FM MODULE 1

To increase a given present value, the discount rate should be adjusted

• Upward

• Downward

• Same

• None of the above

The core work link of financial management is

• Financial forecast

• Financial decision

• Financial budget

• Financial control

The firm's investment decision is so called as the

• Financing decision

• Capital budgeting decision

• Liquidity decision

• Dividend decision

The ultimate purpose of financial management is

• To get a maximum return

• To increase the wealth of owners

• To have a maximum risk factor

• To get a maximum profit

What does present value take

• Compounding rate

• Inflation rate

• Deflation rate

• Discounting rate

Financial decisions involve

• Financing cash decisions

• Investment, financing and dividend decisions

• Investment sales decisions

• Investment dividend decisions

Payments if it is made at the end of each period such as an end of year is classified as

• Ordinary annuity

• Deferred annuity

• Annuity due

• Both A and B

Heterogeneous cash flows can be made comparable by

• Discounting technique

• Compounding technique

• Either a or b

• None of the above

The risk that arises due to change in the purchasing power is called

• Financial risk

• Interest rate risk

• Business risk

• Inflation risk

What does future value interest factor take

• Discounting rate

• Inflation rate

• Compounding rate

• Deflation rate