Financial Management MCQ & QUIZ

Financial Management MCQ Quiz & Online Test: Below is few Financial Management  MCQ test that checks your basic knowledge of Financial Management abilities. This  Financial Management Quiz & Online Test contains questions 40 of multiple choice with 4 options. You have to select the right answer to a question

1. The cost of debt capital is calculated on the basis of _____________ .

  • Annual Interest
  • Net proceeds
  • Annual Depreciation
  • Capital
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2. What is Factoring ?

  • Production Plan
  • New Financial Service
  • Cost of Sales
  • all of the above
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3. Which of the following is the goal of financial management ?

  • Maximise the wealth of Equity shareholders
  • Maximise the wealth of Preference Shareholders
  • Maximise the wealth of Debenture holders
  • All of the above
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4. ____________________ is the limitation of Traditional approach of Financial Management

  • More emphasis on long term problems
  • Ignores allocation of resources
  • One-sided approach
  • All of the above
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5. Financial management mainly focuses on ________________ .

  • Efficient management of every business
  • Brand dimension
  • Arrangement of funds
  • All elements of acquiring and using means of financial resources for financial activities
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6. Heterogeneous cash flows can be made comparable by Discounting technique or Compounding technique.

  • true
  • false

7. Which of the following is Capital market line ?

  • Capital allocation line of a market portfolio
  • Capital allocation line of a risk free asset
  • Both 1 and 2
  • All of the above
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8. A risk free security has __________ variance.

  • 0
  • 2
  • 4
  • 6
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9. ________________ is called as Dividend Ratio Method.

  • Debt Equity Method
  • Dividend Yield Method
  • Equity Method
  • Asset Method
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10. Ke = DPS/MP x 100, is used for -

  • Reserve
  • Calculating capital structure
  • Depreciation
  • calculating Cost of Equity Share Capital
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11. Which of the following is Capital Employed ?

  • Cash + Bank
  • Assets + Cash
  • Shareholders Funds + Long Funds
  • All of the above
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12. The formula used to calculate current ratio is _______________ .

  • Current liabilities / Current assets
  • Current assets / Current liabilities
  • Inventory / Current liabilities
  • Current liabilities / Inventory
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13. _____________ is an example of fixed asset.

  • Value stock
  • Live stock
  • Income stock
  • none of these
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14. Current assets are also referred to as _____________ .

  • Inventory
  • Working capital
  • Livestock
  • Investments
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15. Which of the following is short term Sources ?

  • Bank Credit
  • Public Deposit
  • Commercial Paper
  • All of the above
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16. Investment is the employment of funds on assets to earn returns.

  • true
  • false

17. Which of the following is the primary goal of financial management ?

  • To Maximize the return
  • To Minimize the risk
  • To maximize the wealth of owners
  • To maximize profit
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18. Which of the following are financial Assets ?

  • Bonds
  • Machines
  • Stocks
  • 1 and 2
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19. Savings Account are ____________ , but are not __________________ .

  • Negotiable, Liquid
  • Liquid, Marketable
  • liquid, Personal
  • None of these
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20. _________________ is not a characteristic of investments .

  • Pooled investments.
  • Reduced expenses
  • manage portfolios
  • All of the above
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21. What is Balance of Payment ?

  • Foreign exchange inflow – Foreign exchange outflow
  • Balance of trade + Net earnings on invisibles
  • balance of current account + Balance of capital account + Statistical discrepancy
  • Export of goods – Import of goods
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22. A capital investment is one that ___________ .

  • applies only to investment in fixed assets
  • has the prospect of long-term benefits.
  • has the prospect of short-term benefits.
  • is only undertaken by large corporations
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23. In finance, "working capital" means the same thing as -

  • fixed assets.
  • total assets.
  • current assets
  • current assets minus current liabilities.
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24. Liabilities varies inversely with profitability.

  • true
  • false

25. Net working capital means -

  • total assets minus fixed assets.
  • current assets minus current liabilities
  • current assets minus inventories
  • current assets.
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26. The term "capital structure" indicates to _________________ .

  • long-term debt, preferred stock, and common stock equity
  • shareholders' equity
  • total assets minus liabilities
  • All of the above
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27. Reserves & Surplus are __________________ of financing.

  • Internal Financing
  • Security Financing
  • Loans Financing
  • International Financing
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28. What is an asset ?

  • Inflow of funds
  • Source of fund
  • Use of fund
  • All of the above
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29. Current ratio is 2:5.Current liability is Rs.30000.The Net working capital is __________ .

  • Rs.18,000
  • Rs.(-) 45,000
  • Rs.(-)18000
  • Rs.45,000
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30. What is The ideal quick ratio ?

  • 2:1
  • 1:1
  • 5:1
  • 2.2
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31. What is the focal point of financial management in a firm ?

  • the creation of value for shareholders.
  • the number and types of products or services provided by the firm.
  • the dollars profits earned by the firm.
  • investment, financing, and asset management
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32. Long period of bond maturity leads to _________ .

  • stable prices
  • more price change
  • standing prices
  • mature prices
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33. The price per ratio is divided by cash flow per share ratio, is used for calculating _________________ .

  • Divided to Stock ratio
  • Cash flow to price ratio
  • sales to growth ratio
  • price to cash flow ratio
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34. The Companies that help to set benchmarks are classified as-

  • Competitive Companies
  • Benchmark Companies
  • Analytical Companies
  • Return Companies
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35. If the profit margin is equal to 4.5% and the total assets turnover is 1.8% then the return on assets Dupont Equation would be ________.

  • 0.025
  • 0.023
  • 0.081
  • None of these
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36. In Capital Budgeting, the positive net present value results in -

  • Positive Economic Value Added
  • Negative Economic Value Added
  • Zero Economic Value Added
  • Percent Economic Value Added
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37. The Cash outflows are the costs of project and are represented by ___________ .

  • Negative Numbers
  • Positive Numbers
  • Hurdle Numbers
  • Relative Numbers
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38. The Cash inflows are the revenues of project and are represented by -

  • Relative Number
  • Negative Number
  • Hurdle Number
  • Positive Number
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39. The Long period of bond Maturity lends to -

  • Stable Prices
  • More Price change
  • Standing Prices
  • Mature Prices
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40. The bond issued by corporations and exposed to default risk are classified as _____________ .

  • Default Bonds
  • Corporation Bonds
  • Risk Bonds
  • Zero Risk Bonds
View Answer

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