This quiz works best with JavaScript enabled. Home > Finance > Management > Financial Management > Financial Management – Quiz 59 🏠 Homepage 📘 Download PDF Books 📕 Premium PDF Books Financial Management Quiz 59 (30 MCQs) Quiz Instructions Select an option to see the correct answer instantly. 1. How company raises money is: A) Operational role. B) Investment Role. C) Financing Role. D) None. Show Answer Correct Answer: C) Financing Role. 2. The decision function of financial management can be broken down into the decisions. A) Financing and investment. B) Investment, financing, and asset management. C) Financing and dividend. D) Capital budgeting, cash management, and credit management. Show Answer Correct Answer: B) Investment, financing, and asset management. 3. What is SMART goal? A) Specific, Measurable, Attainable, Relevant, Time-bound. B) Systematic, Manageable, Attainable, Relevant, Time-bound. Show Answer Correct Answer: A) Specific, Measurable, Attainable, Relevant, Time-bound. 4. Which of the following is an example of agency problem? A) Costs incurred for setting up a business. B) Failure of making the best investment decision. C) Payment of income tax. D) Payment of interest. Show Answer Correct Answer: B) Failure of making the best investment decision. 5. Which of the following is a result of failing to pay of your credit card on time? A) Higher taxes. B) Added benefits. C) Free upgrades. D) Increase your credit score. E) Late fees. Show Answer Correct Answer: D) Increase your credit score. 6. Arius, Erynn, and Brayden are planning to start a bakery business. They are discussing various sources of financing for their business. Can you identify the most viable options they could consider? A) Using their credit cards, borrowing from family and friends, and applying for government subsidies. B) Seeking donations, investing in the stock market, and using lottery winnings. C) Engaging in bartering, using inheritance money, and taking personal loans. D) Using personal savings, taking loans from banks or financial institutions, seeking venture capital, finding angel investors, crowdfunding, applying for grants, and forming partnerships. Show Answer Correct Answer: D) Using personal savings, taking loans from banks or financial institutions, seeking venture capital, finding angel investors, crowdfunding, applying for grants, and forming partnerships. 7. The set of ratios that are most useful in evaluating profitability is A) ROA, ROE, and cash flow to debt. B) ROA, ROE, and debt to equity ratio. C) ROA, ROE, and acid-test ratio. D) ROA, ROE, and dividend yield. Show Answer Correct Answer: D) ROA, ROE, and dividend yield. 8. Indicate, by clicking in the relevant boxes, whether the following objectives are financial or non-financial objectives of a company. Objective 1. Maximisation of market share 2. Earnings growth 3. Sales revenue growth 4. Achieving a target level of customer satisfaction 5. Achieving a target level of return on capital employed A) Financial-4 & 5 Non-financial-1, 2 & 3. B) Financial-2, 3 & 5 Non-financial-1 & 4. C) Financial-2, 4 & 5 Non-financial-1 & 3. D) Financial-1, 3 Non-financial-2, 4 & 5. Show Answer Correct Answer: B) Financial-2, 3 & 5 Non-financial-1 & 4. 9. Which of the following is true for NI approach of capital structure A) Higher debts increases value of the firm. B) Lower debt increases WACC. C) Higher equity increases value of the firm. D) All of the above. Show Answer Correct Answer: A) Higher debts increases value of the firm. 10. Bonds are considered what type of strategy A) Aggressive. B) Fund generating. C) Moderate. D) Low risk. E) High risk. Show Answer Correct Answer: D) Low risk. 11. In financial management, what does the term 'liquidity' refer to? A) The profitability of a company. B) The return on investment. C) The ability to meet short-term obligations. D) The value of assets in the long term. Show Answer Correct Answer: C) The ability to meet short-term obligations. 12. Which one of the following statements is INCORRECT? A) Money markets are markets for long-term capital. B) Money markets are operated by banks and other financial institutions. C) Money market instruments include interest-bearing instruments, discount instruments and derivatives. D) Money market instruments are traded over the counter between institutional investors. Show Answer Correct Answer: A) Money markets are markets for long-term capital. 13. Working capital is an investment in short-term assets or investment in current assets, namely: A) Cash, Receivables, Inventory and Long-term debt. B) Cash, Receivables, Inventory and Short-term debt. C) Gross working capital. D) Answers a, b and c are all correct. Show Answer Correct Answer: B) Cash, Receivables, Inventory and Short-term debt. 14. The objective of financial management is to ..... A) Generate the maximum retained earnings. B) Generate the maximum net profit. C) Generate maximum funds for the firm at the least cost. D) Generate the maximum wealth for its shareholders. Show Answer Correct Answer: D) Generate the maximum wealth for its shareholders. 15. Which one of these is non-liquid? A) Real estate. B) Loans. C) Cash. D) Bank accounts. E) Stocks. Show Answer Correct Answer: A) Real estate. 16. What is a creditor's objective in performing an analysis of financial statements? A) To determine the firm's capital structure. B) To decide whether or not the firm has operated profitably in the past. C) To determine the company's future earnings stream. D) To decide whether or not the borrower has the ability to repay interest and principal on borrowed funds. Show Answer Correct Answer: D) To decide whether or not the borrower has the ability to repay interest and principal on borrowed funds. 17. The objective of a credit policy is to curtail the credit period allowed to debtors A) True. B) May be. C) False. D) None. Show Answer Correct Answer: C) False. 18. CALCULATE THE FIXED EXPENSES IF CONTRIBUTION IS RS 15, 00, 000 AND EBIT IS RS 10, 00, 000 A) RS 5, 00, 000. B) RS 25, 00, 000. C) RS-(5, 00, 000). D) NONE OF THE ABOVE. Show Answer Correct Answer: A) RS 5, 00, 000. 19. Logan has recently started a small business and Sam, a business analyst, is helping him understand his financial performance. Sam wants to calculate the return on investment (ROI) for Logan's business. Which formula should he use? A) ROI = (Net Profit / Total Revenue) * 100. B) ROI = (Net Profit / Initial Investment) * 100. C) ROI = (Net Profit / Total Assets) * 100. D) ROI = (Net Profit / Initial Investment). Show Answer Correct Answer: B) ROI = (Net Profit / Initial Investment) * 100. 20. Which of the following statements describes the main objective of financial management? A) Efficient acquisition and deployment of financial resources to ensure achievement of objectives. B) Providing information to management for day to day functions of control and decision making. C) Providing information to external users about the historical results of the organisation. D) Maximisation of shareholder wealth. Show Answer Correct Answer: A) Efficient acquisition and deployment of financial resources to ensure achievement of objectives. 21. The traditional approach is also known as A) 2 Ap lower ch. B) N o the appr. C) Intermediate approach. D) Mm approach. Show Answer Correct Answer: C) Intermediate approach. 22. The mission of the State Reserve is to provide the United States with a safe, flexible, and stable monetary and financial system. A) False. B) True. Show Answer Correct Answer: A) False. 23. Treasurer should report to A) D. Board of directors. B) B. Vice president of operations. C) A. Chief financial officer. D) C chief executive officer. Show Answer Correct Answer: C) A. Chief financial officer. 24. These are the factors that influence market price of the corporation's stocks which are controllable by management, EXCEPT: A) Macroeconomic conditions. B) Profitability. C) Competent management. D) Dividends. Show Answer Correct Answer: A) Macroeconomic conditions. 25. What is the definition of a market cap? A) The 5 year market cap. B) The highest price of a stock for the day. C) The total price of all the shares in a company. D) Percentage of growth. E) Maximum amount of volume. Show Answer Correct Answer: C) The total price of all the shares in a company. 26. Cash dividends payments A) Operating Activities. B) Financing Activities. C) Investing Activities. D) None of above. Show Answer Correct Answer: A) Operating Activities. 27. ) "Living within your means" is a principle that promotes ..... and avoiding excessive debt. A) Financial stability. B) Overspending. C) Impulsive spending. D) Ignoring budgeting. Show Answer Correct Answer: A) Financial stability. 28. All are reasons why it is important to set goals EXCEPT ..... A) They help you see progress. B) They keep you from being unfocused. C) They motivate you. D) They give your life direction. Show Answer Correct Answer: B) They keep you from being unfocused. 29. Which of the following is true for net income approach A) Hi adept increase value of the firm. B) Higher Dept is better. C) Low adept increases weighted average cost of capital. D) All of the above. Show Answer Correct Answer: B) Higher Dept is better. 30. Which of the following is NOT typically thought of as an investment activity? A) Accurately pricing financial assets. B) The process of buying and selling financial assets. C) Repaying borrowed funds. D) Negotiating the rules and regulations of financial transactions. Show Answer Correct Answer: C) Repaying borrowed funds. ← 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