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11
Which one of the following equates the present value of cash out flows and the present value of expected cash inflows from a project?
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Answer: Option B
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12
Formula for net cash inflow of a project is
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Answer: Option C
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13
Which of the following facts are true in the context of forfaiting?
1. Forfaiting enables exporters to receive immediate cash by selling their medium and long-term receivables - the amount an importer owes the exporterat a discount through an intermediary.
2. Banks never function as forfaiters.
3. Forfaiting protects against credit risk, transfer risk, and the risks posed by foreign exchange rate or interest rate changes.
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Answer: Option C
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14
Cost of equity share capital is more than cost of debt because
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Answer: Option D
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15
Assertion (A): The management of working capital refers to the management of current assets and current liabilities.
Reason (R): The major thrust is on the management of current assets; because current liabilities arise in the context of current assets.
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Answer: Option C
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16
Which one of the following is an internal hedging technique?
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Answer: Option C
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17
For the computation of cost of equity, arrange the following measures in the ascending order of accuracy
1. Capital Asset Pricing Model
2. Dividend-Price Ratio
3. Earning-Price Ratio
4. Dividend-Price Plus Growth Ratio
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Answer: Option C
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18
It is very difficult to interpret news in foreign exchange markets because
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Answer: Option B
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19
Hedging transaction is indicated by
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Answer: Option D
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20
The advantage of forward contracts over future contracts is that they
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Answer: Option D
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