MGT201 Midterm MCQs 2024 Set 2 by Miss Mehwish

MGT201 (Mega File) · Mid Term ( Live Quiz) · Past Papers for Mids./Finals are also Available

1. A true value of an asset that provides information to make right investment decision is called:

o

o

o

o Par value

2. The inventory turnover and receivable turnover take 60 days and 30 days, respectively. What

will be the operating cycle, if payable turnover takes 45 days?

o 90 days ✔

o 75 days

o 105 days

3. In three stage growth model of common stock valuation:

o

o

o

o

4. If the intrinsic value of a bond is Rs. 3,500 then an investor should buy the bond at a market

price of:

o Rs. 3,600

o Rs. 3,550 o Rs. 3,000 ✔

Q5. Which of the following is referred to as a statement of financial position?

o

o

o

o

6. A measure that shows the time duration in which we actually realize cash from our business is

called:

o

o Trade cycle

o Operating cycle

o Credit cycle

7. If a company has 25% increase in its earnings, the dividend received by preferred shareholders

will... while the dividend of common shareholders will...

o Remain constant; Increase ✔

o Decrease; Increase

o Increase; Decrease

o Increase; Remain constant

8. The inventory turnover and receivable turnover take 45 days and 30 days, respectively. What

will be the cash conversion cycle if payable turnover takes 60 days?

o 15 days ✔

o 30 days

o 45 days

9. The lesser the cash conversion cycle, the higher will be the:

o Payable turnover of a company

o Inventory turnover of a company

o Liquidity of a company ✔

o Risk of a company

10. If we compare each component of financial statement with any benchmark item of that

statement, this analysis is called:

o Trend analysis

o Differential analysis

o Vertical analysis ✔

o Index analysis

1. A perpetual bond has a coupon rate of 12% and the face value of Rs. 1000. The required rate

of return is 10% per year. The coupon payment on the bond will be:

o Rs. 100

o

Rs. 120 ✅

o Rs. 1,200

2. When a business purchases some goods or services on credit, it results in:

o

o

o

o

3. A true value of an asset that provides information to make right investment decision is called:

o

o Par value

o

o

4. Cash flow is generated through all of the following activities, Except:

o Operating activities

o Investing activities

o Financing activities

o

Contingent activities ✅

5. All of the following are part of gross working capital, except:

o Stores and spares

o Accrued expenses ✅

o Prepayments