Financial Management We Also Provide SYNOPSIS AND PROJECT. Contact www.kimsharma.co.in for best and lowest cost solution or Email: amitymbaassignment@gmail.com Call: +91 82907-72200 (Call/WhatsApp) or +91 88003-52777 (WhatsApp Only) QUESTION 1. Which of the following is true for Net Income Approach? Higher Equity is better Higher Debt is better Debt Ratio is irrelevant None of the above. QUESTION 2. "A firm has EBIT of Rs. 50,000. Market value of debt is Rs. 80,000 and overall capitalization rate is 20%. Market value of firm under NOI Approach is:" "Rs. 2,50,000" "Rs. 1,70,000" "Rs. 30,000" "Rs. 1,30,000." QUESTION 3. The Traditional Approach to Value of the firm in that: There is no optimal capital structure Value can be increased by judicious use of leverage Cost of Capital and Capital structure are m dent Risk of the firm is independent of capital structure QUESTION 4. "In case of Net Income Approach, the Cost of equity is:" Constant Increasing Decreasing None of the above. QUESTION 5. Which of the following is true? "Under Traditional Approach, overall cost of capital remains same" "Under NI Approach, overall cost of capital remains same" "Under NOI Approach, overall cost of capital remains same" None of the above. QUESTION 6. A critical assumption of the net operating income (NOI) approach to valuation is: that debt and equity levels remain unchanged that dividends increase at a constant rate that ko remains constant regardless of changes in leverage that interest expense and taxes are included in the calculation. QUESTION 7. Risk in Capital budgeting implies that the decision-maker knows___________of the cash flows. Variability Probability Certainty None of the above QUESTION 8. "In Certainty-equivalent approach, adjusted cash flows are discounted at:" Accounting Rate of Return Internal Rate of Return Hurdle Rate Risk-free Rate QUESTION 9. ___________________ of a firm refers to the composition of its long-term funds and its capital structure. Capitalisation Over-capitalisation Under-capitalisation Market capitalization QUESTION 10. "In MM-Model, irrelevance of capital structure is based on:" Cost of Debt and Equity Arbitrage Process Decreasing k0 All of the above. We Also Provide SYNOPSIS AND PROJECT. Contact www.kimsharma.co.in for best and lowest cost solution or Email: amitymbaassignment@gmail.com Call: +91 82907-72200 (Call/WhatsApp) or +91 88003-52777 (WhatsApp Only) QUESTION 11. Risk in Capital budgeting is same as: Uncertainty of Cash flows Probability of Cash flows Certainty of Cash flows Variability of Cash flows QUESTION 12. Which of the following is a risk factor in capital budgeting? Industry specific risk factors Competition risk factors Project specific risk factors All of the above QUESTION 13. "In Risk-Adjusted Discount Rate method, the normal rate of discount is:" Increased Decreased Unchanged None of the above QUESTION 14. _______________ refers to the length of time allowed by a firm for its customers to make payment for their purchases. Holding period Pay-back period Average collection period Credit period QUESTION 15. Which of the following is incorrect for value of the firm? "In the initial preposition, MM Model argues that value is independent of the financing mix" Total value of levered and unlevered firms is otherwise arbitrage will take place. Total value incorporates borrowings by firm but excludes personal borrowing. Total value does not change because underlying does not change with financing mix. QUESTION 16. In Playback Period approach to risk the target payback period is Not adjusted Adjusted upward Adjusted downward b or c QUESTION 17. Which of the following is incorrect for NOI? k0 is constant kd is constant ke is constant kd & k0 are constant. QUESTION 18. "In _______________ approach, the capital structure decision is relevant to the valuation of the firm." Net income Net operating income Traditional Miller and Modigliani QUESTION 19. That there is no corporate tax is assumed by: Net Income Approach Net Operating Income Approach Traditional Approach All of these. QUESTION 20. Which of the following assumes constant kd and ke? Net Income Approach Net Operating Income Approach Traditional Approach MM Model. We Also Provide SYNOPSIS AND PROJECT. Contact www.kimsharma.co.in for best and lowest cost solution or Email: amitymbaassignment@gmail.com Call: +91 82907-72200 (Call/WhatsApp) or +91 88003-52777 (WhatsApp Only)