This quiz works best with JavaScript enabled. Home > Corporate Finance > Corporate Finance > Corporate Finance – Quiz 3 🏠 Homepage 📘 Download PDF Books 📕 Premium PDF Books Corporate Finance Quiz 3 (20 MCQs) Quiz Instructions Select an option to see the correct answer instantly. 1. You invest $ 800 in an account that pays 6% interest, compounded annually. How much money do you have after five years? Round your answers to the nearest cent. A) $ 898.09. B) $ 1070.58. C) $ 1710.58. D) $ 975.68. Show Answer Correct Answer: B) $ 1070.58. 2. Which of the following banks did not survive the Financial Crisis? A) Bear Stearns. B) JP Morgan. C) Goldman Sachs. D) Lehman Brothers. Show Answer Correct Answer: D) Lehman Brothers. 3. In the accounting statement of cash flows, interest expense is: A) Ignored completely. B) Included as a financing activity. C) Included as an investing activity. D) Included in operations. Show Answer Correct Answer: D) Included in operations. 4. Company can issue shares with: A) Limited Voting Rights. B) No Voting Rights. C) Both. D) None of the above. Show Answer Correct Answer: C) Both. 5. What type of financial services are provided by commercial banks? A) Underwriting and issuing stocks and bonds. B) Establishing private funds. C) Creating and managing retirement accounts. D) Providing loan services. Show Answer Correct Answer: D) Providing loan services. 6. Which of the following was NOT identified by your authors as one of the three main ideas of financial study? A) Business finance. B) Capital budgeting. C) Investments. D) Financial markets and institutions. Show Answer Correct Answer: B) Capital budgeting. 7. The "time value of money" means that A) Money paid out today less value than if the money is paid out in the future. B) Money received today is worth more than the same amount of money received in the future. C) The more time a person has to save, the lower the return on the money. D) The longer money is held, the less likely it will be spent. Show Answer Correct Answer: B) Money received today is worth more than the same amount of money received in the future. 8. ..... own the securities that they buy or sell; when they engage in a financial transaction, they are trading from their own portfolio. They earn money on the spread between ask and bid prices for the asset. A) Dealers. B) Brokers. C) Advisers. D) Comptrollers. Show Answer Correct Answer: A) Dealers. 9. Which organizational form best enables a firm to sell its securities to the market? A) Sole proprietorship. B) Partnership. C) Private corporation. D) Public corporation. Show Answer Correct Answer: D) Public corporation. 10. The efficient market hypothesis states that ..... is the main determinant of market prices A) The number of participants in a market. B) Fundamental analysis. C) The Level of information in the market. D) Technical Analuysis. Show Answer Correct Answer: A) The number of participants in a market. 11. Joe Inc., a U.S. company, makes a sale and ships goods to Jose, SA, a Mexican customer.Sales price is $ 100, 000 (U.S.)Joe Inc, sells and ships goods on December 1, 2007 not February 1, 2008.Spot rate on December 1, 2007 was $ 0.11 per peso. A) 1/12/2007 record:Debet-Accounts Receivable 110, 000 Credit-Sales 110, 000. B) 1/12/2007 record:Credit-Accounts Receivable 110, 000Debet-Sales 110, 000. C) 1/12/2007Debet-Accounts Receivable 100, 000 Credit-Sales 100, 000. D) 1/12/2007Credit-Accounts Receivable 100, 000 Debet-Sales 100, 000. Show Answer Correct Answer: A) 1/12/2007 record:Debet-Accounts Receivable 110, 000 Credit-Sales 110, 000. 12. A company increasing its credit terms for customers from 1/10, net 30 to 1/10, net 60 will most likely experience: A) An increase in cash on hand. B) A higher level of uncollectible accounts. C) An increase in the average collection period. D) An decrease in the average collection period. Show Answer Correct Answer: C) An increase in the average collection period. 13. What is the present value of an investment that will pay PHP 10, 000 per year for the next 8 years, if the interest rate is 7%? A) PHP 60, 919.47. B) PHP 70, 000. C) PHP 50, 000. D) PHP 80, 000. Show Answer Correct Answer: A) PHP 60, 919.47. 14. Which type of company exercise its borrowing power immediately after incorporation. A) Private Company. B) Public Company. C) Eligible Public Company. D) Government Company. Show Answer Correct Answer: A) Private Company. 15. Which is NOT types of firms? A) Sole Proprietorship. B) Limited Liability Companies. C) Ownership. D) Partnership. Show Answer Correct Answer: C) Ownership. 16. What are the three corporate finance activities? A) Debt financing, Equity financing, Asset management. B) Investment banking, Equity investors, Financial intermediaries. C) Capital financing, Working capital management, Tactical planning. D) Capital budgeting, Financial accounting, Strategic planning. Show Answer Correct Answer: B) Investment banking, Equity investors, Financial intermediaries. 17. Who was the first chairman of the Planning Commission? A) Dr. S. Radhakrishnan. B) Jawaharlal Nehru. C) Dr. Rajendra Prasad. D) Dr. M. Visvesvaraya. Show Answer Correct Answer: B) Jawaharlal Nehru. 18. A company increased its retained earnings last year by $ 170, 000. The company has a net worth of $ 4 million. Assuming that it currently owns 120, 000 common shares, the quotient between price and book value, if the market price of each share is $ 50, will be: A) 1, 4388. B) 0, 6950. C) 1, 6950. D) 0, 4388. Show Answer Correct Answer: A) 1, 4388. 19. In the above Question 2 what will be the tax benefit of depreciation for the old machinery if we continue the production without new machinery? A) Rs.2000 the depreciation. B) Rs.800 ( 40% tax saved as because of the Depreciation of Rs.2000 ). C) None of the above. D) None of above. Show Answer Correct Answer: B) Rs.800 ( 40% tax saved as because of the Depreciation of Rs.2000 ). 20. Which of the following is a Liquid Ratio? A) Current Ratio. B) Net Profit Ratio. C) Asset Turnover. D) Debt to Equity. Show Answer Correct Answer: A) Current Ratio. ← PreviousNext →Related QuizzesCorporate Finance QuizzesCorporate Finance Quiz 1Corporate Finance Quiz 2Corporate Finance Quiz 4Corporate Finance Quiz 5Corporate Finance Quiz 6Corporate Finance Quiz 7Corporate Finance Quiz 8Corporate Finance Quiz 9Corporate Finance Quiz 10 🏠 Back to Homepage 📘 Download PDF Books 📕 Premium PDF Books