This quiz works best with JavaScript enabled. Home > Finance > Management > Financial Management > Financial Management – Quiz 57 🏠 Homepage 📘 Download PDF Books 📕 Premium PDF Books Financial Management Quiz 57 (30 MCQs) Quiz Instructions Select an option to see the correct answer instantly. 1. What does equity financing require the entrepreneur to give up? A) Cash. B) Control and ownership. C) Pro forma statements. D) Internal funds. Show Answer Correct Answer: B) Control and ownership. 2. Governments have a number of economic targets as part of their fiscal policy. Which of the following government actions relate predominantly to fiscal policy? 1. Decreasing interest rates in order to stimulate consumer spending 2. Reducing taxation while maintaining public spending 3. Using official foreign currency reserves to buy the domestic currency 4. Borrowing money from the capital markets and spending it on public works A) 1 only. B) 1 and 3. C) 2 and 4 only. D) 2, 3 and 4. Show Answer Correct Answer: C) 2 and 4 only. 3. Current assets of a business firm should be financed through: A) Current liability only. B) Long-term liability only. C) Both types (i.e. long and short term liabilities). D) Shareholders' funds. Show Answer Correct Answer: A) Current liability only. 4. Which of the following is considered as portfolio income? A) Money earned from working. B) A tip given to a waiter. C) Earnings from stocks. D) None of above. Show Answer Correct Answer: C) Earnings from stocks. 5. Profit maximization does not adequately describe the goal of the firm because A) Profit maximization does not require the consideration of risk. B) Profit maximization ignores the timing of a project's return. C) Maximization of dividend payout ratio is a better description of the goal of the firm. D) A and B. Show Answer Correct Answer: D) A and B. 6. Equity financing involves the activities of A) Issuing share and payment of dividends to shareholder. B) Purchasing of fixed assets. C) Purchasing of current assets. D) Borrowing money from any banks. Show Answer Correct Answer: A) Issuing share and payment of dividends to shareholder. 7. Choose the examples of long-term financial goals. A) Savings for retirement. B) Medicalexpenses. C) Save for children's education. D) All of the above. Show Answer Correct Answer: D) All of the above. 8. Which of the following financial statements provides information about a company's financial position at a specific point in time? A) Statement of retained earnings. B) Balance sheet. C) Income statement. D) Statement of cash flows. Show Answer Correct Answer: B) Balance sheet. 9. What does the top row in the following picture represent? A) HOPE. B) CNBC. C) NYSE. D) Volume in thousands. E) Volume in millions. Show Answer Correct Answer: C) NYSE. 10. What is the main role of financial managers? A) Forecasting sales growth rates. B) Obtaining funds for investment. C) Determining the best method of financing assets. D) Deciding how to invest the firm's funds. Show Answer Correct Answer: B) Obtaining funds for investment. 11. There are several types of budgets in a company's financial plan, except A) Capital Budget. B) Cash Budget. C) Tax Budget. D) Operating Budget. Show Answer Correct Answer: C) Tax Budget. 12. Maximization of shareholder wealth as a goal is superior to accounting profit maximization because A) It considers the time value of the money. B) Following the shareholder wealth maximization goal will ensure high stock prices. C) Accounting profits are not the same as cash flows. D) A and C. Show Answer Correct Answer: D) A and C. 13. Which of the following is not an important financial management decision A) Dividend Decision. B) Assets Management Decision. C) Investing Decision. D) Liquidity decision. Show Answer Correct Answer: B) Assets Management Decision. 14. Which of the following organisations is most likely to benefit from a period of high price inflation? A) An organisation which has a large number of long term payables. B) An exporter of goods to a country with relatively low inflation. C) A supplier of goods in a market where consumers are highly price sensitive and substitute imported goods are available. D) A large retailer with a high level of inventory on display and low rate of inventory turnover. Show Answer Correct Answer: A) An organisation which has a large number of long term payables. 15. Which of the following assets is not considered as current asset: A) Furniture. B) Goodwill. C) Cash. D) Stock. Show Answer Correct Answer: B) Goodwill. 16. Barack Obama thinks that the scope of modern financial management has expanded with the introduction of ..... A) Procurement of optimal capital. B) Efficient allocation of capital. C) Capital budgeting technique. D) Financial planning . Show Answer Correct Answer: C) Capital budgeting technique. 17. Following are some guidelines for international financial managers to minimize currency risk, except A) Reducing the use of foreign currency in transactions. B) Seek expert advice from banks or consultants to organize programs and strategies. C) Determine the level of risk the company can tolerate. D) Monitoring changes in major currencies can help reduce costly mistakes. Show Answer Correct Answer: A) Reducing the use of foreign currency in transactions. 18. E-file offers direct deposit for ..... refunds. A) Faster. B) Smaller. C) Increased. D) None of above. Show Answer Correct Answer: A) Faster. 19. What is included in financial planning? A) Determining financial objectives. B) Determining financial policies. C) Determining financial procedures. D) All of these. Show Answer Correct Answer: D) All of these. 20. The "new issues market" ..... where first-time security issues are offered for sale ..... is called the secondary market. A) FALSE. B) TRUE. Show Answer Correct Answer: A) FALSE. 21. A firm needs to find the sources of fund and then plan to utilize or use the fund for firm's benefits. A) True. B) False. Show Answer Correct Answer: A) True. 22. Almost everyone can find at least one way to save money. A) Fiction. B) Fact. Show Answer Correct Answer: B) Fact. 23. The employees full name, address, and Social Security number. A) Paystub Record. B) W-4. C) I-9. D) Personal Information. Show Answer Correct Answer: D) Personal Information. 24. What is one reason you should keep bank account records up to date that can impact you annually? A) Inflation. B) Net worth. C) Tax purposes. D) Credit score. E) Assets. Show Answer Correct Answer: C) Tax purposes. 25. Your firm intends to finance the purchase of a new construction crane. The cost is $ 1, 500, 000. What is the size of the first payment if the crane is financed with an interest-only loan at an annual rate of 8.50%? A) $ 127, 500.00. B) $ 127, 550.00. C) $ 228, 611.56. D) $ 3, 391, 475.16. Show Answer Correct Answer: A) $ 127, 500.00. 26. A difference between actual and budgeted performance A) Ratio. B) Budget. C) Expense. D) Discrepancy. Show Answer Correct Answer: D) Discrepancy. 27. A sum of money in the hand has ..... value than the same sum to be paid in the future. A) Equal. B) Lesser. C) No. D) Greater. Show Answer Correct Answer: D) Greater. 28. Financial analysis and reporting: A) Provides insights into a company's financial health, performance, and profitability. B) Helps investors make informed investment decisions. C) Both of the above. D) Neither of the above. Show Answer Correct Answer: C) Both of the above. 29. ..... security is known as variable income security. A) Debentures. B) Preference shares. C) Equity shares. D) None of these. Show Answer Correct Answer: C) Equity shares. 30. What is it called when there is debt created without any collateral promised to the creditor? A) Unsecured debt. B) Insolvent. C) Total assets. D) Secured debt. E) Bankruptcy. Show Answer Correct Answer: A) Unsecured debt. ← 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