Question

A graph of a project's NPV as a function of possible capital costs is called the _______ profile.
A. IRR
B. NPV
C. standard deviation
D. beta
The time necessary to acquire raw materials, turn them into finished goods, sell them, and receive payment for them is referred to as the _______ cycle.
A. cash
B. operating
C. manufacturing
D. sales
A theory stating that a company's stock price changes according to changes in the company's policies is known as the
A. information effect.
B. clientele effect.
C. dividend irrelevance theorem.
D. bird-in-the-hand theory.
The hypothesis that, with a well-functioning capital market, a firm's capital budgeting decisions are separate from its capital structure decisions is called the
A. separation principle.
B. Baumol theorem.
C. efficient market hypothesis.
D. Modigliani-Miller theorem.
Credit analysis relating to a borrower generally involves examining which one of the following?
A. The "five C's"
B. The "four C's"
C. The "two C's"
D. The "three C's"

Answer 1

1) NPV

NPV profile is a graph that illustrates a project's NPV against various discount rate

2) Operating cycle

This indicates time taken to buy manufacture and sell the product

3) clientele effect.

clientele effect assumes that the investors are attracted to different policies of company. For eg if company has polict to pay more dividend then it will attract the investors

4) efficient market hypothesis

It assumes that it is impossible to beat the market as all information relating to stock are factored into it's price

5) The "five C's"

The "five C's" ie characted, conditions,capacity,capital collateral are used to assess individual's ability to repay the loan