Multiple Choice
Identify the
choice that best completes the statement or answers the question.
|
|
|
1.
|
 Consider the Investment appraisal decision making
process shown above. Identify the activity represented by “1” in the figure a. | Assemble data | c. | Identify investment opportunities | b. | Assess the data
& decide | d. | Implementation |
|
|
|
2.
|
 Consider the Investment appraisal decision making
process shown above. Identify the activity represented by “3” in the figure a. | Assemble data | c. | Identify investment opportunities | b. | Assess the data
& decide | d. | Implementation |
|
|
|
3.
|
Which of the following is not an attitude to risk?
a. | Risk Averse | c. | Risk Neutral | b. | Risk Seeking | d. | Risk Tolerant |
|
|
|
4.
|
Which of the following attitudes to risk is described?
a person who
prefers the certain prospect to any risky prospect
a. | Risk Averse | c. | Risk Neutral | b. | Risk Seeking | d. | Risk Tolerant |
|
|
|
5.
|
What is being described below?
“when a corporation sells stock
(shares) to an investor”
a. | Bond | c. | Equity Loan | b. | Working Capital | d. | Debt |
|
|
|
6.
|
Identify which financial statement is described below:
“describes
the cash inflows and outflows during the accounting period”
a. | Profit and Loss Account | b. | Balance Sheet | c. | Cash Flow Statement
|
|
|
|
7.
|
Identify which financial statement is described below:
“describes
the trading performance of the business over the accounting period”
a. | Profit and Loss Account | b. | Balance Sheet | c. | Cash Flow Statement
|
|
|
|
8.
|
Company “A” purchase a new system for 1,000,000 (initial investment)
but must also pay 500,000 for new hardware. The new system is estimated to return benefits amounting
to 2,000,000 - what is the approximate ROI?
|
|
|
9.
|
Identify the least true statement
a. | Accounting is typically split into two key branches: financial accounting and
management accounting | b. | Management accounting is the process of
identifying, measuring, analysing, interpreting, and communicating information for the pursuit of an
organization's goals | c. | Financial accounting is the reporting of the
financial position and performance of a firm through financial statements issued to external users on
a periodic basis | d. | Techniques such as costing, budgetary control, marginal costing, and the preparation
of management and financial ratios may be used in the practice of financial
accounting. |
|
|
|
10.
|
Select the least likely Corporate governance aim
to
a. |
Protect shareholder rights |
b. |
Minimise disclosure and
transparency |
c. |
Facilitate effective functioning of the board |
d. |
Provide an efficient
legal and regulatory enforcement framework |
|
|
|
11.
|
Match the explanation with the correct term
“a firm operating in
several industries“
a. | Market capitalization | c. | Listed company | b. | Public Company | d. | Conglomerate |
|
|
|
12.
|
Match the explanation with the correct term
“the overall process of
identifying, measuring, recording, interpreting, and communicating the results of economic
activity“
a. | Company | c. | Accounting | b. | Economics |
|
|
|
13.
|
Consider the payback technique and select the least true item
a. | The payback technique simply asks how long will it take for the investment to pay for
itself out of the expected cash inflows. | b. | Benefits can be quantified as revenues or cost
savings. They should not be converted to present Values. | c. | Payback period =
costs / monthly benefits | d. | Proposals are typically ranked in order of
highest ROI first and are selected until total initial investment exceeds a budget.
|
|
|
|
14.
|
Consider Decisions involving mutually exclusive alternatives - select the least
correct statement
a. | When only one alternative can be selected from many, the best choice can usually be
identified by evaluating each alternative according to some criteria. | b. | For decisions
involving multiple criteria, simple scoring models are often used. The scoring model is a
qualitative assessment of a decision alternatives value, based on a set of attributes.
| c. | The NPV or IRR may be used to choose between competing projects/choices.
| d. | Mutually exclusive options do not compete with each
other. |
|
|
|
15.
|
There are different ways of looking at the data in the pay-off table and
reaching decisions (decision strategies/ rules) - select the rule that is incorrect
a. | MAXIMAX looks at only the best outcome for each alternative | b. | An alternative
decision rule/ strategy might be to take the average of the outcomes for each alternative.
| c. | MaxiMin - considers the Best-of-the-Best | d. | The
“Regret” rule, is also known as the MiniMax (opportunity loss) or Minimize Maximum
Regret |
|