Business Finance MCQs

Which of the following approaches would be consistent with a hedging (maturity matching) approach to financing working capital?

Cost of capital from all the sources of funds is called

Which one of the following equates the present value of cash out flows and the present value of expected cash inflows from a project?

Formula for net cash inflow of a project is

Which of the following facts are true in the context of forfaiting? 1. Forfaiting enables exporters to receive immediate cash by selling their medium and long-term receivables - the amount an importer owes the exporterat a discount through an intermediary. 2. Banks never function as forfaiters. 3. Forfaiting protects against credit risk, transfer risk, and the risks posed by foreign exchange rate or interest rate changes.

Cost of equity share capital is more than cost of debt because

Assertion (A): The management of working capital refers to the management of current assets and current liabilities. Reason (R): The major thrust is on the management of current assets; because current liabilities arise in the context of current assets.

Which one of the following is an internal hedging technique?

For the computation of cost of equity, arrange the following measures in the ascending order of accuracy 1. Capital Asset Pricing Model 2. Dividend-Price Ratio 3. Earning-Price Ratio 4. Dividend-Price Plus Growth Ratio