the present value of a payment or a stream of payments that is to be received in the future is known as:

• (A)  Discounting
• (B)  Compounding
• (C)  Factorization
• (D)  None of the given options

Answer

Submitted By :Ali Uppal

Which of the following item provides the important function of shielding part of income from taxes?

• (A)  Inventory
• (B)  Supplies
• (C)  Machinery
• (D)  Depreciation

Answer

Submitted By :Ali Uppal

In which form of Business, owners have limited liability?

• (A)  sole proprietorship
• (B)  partnership
• (C)  joint stock company
• (D)  none of the above

Answer

Submitted By :Ali Uppal

Which of the following ratios are particularly interesting to shortterm creditors?

• (A)  Liquidity Ratios
• (B)  Long-term Solvency Ratios
• (C)  Profitability Ratios
• (D)  Market Value Ratios

Answer

Submitted By :Ali Uppal

You just won a prize, you can either receive Rs. 1000 today or Rs. 1,050 in one year. Which option do you prefer and why if you can earn 5 percent on your money?

• (A)  Rs. 1,000 because it has the higher future value
• (B)  Rs. 1,000 because you receive it sooner
• (C)  Rs. 1,050 because it is more money
• (D)  Either because both options are of equal value

Answer

Submitted By :Ali Uppal

Which of the following is a special case of annuity, where the stream of cash flows continues forever?

• (A)  Ordinary Annuity
• (B)  Special Annuity
• (C)  Annuity Due
• (D)  Perpetuity

Answer

Submitted By :Ali Uppal

Which of the following ratios are particularly interesting to short term creditors?

• (A)  Liquidity Ratios
• (B)  Long-term Solvency Ratios
• (C)  Profitability Ratios
• (D)  Market Value Ratios

Answer

Submitted By :Ali Uppal

Standard Corporation sold fully depreciated equipment for Rs.5,000. This transaction will be reported on the cash flow statement as a(n):

• (A)  Operating activity
• (B)  Investing activity
• (C)  Financing activity
• (D)  None of the given options

Answer

Submitted By :Ali Uppal

If a firm uses cash to purchase inventory, its quick ratio will?

• (A)  Increase
• (B)  Decrease
• (C)  Remain unaffected
• (D)  Become zero

Answer

Submitted By :Ali Uppal

Which of the following set of ratios relates the market price of the firm’s common stock to selected financial statement items?

• (A)  Liquidity Ratios
• (B)  Leverage Ratios
• (C)  Profitability Ratios
• (D)  Market Value Ratios

Answer

Submitted By :Ali Uppal