Business Finance MCQs

Finance leases are accounted for in a similar manner to

Assertion (A): Weighted average cost of capital should be used as a hurdle rate for accepting or rejecting a capital budgeting proposal. Reason (R): It is because by financing in the proportions specified and accepting the project, yielding more than the weighted average required return, the firm is able to increase the market price of its stock.

Which of the following can be defined as the example of direct finance?

Which of the following is a long-term lease that is not cancelable and its life often matches the useful life of the asset?

Which capital investors are long-term investors who are prepared to take the risk that the entrepreneurial projectcan fail?

The profit made by the Government (or Central Bank) by issuing currency, especially the difference between the face value of coins and their production costs is called

Securitised assets carry a unique form of risk called

Match the following. List-I List-II a. Fixed capital 1. . . . . . . . . refers to make-up of a firm's capitalisation b. Normal rate of return 2. . . . . . . . . is the cause of over-capitalisation c. Liberal dividend policy 3. Earnings per share ÷ Market price per share = . . . . . . . . d. Capital structure 4. . . . . . . . . is the funds required for a acquisition of assets that are to be used over and over a long period

Examine the following statements. (i) Payback Period Method measures the true profitability of a project. (ii) Capital Rationing and Capital Budgeting mean the same. (iii) Internal Rate of Return and Time Adjusted Rate of Return are the same. (iv) Rate of Return Method takes into account the time value of money.