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10. Below are the limitations of financial ratio except: A. More useful for narrowly focused firms than for multidivisional ones B. Benchmarking is better than
10. Below are the limitations of financial ratio except: A. More useful for narrowly focused firms than for multidivisional ones B. Benchmarking is better than industry average C. Inflation has not distorted many firms' balance sheets 11. Time value of money indicates that A. A unit of money obtained today is worth more than a unit of money obtained in future B. A unit of money obtained today is worth less than a unit of money obtained in future C. There is no difference in the value of money obtained today and tomorrow 12. Time value of money supports the comparison of cash flows recorded at different time period by A. discounting all cash flows to a common point of time B. compounding all cash flows to a common point of time C. using either A or B 13. To increase a given present value, the discount rate should be adjusted A. upward B. Downward C. accordingly 14. In 3 years you are to receive $5,000. If the interest rate were to suddenly increase, the present value of that future amount to you would A. fall B. Rise C. remained unchanged 15. An ordinary annuity can be defined as A. a series of unequal payments received or paid at equal intervals at the beginning of each period B. a series of equal payments received or paid at equal intervals of time at the end of each period C. a lump sum 16. Which of the following it not an annuity? A. Equal monthly payments to your investment account B. Mortgage payments for a fixed-rate loan C. Monthly utility bills 17. The process of earning on interest is referred to as compounding. A. dividends B. interest C. cash outflows 18. Which of the following is not an example of a future value? A. The balance in your checking account today B. A savings account balance in 5 years C. The value of a retirement account in 20 years 19. Everything else being equal, the the interest rate, the the final accumulation of money. A. higher; higher B. lower; lower C. Both A and B are correct
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