MGT201 Quiz 3 Jan 2024 by Miss Mehwish

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

Q1. Generally, net working capital is defined as:

Q2. Which of the following risks best explains portfolio returns?

Economic factors · Specific risk · Diversification

Q3. Which of the following is a shortcoming of using payback period to determine the acceptability of a project?

It ignores time value of money ✅

It takes into account cash flows after payback period of a project

It ignores cash flows during payback period of a project

It takes into account times value of money

Q4. Assume, ABC Company was following conservative working capital policy and now it wants to move to an aggressive policy. As a result of this shift in policy, the company should expect which of the following?

Both risk and profitability will decrease

Both risk and liquidity will increase

Expected profitability will increase, while risk will decrease

Decrease in liquidity, while expected profitability will increase ✅

Q5. Which of the followings is true with respect to straight line method of depreciation?

Q6. Which of the following is a type of bond?

Q7. The time period between ordering and receiving inventory order is known as:

Lead time ✅ · Carrying time · Over time

Q8. What will be cost of preferred shares if a company is paying Rs. 12 per share dividend and the shares are selling Rs. 95 per share in the market?

7% · 12.63% ✅ · 15%

Q9. Gross working capital can further be classified according to:

Time and financing method · Time and rate of return · Time and components ✅ · Rate of return and financing method

Q10. Which of the following statement is TRUE, if contribution margin is positive?

Q1. Cost of debt includes:

⬜ Cost of fixed income securities

⬜ Cost of debentures