11/10/2018 Midterms

Question 1 These funds are obtained from banks and credit unions
Not yet
answered
Select one:
Marked out of
1.00
a. Long-term source

b. borrowed funds

c. Short-term source

d. Owner's funds

Question 2 Examples of this outlay are the purchase of fixed assets such as land and building, plant and machinery, expenses relating to
Not yet improvement or renovation these fixed assets and costs incurred for the research and development projects
answered

Marked out of Select one:

1.00
a. Fixed capital
b. Working Capital

c. Working Assets
d. Fixed Assets

Question 3 Which of the following has a wrong order based on the discussion in capital budgeting
Not yet (https://blended.amauonline.com/mod/page/view.php?id=57604) process
answered
Marked out of Select one:
1.00
a. Matching of Proposals - Final Approval - Performance Review
b. Identification of Proposals - Evaluation - Final Approval

c. Evaluation - Implementing - Performance Review

d. Final Approval - Implementing - Fixing Properties

https://blended.amauonline.com/mod/quiz/attempt.php?attempt=31777380 1/18
11/10/2018 Midterms
Question 4 This is the required rate of return on the various types of financing.
Not yet
answered
Select one:
Marked out of
a. Cost of debt
1.00
b. Return on debt

c. Cost of capital
d. Total return

Question 5 FPL company has machineries and equipment worth 150,000, land and building for business 1,000,000, Cash 150,000,
Not yet Inventories 30,000 and accounts receivables 50,000. He also owes 200,000 to a bank. How much is the gross working
answered
capital?
Marked out of
1.00
Select one:
a. Php 1,380,000

b. Php 380,000

c. Php 1,180,000
d. Php 230,000

Question 6 These proposals are those that compete with other. Therefore, the acceptance of one proposal will exclude the acceptance of
Not yet the other proposals.
answered
Marked out of Select one:
1.00
a. Mutually Exclusive
b. Accept-Reject

c. none of the above

d. Capital Rationing

https://blended.amauonline.com/mod/quiz/attempt.php?attempt=31777380 2/18
11/10/2018 Midterms
Question 7 FPL Company owes Php20,000 to supplier A, Php30,000 to Supplier B, 50,000 to Supplier C and a long term bonds payable
Not yet 10,000. After struggling in its operations, the company ended up having Php20,000 cash on hand, Php30,000 worth
answered
inventories, Php40,000 Accounts receivable and equipment worth Php50,000. What is the net working capital?
Marked out of
1.00
Select one:
a. none of these

b. Php 70,000

c. Php 40,000
d. Php 30,000

Question 8 Given:
Not yet
answered
Debt= 1,000,000 ; Common Shares = 10,000,000 ; Preference Shares = 5,000,000

Marked out of Cost of Debt = 10% ; Cost of Preference Shares = 5% ; Cost of Equity = 3%
1.00

Find WACC

Select one:
a. 750,000
b. 650,000

c. 1,050,000

d. 1,250,000

https://blended.amauonline.com/mod/quiz/attempt.php?attempt=31777380 3/18
11/10/2018 Midterms
Question 9 If you have a financial source that is required to be paid within ten years, this describes
Not yet
answered
Select one:
Marked out of
1.00
a. Short-term source

b. Medium-term source

c. Perpetual source
d. Long-term source

Question 10 This is the required return on investment of the lenders of a company.

Not yet
answered
Select one:
Marked out of
1.00
a. Cost of capital
b. Return on debt

c. Total return

d. Cost of debt

Question 11 FPL Company has a total Assets worth 400,000 of which 250,000 are non current the company also has 200,000 total
Not yet liabilities of which 150,000 are long term debts. What is the gross working capital?
answered
Marked out of Select one:
1.00
a. 150,000

b. 100,000

c. 300,000

d. 200,000

https://blended.amauonline.com/mod/quiz/attempt.php?attempt=31777380 4/18
11/10/2018 Midterms
Question 12 Which of the following does not belong to the group?
Not yet
answered
Select one:
Marked out of
a. Modigliani and Miller Approach
1.00
b. net operating income approach
c. Intermediate Approach

d. Net Income approach

Question 13 A corporation is issuing 10% common stock that should be sold for Php 15 each. The business will incur flotation costs of
Not yet Php 5 per share. What is the cost of equity?
answered

Marked out of Select one:

1.00
a. 10%

b. 3%

c. 33.3%

d. 15%

Question 14 If you have a financial source that is required to be paid within four years, you have a
Not yet
answered
Select one:
Marked out of
1.00
a. Medium-term source

b. Perpetual source

c. Long-term source

d. Short-term source

https://blended.amauonline.com/mod/quiz/attempt.php?attempt=31777380 5/18
11/10/2018 Midterms
Question 15 This type of decision making applies when the projects proposed are independent from each other. The acceptance or
Not yet rejection of one proposal does not affect the decision on the other proposals.
answered

Marked out of Select one:

1.00
a. Accept-Reject

b. Mutually Exclusive
c. none of the above

d. Capital Rationing

Question 16 These are sources of finances which have a required of payment for a period not exceeding one year.
Not yet
answered
Select one:
Marked out of
1.00
a. Medium-term
b. Short-term

c. Long-term
d. Perpetual

Question 17 This is a decision support tool that uses a tree-like graph or model of decisions and their possible consequences, including
Not yet chance event outcomes, resource costs, and utility.
answered
Marked out of Select one:
1.00
a. Financial Tree Analysis

b. Tree of Chances Analysis

c. Decision Tree Analysis

d. Financial Tree Diagram

https://blended.amauonline.com/mod/quiz/attempt.php?attempt=31777380 6/18
11/10/2018 Midterms
Question 18 FPL Company has a gross working capital of 100,000 and the company has 200,000 total liabilities of which 150,000 are long
Not yet term debts. What is the net capital?
answered

Marked out of Select one:

1.00
a. 250,000

b. 100,000

c. 50,000
d. 150,000

Question 19 This is the credit extended by

Not yet one trader to another for the purchase
answered
of goods and services
Marked out of
1.00
Select one:
a. notes

b. debentures

c. bank loans

d. trade credit

Question 20 This is the required return on investment of the preferred shareholders of the company.
Not yet
answered
Select one:
Marked out of
1.00
a. Cost of capital

b. Return on Preference share

c. Cost of preference share

d. Return on Investment

https://blended.amauonline.com/mod/quiz/attempt.php?attempt=31777380 7/18
11/10/2018 Midterms
Question 21 Which does not belong to the group?
Not yet
answered
Select one:
Marked out of
a. trade credit
1.00
b. retained earnings
c. Commercial papers
d. preference shares

Question 22 FPL Company plans to make Php50,000 loan with Php7,000 annual interest. If the cost incurred related to this instrument is
Not yet Php2,000 and the total tax rate is 30%, what is the cost of debt?
answered

Marked out of Select one:

1.00
a. 9.80%

b. 4.38%

c. 10.00%

d. 10.21%

Question 23 This is the process in which a business determines and evaluates potential expenses or investments that are large in nature.
Not yet
answered
Select one:
Marked out of
1.00
a. Investment-expense Analysis

b. Financial Capital

c. Capital Budgeting (https://blended.amauonline.com/mod/page/view.php?id=57604)

d. Monetary Management

https://blended.amauonline.com/mod/quiz/attempt.php?attempt=31777380 8/18
11/10/2018 Midterms
Question 24 This is a metric that measures the degree to which a company uses fixed income securities such as debt and preferred equity.
Not yet
answered
Select one:
Marked out of
a. Degree of Financial Leverage
1.00
b. Leverage
c. Combined Degree of Leverage
d. Degree of Operating Leverage

Question 25 Which of the following has a wrong order based on the discussion in capital budgeting
Not yet (https://blended.amauonline.com/mod/page/view.php?id=57604) process
answered

Marked out of Select one:

1.00
a. Identification of Proposals - Screening of Proposals - Evaluation
b. Identification of Proposals - Evaluation - Final Approval

c. Matching of Proposals- Performance Review - Final Approval

d. Evaluation - Implementing - Performance Review

Question 26 This is a statistical measure of the variability of a distribution around its mean. It is the square root of the variance.
Not yet
answered
Select one:
Marked out of
1.00
a. Standard deviation
b. Financial Tree Analysis

c. Squared variance analysis

d. Expected value

https://blended.amauonline.com/mod/quiz/attempt.php?attempt=31777380 9/18
11/10/2018 Midterms
Question 27 This is the capital invested in total current assets of the business concern.
Not yet
answered
Select one:
Marked out of
a. Fixed Capital
1.00
b. Net Woking Capital
c. Financial casipal

d. Gross Working Capital

Question 28 Which does not belong to the classification of the sources of financing?
Not yet
answered
Select one:
Marked out of
1.00
a. based on interest
b. based on the source of generation

c. based on period

d. based on ownership

Question 29 FPL Company has a net working capital of 100,000 and the company has 200,000 total liabilities of which 150,000 are long
Not yet term debts. What is the gross capital?
answered
Marked out of Select one:
1.00
a. 200,000
b. 300,000

c. 250,000
d. 150,000

https://blended.amauonline.com/mod/quiz/attempt.php?attempt=31777380 10/18
11/10/2018 Midterms
Question 30 Which is not a motive of holding cash?
Not yet
answered
Select one:
Marked out of
1.00
a. Speculative motive

b. Transaction motive

c. Auto Motive
d. Precautionary motive

Question 31 The objective of having a good _____________________ is to maximize the value of the firm and minimize the overall cost of
Not yet capital.
answered

Marked out of Select one:

1.00
a. Income
b. Business

c. Capital structure
d. Operations

Question 32 FLP Company has 1000 existing common shares. The market value of the share is Php 90 and the net earnings is Php
Not yet 1,000. What is the cost of Capital assuming that the new shares will be issued at market price?
answered
Marked out of Select one:
1.00
a. 11.11%

b. 0.11%

c. 1.11%

d. 0.01%

https://blended.amauonline.com/mod/quiz/attempt.php?attempt=31777380 11/18
11/10/2018 Midterms
Question 33 According to this approach, the mix of debt and equity capital can increase the value of the firm by reducing overall cost of
Not yet capital up to certain level of debt.
answered

Marked out of Select one:

1.00
a. Modern Approach

b. Classical Approach
c. Medieval Approach
d. Traditional Approach

Question 34 FPL Company has a gross working capital of 100,000 and the company has 200,000 total liabilities of which 150,000 are long
Not yet term debts. What is the total current assets?
answered

Marked out of Select one:

1.00
a. 50,000
b. 250,000

c. 100,000

d. 150,000

Question 35 This is a measure of both a company's efficiency and its short-term financial health.
Not yet
answered
Select one:
Marked out of
1.00
a. Net Capital
b. Financial Capital

c. Working Capital
d. Fixed Capital

https://blended.amauonline.com/mod/quiz/attempt.php?attempt=31777380 12/18
11/10/2018 Midterms
Question 36 Which of the following is not considered a capital component for the purpose of calculating the weighted average cost of
Not yet capital (WACC) as it applies to capital budgeting (https://blended.amauonline.com/mod/page/view.php?id=57604)?
answered

Marked out of Select one:

1.00
a. preferred Stock

b. Accruals
c. Long-term debt

d. Common Stock

Question 37 Which is not a part of capital budgeting (https://blended.amauonline.com/mod/page/view.php?id=57604) process?

Not yet
answered
Select one:
Marked out of
a. Performance Review
1.00
b. Observation of proposal making

c. Screening proposals

d. Fixing property

Question 38 This is the after tax cost of long-term funds through borrowing.
Not yet
answered
Select one:
Marked out of
1.00
a. Return on debt
b. Total return

c. Cost of debt
d. Cost of capital

https://blended.amauonline.com/mod/quiz/attempt.php?attempt=31777380 13/18
11/10/2018 Midterms
Question 39 A corporation is issuing 10% common stock that should be sold for Php 15 each. The business will incur flotation costs of Php
Not yet 2 per share. With growth rate of 5% What is the cost of capital?
answered

Marked out of Select one:

1.00
a. 61.54%

b. 16.54%

c. 13.54%
d. 4.12%

Question 40 This refers to the level of inventory at which the total cost of inventory comprising ordering cost and carrying cost.
Not yet
answered
Select one:
Marked out of
a. Economic Order Quantity (EOQ)
1.00
b. Standard deviation

c. Cost Variance Analysis

d. ABC Analysis

Question 41 Which of the following does not belong to the group?

Not yet
answered
Select one:
Marked out of
1.00
a. dividend price plus growth approach
b. dividend price minus growth approach

c. Earning price approach

d. dividend price approach

https://blended.amauonline.com/mod/quiz/attempt.php?attempt=31777380 14/18
11/10/2018 Midterms
Question 42 Which of the following has a wrong order based on the discussion in capital budgeting
Not yet (https://blended.amauonline.com/mod/page/view.php?id=57604) process
answered

Marked out of Select one:

1.00
a. Evaluation - Implementing - Performance Review

b. Screening pf Proposals - Fixing Properties- Performance review

c. Matching of Proposals- Performance Review - Final Approval

d. Identification of Proposals - Evaluation - Final Approval

Question 43 This is a measurement of the degree to which a firm or project incurs a combination of fixed and variable costs
Not yet
answered
Select one:
Marked out of
a. Leverage
1.00
b. Degree of Financial Leverage

c. Degree of Operating Leverage

d. Combined Degree of Leverage

Question 44 In this approach, the mix of debt and equity capital can increase the value of the firm by reducing overall cost of capital up to
Not yet certain level of debt.
answered
Marked out of Select one:
1.00
a. Intermediate Approach
b. Modigliani and Miller Approach

c. net operating income approach

d. Net Income approach

https://blended.amauonline.com/mod/quiz/attempt.php?attempt=31777380 15/18
11/10/2018 Midterms
Question 45 This is the mix or proportion of a firm’s permanent long-term financing represented by debt, preferred stock, and common
Not yet stock equity.
answered

Marked out of Select one:

1.00
Investment Mix

Capital Structure

Retained earnings
Equity and Debt

Question 46 This is the required return on investment of the common shareholders of the company.
Not yet
answered
Select one:
Marked out of
a. Return on Equity
1.00
b. Return on common share

c. Cost of Equity
d. Return on Investment

Question 47 These are source of finances are those which are required for a period of more than five years.
Not yet
answered
Select one:
Marked out of
1.00
a. Long-term

b. Medium-term

c. Perpetual
d. Short-term

https://blended.amauonline.com/mod/quiz/attempt.php?attempt=31777380 16/18
11/10/2018 Midterms
Question 48 This policy is usually used when the companies are facing constraints of earnings and unsuccessful business operation
Not yet
answered
Select one:
Marked out of
1.00
a. Stable Dividend Policy

b. Unstable Policy

c. Irregular Dividend Policy

d. Regular Dividend policy

Question 49 This determines the amount of profit to be distributed among shareholders and amount of profit to be treated as retained
Not yet earnings for financing its long term growth
answered

Marked out of Select one:

1.00
a. Income Distribution Ratio

b. Net income sharing

c. Share Issuance Policy

d. Dividend Policy

Question 50 This is the use of various financial instruments or borrowed capital, such as margin, to increase the potential return of an
Not yet investment.
answered
Marked out of Select one:
1.00
a. leverage

b. efficacy

c. efficiency

d. capital efficiency

https://blended.amauonline.com/mod/quiz/attempt.php?attempt=31777380 17/18
11/10/2018 Midterms

https://blended.amauonline.com/mod/quiz/attempt.php?attempt=31777380 18/18