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

Quick Ratio is also known as_________?

A. Current ratio
B. Acid-test ratio
C. Cash ratio
D. None of the given options

Balance Sheet is based upon which of the following formula?

A. Assets = liabilities – stockholder’s equity
B. Assets + liabilities = stockholder’s equity
C. Assets + stockholder’s equity = liabilities
D. Assets = liabilities + stockholder’s equity

Which of the following ratios are intended to address the firm’s financial leverage?

A. Liquidity ratios
B. Long-term solvency ratios
C. Asset management ratios
D. Profitability ratios

Which of the following form of business organization is least regulated?

A. Sole-proprietorship
B. General partnership
C. Limited partnership
D. Corporation

The conflict of interest between stockholders and management is known as:

A. Agency problem
B. Interest conflict
C. Management conflict
D. Agency cost

Which of the following is a series of constant cash flows that occur at the end of each period for some fixed number of periods?

A. Ordinary annuity
B. Annuity due
C. Perpetuity
D. None of the given options

Which of the following is not a quality of IRR ?

A. Most widely used
B. Ideal to rank the mutually exclusive investments
C. Easily communicated and understood
D. Can be estimated even without knowing the discount rate

A model which makes an assumption about the future growth of dividends is known as:

A. Dividend price model
B. Dividend growth model
C. Dividend policy model
D. All of the given options