The process of determining the present value of a payment or a stream of payments that is to be received in the future is known as:
(A) Discounting
(B) Compounding
(C) Factorization
(D) None of the given options
Which of the following item provides the important function of shielding part of income from taxes?
(A) Inventory
(B) Supplies
(C) Machinery
(D) Depreciation
In which form of Business, owners have limited liability?
(A) sole proprietorship
(B) partnership
(C) joint stock company
(D) none of the above
Which of the following ratios are particularly interesting to shortterm creditors?
(A) Liquidity Ratios
(B) Long-term Solvency Ratios
(C) Profitability Ratios
(D) Market Value Ratios
You just won a prize, you can either receive Rs. 1000 today or Rs. 1,050 in one year. Which option do you prefer and why if you can earn 5 percent on your money?
(A) Rs. 1,000 because it has the higher future value
(B) Rs. 1,000 because you receive it sooner
(C) Rs. 1,050 because it is more money
(D) Either because both options are of equal value
Which of the following is a special case of annuity, where the stream of cash flows continues forever?
(A) Ordinary Annuity
(B) Special Annuity
(C) Annuity Due
(D) Perpetuity
Which of the following ratios are particularly interesting to short term creditors?
(A) Liquidity Ratios
(B) Long-term Solvency Ratios
(C) Profitability Ratios
(D) Market Value Ratios
Standard Corporation sold fully depreciated equipment for Rs.5,000. This transaction will be reported on the cash flow statement as a(n):
(A) Operating activity
(B) Investing activity
(C) Financing activity
(D) None of the given options
If a firm uses cash to purchase inventory, its quick ratio will?
(A) Increase
(B) Decrease
(C) Remain unaffected
(D) Become zero
Which of the following set of ratios relates the market price of the firm’s common stock to selected financial statement items?
(A) Liquidity Ratios
(B) Leverage Ratios
(C) Profitability Ratios
(D) Market Value Ratios