MCQs of Cash Flow, Interest and Equivalence (Economics for Engineers - 3140911)

Showing 21 to 30 out of 85 Questions

21.

Cash flow example from an investing activity is

(a)	Issue of debenture
(b)	Repayment of long-term loan
(c)	Purchase of raw materials for cash
(d)	Sale of investment by non-financial enterprise

22.

Cash flow example from an operating activity is

(a)	Purchase of own debenture
(b)	Sale of fixed assets
(c)	Interest paid on term-deposits by a bank
(d)	Issue of equity share capital

23.

Which item comes under financial activities in cash flow?

(a)	Redemption of preference share
(b)	Issue of preference share
(c)	Interest paid
(d)	All of above

24.

Money has time value because

(a)	Money today is more certain than money tomorrow
(b)	Money today is wroth more than money tomorrow in terms of purchasing power
(c)	There is a possibility of earning risk free return on money invested today
(d)	All of above

25.

Given an investment of Rs. 10,000 to be invested for one year

(a)	It is better to invest in a scheme that pays 10% simple interest
(b)	It is better to invest in a scheme that pays 10% annual compound interest
(c)	Both (a) and (b)
(d)	None of above

26.

Given an investment of Rs. 10,000 for a period of one year, it is better to invest in a scheme that pays

(a)	12% interest compounded annually
(b)	12% interest compounded quarterly
(c)	12% interest compounded monthly
(d)	12% interest compounded daily

27.

Given an investment of Rs. 10,000 over a period of two years, it is better to invest in a scheme that pays

(a)	10% interest in the first year and 12% in second year
(b)	12% interest in the first year and 10% in second year
(c)	Both (a) and (b)
(d)	None of above

28.

In 3 years, a person will receive 5,000. If the interest rate were to suddenly increase, the present value of that future amount to a person will

(a)	Fall
(b)	Rise
(c)	Remain unchanged
(d)	Cannot be determined without more information

29.

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

(a)	Upward
(b)	Downward
(c)	Remain unchanged
(d)	Cannot be determined without more information

30.

In a typical loan amortization schedule, the amount of interest paid each period

(a)	Increases with each payment
(b)	Decreases with each payment
(c)	Remains constant with each payment
(d)	Cannot be determined without more information

Showing 21 to 30 out of 85 Questions