Financial Management

✅ The correct answer is A.
Land, buildings, and factory fixed equipment are classified as tangible asset. A tangible asset is an asset that has a physical form.

✅ The correct answer is C.
The cash management refers to management of cash and near cash assets. Cash management is the process of collecting and managing cash flows. Cash management can be important for both individuals and companies. In business, it is a key component of a company’s financial stability.

✅ The correct answer is C.
A point where profile of net present value crosses horizontal axis at plotted graph indicates project internal rate of return. The internal rate of return (IRR) is a metric used in capital budgeting to estimate the profitability of potential investments.

✅ The correct answer is A.
A major difference between real and nominal returns is that real returns adjust for inflation and nominal returns do not.

✅ The correct answer is D.
In finance, “working capital” means the same thing as current assets minus current liabilities. Working capital is the amount of cash a business can safely spend. It’s commonly defined as current assets minus current liabilities.

✅ The correct answer is A.
The return after the pay off period is not considered in case of Payback period method. Payback period is the time in which the initial outlay of an investment is expected to be recovered through the cash inflows generated by the investment. It is one of the simplest investment appraisal techniques.

✅ The correct answer is D.
Liquidity risk increases whenever interest rates increase. Liquidity risk is the risk that a company or bank may be unable to meet short term financial demands.

✅ The correct answer is A.
The bonus issue is permitted to be made out of free reserves and premium collected in cash. A bonus issue, also known as a scrip issue or a capitalization issue, is an offer of free additional shares to existing shareholders.

✅ The correct answer is C.
Noncash revenues and noncash charges if it subtracted from net income is equal to net cash flow. Net cash flow refers to the difference between a company’s cash inflows and outflows in a given period. In the strictest sense, net cash flow refers to the change in a company’s cash balance as detailed on its cash flow statement.

✅ The correct answer is C.
An effect of interest rate risk and investment risk on a bond’s yield is classified as maturity risk premium. A maturity risk premium is the amount of extra return you’ll see on your investment by purchasing a bond with a longer maturity date.