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This set of Financial Management Multiple Choice Questions & Answers (MCQs) focuses on Financial Management Set 25

Q1 | Book building --------------------
  • Is a plant
  • Is a profit cum expenses
  • Is a process used for marketing a public offer of equity shares of a company
  • Is a cost
Q2 | When an option is allowed to be exercised only on maturity date is called --------------
  • Indian option
  • European option
  • American option
  • Option
Q3 | Commercial paper effective from ---------------------
  • 1-1-1980
  • 1-1-1990
  • 1-1-1975
  • 1-1-1995
Q4 | In India commercial paper is regulated by -------------------
  • RBI
  • SEBI
  • SBI
  • Indian companies act 1956
Q5 | The interest rate on commercial paper is determined by -------------
  • RBI
  • SEBI and Market Force
  • SBI
  • Market Force
Q6 | Factoring is a ----------------
  • Cost of sales
  • Production plan
  • Financial planning
  • New financial service
Q7 | Factoring involves ----------------
  • Provision of specialized services relating to credit investigation
  • Sales ledger management
  • Purchase and collection of debts
  • All of these
Q8 | Which of the following recognizes risk in capital budgeting analysis by adjusting estimated cash flows and employs risk free rate to discount the adjusted cash flows?
  • Pay back period
  • Certainty equivalent approach
  • Cash
  • Inventory
Q9 | ------------- rate at which discounts the cash flows to zero
  • Payback period by economic order quantity
  • Internal rate of return
  • Cash flow
  • None of these
Q10 | The net present value is expressed in financial value, where as internal rate of return(IRR) is expressed in ---------------
  • Hundred by percentage terms
  • One thousand
  • All of these
  • None of these
Q11 | Return on assets is a ratio which measures ----------------
  • Cost of capital
  • Cost of production
  • Profitability
  • Cost of sales
Q12 | Return on equity measures the profitability of ------------------- invested in the firm
  • Capital
  • Equity funds
  • Book debt
  • Debentures and book dept
Q13 | Which ratio reveals how profitability of the owner’s funds have been utilized by the firm?
  • Return on equity
  • Current ratio
  • Fixed asset ratio
  • Debt equity ratio
Q14 | Capital employed is ----------
  • Assets + cash
  • Shareholders funds + Long funds
  • Cash + bank
  • Bank
Q15 | Financial leverage is ----------------
  • EBIT/100* sales
  • EBIT/EBT
  • Sales/fixed asset
  • Profit/sales*capital
Q16 | Shareholder value analysis is an approach to Financial Management Development in ------------------
  • 1970
  • 1980
  • 1990
  • 1996
Q17 | The term financial engineering is used to ----------------
  • Cost of production
  • Risk management
  • Capital
  • Sales planning
Q18 | The packing order theory is based on -----------
  • Stable dividend policy
  • A performance for internal
  • All of these
  • None of these
Q19 | SGR is stands for --------------
  • Sustainable Growth rate
  • Sales Growth rate
  • Sales Goodwill rate
  • Super Goodwill ratio
Q20 | A company may raise funds by issue of shares or -------------
  • By borrowings
  • By sales of goods
  • By sale of assets
  • By sale of services
Q21 | Borrowings carry -----------
  • Fixed rate of interest
  • A flexible rate of interest
  • A fixed dividend
  • A flexible dividend
Q22 | Which helps in deciding whether funds should be raised by internal equity or by borrowings>
  • Capital structure
  • Loan
  • Cash
  • Trading on equity
Q23 | Which are the determinants of capital structure?
  • Requirement of investors
  • Control
  • Tax
  • Govt. policy
Q24 | Which is the instrument of finance
  • Zero coupon bonds
  • Debt securitization
  • Credit card
  • All of these
Q25 | Which is the part of restrictive covenants
  • Asset related covenants
  • Liability related covenants
  • Cash flow related covenants
  • All of these