Financial Management MCQ with Answers for exam and online assignments

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Online Quiz of Financial Management

Financial Management

1 / 20

Q: Which are the determinants of capital structure?

A. Requirement of investors

B. Control

C. Tax

D. Govt. policy

2 / 20

Q: The redemption means

A. The payment of amount

B. The depreciation of the amount

C. The allocation of cost

D. All of these

3 / 20

Q: The dividend on equity shares is only paid when dividend on___has already been paid

A. Equity shares

B. Preference shares

C. Bond

D. Debenture

4 / 20

Q: Financial planning is___function of a finance manager

A. Executive

B. Incidental

C. Auxiliary

D. None of these

5 / 20

Q: Funds Flow Statement reveals the change in___between two Balance Sheet dates.

A. Working capital

B. Internal capital

C. Share capital

D. Both (A) & (C)

6 / 20

Q: Which of the following is a feature of Factoring?

A. Tool of short term borrowing

B. Purchase of export bill only

C. Used in Export business only

D. Done without recourse to the client

7 / 20

Q: A firm has a capital of Rs. 10 lakhs, sales of Rs. 5 lakhs, gross profit of Rs. 2 lakhs and expenses of Rs. 1 lakh. The Net Profit Ratio is:

A. 50%

B. 40%

C. 20%

D. 10%

8 / 20

Q: Which of the following is not a disadvantage of rate of return method of capital budgeting?

A. It ignores the time value of money

B. It uses the earnings of a project up to the payback period only

C. It does not take into consideration cash flows

D. This method can not be applied to a situation where investment in a project is to be made in parts.

9 / 20

Q: The cash inflows on account of operations are presumed to have been reinvested at the cutoff rate in case of

A. Pay back method

B. NPV

C. Accounting rate of return

D. IRR

10 / 20

Q: Optimum capital structure is obtained when

A. Firm earns maximum profits

B. Firm declares reasonable dividend

C. Market value per equity share is the maximum

D. The debt increases

11 / 20

Q: Which of the following is not true for a "Lease decision for the lessee?

A. Helps in project selection

B. Helps in project financing

C. Helps in project location

D. All of the above.

12 / 20

Q: Which of the following is not an element of credit policy?

A. Credit Terms

B. Collection Policy

C. Cash Discount Terms,

D. Sales Price

13 / 20

Q: If the following is an element of dividend policy?

A. Production capacity,

B. Change in Management,

C. Informational content,

D. Debt service capacity

14 / 20

Q: Relationship between change in sales and change m is measured by:

A. Financial leverage

B. Combined leverage

C. Operating leverage

D. None of the above

15 / 20

Q: Marginal cost of capital is the cost of:

A. Additional Sales

B. Additional Funds

C. Additional Interests

D. None of the above.

16 / 20

Q: Which of the following is a risk factor in capital budgeting?

A. Industry specific risk factors

B. Competition risk factors

C. Project specific risk factors

D. All of the above

17 / 20

Q: Real rate of return is equal to:

A. Nominal Rate x Inflation Rate

B. Nominal Rate / Inflation Rate

C. Nominal Rate - Inflation Rate

D. Nominal Rate + Inflation Rate

18 / 20

Q: In capital budgeting, the term Capital Rationing implies:

A. That no retained earnings available

B. That limited funds are available for investment

C. That no external funds can be raised,

D. That no fresh investment is required in current year

19 / 20

Q: Which of the following is not a relevant cost in Capital Budgeting?

A. Sunk Cost

B. Opportunity Cost

C. Allocated Overheads

D. Both (a) and (c) above.

20 / 20

Q: Financial decision involve;

A. Investment, financing and dividend decision

B. Investment, financing and sales decision

C. Financing, dividend and cash decision

D. None of these.

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Financial Management MCQ with Answers

Online Quiz of Financial Management

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