MGT201 Quiz 1 Solution and Discussion
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Which of the following is/are the characteristic(s) of Perpetuity?
Select correct option:It is an annuity
It has no definite end (Correct)
It is a constant stream of identical cash flows
All of the given options -
What type of long-term financing most likely has the following features: 1) it has an infinite life, 2) it pays dividends, and 3) its cash flows are expected to be a constant annuity stream?
Select correct option:Long-term debt
Preferred stock
Common stock
None of the given options -
What is the most important criteria in capital budgeting?
Select correct option:Return on investment
Profitability index (Correct)
Net present value
Pay back period -
What is the additional amount a borrower must pay to lender to compensate for assuming the risk associated with non-payment?
Select correct option:Default risk premium
Sovereign Risk Premium (Correct)
Market risk premium
Maturity risk premium -
What is the present value of Rs.1,000 to be paid at the end of 5 years if the correct risk adjusted interest rate is 8%?
Select correct option:Rs.714
Rs.1,462
Rs.322.69
Rs.401.98 -
______ are also known as Spontaneous Financing.
Select correct option:Current liabilities
Current assets (Correct)
Fixed assets
Long-term liabilities -
MGT201 vuzs.info Question # 15 of 15 ( Start time: 11:11:06 PM ) Total M - 1
Effective interest rate is different from nominal rate of interest because:
Select correct option:Nominal interest rate ignores compounding
Nominal interest rate includes frequency of compounding (Correct)
Periodic interest rate ignores the effect of inflation
All of the given options -
Which of the following document/s is/are used to prepare a financial plan?
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@zareen said in MGT201 Quiz 1 Solution and Discussion:
Which of the following document/s is/are used to prepare a financial plan?
A financial plan documents an individual’s long-term financial goals and … The following steps in creating a financial plan may, of course, … You can’t create a financial plan without knowing where your money is … Don’t overlook cash withdrawals that may be used on sundries from shampoo to sodas.