Financial Management Set 18
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This set of Financial Management Multiple Choice Questions & Answers (MCQs) focuses on Financial Management Set 18
Q1 | Which of the following is not a Source of Fund?
- Issue of Capital
- Issue of Debenture
- Decrease in working capital
- Increase in working capital
Q2 | Determinants of credit policy relates to:
- Credit standards
- Credit terms
- Collection Procedures
- All of the above
Q3 | The following is not a Discounted Cash Flow Technique:
- NPV
- PI
- Accounting of Average rate of return
- IRR
Q4 | β (Beta) of a security measures its:
- Diversifiable risk
- Financial risk
- Market risk
- None of above
Q5 | Following method is also known as ‘Benefit Cost Ratio.’
- NPV
- IRR
- ARR
- PI
Q6 | ROI (Return on Investment) can be decomposed into the following ratios:
- Overall Turnover Ratio and Current Ratio
- Net Profit Ratio and Fixed Assets Turnover
- Working Capital Turnover Ratio and Net Profit Ratio
- Net Profit Ratio and Overall Turnover Ratio
Q7 | Which one of the following activities is outside the purview of dividend decision infinancial management?
- Identification of the profit after taxes
- Measurement of the cost of funds
- Deciding on the pay-out ratio
- Considering issue of bonus shares to equity shareholders
Q8 | Which of the following does not help to increase Current Ratio?
- Issue of Debentures to buy Stock
- Issue of Debentures to pay Creditors
- Sale of Investment to pay Creditors
- Avail Bank Overdraft to buy Machine
Q9 | Which of the following statements is correct?
- A higher Receivable Turnover is not desirable.
- Interest Coverage Ratio depends upon Tax Rate.
- Increase in Net Profit Ratio means increase in Sales
- Lower Debt Equity Ratio means lower Financial Risk
Q10 | “Shareholders Wealth” in a firm is reflected by:
- the number of people employed in the firm
- the book value of the firm’s assets less the book value of its liabilities
- the amount of salary paid to its employees
- the market price per share of the firm
Q11 | The excess of Current Assets over Current Liabilities is called:
- Net Current Assets
- Net Working Capital
- Working Capital
- All of the above
Q12 | Profit Maximization is the main objective of business because:
- Profit acts as a measure of efficiency and
- It serves as a protection against risk
- Both
- none
Q13 | Stock holder’s wealth = ____________
- No. of shares owned x Current stock price per share
- No. of shares owned x Current stock price per share
- No. of shares owned x Current stock price per share
- none
Q14 | Working Capital Management refers to a Trade-off between _____________andProfitability.
- Liquidity
- Risk
- Both of the above
- None of the above
Q15 | Which one of the following is a medium term source?
- Public Deposits
- Lease Financing
- Euro Debt Issue
- All of the above
Q16 | The lease period in such a contract is less than the useful life of asset. Here we aretalking about _______.
- Operating or Service Lease
- Service Lease
- Financial Lease
- None of the above
Q17 | Which one is the Benefit(s) of Factoring?
- Better Cash Flows
- Better Assets Management
- Better Working Capital Management
- All of the above
Q18 | Find the present value of Rs. 1,000 receivable 6 years hence if the rate of discount is10 percent.
- 564.5
- 554.5
- 574.5
- 600
Q19 | The term _______means manipulation of accounts in a way so as to conceal vital facts and present the financial statements in a way to show a better position than what it actually is.
- window dressing
- creative accounting
- window accounting
- modified accounting
Q20 | Collateralized borrowing and lending obligation (CBLO) is a discounted instrumentavailable in electronic book entry for the maturity period ranging from __________.
- 1 day to 19 days
- 1 day to 15 days
- 1 day to 30 days
- None of the above
Q21 | IPO refers to ____________; the first time a company comes to public to raise money.
- Immediate Public Offer
- Immediate Public Offering
- Initial Public Offer
- Initial Public Offering
Q22 | SPO refers to ________, the second and subsequent time a company raises moneyfrom the public directly.
- Second Public Offering
- Subsequent Public Offering
- Subsequent Public Offer
- Seasonal Public Offering
Q23 | Liquid Liability = Current Liability – Bank Overdraft – ___________
- Cash Credit
- Trade Credit
- Both of the above
- None of the above
Q24 | Ratio analysis is the process of determining and interpreting numerical relationshipsbased on _______.
- Financial values
- Financial statements
- Financial numerical information
- All of the above
Q25 | Ratio analysis is based on __________ measure.
- relative
- absolute
- Both of the above
- None of the above