This quiz works best with JavaScript enabled. Home > Finance > Management > Financial Management > Financial Management – Quiz 55 🏠 Homepage 📘 Download PDF Books 📕 Premium PDF Books Financial Management Quiz 55 (30 MCQs) Quiz Instructions Select an option to see the correct answer instantly. 1. PD Co is deciding whether to replace its delivery vans every year or every other year. The initial cost of a van is $ 20, 000. Maintenance costs would be nil in the first year, and $ 5, 000 at the end of the second year. Secondhand value would fall from $ 10, 000 to $ 8, 000 if it held onto the van for 2 years instead of just 1. PD Co's cost of capital is 10%. How often should PD Co replace its vans, and what is the equivalent annual cost (EAC) of that option?Replace every EACYear $ A) 2, 8, 761. B) 1, 10, 910. C) 2, 10, 093. D) 1, 12, 002. Show Answer Correct Answer: C) 2, 10, 093. 2. Compounding is the process in which an asset's ....., from either capital gains or interest, are reinvested to generate additional earnings over time. A) Expenses. B) Value. C) Price. D) Earnings. Show Answer Correct Answer: D) Earnings. 3. Jose wants to buy a new pair of Air Jordan 11's. They cost $ 300. He wants to buy them in 4 months. How much money should he save each month in order to buy the shoes? A) $ 100. B) $ 50. C) $ 75. D) None of above. Show Answer Correct Answer: C) $ 75. 4. Facilitates the sale of short-term debt securities by deficit units to surplus units. A) Derivation Securities. B) Money Market. C) Valuation of Securities. D) Capital Market. Show Answer Correct Answer: B) Money Market. 5. One benefit of using e-file to prepare and file federal and state income taxes is ..... A) Takes longer to complete. B) Increased accuracy in calculations. C) Increased math errors. D) None of above. Show Answer Correct Answer: B) Increased accuracy in calculations. 6. Which of the following is not concerned with long term investment decision? A) Advertisement Campaign. B) Purchase of Fixed Asset. C) Payment of salaries to employees. D) Launching a product line. Show Answer Correct Answer: C) Payment of salaries to employees. 7. Banks require collateral as security for their loans. A) False. B) True. Show Answer Correct Answer: B) True. 8. Which of the following is not a key component in the SMART concept for goal setting? A) Goal. B) Measurable. C) Specific. D) Time-bound. Show Answer Correct Answer: A) Goal. 9. It estimates the overall debt status of the firm in light of its asset base and earning power. A) Debt-Utilization. B) Liquidity. C) Profitability. D) Asset utilization. Show Answer Correct Answer: A) Debt-Utilization. 10. Short-term financial goals are less than a year and donot involve a large amount of money to be achieved.True or false? A) False. B) True. Show Answer Correct Answer: B) True. 11. Margin trading means borrowing debt and trading in shares with the borrowed fund A) False. B) True. Show Answer Correct Answer: B) True. 12. What do you need to do within the process of evaluating financial statues? A) Evaluate assets owned. B) Evaluate assets owned and liabilities borne. C) Check savings and investments owned. D) Check credit cards debts. Show Answer Correct Answer: B) Evaluate assets owned and liabilities borne. 13. Operating leverage measures ..... A) Business Risk. B) Financial Risk. C) Market Risk. D) Production Risk. Show Answer Correct Answer: A) Business Risk. 14. Managers' Decisions are essential factors. A) Money Has Time Value. B) Cash Flows Are Source Of Values. C) Risk Return Trade Off. D) Market Prices Reflect Information. Show Answer Correct Answer: D) Market Prices Reflect Information. 15. What does a cash budget help financial managers to anticipate? A) Loan needs, debt repayments, operating costs, and short-term investments. B) Report a company's assets, liabilities and shareholders' equity at a specific point in time. C) Profit margin or a company in a specific point in time. D) None of above. Show Answer Correct Answer: A) Loan needs, debt repayments, operating costs, and short-term investments. 16. Other things remaining the same, an increase in the tax rate on corporate profit will A) Make debt relatively cheaper. B) Make debt relatively costlier. C) No impact on cost of debt. D) We can't say. Show Answer Correct Answer: A) Make debt relatively cheaper. 17. What type of financial instrument is an equity? A) Deposit. B) Loan. C) Bond. D) Stock. Show Answer Correct Answer: D) Stock. 18. The two key financial markets are the secondary market and primary market. A) FALSE . B) TRUE. Show Answer Correct Answer: A) FALSE . 19. Allow a person to buy goods and services up to a certain limit without immediate payment. The amount is paid to the shops, hotel, etc. by the commercial banks. A) Credit cards. B) Telebanking. C) Venture capital. D) Automated teller machine. Show Answer Correct Answer: A) Credit cards. 20. Who does the attendance? A) Professor Dinter. B) You do!. C) Your Mom. D) Nobody does. E) Your TA. Show Answer Correct Answer: E) Your TA. 21. What type of records identify the type and number of products on hand for sale? A) Inventory. B) Current. C) Payroll. D) Asset. Show Answer Correct Answer: A) Inventory. 22. The present value of $ 115, 000 expected to be received one year from today at an interest rate (discount rate) of 10% per year is: A) $ 121, 000. B) $ 100, 500. C) $ 104, 545. D) $ 110, 000. Show Answer Correct Answer: C) $ 104, 545. 23. Which of the following is an example of short-term finance source? A) Fixed deposit. B) Preference share. C) Debenture. D) Trade credit. Show Answer Correct Answer: D) Trade credit. 24. What is not part of the Financial Report is A) Laporan Neraca (Balance Sheet). B) Profit and Loss Report (Income Statement). C) Laporan Arus Kas (Cash Flow Statement). D) Working Capital Report (Net working Capital Statement). Show Answer Correct Answer: D) Working Capital Report (Net working Capital Statement). 25. Makenzy, Tiernan, and Kylonie are running a small business. They are trying to understand the concept of break-even point. Can you explain it to them? A) Break-even point is the point at which total cost and total revenue are equal, i.e., there is no net loss or gain. B) Break-even point is the total amount of variable costs that a company has. C) Break-even point is the total amount of fixed costs that a company has. D) Break-even point and financial leverage are the same thing in a business. Show Answer Correct Answer: A) Break-even point is the point at which total cost and total revenue are equal, i.e., there is no net loss or gain. 26. Financial ratios are used to: A) Provide insights into a company's liquidity, profitability, efficiency, and solvency. B) Aid in decision-making and performance evaluation. C) Track a company's financial performance over time. D) All of the above. Show Answer Correct Answer: A) Provide insights into a company's liquidity, profitability, efficiency, and solvency. 27. Which of the following is NOT a tax form A) Form 1099-DIV. B) Form W4. C) Form 1040-EZ. D) Form 1099-TIN. E) Form W2. Show Answer Correct Answer: D) Form 1099-TIN. 28. Which of the following statements are correct? (1) Capital market securities are assets for the seller but liabilities for the buyer (2) Financial markets can be classified into exchange and over-the-counter markets (3) A secondary market is where securities are bought and sold by investors 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. 29. It corresponds to an indicator that defines how many products or services have been produced for each of the resources used in their production (labor, time and capital, among others) within a determined period. A) Optimize. B) Utility. C) Costs. D) Productivity. Show Answer Correct Answer: D) Productivity. 30. Based on the example below, which items need to be included in a financial plan?I. InsuranceII. Emergency fundIII. Savings and investmentsIV. Debts management A) II and III. B) I, II and III. C) II, III and IV. D) I, II, III and IV. Show Answer Correct Answer: D) I, II, III and IV. ← 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