Financial Management Set 20
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This set of Financial Management Multiple Choice Questions & Answers (MCQs) focuses on Financial Management Set 20
Q1 | The term mutually exclusive investments mean:
- Choose only the best investments
- Selection of one investment precludes the selection of an alternative
- The elite investment opportunities will get chosen
- There are no investment options available
Q2 | Which of the following is a Profitability Ratio?
- Proprietary Ratio
- Debt-Equity Ratio
- Price-Earning Ratio
- Fixed Asset Ratio
Q3 | The 'Dividend-Payout Ratio' is equal to
- The Dividend yield plus the capital gains yield
- Dividends per share divided by Earning per Equity Share
- Dividends per share divided by par value per share
- Dividends per share divided by current price per share
Q4 | If EBIT = Rs. 1,00,000, Fixed Assets = Rs. 2,00,000, Sales = Rs. 10,00,000 and VariableCost = Rs. 7,00,000. Then, the Operating Leverage will be
- 2
- 3
- 6
- 4
Q5 | Which of the following is not considered while preparing cash budget?
- Accrual Principal
- Difference in Capital and Revenue items
- Conservation Principle
- All of the above
Q6 | At Indifference level of EBIT, different capitals have:
- same EBIT
- same EPS
- same PAT
- same PBT
Q7 | ABC Analysis is used in
- Inventory Management
- Receivables Management
- Accounting Policies
- Corporate Governance
Q8 | Which of the following is not incorporated in Capital Building?
- Tax-Effect
- Time Value of Money
- Required Rate of Return
- Rate of Cash Discount
Q9 | Objective of Financial Management is
- Management of Liquidity
- Maximization of Profit
- Maximization of Shareholders’ Wealth
- Management of Fixed Assets
Q10 | Which of the following variables is not known in Internal Rate of Return?
- Initial Cash Flows
- Discount Rate
- Terminal Inflows
- Life of the Project
Q11 | Cost of Capital refers to
- Floatation Cost
- Dividend
- Required Rate of Return
- None of the above
Q12 | Working Capital Management involves financing and management of
- All Assets
- All Current Assets
- Cash and Bank Balance
- Receivables and Payables
Q13 | All listed companies are required to prepare
- Funds Flow statement
- Cash Flow Statement
- Statement of Affairs
- All of the above
Q14 | Ratio Analysis can be used to study liquidity, turnover, profitability etc., of a firm. What does Debt-Equity Ratio help to study?
- Solvency
- Liquidity
- Profitability
- Turnover
Q15 | A firm determines the shareholders’ wealth by taking
- 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
Q16 | Capital Budgeting techniques which considers the time value of money is based on
- Cash Flows of the organization
- Accounting Profit of the organization
- Interest Rate on Borrowings
- Last Dividend Paid
Q17 | Debt Financing is a cheaper source of finance because of
- Time Value of Money
- Rate of Interest
- Tax-deductibility of Interest
- Dividends not Payable to lenders
Q18 | What should be the optimum Dividend payout ratio, when r=12% and Ke=10%?
- Zero
- 50%
- 12%
- 100%
Q19 | The term Float is used in
- Receivable Management
- Cash Management
- Marketable Management
- Inventory Management
Q20 | Financial planning is ---------- function of a finance manager
- Executive
- Incidental
- Auxiliary
- None of these
Q21 | Profit maximization may lead to better and efficient utilization of the recourses only when there is -----------
- Monopoly
- Oligopoly
- Perfect competition
- None of these
Q22 | During inflationary period the risk free interest rate will be …………………………….
- Lower
- Does not change
- Higher
- Cannot say
Q23 | Implicit cost also called ………………………….
- Marginal cost
- Composite cost
- Opportunity cost
- Average cost
Q24 | After tax cost of debt is equal to (1-t)x
- Ko
- WACC
- Before tax cost of debt
- KE
Q25 | Cost of irredeemable preferences share capital is equal to kp=preference dividend divided by
- Total liabilities
- Face value Preference issue
- Total capital
- Net proceeds