This quiz works best with JavaScript enabled. Home > Management > Financial Management > Financial Management – Quiz 102 🏠 Homepage 📘 Download PDF Books 📕 Premium PDF Books Financial Management Quiz 102 (20 MCQs) Quiz Instructions Select an option to see the correct answer instantly. 1. This is the last component of Shareholder's Equity A) Share Capital. B) Reserves. C) Retained Earnings. D) Additional Paid-In Capital. Show Answer Correct Answer: C) Retained Earnings. 2. 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) $ 784.00. B) $ 560.00. C) $ 1, 230. D) $ 896.00. Show Answer Correct Answer: D) $ 896.00. 3. 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. 4. 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. 5. Internal Rate of Return (IRR) is equal to: A) The hurdle rate of return. B) The cost of equity. C) The cost of debt. D) The actual return of the investment. Show Answer Correct Answer: D) The actual return of the investment. 6. Cost of advertising, printing prospectus, etc incurred at the time of raising funds is called ..... A) Marginal Cost. B) Opportunity Cost. C) Floatation Cost. D) Variable Cost. Show Answer Correct Answer: C) Floatation Cost. 7. 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. 8. 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. 9. 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. 10. Which of the below is NOT a major component of interest rates? A) Real rate. B) Inflation premium. C) Historical interest rates. D) Default premium. Show Answer Correct Answer: C) Historical interest rates. 11. Working capital is of- A) High risk. B) Flexible. C) Depreciable. D) Long-term. Show Answer Correct Answer: B) Flexible. 12. 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. 13. 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) RM692. B) RM693. C) RM700. D) RM792. Show Answer Correct Answer: B) RM693. 14. A reputation for unethical behavior can negatively affect the value of a company's stock. A) True. B) False. Show Answer Correct Answer: A) True. 15. 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) $ 150, 000. B) $ 105, 000. C) $ 127, 050. D) $ 181, 500. Show Answer Correct Answer: D) $ 181, 500. 16. A bull market is ..... and a bear market is ..... A) Optimistic, pessimistic. B) Neutral, neutral. C) Pessimistic, optimistic. D) Good, optimistic. E) Bad, pessimistic. Show Answer Correct Answer: A) Optimistic, pessimistic. 17. Weaknesses of the IRR approach, among others A) Considers the time value of money. B) Considers all cash flows. C) Tells whether firm value is increased. D) May produce multiple IRRs. Show Answer Correct Answer: D) May produce multiple IRRs. 18. The formula to calculate Gross Profit is: A) COGS + Expenses. B) Sales-COGS. C) Net profit + Operating expenses. D) Revenue-Owner's equity. Show Answer Correct Answer: B) Sales-COGS. 19. Which taxes must employers make matching contributions to? A) Income taxes. B) Unemployment taxes. C) FICA (Social Security and Medicare) taxes. D) All of the above. Show Answer Correct Answer: C) FICA (Social Security and Medicare) taxes. 20. It refers to the renting out of immovable property by the bank to the businessmen. A) Merchant. B) Leasing. C) Mutual funds. D) None of above. Show Answer Correct Answer: B) Leasing. ← PreviousNext →Related QuizzesManagement QuizzesFinancial Management Quiz 1Financial Management Quiz 2Financial Management Quiz 3Financial Management Quiz 4Financial Management Quiz 5Financial Management Quiz 6Financial Management Quiz 7Financial Management Quiz 8Financial Management Quiz 9 🏠 Back to Homepage 📘 Download PDF Books 📕 Premium PDF Books