This quiz works best with JavaScript enabled. Home > Finance > Management > Financial Management > Financial Management – Quiz 8 🏠 Homepage 📘 Download PDF Books 📕 Premium PDF Books Financial Management Quiz 8 (30 MCQs) Quiz Instructions Select an option to see the correct answer instantly. 1. What has the same meaning as negative cash flow? A) Deficit. B) Surplus. Show Answer Correct Answer: A) Deficit. 2. The following are NOT characteristics of VAT, namely: A) Existence of a tax invoice for the seller (Output Tax Invoice). B) Existence of a tax invoice for buyers (Input Tax Invoice). C) Both answers a and b are characteristics of VAT. D) There are event news from customers. Show Answer Correct Answer: D) There are event news from customers. 3. Which of the following is/are usually seen as forms of market failure where regulation may be a solution? 1. Imperfect competition 2. Social costs or externalities 3. 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. 4. Which of the following would NOT be considered a benefit? A) Paid vacation. B) Salary. C) Unpaid vacation. D) Health insurance. Show Answer Correct Answer: B) Salary. 5. The total money you get to "take home" from your paycheck after taxes and deductions is A) Gross Pay. B) Net Pay. C) "The Bag". D) None of above. Show Answer Correct Answer: B) Net Pay. 6. According to the net operating income approach A) Financial mix is irrelevant and it does not affect the value of the firm. B) The business risk remains constant at every level of Dept equity mix. C) Every capital is optimum capital structure as per NOI approach. D) All of the above. Show Answer Correct Answer: D) All of the above. 7. What is meant by diversification in investment? A) Investing all money in one type of asset. B) Investing money in various types of assets. C) Investing money in foreign currency. D) Investing money in precious metals. Show Answer Correct Answer: B) Investing money in various types of assets. 8. The sum of short term and long term sources of finance is known as: A) Capital structure. B) Both of these. C) Financial structure. D) None of these. Show Answer Correct Answer: C) Financial structure. 9. A contract between the issuer and the lended specifying the terms of repayments and interest to be charged. A) Revenues. B) Mortgage. C) Bond. D) Payables. Show Answer Correct Answer: C) Bond. 10. How should you write your signature on a check A) Print. B) Italian. C) Cursive. D) Hebrew. E) English. Show Answer Correct Answer: C) Cursive. 11. What is an example of a FIXED expense? A) New shoes. B) Groceries. C) Rent. D) None of above. Show Answer Correct Answer: C) Rent. 12. Reese's gross pay is $ 1, 900.00. All of his deductions total $ 550. What is his net pay? A) $ 680.00. B) $ 19.99. C) $ 1350.00. D) None of above. Show Answer Correct Answer: C) $ 1350.00. 13. If interest rates are currently 5 per cent then the NPV of $ 100 received next year will be $ 95 A) This cannot be determined. B) True. C) False, it will be more. D) False, it will be less. Show Answer Correct Answer: C) False, it will be more. 14. A smart shopper: A) Throws away receipts immediately. B) Only uses an ATM card. C) Compares prices before buying. D) Charges lots of things on a credit card. Show Answer Correct Answer: C) Compares prices before buying. 15. The amount of money you earn before taxes are taken out is your ..... A) Net Income. B) Gross Income. C) Balance. D) Savings. Show Answer Correct Answer: B) Gross Income. 16. Which formula is used to measure the degree of financial leverage A) EBIT/EBT. B) Contribution/EBIT. C) EBIT/EBT. D) EBT/EBIT. Show Answer Correct Answer: A) EBIT/EBT. 17. The ..... compensates the investor for the additional risk that the loan will not be repaid in full. A) Default premium. B) Real rate. C) Inflation premium. D) Interest rate. Show Answer Correct Answer: A) Default premium. 18. Cost of raising Funds A) Variable cost. B) Fixed Cost. C) Fluctuating cost. D) Floatation Cost. Show Answer Correct Answer: D) Floatation Cost. 19. The degree of combined leverage is A) The percentage change in sales divided by the percentage change in earnings per share. B) The percentage change in earnings before interest and taxes divided by the percentages change in sales. C) The degree of operating leverage divided by the degree of financial leverage. D) The percentage change in earnings per share divided by the percentage change in sales. Show Answer Correct Answer: D) The percentage change in earnings per share divided by the percentage change in sales. 20. In debenture, interest payable is A) Transferred to general reserve. B) Transferred to falling fund investment account. C) Charged against the firms profit. D) Appropriation of the company's profit. Show Answer Correct Answer: C) Charged against the firms profit. 21. Sophie earns $ 500 per month. She spends 15% on food/snacks. How much is she spending? A) $ 75. B) $ 100. C) $ 15. D) None of above. Show Answer Correct Answer: A) $ 75. 22. In weighted average cost of capital, a company can affect its capital cost through-1. Policy of capital structure 2. Policy of dividends 3. Policy of investment A) 1 only. B) 2 & 3. C) 1 & 3. D) All 1, 2 & 3. Show Answer Correct Answer: D) All 1, 2 & 3. 23. Identify the function of stock exchange A) (a) Trading and settlement procedure. B) (b) Dematerialisation. C) C) Pricing of securities. D) (d) Depository participants. Show Answer Correct Answer: C) C) Pricing of securities. 24. Helen has accumulated money from her daily allowance. She is looking for the best way to invest her money. She learned that Peter was in need of money for the expansion of his business. In this scenario, Peter is the ..... A) Owner. B) User of Funds. C) Customer. D) Sources of Funds. Show Answer Correct Answer: B) User of Funds. 25. A(n) would be an example of a principal, while a(n) would be an example of an agent. A) Shareholder; manager. B) Manager; owner. C) Accountant; bondholder. D) Shareholder; bondholder. Show Answer Correct Answer: A) Shareholder; manager. 26. The time value of money concept recognizes that: A) Money today is worth more than the same amount in the future. B) Money in the future is worth more than the same amount today. C) The value of money is constant over time. D) The value of money is determined by inflation. E) None of the above. Show Answer Correct Answer: A) Money today is worth more than the same amount in the future. 27. Financial analysis become useless because it: A) Measures the Solvency. B) Makes a comparative study. C) Lacks Qualitative Analysis. D) Measures the profitability. Show Answer Correct Answer: C) Lacks Qualitative Analysis. 28. When buying stocks, what's the easiest starting point A) Buy the most expensive stock. B) Buy the highest volume stock. C) Buy what you know. D) Buy the penny stocks. E) Buy stocks on the downswing. Show Answer Correct Answer: C) Buy what you know. 29. Which of the following is not a basic need? A) Holiday. B) Accomodation. C) Food. D) Clothing. Show Answer Correct Answer: A) Holiday. 30. Below are the characteristics of excessive spending, EXCEPT ..... A) Cash is too large. B) So many people are unemployed. C) Cash is too small to pay its obligations. D) Too much raw. Show Answer Correct Answer: C) Cash is too small to pay its obligations. ← 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 9 🏠 Back to Homepage 📘 Download PDF Books 📕 Premium PDF Books