This quiz works best with JavaScript enabled. Home > Finance > Management > Financial Management > Financial Management – Quiz 21 🏠 Homepage 📘 Download PDF Books 📕 Premium PDF Books Financial Management Quiz 21 (30 MCQs) Quiz Instructions Select an option to see the correct answer instantly. 1. In case of ..... One existing company takes over the business of another company and no new company is formed A) Demerger. B) Absorption. C) Merger. D) Amalgamation. Show Answer Correct Answer: B) Absorption. 2. ..... refers to a firm holding some cash to meet its routine expenses that are incurred in the ordinary course of business. A) Compensating motive. B) Speculative motive. C) Precautionary motive. D) Transaction motive. Show Answer Correct Answer: D) Transaction motive. 3. What is the formula for calculating the Net Present Value (NPV) of a project or investment? A) NPV = Initial Investment / Annual Cash Flow. B) NPV = Total Revenue-Total Expenses. C) NPV = Future Value / Present Value. D) NPV = Present Value-Initial Investment. Show Answer Correct Answer: D) NPV = Present Value-Initial Investment. 4. Capital structure shows A) Interest coverage ratio. B) Debtor-creditor ratio. C) Fixed assets-current assets ratio. D) Debt-equity ratio. Show Answer Correct Answer: D) Debt-equity ratio. 5. Net Present Value (NPV) is: A) Total discounted free cash flows to all capital providers minus total invested capital. B) Total undiscounted free cash flows to all capital providers minus total invested capital. C) Total discounted net profits minus total invested capital. D) Total discounted free cash flows to all capital providers minus invested equity capital. Show Answer Correct Answer: A) Total discounted free cash flows to all capital providers minus total invested capital. 6. Investment Decision is also called A) Capital budgeting. B) Current Decisions. C) Working capital decisions. D) All Above. Show Answer Correct Answer: A) Capital budgeting. 7. A ..... is a for profit institution that is run by share holders. A) Commercial bank. B) Credit unions. C) Retirement accounts. D) None of above. Show Answer Correct Answer: A) Commercial bank. 8. If Employee A, works 37 hours in one week and their hourly pay rate is:$ 10.25; what is their gross pay for the week? A) $ 37.95. B) $ 380.00. C) $ 379.25. D) $ 300.25. Show Answer Correct Answer: C) $ 379.25. 9. Which THREE of the following will adversely affect the reported earnings per share of a profit-seeking company for an accounting period?1. A larger than expected tax liability for the period.2. Interest payable to creditors is higher than expected.3. A larger than usual dividend declared for ordinary shareholders.4. The company issues some 7% preference shares at the beginning of the accounting period.5.The reversal of a provision made in the previous accounting period. A) 1, 2, 5. B) 2, 4, 5. C) 1, 2, 4. D) 2, 3, 4. Show Answer Correct Answer: C) 1, 2, 4. 10. How would payments for taxes be classified? A) Operating outflow. B) Operating inflow. C) Investing inflow. D) Investing outflow. Show Answer Correct Answer: A) Operating outflow. 11. Which of the following statements are correct? (1) Share option schemes always reward good performance by managers (2) Performance-related pay can encourage dysfunctional behaviour (3) Value for money as an objective in not-for-profit organisations requires the pursuit of economy, efficiency and effectiveness. A) 1 and 2 only. B) 1 and 3 only. C) 2 and 3 only. D) 1, 2 and 3. Show Answer Correct Answer: C) 2 and 3 only. 12. Which of the following is a financing decision? A) Providing for doubtful debts. B) Issuing a 5-year Bond. C) Depreciating a fixed asset. D) None of above. Show Answer Correct Answer: B) Issuing a 5-year Bond. 13. Protection is very important. Which of these does not fall into the financial protection category? A) Insurance. B) Hire Security Guards at Home. C) Emergency Fund. D) None of above. Show Answer Correct Answer: B) Hire Security Guards at Home. 14. Neveah, Samuel, and Stephen are studying for their financial management exam. They are discussing the concept of working capital. According to their understanding, what is the role of working capital in financial management? A) Neveah believes that working capital is not important in financial management. B) Samuel thinks that working capital is the difference between current assets and current liabilities. C) Stephen says that working capital is the total amount of a company's equity. D) They all agree that working capital is the amount of money a company has available to pay its short-term expenses. Show Answer Correct Answer: D) They all agree that working capital is the amount of money a company has available to pay its short-term expenses. 15. Capital markets are markets for short term debt instruments maturing in less than one year, and money markets are markets for long term debt instruments maturing in more than one year. A) True. B) False. Show Answer Correct Answer: B) False. 16. The action or process of allocating or distributing something A) Capital. B) Allocation. C) Bonds. D) Stocks. Show Answer Correct Answer: B) Allocation. 17. Examples of cash outflows A) Salaries, dividend. B) Electricity, rent. C) Allowances, investment. D) Interest, housebloan. Show Answer Correct Answer: B) Electricity, rent. 18. What happens if you don't pay your Credit Card? A) Nothing. B) You can't use your credit card. C) You Impact your interest rate. D) Your mom yells at you. E) Your credit card gets revoked. Show Answer Correct Answer: C) You Impact your interest rate. 19. What is the EAR if the APR is 5% and compounding is quarterly? A) Slightly above 5.09%. B) Slightly below 5.09%. C) Under 5.00%. D) Over 5.25%. Show Answer Correct Answer: A) Slightly above 5.09%. 20. Financial leverage is intended to A) Increase return on capital employed. B) Increase net equity returns. C) Decrease volatility in return. D) Increase return on capital employed and net equity. Show Answer Correct Answer: D) Increase return on capital employed and net equity. 21. What is the major objective of financial management? A) Profit Maximization. B) Wealth Maximization. C) None of them. D) None of above. Show Answer Correct Answer: B) Wealth Maximization. 22. Positive cash flow is also known as A) Deficit. B) Surplus. Show Answer Correct Answer: B) Surplus. 23. Cash & Cash Equivalent-24, 890Held for Trading-10, 000Trade and Other Receivables-16, 000Inventory-8, 960 If total current liabilities amounted to 19, 900. How much is the quick assets? A) 40, 890. B) 24, 890. C) 49, 850. D) 50, 890. Show Answer Correct Answer: D) 50, 890. 24. Which of the following is NOT in a bank statement? A) Deposits. B) Charges. C) Withdrawals. D) Beginning and ending balance for the period. E) Cash in hand. Show Answer Correct Answer: E) Cash in hand. 25. What does ARM stand for? A) An appendage from your torso with a hand and elbow. B) Adjustable rate mortgage. C) Adjustable rate money. D) Adjustable ratio mortgage. Show Answer Correct Answer: B) Adjustable rate mortgage. 26. Encik Sharul wants to buy a car in two years. His total monthly income is RM 5 600 and his total monthly fixed and variable expenses is RM 3 800. He plans to pay RM 8 400 as the down payment of the car. How much is his monthly savings in order to achieve his financial goal? A) RM180. B) RM275. C) RM350. D) RM75. Show Answer Correct Answer: C) RM350. 27. Which of these is not a part of Capital Structure? A) Short-term borrowings. B) Debentures. C) Equity Shares. D) Bonds. Show Answer Correct Answer: A) Short-term borrowings. 28. Future value interest factor takes A) Deflation. B) Compounding. C) Discounting. D) Inflation. Show Answer Correct Answer: B) Compounding. 29. Which is NOT a good investment? A) Houses. B) Solar panels. C) Real estate. D) Stocks. E) Cars. Show Answer Correct Answer: E) Cars. 30. Keshawn wants to buy a new shirt for $ 16.50, what would his total be with a sales tax of 7.5%? A) $ 17.47. B) $ 17.50. C) $ 15.26. D) $ 17.74. Show Answer Correct Answer: D) $ 17.74. ← 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