McqMate
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 | |
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