MBT610-1:Financial Management (Open Elective)

Objective of Financial management is

• Management of Liquidity
• Maximization of Profit
• Maximization of Shareholders Wealth
• Management of Fixed Assets

What is ignored in Principle of Profit Maximization?

• Time value of Money
• Risk
• Wealth Creation
• All of the above

Which is not a part of Investment Decision in Financial Management

• Dividend Payout Decision
• Capital Budgeting Decision
• Working Capital Management
• Asset composition of the firm

Discounting technique is used to find out

• Terminal Value
• Compounded value
• Present Value
• Future value

Equal annual cash flows occurring at the end of each year for certain period are known as

• Annuity
• Perpetuity
• Annuity due
• Deferred Payments

If a student is awarded scholarship receivable over next 12 months, what calculation he should use to find out the worth of scholarship today

• Present Value of an amount
• Future Value of an amount
• Present Value of an Annuity
• Future Value of an Annuity

Which of the following statements is correct?

• if PI< 1, its NPV is less than zero
• if PI= 0, its NPV is greater than zero
• if PI > 1, its NPV will be negative
• None of the above

Which of the following variables is not known in Internal Rate of return

• Initial Cash Flow
• Discount Rate
• Cash Outflow
• Life of the project

Project costing Rs. 8,00,000 and a life of 5 years is expected to bring cash inflows of Rs. 2,00,000 per annum. What is payback period

• 5 years
• 4 years
• 3 years
• None of the above

A project has a profitability index of 1.30. What does it mean?

• The NPV is less than zero
• The payback period is more than one year
• That the project returns Rs. 1.30 for every Rs. 1 invested in project
• That IRR is 1.30 times that of the Hurdle rate