Accounting for Managers

321. Net present value ______________.

1. Is equal to the initial investment in a project
2. Is equal to the present value of the project benefits
3. Is equal to zero when the discount rate used is equal to the IRR
4. Is simplified by the fact that future cash flows are easy to estimate

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322. Profit maximization is a

1. Short term concept
2. Long term concept
3. Both a & b
4. None

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323. Which of the following is the variability of return on stocks or portfolios associated with changes in return on the market as a whole?

1. Systematic risk
2. Standard deviation
3. Unsystematic risk
4. Coefficient of variation

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324. When the bond approaches its maturity, the market value of the bond approaches to which of the following?

1. Intrinsic value
2. Book value
3. Par value
4. Historic cost

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325. Bonds are hybrid of

1. Annuity due + Lumpsum amount
2. Ordinary annuity + Lumpsum amount
3. Annuity due + Ordinary annuity
4. Perpetuity + Lumpsum amount

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326. Which one of the following can issue the corporate bond?

1. Individuals
2. Government
3. Public limited companies
4. All of before

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327. A Bond that pays no interest payments and sells at a deep discount is called

1. Bond
2. Zero Coupon
3. Convertible
4. Tax-free

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328. Which of the following statements is incorrect?

1. Assets - Capital = Liabilities
2. Liabilities + Assets = Capital
3. Liabilities + Capital = Assets
4. Assets - Liabilities = Capital

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329. Given the following, what is the amount of Capital? Assets: Premises £20,000; Stock £8,500; Cash £100. Liabilities: Creditors £3,000; Loan from A Adams £4,000

1. £21,100
2. £21,400
3. £21,600
4. £32,400

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330. To find the value of closing stock at the end of a period we

1. do this by stocktaking
2. deduct cost of goods sold from sales
3. deduct opening stock from cost of goods sold
4. look in the stock account

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