WorksheetsS1. Principles of Finance (2)
Total questions: 10
Worksheet time: 4mins
Which of the following methods ignores the time value of money in investment appraisal?
Net Present Value (NPV)
Payback Period
Internal Rate of Return (IRR)
Which of the following is an example of a long-term financing option?
Debentures
T-bill
Certificate of deposit
Trade credit
Which financial statement provides a snapshot of a company’s financial position at a specific point in time?
Income Statement
Cash Flow Statement
Balance Sheet
Statement of Retained Earnings
Which of the following describes the concept of time value of money?
A dollar today is worth more than a dollar in the future.
Money has a higher value when invested.
Money loses value over time due to inflation.
Future money has the same value as money today.
Which of the following is an example of a primary market transaction?
Buying shares on the stock exchange
Initial Public Offering (IPO)
Trading government bonds
Selling shares to another investor
Managing cash involves ensuring that there is neither a shortage nor an excess of cash.
True
False
Which of the following is NOT a factor in time value of money calculations?
Principal amount
Interest rate
Inflation rate
d. Time period
What is the primary purpose of the income statement?
To show the company’s financial position at a point in time.
To summarize the company’s revenues and expenses over a period.
To track cash inflows and outflows.
To list all the company’s assets and liabilities.
What is capital budgeting?
Managing a company’s working capital
Deciding how to finance short-term assets
Evaluating long-term investment opportunities
Estimating a company’s profitability
Which of the following is a primary objective of financial management?
Maximizing revenue
Minimizing costs
Maximizing shareholder wealth
Achieving zero debt
