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 .
| 401. |
Which of the following is not a part of the money market? |
| A. | Call money market |
| B. | Treasury bill market |
| C. | Commercial paper market |
| D. | Stock market |
| Answer» D. Stock market | |
| 402. |
The objective of financial management is to |
| A. | Maximize the revenue |
| B. | Minimize the expenses |
| C. | Maximize the return on investment |
| D. | Maximize the wealth of the owners by increasing the value of the firm |
| Answer» D. Maximize the wealth of the owners by increasing the value of the firm | |
| 403. |
Which of the following is the main objective of financial management? |
| A. | Revenue Maximisation |
| B. | Profit Maximisation |
| C. | Wealth Maximisation |
| D. | Cost Minimisation |
| Answer» C. Wealth Maximisation | |
| 404. |
Which one of the following activities is outside the purview of financing decision in financial management? |
| A. | Identification of the source of funds |
| B. | Measurement of the cost of funds |
| C. | Deciding on the time of raising the funds |
| D. | Deciding on the utilization of the funds |
| Answer» D. Deciding on the utilization of the funds | |
| 405. |
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% |
| Answer» C. 20% | |
| 406. |
Which of the following forms of equity financing is especially designed for funding High Risk & High Reward projects? |
| A. | ADR |
| B. | GDR |
| C. | FCCB |
| D. | Venture Capital |
| Answer» D. Venture Capital | |
| 407. |
A process through which loans and other receivables are underwritten and sold in a form of asset is known as: |
| A. | Factoring |
| B. | Forfeiting |
| C. | Securitisation |
| D. | Bill Discounting |
| Answer» C. Securitisation | |
| 408. |
In Net Profit Ratio, the denominator is: |
| A. | Credit Sales |
| B. | Net Sales |
| C. | Cost of Sales |
| D. | Cost of Goods Sold |
| Answer» B. Net Sales | |
| 409. |
Current Assets Rs. 20,00,000; Current Liabilities Rs. 10,00,000 and Stock Rs. 2,00,000, then what is liquid ratio? |
| A. | 2 times |
| B. | 1.8 times |
| C. | 1.4 times |
| D. | None of these |
| Answer» B. 1.8 times | |
| 410. |
Annual credit sales Rs. 4,00,000; Average collection period 45 days (assume 360 days in a year). What is Average debtors? |
| A. | Rs. 60,000 |
| B. | Rs. 74,000 |
| C. | Rs. 50,000 |
| D. | Rs. 4,00,000 |
| Answer» C. Rs. 50,000 | |
| 411. |
Investment in a project is Rs. 200 lakhs and Net Present Value is Rs. 50 lakhs. Then the amount of inflows is : |
| A. | Rs. 150 lakhs |
| B. | Rs. 200 lakhs |
| C. | Rs. 100 lakhs |
| D. | Rs. 250 lakhs |
| Answer» D. Rs. 250 lakhs | |
| 412. |
PAT of a company Rs. 100 lakhs and number of equity shares of Rs. 10 each with a capital of Rs. 50 lakhs, then EPS is: |
| A. | Rs. 2 |
| B. | Rs. 1 |
| C. | Rs. 10 |
| D. | None of these |
| Answer» D. None of these | |
| 413. |
Degree of operating leverage is: |
| A. | EBIT / EBT |
| B. | Contribution / EBT |
| C. | Contribution / EBIT |
| D. | None of these |
| Answer» C. Contribution / EBIT | |
| 414. |
Cost of goods sold is Rs. 8000 and gross margin is Rs. 5000 then revenue will be |
| A. | Rs. 3,000 |
| B. | Rs. 5,000 |
| C. | Rs. 8,000 |
| D. | Rs. 13,000 |
| Answer» D. Rs. 13,000 | |
| 415. |
Present value of inflows Rs. 10 lakhs from a project and initial investment is Rs. 7.5 lakhs. The NPV is: |
| A. | Rs. 17.5 lakhs |
| B. | Rs. 7.5 lakhs |
| C. | Rs. 10 Lakhs |
| D. | Rs. 2.5 lakhs |
| Answer» D. Rs. 2.5 lakhs | |
| 416. |
Cash & Bank Rs. 20,000; Debtors Rs. 2,00,000; Stock Rs. 2,80,000 and Current Liabilities: Creditors Rs. 1,00,000; Bills Payable Rs. 50,000. Then the working capital is: |
| A. | Rs. 4,00,000 |
| B. | Rs. 3,80,000 |
| C. | Rs. 3,50,000 |
| D. | Rs. 70,000 |
| Answer» C. Rs. 3,50,000 | |
| 417. |
1,00,000; 10% Debentures of Rs. 100 each of company, the interest payable for quarter is: |
| A. | Rs. 10,00,000 |
| B. | Rs. 2,50,000 |
| C. | Rs. 5,00,000 |
| D. | None of these |
| Answer» B. Rs. 2,50,000 | |
| 418. |
Gross margin is added to cost of sold goods for calculating |
| A. | revenues |
| B. | selling price |
| C. | unit price |
| D. | bundle price |
| Answer» A. revenues | |
| 419. |
Cash Flow Statement is also known as |
| A. | Statement of Changes in Financial Position on Cash basis |
| B. | Statement accounting for variation in cash |
| C. | Both a and b |
| D. | None of the above |
| Answer» C. Both a and b | |
| 420. |
Degree of financial leverage of business indicates. |
| A. | Total risk |
| B. | Operating risk |
| C. | Financial risk |
| D. | None of these |
| Answer» C. Financial risk | |
| 421. |
Which of the following is not a characteristic of GDR? |
| A. | Is a negotiable instrument |
| B. | Carry voting rights |
| C. | Freely tradable in International Market |
| D. | Denominated in US Dollars |
| Answer» B. Carry voting rights | |
| 422. |
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 |
| Answer» A. Tool of short term borrowing | |
| 423. |
Which of the following is a Profitability Ratio? |
| A. | Proprietary Ratio |
| B. | Debt –equity Ratio |
| C. | Price Earnings Ratio |
| D. | Fixed Asset Ratio |
| Answer» C. Price Earnings Ratio | |
| 424. |
You're given the gross profit margin, which is 20%, and the gross profit (GP), which is Rs. 54000. Find the sales amount. |
| A. | Rs. 300000 |
| B. | Rs. 270000 |
| C. | Rs. 280000 |
| D. | Rs. 290000 |
| Answer» B. Rs. 270000 | |
| 425. |
EBIT= Rs. 1120000, PBT= Rs. 320000, Fixed Costs= Rs. 700000, Operating Leverage = |
| A. | 1.625 |
| B. | 2.625 |
| C. | 6.625 |
| D. | 3.625 |
| Answer» A. 1.625 | |
| 426. |
Which of the following is not a Source of Fund? |
| A. | Issue of Capital |
| B. | Issue of Debenture |
| C. | Decrease in working capital |
| D. | Increase in working capital |
| Answer» D. Increase in working capital | |
| 427. |
Determinants of credit policy relates to: |
| A. | Credit standards |
| B. | Credit terms |
| C. | Collection Procedures |
| D. | All of the above |
| Answer» D. All of the above | |
| 428. |
The following is not a Discounted Cash Flow Technique: |
| A. | NPV |
| B. | PI |
| C. | Accounting of Average rate of return |
| D. | IRR |
| Answer» C. Accounting of Average rate of return | |
| 429. |
β (Beta) of a security measures its: |
| A. | Diversifiable risk |
| B. | Financial risk |
| C. | Market risk |
| D. | None of above |
| Answer» C. Market risk | |
| 430. |
Following method is also known as ‘Benefit Cost Ratio.’ |
| A. | NPV |
| B. | IRR |
| C. | ARR |
| D. | PI |
| Answer» D. PI | |
| 431. |
ROI (Return on Investment) can be decomposed into the following ratios: |
| A. | Overall Turnover Ratio and Current Ratio |
| B. | Net Profit Ratio and Fixed Assets Turnover |
| C. | Working Capital Turnover Ratio and Net Profit Ratio |
| D. | Net Profit Ratio and Overall Turnover Ratio |
| Answer» D. Net Profit Ratio and Overall Turnover Ratio | |
| 432. |
Which one of the following activities is outside the purview of dividend decision in financial management? |
| A. | Identification of the profit after taxes |
| B. | Measurement of the cost of funds |
| C. | Deciding on the pay-out ratio |
| D. | Considering issue of bonus shares to equity shareholders |
| Answer» B. Measurement of the cost of funds | |
| 433. |
Which of the following does not help to increase Current Ratio? |
| A. | Issue of Debentures to buy Stock |
| B. | Issue of Debentures to pay Creditors |
| C. | Sale of Investment to pay Creditors |
| D. | Avail Bank Overdraft to buy Machine |
| Answer» D. Avail Bank Overdraft to buy Machine | |
| 434. |
Which of the following statements is correct? |
| A. | A higher Receivable Turnover is not desirable. |
| B. | Interest Coverage Ratio depends upon Tax Rate. |
| C. | Increase in Net Profit Ratio means increase in Sales |
| D. | Lower Debt Equity Ratio means lower Financial Risk |
| Answer» D. Lower Debt Equity Ratio means lower Financial Risk | |
| 435. |
“Shareholders Wealth” in a firm is reflected by: |
| A. | the number of people employed in the firm |
| B. | the book value of the firm’s assets less the book value of its liabilities |
| C. | the amount of salary paid to its employees |
| D. | the market price per share of the firm |
| Answer» D. the market price per share of the firm | |
| 436. |
The excess of Current Assets over Current Liabilities is called: |
| A. | Net Current Assets |
| B. | Net Working Capital |
| C. | Working Capital |
| D. | All of the above |
| Answer» D. All of the above | |
| 437. |
Profit Maximization is the main objective of business because: |
| A. | Profit acts as a measure of efficiency and |
| B. | It serves as a protection against risk |
| C. | Both |
| D. | none |
| Answer» C. Both | |
| 438. |
Stock holder’s wealth = ____________ |
| A. | No. of shares owned x Current stock price per share |
| B. | No. of shares owned x Current stock price per share |
| C. | No. of shares owned x Current stock price per share |
| D. | none |
| Answer» A. No. of shares owned x Current stock price per share | |
| 439. |
Working Capital Management refers to a Trade-off between _____________and Profitability. |
| A. | Liquidity |
| B. | Risk |
| C. | Both of the above |
| D. | None of the above |
| Answer» C. Both of the above | |
| 440. |
Which one of the following is a medium term source? |
| A. | Public Deposits |
| B. | Lease Financing |
| C. | Euro Debt Issue |
| D. | All of the above |
| Answer» D. All of the above | |
| 441. |
The lease period in such a contract is less than the useful life of asset. Here we are talking about _______. |
| A. | Operating or Service Lease |
| B. | Service Lease |
| C. | Financial Lease |
| D. | None of the above |
| Answer» A. Operating or Service Lease | |
| 442. |
Which one is the Benefit(s) of Factoring? |
| A. | Better Cash Flows |
| B. | Better Assets Management |
| C. | Better Working Capital Management |
| D. | All of the above |
| Answer» D. All of the above | |
| 443. |
Find the present value of Rs. 1,000 receivable 6 years hence if the rate of discount is 10 percent. |
| A. | 564.5 |
| B. | 554.5 |
| C. | 574.5 |
| D. | 600 |
| Answer» A. 564.5 | |
| 444. |
The term _______means manipulation of accounts in a way so as to conceal vital facts and present the financial statements in a way to show a better position than what it actually is. |
| A. | window dressing |
| B. | creative accounting |
| C. | window accounting |
| D. | modified accounting |
| Answer» A. window dressing | |
| 445. |
Collateralized borrowing and lending obligation (CBLO) is a discounted instrument available in electronic book entry for the maturity period ranging from __________. |
| A. | 1 day to 19 days |
| B. | 1 day to 15 days |
| C. | 1 day to 30 days |
| D. | None of the above |
| Answer» A. 1 day to 19 days | |
| 446. |
IPO refers to ____________; the first time a company comes to public to raise money. |
| A. | Immediate Public Offer |
| B. | Immediate Public Offering |
| C. | Initial Public Offer |
| D. | Initial Public Offering |
| Answer» D. Initial Public Offering | |
| 447. |
SPO refers to ________, the second and subsequent time a company raises money from the public directly. |
| A. | Second Public Offering |
| B. | Subsequent Public Offering |
| C. | Subsequent Public Offer |
| D. | Seasonal Public Offering |
| Answer» B. Subsequent Public Offering | |
| 448. |
Liquid Liability = Current Liability – Bank Overdraft – ___________ |
| A. | Cash Credit |
| B. | Trade Credit |
| C. | Both of the above |
| D. | None of the above |
| Answer» A. Cash Credit | |
| 449. |
Ratio analysis is the process of determining and interpreting numerical relationships based on _______. |
| A. | Financial values |
| B. | Financial statements |
| C. | Financial numerical information |
| D. | All of the above |
| Answer» D. All of the above | |
| 450. |
Ratio analysis is based on __________ measure. |
| A. | relative |
| B. | absolute |
| C. | Both of the above |
| D. | None of the above |
| Answer» A. relative | |
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