Financial Management Set 30
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This set of Financial Management Multiple Choice Questions & Answers (MCQs) focuses on Financial Management Set 30
Q1 | In Walter model formula D stands for
- Dividend per share
- Direct Dividend
- Dividend Earning
- None of these
Q2 | In MM model MM stands for...
- M.Khan and Modigiliani
- Miller and M.Khan
- Modigiliani and M.Khan
- Miller and Modigliani
Q3 | The addition of all current assets investment is known as...
- Net Working Capital
- Gross Working capital
- Temporary Working Capital
- All of these
Q4 | When total current assets exceeds total current liabilities it refers to.
- Gross Working Capital
- Temporary Working Capital
- Both a and b
- Net Working Capital
Q5 | If the weighting of equity in total capital is 1/3, that of debt is 2/3, the return on equity is 15% that of debt is 10% and the corporate tax rate is 32%, what is the Weighted Average Cost of Capital (WACC)?
- 10.533%
- 7.533%
- 9.533%
- 11.350%
Q6 | Which of the following would not be financed from working capital?
- Cash float.
- Accounts receivable.
- Credit sales.
- A new personal computer for the office.
Q7 | What is the difference between the current ratio and the quick ratio?
- The current ratio includes inventories and the quick ratio does not.
- The current ratio does not include inventories and the quick ratio does.
- The current ratio includes physical capital and the quick ratio does not.
- The current ratio does not include physical capital and the quick ratio does.
Q8 | Which of the following working capital strategies is the most aggressive?
- Making greater use of short term finance and maximizing net short term asset.
- Making greater use of long term finance and minimizing net short term asset.
- Making greater use of short term finance and minimizing net short term asset.
- Making greater use of long term finance and maximizing net short term asset.
Q9 | Which of the following is not a metric to use for measuring the length of the cash cycle?
- Acid test days.
- Accounts receivable days.
- Accounts payable days.
- Inventory days.
Q10 | Which of the following is not the responsibility of financial management?
- allocation of funds to current and capital assets
- obtaining the best mix of financing alternatives
- preparation of the firm's accounting statements
- development of an appropriate dividend policy
Q11 | Which of the following are not among the daily activities of financial management?
- sale of shares and bonds
- credit management
- inventory control
- the receipt and disbursement of funds
Q12 | Debt Equity Ratio is 3:1,the amount of total assets Rs.20 lac,current ratio is 1.5:1 and owned funds Rs.3 lac.What is the amount of current asset?
- Rs.5 lac
- Rs.3 lac
- Rs.12 lac
- d) none of the above.
Q13 | Banks generally prefer Debt Equity Ratio at :
- 1:1
- 1:3
- 2:1
- 3:1
Q14 | An asset is a
- Source of fund
- Use of fund
- Inflow of funds
- none of the above.
Q15 | If a company issues bonus shares the debt equity ratio will
- Remain unaffected
- Will be affected
- Will improve
- none of the above.
Q16 | In the balance sheet amount of total assets is Rs.10 lac, current liabilities Rs.5 lac & capital & reserves are Rs.2 lac .What is the debt equity ratio?
- a)1;1
- 1.5:1
- c)2:1
- none of the above.
Q17 | In last year the current ratio was 3:1 and quick ratio was 2:1.Presently current ratio is 3:1 but quick ratio is 1:1.This indicates comparably
- high liquidity
- higher stock
- lower stock
- low liquidity
Q18 | Authorised capital of a company is Rs.5 lac, 40% of it is paid up. Loss incurred during the year is Rs.50,000. Accumulated loss carried from last year is Rs.2 lac. The company has a Tangible Net Worth of
- Nil
- Rs.2.50 lac
- (-)Rs.50,000
- Rs.1 lac.
Q19 | Proprietary ratio is calculated by
- Total assets/Total outside liability
- Total outside liability/Total tangible assets
- Fixed assets/Long term source of fund
- Proprietors’’ Funds/Total
Q20 | Current ratio of a concern is 1,its net working capital will be
- Positive
- Negative
- Nil
- None of the above
Q21 | Current ratio is 4:1.Net Working Capital is Rs.30,000.Find the amount of currentAssets.
- Rs.10,000
- Rs.40,000
- Rs.24,000
- Rs.6,000
Q22 | Current ratio is 2:5.Current liability is Rs.30000.The Net working capital is
- Rs.18,000
- Rs.45,000
- Rs.(-) 45,000
- Rs.(-)18000
Q23 | Quick assets do not include
- Govt.bond
- Book debts
- Advance for supply of raw materials
- Inventories.
Q24 | The ideal quick ratio is
- 2:1
- 1:1
- 5:1
- None of the above