BFN303 Tma Solutions
1. All the following are modern approaches to capital budgeting except ____________
—>> Profitability Index
Net present value
Internal rate of return
Accounting Rate of Return
2. The combination of two firms which are in the same industry but at different stages in the production and sale of products is called _______________.
Conglomerate merger
Horizontal Integration
Subsidiary merger
—>> Vertical integration
3. The CBN was established by the Central Bank of Nigeria Act of….
1959
1957
—>> 1958
1956
4. Which of these ratios do not measure profitability?
Net profit margin
Return on assets ratio
Gross profit margin
—>> Acid Test ratio
5. Dr. Araga bought a 15% irredeemable debenture for N1000 ex-interest. Compute the cost of debt.
—>> N150
N45
N15
N115
6. Which of the following is not an assumption of Modgilliani and Miller
Perfect market
No retained earning
No corporate taxes
—>> Investors act irrationally
7. Which of the following is not a Principal Functions of management?
—>> Planning decision
Dividend function
Investment decision
Finance function
8. Treasury management include management of the following except_______________
Mortgage
—>> Fictitious Asset
Marketable securities
Receivables
9. All the following are sources of short-term finance except _____________________
Bank overdraft
Borrowing from relations
Trade credits
—>> Equity funds
10. What is the rate of return that a firm must earn on its project investments to maintain its market value and attract funds?
Average cost of capital
Interest rate
—>> Cost of capital
Marginal cost of capital
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