INSTURCTION
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1. hyira Ltd is considering the purchase of new equipment costing GHS32,000 with an estimated life of 8 years. If annual net cash flows of the equipment is GHS9,000, what is the payback period of the new equipment?
2. Adom is considering a project with a GHS400,000 net investment and a net cash inflow of GHSI16,520 each for the next five years. If the firm uses a 10% discount rate for projects with similar risk, what is the projects net present value?
3. Which of the following is a non-cash outlay associated with an investment project?
4. The method for valuating securities which assumes that dividend will grow at a steady rate in perpetuity is ....
5. The cost of capital for treasury bill is known as ....
6. In the formula P = Do (1 + g)/ke - g, g is
7. Capital budgeting decision is important because of the following reasons, except that fixed asset ...
8. A good capital budgeting programme requires the following steps, except ....
9. Which of the following statements are correct?
I. An increase in shareholder required rate of return leads to a fall in share price.
II. Investors faced with increased risk will expect an increase return in compensation.
III. The required return on preference shares is usually lower than required return on ordinary shares.
10. Kwashie PLC has just paid a dividend of 20 pesewas per share and its share price is GHS3.50 per share. One year ago, its share price was GHS3.10 per share. What is the total shareholder return over the last year?
11. Pauli has just paid a dividend of 20 pesewas per share. Dividends are growing at the rate of 6% per annum, and shareholders required rate of return is 20%. What is the market value per share?
12. When the market's required rate of return for a particular bond is less than its coupon rate, the bond is referred to as a
13. In the formula Ke = (D:/Po) + g, what does (Di/Po) represent?
14. Which of the following accurately describes the behaviour of bond prices?
15. Length of time between the purchase of raw materials and the sale of finished goods is referred to as what?
16. Which of the following is not a major decision in cash management?
17. The time lag or delay between the moments of disbursement of funds on the part of the customer and the moment of receipt of funds on the part of the firm (seller) is known as ...
18. Which of the following capital budgeting techniques takes into account the incremental accounting income rather than cash flows:
19. Which of the following techniques does not take into account the time value of money?
20. The current worth of a sum of money to be received at a future date is called
