Top 550+ Solved Financial Management MCQ Questions Answer
Q. If there is no inflation during a period, then the Money Cashflow would be equal to:
a. Present Value
b. Real Cash flow
c. Real Cash flow + Present Value
d. Real Cash flow - Present Value
Q. The Real Cashflows must be discounted to get the present value at a rate equal to:
a. Money Discount Rate
b. Inflation Rate
c. Real Discount Rate
d. Risk free rate of interest
Q. Real rate of return is equal to:
a. Nominal Rate × Inflation Rate
b. Nominal Rate ÷ Inflation Rate
c. Nominal Rate - Inflation Rate
d. Nominal Rate + Inflation Rate
Q. If the Real rate of return is 10% and Inflation s Money Discount Rate is:
a. 14.4%
b. 2.5%
c. 25%
d. 14%
Q. If the Money Discount Rate is 19% and Inflation Rate is 12%, then the Real DiscountRate is:
a. 7%
b. 5%
c. 5.70%
d. 6.25%
Q. Money Discount Rate if equal to:
a. (1 + Inflation Rate) (1 + Real Rate)-1
b. (1 + Inflation Rate) 4- (1 + Real Rate)-1
c. (1 + Real Rate) 4- (1 + Inflation Rate)-1
d. (1 + Real Rate) + (1 + Inflation Rate)-1
Q. Real Discount Rate is equal to:
a. (1 + Inf. Rate) (1 + Money D Rate)-1
b. (1 + Money D Rate) + (1 + Inf. Rate)-1
c. (1 + Money D Rate) 4- (1 + Inf. Rate)-1
d. (1 + Money D Rate) - (1 + Inf. Rate)-1
Q. Two mutually exclusive projects with different economic lives can be compared on thebasis of
a. Internal Rate of Return
b. Profitability Index
c. Net Present Value
d. Equivalent Annuity Value
Q. Risk in Capital budgeting implies that the decision-maker knows___________of thecash flows.
a. Variability
b. Probability
c. Certainty
d. None of the above
Q. In Certainty-equivalent approach, adjusted cash flows are discounted at:
a. Accounting Rate of Return
b. Internal Rate of Return
c. Hurdle Rate
d. Risk-free Rate
Q. Risk in Capital budgeting is same as:
a. Uncertainty of Cash flows
b. Probability of Cash flows
c. Certainty of Cash flows
d. Variability of Cash flows
Q. Which of the following is a risk factor in capital budgeting?
a. Industry specific risk factors
b. Competition risk factors
c. Project specific risk factors
d. All of the above
Q. In Risk-Adjusted Discount Rate method, the normal rate of discount is:
a. Increased
b. Decreased
c. Unchanged
d. None of the above
Q. In Risk-Adjusted Discount Rate method, which one is adjusted?
a. Cash flows
b. Life of the proposal
c. Rate of discount
d. Salvage value
Q. NPV of a proposal, as calculated by RADR real CE Approach will be:
a. Same
b. Unequal
c. Both (a) and (b)
d. None of (a) and (b)