Description : Return on investment is determined by … A.Net profit B . capital employed C. Net worth D.Net profit & capital employed
Last Answer : Answer:D
Description : The return on investment (ROI) may be calculated as A. Net profit before interest, tax and dividend / Capital employed B. Net profit after interest, tax and dividend / Shareholder's fund C. ( Net profit - preference dividend )/ No. of equity shares D. Return on Investment / Net profit ratio
Last Answer : A. Net profit before interest, tax and dividend / Capital employed
Description : The return on capital employed shows the combined effect of– (A) net profit ratio and inventory turnover ratio (B) operating ratio and net profit ratio (C) net profit ratio and capital turnover ratio (D) gross profit ratio and capital turnover ratio
Last Answer : Answer: operating ratio and net profit ratio
Description : Pick out the wrong statement. (A) Net worth means paid up share capital and reserve & surplus (i.e. shareholders equity) (B) Return on equity = profit after tax/net worth (C) Working ... /net working capital (D) Total cost of production is more than net sales realisation (NSR) at breakeven point
Last Answer : (D) Total cost of production is more than net sales realisation (NSR) at breakeven point
Description : _________ method for profitability evaluation of a project does not account for investment cost due to land. (A) Net present worth (B) Pay out period (C) Discounted cash flow (D) Rate of return on investment
Last Answer : (B) Pay out period
Description : The profit of a company (whose capital is divided into 25‚000 shares of Rs. 10 each) for the last three years are : Rs. 50‚000; Rs. 60‚000 and Rs. 40‚000. The fair return on investment is taken at 10% p.a. The value of company’s share will be– (A) Rs. 10 (B) Rs. 20 (C) Rs. 30 (D) Rs. 40
Last Answer : Answer: Rs. 20
Description : 'Marginal efficiency of capital' is - (1) expected rate of return on new investment (2) expected rate of return of existing investment (3) difference between rate of profit and rate of interest (4) value of output per unit of capital invested
Last Answer : (1) expected rate of return on new investment Explanation: The volume of investment depend upon the following two factors: (1) rate of interest: and (2) marginal efficiency of capital. Before ... partly on expectations of future yields and partly on the actual price of the capital good concerned.
Description : The return available by investing the capital elsewhere is known as (A) profit rate (B) discount rate (C) opportunity cost (D) return on investment
Last Answer : (C) opportunity cost
Description : Judging from the PIMS database, Nestle's high market share definitely guarantees the firm a: A)large level of profit. B)high return on investment. C)quality product. D)high level of capital intensity. E)strong market position.
Last Answer : E)strong market position.
Description : ‘Marginal efficiency of capital’ is (1) expected rate of return on new investment (2) expected rate of return of existing investment (3) difference between rate of profit and rate of interest (4) value of output per unit of capital invested
Last Answer : expected rate of return on new investment
Description : Net profit after tax of Rs. 2,00,000 is Rs. 4,00,000. Share capital is Rs. 8,00,000 and revenue reserve is Rs. 2,00,000. What is rate of return on equity ? (A) 40% (B) 50% (C) 60% (D) 75%
Last Answer : Answer: 40%
Description : In a business, raw materials, components, work in progress and finished goods are jointly regarded as - (1) capital stock (2) inventory (3) investment (4) net worth
Last Answer : (2) inventory Explanation: Inventory refers to raw materials, work-in-process goods and completely finished goods that are considered to be the portion of a business's assets that are ... of the primary sources of revenue generation and subsequent earnings for the company's shareholders/owners.
Description : In a business, raw materials, components, work in progress and finished goods are jointly regarded as (1) capital stock (2)inventory (3) investment (4)net worth
Last Answer : inventory
Description : Explain the following a) Dry Bulb Temperature and Wet bulb Temperature b) Maximum Demand and Power Factor c) Gross Calorific Value & Net Calorific Value d) 5S & Return of Investment (ROI) e) CUSUM
Last Answer : a) Dry Bulb Temperature and Wet bulb Temperature Dry bulb Temperature is an indication of the sensible heat content of air-water vapour mixtures Wet bulb Temperature is a measure of ... of capital cost. This is a broad indicator of the annual return expected from initial capital investment
Description : Capital employed is Rs.50,000 Trading Profit amounted Rs.12,200, Rs.15,000 and Rs.2000 loss for 2016, 2017 and 2018 respectively. Rate of interest is 8% and the rate of risk is 2% Remuneration from alternative employment of the ... A Rs.8,000 B Rs.8,800 C Rs.8,850 D Rs.9,500 ANS: Rs.8,850
Last Answer : A
Description : Capital employed at the end of the year is Rs.4,20,000. Profit earned Rs.40.000. Average capital employed is A Rs.4,20,000 B Rs.4,00,000 C Rs.4,40,000 D Rs.4,60,000
Last Answer : Rs 400000
Description : In the long run a firm in perfect competition earns (a) Normal profit only ; (b) Abnormal profit ; (c) Average profit of past five years; (d) 12.33% profit on capital employed
Last Answer : (a) Normal profit only ;
Description : Net capital employed is equal to --------------- a) Total assets minus liabilities b) Fixed asset plus net working capital c) Total asset minus long-term liabilities d) Total assets
Last Answer : b) Fixed asset plus net working capital
Description : With regard to the rate of return on investment (ROI), which one of the following statements is not valid ? (A) It is an overall indicator of the profitability of an enterprise (B) It is a ... superior measure compared to the cash flow generated per share (D) It was first developed by Dupont, USA
Last Answer : Answer: It is a superior measure compared to the cash flow generated per share
Description : The total investment in a project is Rs. 10 lakhs and the annual profit is 1.5 lakhs. If the project life is 10 years, then the simple rate of return on investment is (A) 15% (B) 10% (C) 1.5% (D) 150%
Last Answer : (C) 1.5%
Description : A profit centre is a centre (a) Where the manager has the responsibility of generating and maximising profits (b) Which is concerned with earning an adequate Return on Investment (c) Both of the above (d) Which manages cost
Last Answer : (a) Where the manager has the responsibility of generating and maximising profits
Description : Return on investment is a---------------- a) Profit and loss account ratio b) Balance sheet ratio c) Combined ratio d) Position statement ratio
Last Answer : c) Combined ratio
Description : If Nabisco established a pricing objective of selling one out of every three crackers consumed in the world, it would have established an objective based on: A)cash flow. B)market share. C)survival. D)return on investment. E)profit.
Last Answer : B)market share.
Description : Most pricing objectives based on ---- are achieved by trial and error because not all the cost and revenue data are available when prices are set. A)market share B)cash flow C)return on investment D)survival E)profit
Last Answer : C)return on investment
Description : When a company adjusts price levels so that it can increase sales volume to levels that match the organisation's expenses, it is said to employ a ---- pricing objective. A)market share B)cash flow C)return on investment D)survival E)profit
Last Answer : D)survival
Description : Which of the following pricing objectives sets prices to recover cash as quickly as possible? A)Market share B)Profit C)Cash flow D)Return on investment E)Product quality
Last Answer : C)Cash flow
Description : What type of pricing objective might an organisation set if it was already in a favourable financial position and desired nothing more? A)Return on investment B)Cash flow C)Profit D)Status quo E)Survival
Last Answer : D)Status quo
Description : Which one of the following pricing objectives is rarely operational because its achievement is difficult to measure? A)Return on investment B)Cash flow C)Profit maximisation D)Market share E)Survival
Last Answer : C)Profit maximisation
Description : The cost of replacement of inefficient chiller with an energy efficient chiller in a plant was Rs. 10 lakh .The net annual cash flow is Rs 2.50 lakh .The return on investment is: a) 18% b) 20% c) 15 % d) none of the above
Last Answer : d) none of the above
Description : Pick out the wrong statement. (A) Gross revenue is that total amount of capital received as a result of the sale of goods or service (B) Net revenue is the total profit remaining ... indicates surplus capital and shows the relationship among total income, costs & profit over the time interval
Last Answer : (C) Working capital turnover ratio = sales/net working capital
Description : Net Present Value of a machine is A. PV of cash inflows less cost of investment B. PV of cash inflows ÷ cost of investment C. PV of net profit after tax less cost of investment D.PV of cash inflows less average cost of investment
Last Answer : A. PV of cash inflows less cost of investment
Description : Super profit mean A. Average Profit – Net profit B. Average Profit – Normal rate of return C. Weighted Average Profit D. Net profit – Average Profit
Last Answer : A. Average Profit – Net profit
Description : Rate of interest is determined by - (1) The rate of return on the capital invested (2) Central Government (3) Liquidity preference (4) Commercial Banks
Last Answer : (3) Liquidity preference Explanation: According to the classical view, rate of interest is determined by the interaction of supply of and demand for capital. Thus this theory is popularly called ... higher shall be the rate of interest. The liquidity preference constitutes the demand for money.
Last Answer : (4) Commercial Banks Explanation: Bank Rate is determined by the Reserve Bank of India. The rate of interest is determined by the commercial banks in India. As per RBI notification, banks are free to determine rates of interest subject to BPLR and spread guidelines.
Description : Rate of interest is determined by (1) The rate of return on the capital invested (2) Central Government (3) Liquidity preference (4) Commercial Banks
Last Answer : Liquidity preference
Description : In the calculation of return on shareholders investments the referred investment deals with A. All reserves B. Preference and equity capital only C. All appropriations D. All of the above
Last Answer : D. All of the above
Description : MM Model of Dividend irrelevance uses arbitrage between : A. Dividend and Bonus B. Dividend and Capital Issue C. Profit and Investment D. None of the
Last Answer : B. Dividend and Capital Issue
Description : Which of the following is Stock concept ? (a) Capital (b) Investment (c) Income (d) Profit
Last Answer : (a) Capital
Description : A profit maximizing firm will invest up to the level of investment where (a) The cost of borrowing equals marginal efficiency of capital (b) The cost of borrowing is greater than marginal ... marginal efficiency of capital (d) The cost of borrowing is equal to marginal propensity to consume.
Last Answer : (a) The cost of borrowing equals marginal efficiency of capital
Description : In accounting terms, what constitutes the 'closing stock'? (1) Net Investment (2) Gross Investment-Capital Losses (3) Opening Stock-Capital Losses (4) Opening Stock + Net Investment - Capital Losses
Last Answer : (4) Opening Stock + Net Investment - Capital Losses Explanation: Closing stock refers to the goods remaining un-sold during the year. It includes finished products, raw materials, or work in progress ... with the following calculation: Opening stock + Purchases - Closing stock = Cost of goods sold.
Description : Assume that a firm has accurately calculated the net cash flows relating to two mutua lly exclusive investment proposals. If the net present value of both proposals exceed zero and the firm is ... maximize shareholder wealth and, since the projects are mutually exclusive, we can only take one
Last Answer : D. accept the proposal that has the largest NPV since the goal of the firm is to maximize shareholder wealth and, since the projects are mutually exclusive, we can only take one
Description : Which of the following is least likely to be part of the calculation of the terminal- year incremental net cash flow for an energy-related expansion project? A. An initial working capital ... Disposal/reclamation costs C. Capitalized expenditures D. Salvage value of any sold or disposed assets
Last Answer : D. Salvage value of any sold or disposed assets
Description : Pick out the wrong statement. (A) The annual depreciation rate for machinery and equipments in a chemical process plant is about 10% of the fixed capital investment (B) Annual depreciation rate ... chemical industry, research and development cost amounts to about 15% of net sales realisation (NSR)
Last Answer : (D) In a chemical industry, research and development cost amounts to about 15% of net sales realisation (NSR)
Description : A firm’s investment in current asset is known as ---------------- a) Net working capital b) Gross working capital c) Average working capital d) None of these
Last Answer : b) Gross working capital
Description : The difference between gross investment and net investment is (a) Depreciation (b) Acceleration © Deceleration (d) Capital investment
Last Answer : (a) Depreciation
Description : GDP at market prices is the sum of Consumption, Investment, Government Spending and Net Exports. „Net‟ exports is (a) Gross exports minus depreciation ; (b) Exports minus imports ; (c) Gross exports earnings minus capital inflow ; (d) Export minus imports of merchandize
Last Answer : (b) Exports minus imports ;
Description : In accounting terms, what constitutes the ‘closing stock’? (1) Net Investment (2) Gross Investment-Capital Losses (3) Opening Stock-Capital Losses (4) Opening Stock + Net Investment – Capital Losses
Last Answer : Opening Stock + Net Investment – Capital Losses
Description : Under the Net worth method, the basis for ascertaining profit or loss is the difference between ________
Last Answer : Under the Net worth method, the basis for ascertaining profit or loss is the difference between ________ ... dates (d) Net assets on two dates
Description : The figures of profit and net worth are disclosed by books of accounts.
Last Answer : State whether the following statement are true or false with reason : The figures of profit and net worth are disclosed by books of accounts.
Description : Which of the following statements is correct regarding the internal rate of return (IRR) method? A. Each project has a unique internal rate of return. B. As long as you are not dealing with ... of return is rarely used by firms today because of the ease at which net present value is calculated
Last Answer : D. The internal rate of return is rarely used by firms today because of the ease at which net present value is calculated.