This quiz works best with JavaScript enabled. Home > Finance > Management > Financial Management > Financial Management – Quiz 67 🏠 Homepage 📘 Download PDF Books 📕 Premium PDF Books Financial Management Quiz 67 (30 MCQs) Quiz Instructions Select an option to see the correct answer instantly. 1. The document that lenders ask for as a guarantee that a loan will be paid. A) Interest. B) References. C) Advanced Payment. D) Collateral. Show Answer Correct Answer: D) Collateral. 2. Capital budgeting technique is a fundamental requirement of ..... ? A) Cost of debt. B) Cost of capital. C) Capital structure. D) All the above. Show Answer Correct Answer: B) Cost of capital. 3. Financial markets are: A) Places where financial instruments are bought and sold. B) Institutions that facilitate the buying and selling of financial instruments. C) Both of the above. D) Neither of the above. Show Answer Correct Answer: A) Places where financial instruments are bought and sold. 4. Securities whose values are determined by the market price or interest rate of some other asset is called ..... ? A) Derivatives. B) Hedging. C) Equities. D) Liabilities. Show Answer Correct Answer: A) Derivatives. 5. The model that describes the relation between risk and expected return is A) APT model. B) CAPM model. C) Dividend growth model. D) None. Show Answer Correct Answer: B) CAPM model. 6. Adam, Robbie, and Sean are planning their financial future. What are the key components they should consider in their financial plan? A) Setting financial goals, creating a budget, managing debt, saving and investing, and planning for college. B) Setting financial goals, creating a budget, managing debt, saving and investing, and planning for a vacation. C) Setting financial goals, creating a budget, managing debt, saving and investing, and planning for a new car. D) Setting financial goals, creating a budget, managing debt, saving and investing, and planning for retirement. Show Answer Correct Answer: D) Setting financial goals, creating a budget, managing debt, saving and investing, and planning for retirement. 7. Which one is not the international trade flows? A) Regional trade bloc. B) Trade agreements. C) Tariffs. D) Exports and imports. Show Answer Correct Answer: C) Tariffs. 8. Blue print of Financial management is drawn by A) Accountant. B) Auditor. C) Finance manager. D) Treasurer. Show Answer Correct Answer: C) Finance manager. 9. What is the other name of long term decision? A) Gross working capital. B) Working Capital. C) Financial management. D) Capital Budgeting. Show Answer Correct Answer: D) Capital Budgeting. 10. The capital structure of a company consists of the following securities:Equity share capital of Rs. 10 each Rs. 1, 00, 0008% Debentures RS. 1, 00, 00010% Preference shares Rs. 1, 00, 000The amount of operating profit is Rs. 60, 000. The tax rate applicable to the company is 50%.You are required to calculate the financial leverage of the company A) 1.234. B) 1.154. C) 1.524. D) 1.352. Show Answer Correct Answer: B) 1.154. 11. Which financial statement is crucial for evaluating a company's profitability over a specific period? A) Cash Flow Statement. B) Statement of Retained Earnings . C) Balance Sheet. D) Income Statement. Show Answer Correct Answer: D) Income Statement. 12. What are the three financial statements? A) Balance sheet, equity statement, and revenue statement. B) Balance sheet, income statement, and cash-flow statement. C) Asset statement, liability statement, and income statement. D) Cash-flow statement, accrual statement, and depreciation statement. Show Answer Correct Answer: B) Balance sheet, income statement, and cash-flow statement. 13. Capital Structure (Capital Structure) is A) A combination of long-term equity financing and debt financing. B) A combination of large long-term financing and debt financing. C) A combination of long-term equity financing and short-term financing. D) A combination of long-term financing. Show Answer Correct Answer: A) A combination of long-term equity financing and debt financing. 14. How does financial management training help improve profitability? A) It reduces overhead costs. B) It improves marketing strategies. C) It creates more efficient accounting processes. D) It optimizes cash flow management. Show Answer Correct Answer: D) It optimizes cash flow management. 15. This is the last component of Shareholder's Equity A) Reserves. B) Additional Paid-In Capital. C) Retained Earnings. D) Share Capital. Show Answer Correct Answer: C) Retained Earnings. 16. If an employee works 56 hours in one week, and earns $ 14.00 an hour, what would be his gross pay for the week? A) $ 1, 230. B) $ 784.00. C) $ 560.00. D) $ 896.00. Show Answer Correct Answer: D) $ 896.00. 17. The process of calculating present value of future cash flows A) Compounding. B) Discounting. C) Both compounding and discounting. D) None of the above. Show Answer Correct Answer: B) Discounting. 18. A B C analysis is useful for analyzing the inventories? A) Based on their quality. B) Based on physical volume. C) Based on their usage and value. D) All the above. Show Answer Correct Answer: C) Based on their usage and value. 19. Internal Rate of Return (IRR) is equal to: A) The cost of equity. B) The hurdle rate of return. C) The cost of debt. D) The actual return of the investment. Show Answer Correct Answer: D) The actual return of the investment. 20. Cost of advertising, printing prospectus, etc incurred at the time of raising funds is called ..... A) Opportunity Cost. B) Floatation Cost. C) Variable Cost. D) Marginal Cost. Show Answer Correct Answer: B) Floatation Cost. 21. These are activities related in the generation of the principal revenue of the firm A) Investing Activities. B) Financing Activities. C) Operating Activities. D) All of the above. Show Answer Correct Answer: C) Operating Activities. 22. Rate of Returns is less than Rate of Interest, company should prefer A) Equity. B) Debt. C) Both. D) None. Show Answer Correct Answer: A) Equity. 23. Systematic Risk is classified as A) Investment Risk, Market Risk and Business Risk. B) Interest Rate Risk, Market Risk and Inflation Risk. C) Financial Risk and Business Risk. D) Investment Risk, Financial Risk and Purchase power Risk. Show Answer Correct Answer: B) Interest Rate Risk, Market Risk and Inflation Risk. 24. Which of the below is NOT a major component of interest rates? A) Real rate. B) Default premium. C) Historical interest rates. D) Inflation premium. Show Answer Correct Answer: C) Historical interest rates. 25. Working capital is of- A) Flexible. B) High risk. C) Depreciable. D) Long-term. Show Answer Correct Answer: A) Flexible. 26. When the net income of the combined companies after merger exceeds the sum of the net income prior to the merger ..... Is said to A) Goodwill. B) Synergy. C) Leverage. D) None of above. Show Answer Correct Answer: B) Synergy. 27. On June 1, RM800 of goods are sold with credit terms of 1/10, net 30. On June 3 the customer returned RM100 of the goods. How much should the seller expect to receive if the buyer pays on June 8? A) RM792. B) RM693. C) RM700. D) RM692. Show Answer Correct Answer: B) RM693. 28. A reputation for unethical behavior can negatively affect the value of a company's stock. A) False. B) True. Show Answer Correct Answer: B) True. 29. Juicy Co is considering investing in a new industrial juicer for use on a new contract. It will cost $ 150, 000 and will last 2 years. Juicy Co pays corporation tax at 30% (as the cash flows occur) and, due to the health benefits of juicing, the machine attracts 100% tax-allowable depreciation immediately.Given a cost of capital of 10%, what is the minimum value of the pre-tax contract revenue receivable in two years which would be required to recover the net cost of the juicer? A) $ 127, 050. B) $ 150, 000. C) $ 105, 000. D) $ 181, 500. Show Answer Correct Answer: D) $ 181, 500. 30. A bull market is ..... and a bear market is ..... A) Bad, pessimistic. B) Pessimistic, optimistic. C) Optimistic, pessimistic. D) Good, optimistic. E) Neutral, neutral. Show Answer Correct Answer: C) Optimistic, pessimistic. ← 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