This quiz works best with JavaScript enabled. Home > Finance > Management > Financial Management > Financial Management – Quiz 26 🏠 Homepage 📘 Download PDF Books 📕 Premium PDF Books Financial Management Quiz 26 (30 MCQs) Quiz Instructions Select an option to see the correct answer instantly. 1. What annual rate of return must you earn to double your money in about 9 years? Use the Rule of 72 to determine your answer. A) You would need to earn an annual rate of return of about 8%. B) You would need to earn an annual rate of return of about 10%. C) You would need to earn an annual rate of return of about 12%. D) There is not enough information to answer this question. Show Answer Correct Answer: A) You would need to earn an annual rate of return of about 8%. 2. In a futures contract, the buyer has the obligation to buy the underlying asset, while the seller has the obligation to sell. A) FALSE . B) TRUE. Show Answer Correct Answer: A) FALSE . 3. Cash & Cash Equivalent-24, 890Held for Trading-10, 000Trade and Other Receivables-16, 000Inventory-8, 960If total current liabilities amounted to 19, 900, Net Sales for the present year amounted to 480, 000 and the ending receivables totaled to 16, 500. However, it was found out that the ending inventory amounted to 9, 500 and the Cost of Goods Sold totaled to 364, 000. What is the average sale period? A) 11 days. B) 10 days. C) 12 days. D) 9 days. Show Answer Correct Answer: D) 9 days. 4. Financial instruments are: A) Debt securities. B) Equity securities. C) Derivatives. D) All of the above. Show Answer Correct Answer: D) All of the above. 5. Car insurance usually costs less or female teens than male teens ..... A) Fact. B) Fiction. Show Answer Correct Answer: A) Fact. 6. Which is the main motive is to select activities having positive impact on society in: A) Profit maximization objective. B) Welfare maximization objective. C) Wealth maximization objective. D) None of these. Show Answer Correct Answer: C) Wealth maximization objective. 7. Decrease in accounts receivable A) Operating Activities. B) Investing Activities. C) Financing Activities. D) None of above. Show Answer Correct Answer: A) Operating Activities. 8. Which one of these is a liability? A) Bonds. B) Loans. C) Shoes. D) Cash. E) Stocks. Show Answer Correct Answer: B) Loans. 9. Retained earnings items can be seen in what components of financial management. Choose the letter below. A) Income Statement. B) Balance Sheet Statement. Show Answer Correct Answer: B) Balance Sheet Statement. 10. Which of the following is not the factor affecting Investment decision. A) Rate of return of project. B) Cash flows of project. C) Flotation cost. D) Investment criteria. Show Answer Correct Answer: C) Flotation cost. 11. Q1) Basic objective of Financial Management is ..... A) Maximization of profit. B) Maximization of share holder's wealth. C) Ensuring Financial discipline in the firm. D) All of these. Show Answer Correct Answer: B) Maximization of share holder's wealth. 12. What do you NOT need to order a credit report A) Tin number. B) SSN. C) Your Legal Name. D) Permanent address. E) Previous Address (from 3 years ago). Show Answer Correct Answer: E) Previous Address (from 3 years ago). 13. Mm model irrelevance of capital structure is based on A) Cost of Dept. B) Cost of equity. C) Arbitrage process. D) All of the above. Show Answer Correct Answer: C) Arbitrage process. 14. The date on which ownership officially changes hands, is the meaning of ..... A) Redemption. B) Rate. C) Maturity. D) Settlement. Show Answer Correct Answer: D) Settlement. 15. This type of loan allows customers to borrow money up to a certain limit against the security of the commodity. A) Overdraft. B) Trade Credit. C) Cash Credit. D) None of above. Show Answer Correct Answer: C) Cash Credit. 16. The amount of money left after all deductions have been taken from the gross pay earned in pay period. A) Pay Period. B) Retirement Pay. C) Gross Pay. D) Net Pay. Show Answer Correct Answer: D) Net Pay. 17. An increase in the firm's receivable turnover ratio means that: A) It has initiated more liberal credit terms. B) It is collecting credit sales more quickly than before. C) Cash sales have decreased. D) Inventories have increased. Show Answer Correct Answer: B) It is collecting credit sales more quickly than before. 18. The following are the results of business activities. Everything is important, but the MOST IMPORTANT is: A) Investment. B) Cash. C) Profit/Profit. D) Revenue / turnover. Show Answer Correct Answer: B) Cash. 19. Calculate the cash flow for Mr Razak. Then, determine whether it is Deficit or Surplus.Active Income:RM3 000Passive Income:RM350Fixed Expenses:RM2 300Variable Expenses:RM250 A) -800 (Deficit). B) 800 (Surplus). C) 1000 (Surplus). D) -1000 (Deficit). Show Answer Correct Answer: B) 800 (Surplus). 20. How much more are short term stocks taxed compared to long term stocks A) 15-25%. B) 0-5%. C) 0.4. D) 15-20%. E) 5-10%. Show Answer Correct Answer: A) 15-25%. 21. Which of the following is not used to calculate insurance needed? A) Long-term wants. B) Long-Term Needs. C) Short-term needs. D) Maintenance expenses. E) Resources. Show Answer Correct Answer: A) Long-term wants. 22. You'll get Rs. 110 after one year if you invest Rs. 100 at 10% interest rate. A) False. B) True. Show Answer Correct Answer: B) True. 23. Short term investment decisions affect the A) Day to day working of business. B) Purchase of fixed assets. C) Long term profitabiliy. D) Large amount of funds for future. Show Answer Correct Answer: A) Day to day working of business. 24. What is the first step in the budgeting process? A) Prepare a list of each type of income and expense that will part of the budget. B) Calculate each type of income, expense, and the amount of net income or loss. C) Explain the budget to people who need to make financial decisions. D) Gather accurate financial information. Show Answer Correct Answer: A) Prepare a list of each type of income and expense that will part of the budget. 25. One of the reasons why companies are required to maximize value compared to company profits is? A) Maximizing company value considers risk factors. B) Maximizing long-term oriented profits. C) Maximizing profits considers risk factors. D) Maximizing value, not paying attention to social responsibility. Show Answer Correct Answer: A) Maximizing company value considers risk factors. 26. . When a company uses increased fixed cost for production, this is an example of what type of leverage A) Operating leverage. B) Variable cost leverage. C) Financial leverage. D) Combined leverage. Show Answer Correct Answer: A) Operating leverage. 27. Financing Decision comes under A) Investment Decision. B) Working capital decision. C) Dividend decision. D) Financial decision. Show Answer Correct Answer: D) Financial decision. 28. How much is Puan Soffia's monthly saving if she wanted to pay the down payment (10%) for a RM650, 000 house in five years? How much monthly savings should Puan Soffia save if she wants to pay a down payment (10%) for a house worth RM 650, 000 within 5 years? A) RM1083.33. B) RM900.00. C) RM902.78. D) RM1111.78. Show Answer Correct Answer: A) RM1083.33. 29. Cash flows are discounted for various reasons, but NOT because of A) Time. B) Inflation. C) Interest rate. D) Risk and uncertainty. Show Answer Correct Answer: D) Risk and uncertainty. 30. Who is the player in foreign exchange market? A) Commercial banks. B) Wholesalers. C) Retailers. D) Workers. Show Answer Correct Answer: A) Commercial banks. ← 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