Accounting for Managers
321. Net present value ______________.
- Is equal to the initial investment in a project
- Is equal to the present value of the project benefits
- Is equal to zero when the discount rate used is equal to the IRR
- Is simplified by the fact that future cash flows are easy to estimate
Correct answer: (B)
Is equal to the present value of the project benefits
322. Profit maximization is a
- Short term concept
- Long term concept
- Both a & b
- None
Correct answer: (A)
Short term concept
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?
- Systematic risk
- Standard deviation
- Unsystematic risk
- Coefficient of variation
Correct answer: (A)
Systematic risk
324. When the bond approaches its maturity, the market value of the bond approaches to which of the following?
- Intrinsic value
- Book value
- Par value
- Historic cost
Correct answer: (A)
Intrinsic value
325. Bonds are hybrid of
- Annuity due + Lumpsum amount
- Ordinary annuity + Lumpsum amount
- Annuity due + Ordinary annuity
- Perpetuity + Lumpsum amount
Correct answer: (B)
Ordinary annuity + Lumpsum amount
326. Which one of the following can issue the corporate bond?
- Individuals
- Government
- Public limited companies
- All of before
Correct answer: (C)
Public limited companies
327. A Bond that pays no interest payments and sells at a deep discount is called
- Bond
- Zero Coupon
- Convertible
- Tax-free
Correct answer: (B)
Zero Coupon
328. Which of the following statements is incorrect?
- Assets - Capital = Liabilities
- Liabilities + Assets = Capital
- Liabilities + Capital = Assets
- Assets - Liabilities = Capital
Correct answer: (B)
Liabilities + Assets = Capital
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
- £21,100
- £21,400
- £21,600
- £32,400
Correct answer: (C)
£21,600
330. To find the value of closing stock at the end of a period we
- do this by stocktaking
- deduct cost of goods sold from sales
- deduct opening stock from cost of goods sold
- look in the stock account
Correct answer: (A)
do this by stocktaking