The Global Open University 2012-1st Year M.B.A Global open University of Accounting and Financial Administration - Question Paper

returns on projects
10. What is the current value of Rs.
3,500,000 to be paid at the end of 50
years if the accurate risk adjusted
interest rate is 18%?
a. Rs.105,000
b. .1,500,000
c. Rs.3975,000
d. Rs. 350,000
11. When the zero coupon bond
approaches to its maturity, the
market value of the bond approaches
to which of the following?
a. Intrinsic value
b. Book value
c. Par value
d. Historic cost
12. Which of the subsequent would be
considered a cash-flow item from an
"operating" activity?
a. Cash outflow to the government for
taxes
b. Cash outflow to shareholders as
dividends
c. Cash inflow to the firm from selling
new common equity shares
d. Cash outflow to purchase bonds
issued by a different company
13. Which of the subsequent refers to a
highly competitive market where
good business ideas are taken up
immediately?
a. Capital market
b. Efficient market
c. Money market
d. Real asset market
14. What is the most important
criteria in capital budgeting?
a. Return on investment
b. Profitability index
c. Net current value
d. Pay back period
15. Which of the subsequent statements
(in general) is correct?
a. A low receivables turnover is
desirable
b. The lower the total debt-to-equity
ratio, the lower the financial risk for
a firm
c. An increase in net profit margin
with no change in sales or assets
means a weaker ROI
d. The higher the tax rate for a firm,
the lower the interest coverage
ratio
16. What should be the focal point of
financial management in a firm?
a. The number and kinds of products
or services given by the firm
b. The minimization of the amount of
taxes paid by the firm
c. The creation of value for
shareholders
d. The dollars profits earned by the
firm
17. Which of the subsequent is (are)
item (s) of cost of goods sold
statement?
a. Purchase of raw material
b. Any tax/freight paid on purchases
c. Any expense incurred on
carriage/transportation of raw
material purchased items
d. All of the provided choices
18. Which of the subsequent refers to
the risk associated with interest rate
uncertainty?

Earning:   Approval pending.