MBF839
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1. Sinking fund is a fund, which is created out of fixed ________ each period to accumulate to a future sum after a specified period
interest
rate
payment
none of the above
2. Investment decision rules may be referred to as ________
earning
capital budgeting
profitability
appraisal
3. Bond is a long term debt instrument or ________
security
dividend
interest
liquidity
4. Only a __________ can have a positive dual price and the calculated price assumes that there is only a marginal increase or decrease in the availability of the scarce resource and that all other factors are held constraint.
Shadow prices
Scarce resource
Constraint A
Constraint B
5. The contribution lines are sometimes termed __________ lines
180 profit
Point X
Feasible region
Optimum solution
6. An annuity yields #100 per annum for 7years. How much does it cost if the current market rate of interest is 6%
0.3349
0.4539
1.2317
6.0033
7. Assuring that the company will follow a constant policy of retaining 40 percent earning (ie payout of 60 percent) at 20 percent rate of return then its earning and dividend will grow perpetually at 8 percent (g =rb= 0.2×04). what would be the price of the
N200.00
N750.00
N2000.00
N684.50
8. The _______ of a binding provides valuation guidance because it indicates to management the extra contribution they would gain from increasing one unit the amount of the scarce resources
Shadow prices
Dual prices
Dual formulation
Constraint binding
9. __________ do not carry an explicit rate of interest
Bond with maternity
Price discount bond
Perpetual Bonds
Valuation of preference shares
10. The main features of a bond or debenture are _________
face value
interest rate
multiple
all of the above
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