Accounting for Managers

271. Pension fund and insurance obligation is an example of

1. Annuities
2. Perpetuity
3. Consol
4. Securities

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272. Carrying cost always calculate on

1. Inventory cost
2. Ordering cost
3. Purchase cost
4. EOQ

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273. Assume that the interest rate is greater than zero. Which of the following cash-inflow streams totalling Rs.1, 500 would you prefer? The cash flows are listed in order for Year 1, Year 2, and Year 3 respectively.

1. Rs.700; Rs.500 and Rs.300
2. Rs.300; Rs.500 and Rs.700
3. Rs.500; Rs.500 and Rs.500
4. Any of the above, since they each sum to Rs.1,500

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274. The higher the Future Value (FV) of the payment, the higher will be the:

1. Discount rate
2. Present value
3. Liquidity
4. Cost of borrowing

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275. In the Balance Sheet of a firm, the Total Debt-to-Equity Ratio is 2:1.The amount of Long Term and Short Term Sources are Rs.12 billion. What is the amount of owner’s Net Worth of the firm?

1. Rs.18 billion
2. Rs.6 billion
3. Rs.4 billion
4. Rs.2 billion

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276. Which group of ratios shows the extent to which the firm is financed with debt?

1. Liquidity ratios
2. Debt ratios
3. Coverage ratios
4. Profitability ratios

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277. Income statement comes under the category of

1. Point in time statement
2. Period statement
3. Flow statement
4. Both b & c

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278. If you have to judge a project from its NPV, you will select the one with the ______________

1. Lowest NPV
2. Highest NPV
3. NPV cannot judge the project
4. Information is not enough

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279. In the Balance Sheet amount of total Assets is Rs.10 million, Current Liabilities Rs.5 million and Owner Equity are Rs.2 million. What is the Long term Debt-to-Equity Ratio?

1. 1 : 1
2. 1.5 : 1
3. 2 : 1
4. None of the above

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280. Financing decision determines

1. Current asset
2. Fix asset
3. Equity
4. Mix of finance

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