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Business
8th -
Professional Development
Accounting for Business Stability
23 questions
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- 1. Multiple Choice
An independent project should be accepted if it
produces a net present value that is greater than or equal to zero.
produces a net present value that is greater than the equivalent IRR.
has only one sign reversal.
produces a profitability index greater than or equal to zero.
- 2. Multiple Choice
Expenditures for the Extensions or additions to buildings of non-current assets are treated as
revenue expenditure
capital expenditure
revenue
expenses
- 3. Multiple Choice
Which of the following statement regarding NPV is true?
An investment should be accepted if, and only if, the NPV equals the initial investment.
An investment should be accepted if, and only if, the NPV equals zero.
An investment should be accepted if the NPV is positive and rejected if it is negative
An investment with greater cash inflows than cash outflows, regardless of when the cash flows occur, will always have a positive NPV and therefore should always be accepted.
- 4. Multiple Choice
Which of the following is an example of a market?
garage sale
New York Stock Exchange
Grocery stores
Online auctions
All of the above
- 5. Multiple Choice
Expenditures relating to the acquisition of non current assets are treated as
capital expenditure
revenue expenditure
expenses
revenue
- 6. Multiple Choice
A capital market is ideal when:
Financial institutions are sufficiently developed
Finance is available at a reasonable cost
Capital is most productively allocated
All of these
- 7. Multiple Choice
What is the purpose of a cash budget?
To get people into trouble if they overspend
To make people use spreadsheets
To see what happened to cash last year
To plan for the future
- 8. Multiple Choice
Expenditures for the maintenance of non-current assets are treated as
revenue expenditure
capital expenditure
revenue
expenses
- 9. Multiple Choice
The amount of cash moving into and out of a business
Cash Flow
Net Worth
- 10. Multiple Choice
The two main headings of a Cash budget are
Cash Receipts and Cash Payments
Cash Receipts and Cash Credit
Cash Debit and Cash Credit
Accounts Payable and Accounts Receivable
- 11. Multiple Choice
selling an asset would be an example of
cash inflow
cash outflow
- 12. Multiple Choice
In analyzing the ability of a company to pay its bills in the near future, the amount of its quick assets is generally significant.
TRUE
FALSE
- 13. Multiple Choice
Ratios are used as tools in financial analysis
instead of horizontal and vertical analyses.
because they can provide information that may not be apparent from inspection of the individual components of a particular ratio.
because even single ratios by themselves are quite meaningful.
because they are prescribed by GAAP.
- 14. Multiple Choice
The acquisition of a firm in the same industry as the bidder is called ____
Forward
backward
horizontal
generic
- 15. Multiple Choice
he complete absorption of one company by another, wherein the acquiring firm retains its identity and the acquired firm ceases to exist as a separate entity, is called
Merger
Acquisition
Consolidation
spin off
- 16. Multiple Choice
merger of the two firms belonging to the same industry but neither in the same line of business or products.
Vertical merger
Horizontal merger
Concentric merger
Conglomerate merger
- 17. Multiple Choice
This merger is basically executed so as to ensure smooth supply of raw materials to the acquiring firm. This means the main product manufacturing company can directly source the main ingredients from the merged company without bothering for the other supply chain company.
horizontal merger
Vertical merger
Conglomerate merger
Concentric merger
- 18. Multiple Choice
A treasury note is an example of a...
Corporate Bond
Government Bond
- 19. Multiple Choice
sale of all or substantially all assets of the company or any of its business undertaking/divisions, usually for cash and not for equity shares.
buyouts
Carve outs
Divestiture
buy backs
- 20. Multiple Choice
A debenture is an example of a...
Corporate Bond
Government Bond
- 21. Multiple Choice
Criteria that measures how quickly project will return its original investment is?
Accounting rate of return
Payback period
Internal rate of return
Benefit cost ratio
- 22. Multiple Choice
A subordinated debenture is an example of a...
Corporate Bond
Government Bond
- 23. Multiple Choice
The span of time within which the investment made for the project will be recovered by the net returns of the project is known as:
Period of return
Payback period
Span of return
None of the above
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