This quiz works best with JavaScript enabled. Home > Finance > Management > Financial Management > Financial Management – Quiz 58 🏠 Homepage 📘 Download PDF Books 📕 Premium PDF Books Financial Management Quiz 58 (30 MCQs) Quiz Instructions Select an option to see the correct answer instantly. 1. One drawback of switching from a partnership to the corporate form of organization is the following: A) It makes it more difficult for the firm to raise additional capital. B) It makes the firm's investors subject to greater potential personal liabilities. C) It makes it more difficult for the firm's investors to transfer their ownership interests. D) It subjects the firm to additional regulations. Show Answer Correct Answer: D) It subjects the firm to additional regulations. 2. A ratio that shows the company's ability to settle its short-term obligations A) Current Ratio. B) Quick Ratio. C) Acid Test Ratio. D) All answers are correct. Show Answer Correct Answer: D) All answers are correct. 3. Portion of profit after tax, which is distributed to shareholders is a A) Financing decision. B) Dividend decision. C) Investment decision. D) None of above. Show Answer Correct Answer: B) Dividend decision. 4. If net credit sales for a given year are RM400, 000 and the average accounts receivable are RM20, 000, What is the accounts receivable turnover? A) 50. B) 20. C) 80. D) 200. Show Answer Correct Answer: B) 20. 5. Assume that you are willing to postpone consumption today and buy a certificate of deposit (CD) at your local bank. Your reward for postponing consumption implies that at the end of the year ..... A) You will be able to buy the same amount of goods or services. B) You will be able to consume fewer goods. C) You will be able to buy more goods or services. D) You will be able to buy fewer goods or services. Show Answer Correct Answer: C) You will be able to buy more goods or services. 6. Which of the following does NOT form part of the objectives of a corporate governance best practice framework? A) Separation of chairperson and CEO roles. B) Establishment of audit, nomination and remuneration committees. C) Minimisation of risk. D) Employment of non-executive directors. Show Answer Correct Answer: C) Minimisation of risk. 7. EBIT of NS Ltd. is ₹ 4, 50, 000.Debt in capital structure = ₹ 6, 00, 000Cost of debt (Kd) =10%Cost of equity (Ke) = 12.5%Ignore taxation.Total market value of X Ltd. =? A) ₹ 32, 70, 000. B) ₹ 37, 20, 000. C) ₹ 34, 72, 222. D) ₹ 34, 70, 000. Show Answer Correct Answer: B) ₹ 37, 20, 000. 8. What does it mean when financial managers doing financial control? A) Comparing actual revenues, costs & expenses with its budget planning. B) Estimating the company's short and long term financial needs. C) Setting income forecast and allocating the use of the company's financial resources. D) None of above. Show Answer Correct Answer: A) Comparing actual revenues, costs & expenses with its budget planning. 9. Financial instruments can be supported by debt (promise of future cash) or equity (ownership in something of value). A) True. B) False. C) Maybe. D) It depends on the situation. Show Answer Correct Answer: A) True. 10. Corporation finance is a part of public finance A) True. B) False. Show Answer Correct Answer: B) False. 11. RENT, HOUSE INSTALMENT, INSURANCE, AND CREDIT CARD PAYMENT ARE: A) FIXED EXPENSES. B) VARIABLE EXPENSES. Show Answer Correct Answer: A) FIXED EXPENSES. 12. Finance is a broad term that describes activities associated with ....., leverage or debt, credit, capital markets, ....., and ..... A) Banking, investments, fintech. B) Banking, money, investments. C) Banking, money, fintech. D) Banking, insurance, fintech. Show Answer Correct Answer: B) Banking, money, investments. 13. Which of the following is/are usually seen as forms of market failure where regulation may be a solution?1. Imperfect competition2. Social costs or externalities3. Imperfect information. A) 1 only. B) 1 and 2 only. C) 2 and 3 only. D) 1, 2 and 3. Show Answer Correct Answer: D) 1, 2 and 3. 14. Which of the following is true for "Savings" ? A) The income remaining from the household sector after all consumption has taken place. B) The functional relationship between savings and the level of income is the savings function. C) Both A&B. D) None. Show Answer Correct Answer: C) Both A&B. 15. Gross working capital refers to the investment in all the current liabilities. A) False. B) True. Show Answer Correct Answer: A) False. 16. What are the components of capital structure A) Debts and equity. B) Debts, preference shares and equity. C) Debts, revenue and equity. D) None of the above. Show Answer Correct Answer: B) Debts, preference shares and equity. 17. Corporate Finance is wider than business finance A) False. B) True. Show Answer Correct Answer: B) True. 18. Which of the following is a function of the finance manager A) Mobilizing funds. B) Risk return trade off. C) Deployment of funds. D) All of the above. Show Answer Correct Answer: D) All of the above. 19. The time lag between placing an order and actual receipt of materials is known as A) Order placement time. B) Lead time. C) Material receipt time. D) Make time. Show Answer Correct Answer: B) Lead time. 20. Cash & Cash Equivalent-24, 890Held for Trading-10, 000Trade and Other Receivables-16, 000Inventory-8, 960If total liabilities amounted to 598, 030 and total assets amounted to 1, 014, 082. How much is the Shareholder's Equity? A) 390052. B) 400, 052. C) 356, 202. D) 416, 052. Show Answer Correct Answer: D) 416, 052. 21. A firm borrows @12% and the tax rate is 25%. The after-tax cost of debt is ..... A) 9%. B) 15%. C) 25%. D) 12%. Show Answer Correct Answer: A) 9%. 22. Which of the following statements concerning profit are correct?1. Accounting profit is not the same as economic profit2. Profit takes account of risk3. Accounting profit can be manipulated by managers A) 1 and 3 only. B) 1 and 2 only C. C) 2 and 3 only. D) 1, 2 and 3. Show Answer Correct Answer: A) 1 and 3 only. 23. A project has an initial outflow followed by years of inflows. What would be the effect on NPV and the IRR of an increase in the cost of capital? Described to the expected impact from this increase.Item-1. NPV 2. IRR A) No Change, No Change. B) Decrease, Decrease. C) Increase, No Change. D) Decrease, No Change. Show Answer Correct Answer: D) Decrease, No Change. 24. Which things are not included in working capital? A) Account Receivable. B) Property, Building and equipment. C) Inventory. D) All answers are correct. Show Answer Correct Answer: B) Property, Building and equipment. 25. The decisions relating to the use of profits or income of an entity or organization are known A) Dividend decisions. B) Finance decisions. C) Any of these. D) Investment Decision. Show Answer Correct Answer: A) Dividend decisions. 26. Which budget focuses on a company's long-term capital investments? A) Capital budget. B) Flexible budget. C) Operational budget. D) Cash budget. Show Answer Correct Answer: A) Capital budget. 27. Maximum returns to shareholder is ensured by maximizing ..... and the market price of shares. A) EBT. B) EBIT. C) EPS. D) EAT. Show Answer Correct Answer: C) EPS. 28. In NC the insurances required by all people are A) Car insurance. B) Life insurance. C) Home insurance. D) All of the answers are correct. Show Answer Correct Answer: A) Car insurance. 29. Unfavourable financial leverage leads to A) Increase in EPS. B) Decrease in EPS. C) EPS is not affected. D) Lncrease in tax. Show Answer Correct Answer: B) Decrease in EPS. 30. Which ratio measures the efficiency of a company's utilization of its assets to generate profits? A) Current Ratio. B) Quick Ratio. C) Debt Ratio. D) Return on Assets. Show Answer Correct Answer: D) Return on Assets. ← 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