1. You have a cash of GH¢150, 000. If a bank offers four different compounding methods for interest, which method would you choose to maximize the value of your GH¢150,000? A. Compounded daily
B. Compounded quarterly
C. Compounded semiannually
D. Compounded annually
In financial statement analysis, shareholders focus will be on the:
A. Liquidity of the firm
B. Long term cash flow of the firm
C. Profitability and long-term health of the firm
D. Return on investment
A group of assets such as stocks and bonds held by an investor is known as.
A. Portfolio
B. Capital Structure
C. Budget
D. None of the above
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4. Ann is interested in purchasing Ted's factory. Since Ann is a poor negotiator, she hires Mary to negotiate a purchase price. Identify the parties to this transaction from the given options, keeping in view the agency theory:
A. Ann is the principal and Mary is the agent.
B. Mary is the principal and Ann is the agent.
C. Ted is the agent and Ann is the principal.
D. Mary is the principal and Ted is the agent.
5. Ratios company:
look at the relationships between individual values and relate them to how a
A. Has performed in the past
B. Might perform in the future
C. Both a & b
D. None of the given options
6. are short-term, temporary investments that can be readily converted into cash.
A. marketable securities
B. Cash equivalents
C. Treasury bills
D. All of the given options
7. If we deposit GH¢5,000 today in an account paying 10%, how long does it take to grow to GH¢10,000?
A. 5.27 years
B. 6.27 years
C. 7.27 years
D. 7.57 years
8. You can determine the number of periods (n) in a present value calculation, if you know:
A. Future amount
B. Present value
C. Interest rate
D. All of the given options
9. The present value of a sum of GH¢100 to be received in the future will be:
A. More than GH¢100
B. Equal to GH¢100
C. Less than GH¢100
D. None of the given options
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10. Time value of money is an important finance concept because: A. It takes risk into account
B. It takes time into account
C. It takes compound interest into account
D. All of the given options
11. Current ratio is calculated as:
A. Current Assets/Current Liabilities B. Current Assets/Total Liabilities
C. Current Assets - Current Liabilities D. Current Assets/Total Assets
12. Gerold invested $6,200 in an account that pays 5 percent simple interest. How much money will he have at the end of ten years?
A. $8,710
B. $9,300
C. $9,000 D. $10,099
13. Supposing Sampson Ltd has the following information on its statement of financial position: Current assets = ¢68,937; Current Liabilities = ¢123,193 and Inventories = ¢45,108. Determine the quick ratio for the firm.
A. 0.56:1
B. 0.19 days C. 0.19:1
D. 0.56 days
14. Joyce Anamah has $125 now. How much would she have after 8 years if she invests it at 8.5% per annum?
A. $205.83
B. $228.07
C. $216.67 D. $240.08
15. An investment should be rejected if the Net Present Value (NPV) is
and accepted if it is .
A. Positive; positive B. Positive; negative C. Negative; negative D. Negative; positive
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16. One would be indifferent between taking and not taking the investment when:
A. NPV is greater than Zero B. NPV is equal to Zero C. NPV is less than Zero
D. All of the given options
Use the following to answer questions 17 and 18:
John plans to open a service centre. The equipment will cost $50,000. John expects the after-tax cash inflows to be $15,000 annually for 8 years, after which he plans to scrap the equipment and retire.
17. What is the project’s regular payback period? A. 2.67 years
B. 3.67 years C. 3.33 years D. 4.33 years
18. Assume the required return is 10%. What is the project’s discounted payback period? A. 4.26 years
B. 5.25 years C. 6 years
D. 7 years
19. On the income statement, sales revenue, minus cost of goods sold and operating expenses, equals
A. Net profit after tax.
B. Retained earnings.
C. Net income available to preferred shareholders. D. Net operating income (EBIT).
20. This refers to the speed and ease with which an asset can be converted to cash A. Convertibility
B. Liquidity
C. C. Transferability
D. D. Marketability