168
95.9k

740+ Financial Management Solved MCQs

These multiple-choice questions (MCQs) are designed to enhance your knowledge and understanding in the following areas: Bachelor of Business Administration (BBA) , Master of Commerce (M.com) , Bachelor of Accounting and Finance (BAF) , Bachelor of Business Administration in Finance (BBA Finance) , Cost Accounting .

1.

All business need to have which fundamental essential element

A. human resources
B. balance sheet
C. labour team
D. stategy
Answer» D. stategy
2.

Which of the following variable is not known in IRR?

A. discount rate
B. terminal inflows
C. life of the project
D. intitial cash flows
Answer» A. discount rate
3.

Acccording to the traditional approach what is the effect of increase in degree of leverage on the valuation of the firm

A. remains unaffected
B. increase first and then decreases
C. decreases
D. increases
Answer» B. increase first and then decreases
4.

The maximum expenses that an equity scheme charge to an investor is ____________

A. 0.025
B. 0.0225
C. 0.0175
D. 0.02
Answer» A. 0.025
5.

The bonds with shorter maturity will have ______ duration

A. moderate
B. higher
C. lower
D. average
Answer» C. lower
6.

Relaxed or libral credit implies -credit to customers

A. higher
B. both a and b
C. lower
D. neither a nor b
Answer» A. higher
7.

Objectives of financial planning are

A. determining capital structure
B. framing loan policies
C. determining cash requirement
D. determining finance ratio
Answer» A. determining capital structure
8.

PI of project is the ratio of present value of inflows to-

A. total outflows
B. initial cost
C. pv of outflows
D. total cash inflows
Answer» C. pv of outflows
9.

Bird in hand - argument is given by

A. residuals theory
B. walter model
C. mm model
D. gordon\s model
Answer» D. gordon\s model
10.

When the required rate of return is less than the coupon rate the premium on the bond-

A. remains same
B. variable
C. declines
D. increases
Answer» C. declines
11.

Evaluation of firms credit policy can be done by computing expected ___________ from it

A. net benefit
B. net loss
C. net profit
D. net cost
Answer» A. net benefit
12.

All listed and traded securities are valued at _______

A. book value
B. cost
C. cost+ profit
D. closing market price
Answer» D. closing market price
13.

Financial manager would not supervise on the following area

A. cost analyst
B. working capital advisor
C. financial accounting and auditing
D. cash flow advisor
Answer» C. financial accounting and auditing
14.

In case of risky projects the required rate of return would generally be-

A. neutral
B. lower
C. moderate
D. higher
Answer» D. higher
15.

Residuals theory argues that dividend is as -

A. passive decision
B. irrelevant decision
C. active decision
D. relevant decision
Answer» A. passive decision
16.

Investors subscriptions are accounted as _____________

A. cash
B. deposits
C. liabilities
D. unit capital
Answer» D. unit capital
17.

Face value is the value stated on the face of the bond and is known as-

A. redemption value
B. per value
C. intrinsic value
D. market value
Answer» B. per value
18.

_________Policy refers to the procedure follow to collect accounts receivable after the expiry of the credit period

A. risk
B. collection
C. profit
D. manangment
Answer» B. collection
19.

Financial mananger would play the role of __________ in area of finance

A. budget analyst
B. cash analyst
C. cash flow examiners
D. persoanl financial advisors
Answer» A. budget analyst
20.

Accountng rate of return is based on _____________

A. life of the project
B. average expected profit
C. average cash profit
D. average past profit
Answer» B. average expected profit
21.

MM model of dividend irrelevance uses arbitrage between-

A. dividend and capital issue
B. dividend and bonus
C. profit and investment
D. none of the above
Answer» A. dividend and capital issue
22.

__________ Can be traded thourgh out the trading day at market prices

A. mmmf
B. debt fund
C. etf
D. equity fund
Answer» C. etf
23.

Intrinsic value of a bond is ______________ vlaue of the all future cash flows

A. past
B. present
C. estimated
D. future
Answer» B. present
24.

______ Means the basic criteria for the extension of credit to customers

A. credit standards
B. finnacial position
C. cash standards
D. living standards
Answer» A. credit standards
25.

The Presence of Taxes in capital budgeting analysis will cause ___________

A. the arr to remain same
B. the npv to increase
C. the irr to decrease
D. all of the above
Answer» C. the irr to decrease
26.

_____________ refers to the price at which an asset can be traded in the market

A. past value
B. face value
C. market value
D. future value
Answer» C. market value
27.

__________ is a blending of two or more exisiting undertaking into one undertaking

A. partnership
B. joint stock company
C. joint venture
D. amalgamation
Answer» D. amalgamation
28.

_____________ Means the action of an organisation or government selling or liquidating an asset or subsidiary

A. sale out
B. disinvestment
C. lock out
D. wind up
Answer» B. disinvestment
29.

_________The lessee and the owner of the equipment are two different entities

A. direct lease
B. financial lease
C. operating lease
D. net lease
Answer» A. direct lease
30.

___________ is the primary institutional source of working capital finance in India

A. debtors
B. loan from friend
C. bank credit
D. creditors
Answer» C. bank credit
31.

__________ means reputation of a firm which is in existance for a number of year in market

A. goodwill
B. bad debts
C. copy rights
D. royalties
Answer» A. goodwill
32.

___________ involves mergers and acquisition of firm belonging to differernt countries of the world.

A. credit merger
B. group merger
C. cross bordor merger
D. synergy merger
Answer» C. cross bordor merger
33.

_______________Is a entity formed by two or more companies to undertake financial activity together.

A. parntership firm
B. acquisition
C. joint venture
D. merger
Answer» C. joint venture
34.

In a __________ transaction the goods are let on hire the purchase price is to be paid in installment and hirer is allowed an option to purchase the goods by paying all the installment

A. hire purchase
B. credit purchase
C. lease purchase
D. installment purchase
Answer» A. hire purchase
35.

The arrengement in which entire amount of borrowing is credited to the current account of the borrower or realised in cash is called as_________

A. letter of credit
B. bank overdraft
C. loan
D. bill discounting
Answer» C. loan
36.

Book value ( Net assets )= Total Assets - _______________

A. total liability
B. current asset
C. long term debt
D. current liability
Answer» C. long term debt
37.

____________ synergy refers to increase in the value of the firm that occurs to the combined firm from financial factors.

A. group
B. vertical
C. financial
D. operating
Answer» C. financial
38.

The kind of takeover which is done through negotiations between two groups is called_________

A. horizontal merger
B. hostile take over
C. friendly take over
D. vertical synergy
Answer» C. friendly take over
39.

From the point of view lessee, a lease is a_________

A. financing decision
B. buy or make decision
C. working capital decision
D. investment decision
Answer» A. financing decision
40.

____________ indirect form of working capital financing and bank assume only the risk the credit being provided by the supplier himself

A. mortgage loan
B. letter of credit
C. bank overdraft
D. cash credit
Answer» B. letter of credit
41.

EVA= ___________ - (Equity capital x % of cost of equity capital

A. earning after tax
B. net operating profit after tax
C. npat
D. npbt
Answer» B. net operating profit after tax
42.

___________ is the ratio of the number of shares of the aquiring firm and the selling firm's share

A. dividennd pay out ratio
B. debt- equity ratio
C. exchange ratio
D. current ratio
Answer» C. exchange ratio
43.

Which of the follwing is not a usual method of calculation of share swap ratio?

A. sales turnover
B. economic value added
C. dividend after tax
D. tax benefit
Answer» B. economic value added
44.

Sale and lease back and ____________ are types of finance lease

A. operating lease
B. finance lease
C. leverage lease
D. net lease
Answer» C. leverage lease
45.

________ are taken as an additional security for working capital credit by banks

A. hypothecations
B. pledge
C. mortgage
D. cash credit
Answer» C. mortgage
46.

___________ value is used when an investor wants true or real value on basis of analysis of fundamentals without considering the prevailing price in the market

A. intrinsic
B. social
C. current
D. average
Answer» A. intrinsic
47.

EPS = ___________ / Total number of shares

A. profit after tax
B. net profit after interest and tax
C. npbt
D. ebt
Answer» B. net profit after interest and tax
48.

_________ classifies merger as vertical and horizontal

A. as14
B. as20
C. as 9
D. as 12
Answer» A. as14
49.

Treatment of _______ in AS 19 is almost same as required by tax laws in India

A. operating lease
B. net lease
C. financial lease
D. hire purchase
Answer» A. operating lease
50.

_____________ has suggested three methods of working out of the maximum amount that unit may expect from the bank (MPBF)

A. tondon committee
B. chore committee
C. walters committee
D. gordon\s committee
Answer» A. tondon committee

Done Studing? Take A Test.

Great job completing your study session! Now it's time to put your knowledge to the test. Challenge yourself, see how much you've learned, and identify areas for improvement. Don’t worry, this is all part of the journey to mastery. Ready for the next step? Take a quiz to solidify what you've just studied.