Financial Management Set 17
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This set of Financial Management Multiple Choice Questions & Answers (MCQs) focuses on Financial Management Set 17
Q1 | Which of the following is not a part of the money market?
- Call money market
- Treasury bill market
- Commercial paper market
- Stock market
Q2 | The objective of financial management is to
- Maximize the revenue
- Minimize the expenses
- Maximize the return on investment
- Maximize the wealth of the owners by increasing the value of the firm
Q3 | Which of the following is the main objective of financial management?
- Revenue Maximisation
- Profit Maximisation
- Wealth Maximisation
- Cost Minimisation
Q4 | Which one of the following activities is outside the purview of financing decision infinancial management?
- Identification of the source of funds
- Measurement of the cost of funds
- Deciding on the time of raising the funds
- Deciding on the utilization of the funds
Q5 | A firm has a capital of Rs. 10 lakhs, sales of Rs. 5 lakhs, gross profit of Rs. 2 lakhs andexpenses of Rs. 1 lakh. The Net Profit Ratio is:
- 50%
- 40%
- 20%
- 10%
Q6 | Which of the following forms of equity financing is especially designed for fundingHigh Risk & High Reward projects?
- ADR
- GDR
- FCCB
- Venture Capital
Q7 | A process through which loans and other receivables are underwritten and sold in aform of asset is known as:
- Factoring
- Forfeiting
- Securitisation
- Bill Discounting
Q8 | In Net Profit Ratio, the denominator is:
- Credit Sales
- Net Sales
- Cost of Sales
- Cost of Goods Sold
Q9 | Current Assets Rs. 20,00,000; Current Liabilities Rs. 10,00,000 and Stock Rs. 2,00,000,then what is liquid ratio?
- 2 times
- 1.8 times
- 1.4 times
- None of these
Q10 | Annual credit sales Rs. 4,00,000; Average collection period 45 days (assume 360 days in a year). What is Average debtors?
- Rs. 60,000
- Rs. 74,000
- Rs. 50,000
- Rs. 4,00,000
Q11 | Investment in a project is Rs. 200 lakhs and Net Present Value is Rs. 50 lakhs. Then theamount of inflows is :
- Rs. 150 lakhs
- Rs. 200 lakhs
- Rs. 100 lakhs
- Rs. 250 lakhs
Q12 | PAT of a company Rs. 100 lakhs and number of equity shares of Rs. 10 each with acapital of Rs. 50 lakhs, then EPS is:
- Rs. 2
- Rs. 1
- Rs. 10
- None of these
Q13 | Degree of operating leverage is:
- EBIT / EBT
- Contribution / EBT
- Contribution / EBIT
- None of these
Q14 | Cost of goods sold is Rs. 8000 and gross margin is Rs. 5000 then revenue will be
- Rs. 3,000
- Rs. 5,000
- Rs. 8,000
- Rs. 13,000
Q15 | Present value of inflows Rs. 10 lakhs from a project and initial investment is Rs. 7.5lakhs. The NPV is:
- Rs. 17.5 lakhs
- Rs. 7.5 lakhs
- Rs. 10 Lakhs
- Rs. 2.5 lakhs
Q16 | Cash & Bank Rs. 20,000; Debtors Rs. 2,00,000; Stock Rs. 2,80,000 and Current Liabilities:Creditors Rs. 1,00,000; Bills Payable Rs. 50,000. Then the working capital is:
- Rs. 4,00,000
- Rs. 3,80,000
- Rs. 3,50,000
- Rs. 70,000
Q17 | 1,00,000; 10% Debentures of Rs. 100 each of company, the interest payable forquarter is:
- Rs. 10,00,000
- Rs. 2,50,000
- Rs. 5,00,000
- None of these
Q18 | Gross margin is added to cost of sold goods for calculating
- revenues
- selling price
- unit price
- bundle price
Q19 | Cash Flow Statement is also known as
- Statement of Changes in Financial Position on Cash basis
- Statement accounting for variation in cash
- Both a and b
- None of the above
Q20 | Degree of financial leverage of business indicates.
- Total risk
- Operating risk
- Financial risk
- None of these
Q21 | Which of the following is not a characteristic of GDR?
- Is a negotiable instrument
- Carry voting rights
- Freely tradable in International Market
- Denominated in US Dollars
Q22 | Which of the following is a feature of Factoring?
- Tool of short term borrowing
- Purchase of export bill only
- Used in Export business only
- Done without recourse to the client
Q23 | Which of the following is a Profitability Ratio?
- Proprietary Ratio
- Debt –equity Ratio
- Price Earnings Ratio
- Fixed Asset Ratio
Q24 | GP Margin=20%, GP= Rs. 54000, Sales=
- Rs. 300000
- Rs. 270000
- Rs. 280000
- Rs. 290000
Q25 | EBIT= Rs. 1120000, PBT= Rs. 320000, Fixed Costs= Rs. 700000, Operating Leverage =
- 1.625
- 2.625
- 6.625
- 3.625