This quiz works best with JavaScript enabled. Home > Finance > Management > Financial Management > Financial Management – Quiz 10 🏠 Homepage 📘 Download PDF Books 📕 Premium PDF Books Financial Management Quiz 10 (30 MCQs) Quiz Instructions Select an option to see the correct answer instantly. 1. What are the advantages of a sole proprietorship? A) Limited liability. B) Ease of raising capital. C) Unlimited life. D) Low cost and ease of formation. Show Answer Correct Answer: A) Limited liability. 2. The shareholder's equity of a corporation has three basic components. Which does not belong to the group? A) Accounts Payable. B) Reserves. C) Share Capital. D) Retained Earnings. Show Answer Correct Answer: A) Accounts Payable. 3. Why reviewing and revising the progress of financial plan from time to time is important? A) To acheive our financial goals. B) To make sure the cash flow always positive. C) To avoid total expenses exceed total income. D) All above. Show Answer Correct Answer: D) All above. 4. A comprehensive financial plan should include wealth build-up, debts managements, insurance coverage, expenses and purification of property. A) FALSE. B) TRUE. Show Answer Correct Answer: B) TRUE. 5. At optimal capital structure A) Ko of firm is highest. B) Value of firm is maximum. C) Ko of firm is minimum. D) Both b and c. Show Answer Correct Answer: D) Both b and c. 6. What out of the following, financial planning helps to achieve? A) Arrangement of material. B) Financial control. C) Arrangement of machinery. D) All of above. Show Answer Correct Answer: B) Financial control. 7. How does borrowing contribute to a company's capital structure? A) Lowers profitability. B) Increases equity. C) Adds to liabilities. D) Reduces capital. Show Answer Correct Answer: C) Adds to liabilities. 8. How to Correct Credit Errors? A) 1. Circle the incorrect items on your credit report. B) 2. Write a letter to the reporting agency, telling them which information you think is inaccurate. Provide supporting documentation. C) 3. Send all material by certified mail. D) 4. Send a similar letter to the creditor whose reports your disagree with. Their reporting agency will conduct an investigation. E) 5.All of the these are correct. Show Answer Correct Answer: E) 5.All of the these are correct. 9. The following are not advantages of investment instruments in the form of gold A) Does not generate income. B) Liquidity. C) Hedge against inflation. D) Aset safe haven. Show Answer Correct Answer: A) Does not generate income. 10. The greater net cash flows, the faster the payback period A) TRUE. B) FALSE. Show Answer Correct Answer: A) TRUE. 11. It is a kind of bank which provides facilities of more than one type of banking. A) Rural Bank. B) Thrift Bank. C) Commercial Bank. D) Universal Bank. Show Answer Correct Answer: D) Universal Bank. 12. The major goal of financial management is A) Sales maximisation. B) Customer maximisation. C) Profit maximisation. D) Wealth maximisation. Show Answer Correct Answer: D) Wealth maximisation. 13. What is a SHORT term goal? A) A financial goal you can achieve in more than a year ( over 12 months). B) A financial goal you can reach within 1 year or less than 12 months. Show Answer Correct Answer: B) A financial goal you can reach within 1 year or less than 12 months. 14. JCW Co is appraising an opportunity to invest in some new machinery that has the following cash flows.Initial investment-$ 40, 000Net cash inflows for 5 years in advance-$ 12, 000 per annumDecommissioning costs after 5 years-$ 15, 000 What is the internal rate of return of the project, calculated using discount factors for 10% and 15% (to the nearest whole %)? A) 14. B) 12%. C) 11%. D) 13%. Show Answer Correct Answer: B) 12%. 15. Which is the best example of EARNED income? A) Interest earned on a savings account. B) Money earned from working at the mall. C) Money received from Social Security. D) Money inherited from a relative. Show Answer Correct Answer: B) Money earned from working at the mall. 16. A debit card is the same thing as a credit card A) False. B) True. Show Answer Correct Answer: A) False. 17. Payroll taxes consist of income taxes, Social Security, Medicare, and unemployment taxes. A) False. B) True. Show Answer Correct Answer: B) True. 18. Tammy has a basic account that allows her to deposit and withdraw money, write checks, and receive a monthly statement with no service charge if she manintains a minimum balance of $ 25.00. This type of account is called ..... A) IRA. B) Retirement Account. C) Checking Account. D) Savings account. Show Answer Correct Answer: C) Checking Account. 19. International financial managers need to develop strategies for transferring funds from parent companies to subsidiaries to A) Optimize the company's global operations. B) Optimize company marketing. C) Optimize company production. D) Optimize company accounting. Show Answer Correct Answer: A) Optimize the company's global operations. 20. Popular statistical measure used to measure the risk of an asset is: A) Correlation. B) Standard deviation. C) Mean. D) Mode. Show Answer Correct Answer: B) Standard deviation. 21. Under the indirect method of computing operating cash flows, decrease in trade receivable is treated as A) A cash outflow. B) A deduction from income. C) A cash inflow. D) An addition to income. Show Answer Correct Answer: B) A deduction from income. 22. The means by which a company is financed refers to the firm's ..... A) Accounts receivable management. B) Working capital management. C) Capital structure. D) Capital budgeting. Show Answer Correct Answer: C) Capital structure. 23. To establish good credit, you should: A) Pay your rent a few days late. B) Have lots of credit cards. C) Take out loans. D) Pay all of your bills on time. Show Answer Correct Answer: D) Pay all of your bills on time. 24. Your ..... is the amount of money you have left after taxes are taken out. A) Net Income. B) Budget. C) Taxes. D) Balance. Show Answer Correct Answer: A) Net Income. 25. Operating profit is calculated by ..... A) Sales-Cost of Goods Sold. B) Sales-Operating Cost. C) Gross Profit-Operating Cost. D) Gross Profit-Cost of Goods Sold. Show Answer Correct Answer: C) Gross Profit-Operating Cost. 26. Charged if the account balance goes over the set credit limit A) Penalty APR. B) Annual fee. C) Late-payment fee. D) Over-the-limit fee. Show Answer Correct Answer: D) Over-the-limit fee. 27. Is a term for matters regarding the creation, study andmanagement of money and investments. A) Finance. B) Market. C) Stock. D) Allocation. Show Answer Correct Answer: A) Finance. 28. Which financing method typically involves an interest-bearing instrument? A) Debt financing. B) Venture capital. C) Internal funds. D) Equity financing. Show Answer Correct Answer: A) Debt financing. 29. The current ratio is A) Calculated by subtracting current liabilities from current assets. B) Used to evaluate a company's solvency and long-term debt paying ability. C) Calculated by dividing current liabilities by current assets. D) Used to evaluate a company's liquidity and short-term debt paying ability. Show Answer Correct Answer: D) Used to evaluate a company's liquidity and short-term debt paying ability. 30. Minor house improvement. A) Long-term goal. B) Short-term goal. Show Answer Correct Answer: B) Short-term goal. ← PreviousNext →Related QuizzesManagement QuizzesFinance QuizzesFinancial Management Quiz 1Financial Management Quiz 2Financial Management Quiz 3Financial Management Quiz 4Financial Management Quiz 5Financial Management Quiz 6Financial Management Quiz 7Financial Management Quiz 8 🏠 Back to Homepage 📘 Download PDF Books 📕 Premium PDF Books