30 Questions
What type of financial institutions offer bank-like services but cannot accept deposits due to the absence of a banking license?
Nonbanking Institutions
Which of the following is NOT an example of a bank institution?
Villarica Pawnshop
What type of financial institutions typically offer small credits to individuals or businesses?
Microloan organizations
Which financial institutions accept deposits from or offer loans to individuals or entities?
Bank Institutions
What type of financial institutions offer quick cash loans or 'sanla'?
Pawnshops
What is the primary function of capital budgeting in a business?
Evaluating and selecting major projects or investments
What is the initial investment required for Project A?
₱ 80,000.00
What is the expected annual cash return for Project B?
₱ 20,000.00
What is the cost of capital used in computing the net present value of the projects?
10%
What is the formula for simple interest?
P × R × T
What is the future value of the investment if you invested ₱ 30,000 for three years at 5% simple interest rate?
₱ 34,728.75
What type of interest is computed by multiplying together the principal, rate, and time?
Simple interest
What type of investment risk is demonstrated when an investment's value decreases due to a change in market conditions?
Market Risk
What type of investment risk is demonstrated when an investor is unable to sell an investment quickly enough or at a favorable price?
Liquidity Risk
What type of investment risk is demonstrated when the purchasing power of an investment's returns is reduced due to inflation?
Inflation Risk
What type of investment risk is demonstrated when an investment's returns are lower than expected, causing a shortfall?
Reinvestment Risk
What type of investment risk is demonstrated when a portfolio is not diversified and heavily invested in a single asset?
Concentration Risk
What is the future value (FV) of an investment of ₱30,000 for three years at a 5% simple interest rate?
₱34,500.00
What is the present value of an annuity of ₱ 15,000.00 at the end of 10 years converted annually at 7%?
₱ 105,353.73
What is the present value of an annuity of ₱ 15,000.00 at the end of 10 years converted annually at 8%?
₱ 100,561.22
Which project should XYZ Corporation accept?
Project A should be accepted since its net present value is ₱ 15,095.95
What is the net present value of Project A using the PVIFA table, if the cost of capital is 7%?
(₱ 836.50)
What is the correct order in capital budgeting process?
Decision-making, Monitoring
What is the annual cash return of Project A?
₱ 130,000.00
What is the future value of ₱ 30,000 invested for three years at a compound interest rate of 5%?
₱ 34,728.57
Which bank should you invest your ₱ 7,000.00 with to earn a higher interest?
Bank B because it has a higher interest rate
What type of interest is calculated by multiplying the principal, rate, and time?
Simple interest
What is the present value of an annuity of ₱ 15,000.00 at the end of 10 years converted annually at 7%?
₱ 105,353.73
What is the present value of an annuity of ₱ 15,000.00 at the end of 10 years converted annually at 8%?
₱ 100,561.22
What is the present value of an annuity of ₱ 15,000.00 at the end of 10 years converted annually at 9%?
₱ 96,264.87
Test your understanding of business finance concepts with this unit test featuring multiple-choice questions on financial institutions and services.
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