581. When real rate is high, all the interest rates tend to be ___________?
A. Higher
B. Lower
C. Constant
D. None of the given options

582. Profitability index (PI) rule is to take an investment, if the index exceeds___________?
A. -1
B. 0
C. 1
D. 2

583. Average Accounting Return is a measure of accounting profit relative to:
A. Book value
B. Intrinsic value
C. Cost
D. Market value

584. Which of the following is the cheapest source of financing available to a firm?
A. Bank loan
B. Commercial papers
C. Trade credit
D. None of the given options.

585. _______________refers to the extent to which fixed-income securities (debt and preferred stock) are used in a firm’s capital structure?
A. Financial risk
B. Portfolio risk
C. Operating risk
D. Market risk

586. The use of Personal borrowing to alter the degree of financial leverage is called__________?
A. Homemade leverage
B. Financial leverage
C. Operating leverage
D. None of the given option

587. Which of the following set of ratios is used to assess a business’s ability to generate earnings as compared to its expenses and other relevant costs incurred during a specific period of time?
A. Liquidity Ratios
B. Leverage Ratios
C. Profitability Ratios
D. Market Value Ratios

588. A company having a current ratio of 1 will have __________ net working capital.
A. Positive
B. Negative
C. zero
D. None of the given options

589. Which of the following equation is known as Cash Flow (CF) identity?
A. CF from Assets = CF to Creditors – CF to Stockholder
B. CF from Assets = CF to Stockholders – CF to Creditors
C. CF to Stockholders = CF to Creditors + CF from Assets
D. CF from Assets = CF to Creditors + CF to Stockholder

590. The difference between current assets and current liabilities is known as____________?
A. Surplus Asset
B. Short-term Ratio
C. Working Capital
D. Current Ratio

NOTE
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