This quiz works best with JavaScript enabled. Home > Management > Financial Management > Financial Management – Quiz 3 🏠 Homepage 📘 Download PDF Books 📕 Premium PDF Books Financial Management Quiz 3 (20 MCQs) Quiz Instructions Select an option to see the correct answer instantly. 1. A manufacturing company has credit sales of $ 10 million. It has a gross profit margin of 65%. Payable days is 25 days (assume 365 days per year), Receivables days is 42 days and the operating cycle is 80 days. What is the level of inventory? A) $ 124, 658. B) $ 604, 110. C) $ 1, 121, 918. D) $ 1, 726, 027. Show Answer Correct Answer: B) $ 604, 110. 2. Net Operating Income Approach believes that the ..... is irrelevant and does not affect the value of the firm A) Debt. B) Equity. C) Debt, Equity Mix. D) Debt, Equity Cost. Show Answer Correct Answer: C) Debt, Equity Mix. 3. Convert 35% to a decimal A) 3.5. B) 35.00. C) .35. D) None of above. Show Answer Correct Answer: C) .35. 4. The purpose of capital budgeting is A) To help managers decide which international projects can bring more benefits to the company after receiving funding. B) To help managers fund all international projects so that they can bring more benefits to the company after receiving funds. C) To help managers fund all international projects in order to sell many shares of the company to investors. D) To help managers fund all international projects so that they can make a lot of profit from the shares the company sells to investors. Show Answer Correct Answer: A) To help managers decide which international projects can bring more benefits to the company after receiving funding. 5. Which analysis depicts the relationship between two figures A) Ratio Analysis. B) Trend Analysis. C) Cumulative figures and averages. D) Dividend Analysis. Show Answer Correct Answer: A) Ratio Analysis. 6. Are the following statements true or false? True False 1. Maximising market share is an example of a financial objective. 2. Shareholder wealth maximisation is the primary financial objective for a company listed on a stock exchange. 3. Financial objectives should be quantitative so that their achievement can be measured. A) True, False, True. B) True, True, True. C) True, False, False. D) False, True, True. Show Answer Correct Answer: D) False, True, True. 7. The long-run objective of financial management is to: A) Maximize earnings per share. B) Maximize the value of the firm's common stock. C) Maximize return on investment. D) Maximize market share. Show Answer Correct Answer: B) Maximize the value of the firm's common stock. 8. EBIT refers to: A) Earning Before Interest and Tax. B) Earning Before Income and Tax. C) Earning Before Investment and Tax. D) Earning Before Installment and Tax. Show Answer Correct Answer: A) Earning Before Interest and Tax. 9. The major advantage of a regular partnership or a corporation as a form of business organisation is the fact that both offer their owners limited liability, whereas proprietorship do not. A) True. B) False. Show Answer Correct Answer: B) False. 10. A ball costs $ 5. Tax is 6%. Find the amount of tax for the ball. A) .35. B) .25. C) .30. D) .31. Show Answer Correct Answer: C) .30. 11. Which of the following statements is/are correct?1. Securitisation is the conversion of illiquid assets into marketable securities2. The reverse yield gap refers to equity yields being higher than debt yields3. Disintermediation arises where borrowers deal directly with lending individuals A) 2 only. B) 1 and 3 only. C) 2 and 3 only. D) 1, 2 and 3. Show Answer Correct Answer: B) 1 and 3 only. 12. The customers can withdraw money easily and quickly 24 hours a day. A) Venture capital. B) Automated teller machine. C) Telebanking. D) Credit cards. Show Answer Correct Answer: B) Automated teller machine. 13. ..... decision are irreversible. A) Capital budgeting decision. B) Working capital decisions. C) Both A and B. D) None of these. Show Answer Correct Answer: A) Capital budgeting decision. 14. Select the steps involved in financial planning A) Establishing organizational goals and objectives. B) Budgeting for financial needs. C) Identify sources of funds. D) All of the above. Show Answer Correct Answer: D) All of the above. 15. All fixed assets and part of the permanent will be financed by long-term financing. The statement is best described for ..... A) Aggressive approach. B) Hedging approach. C) Preserve approach. D) Conservative approach. Show Answer Correct Answer: A) Aggressive approach. 16. The excess of the present value of benefits over the present value of costs of a course of A) A.payoff. B) B. Benefits. C) C. Wealth. D) D all of these. Show Answer Correct Answer: C) C. Wealth. 17. More value is preferred than ..... A) None. B) Less. C) Equal. D) All. Show Answer Correct Answer: B) Less. 18. Source of Finance Through Less cost is A) Debenture. B) Equity share. C) Preference share. D) Retained earnings. Show Answer Correct Answer: D) Retained earnings. 19. You just rented a new apartment and you pay $ 950.00 every month, this is a A) Variable expense. B) Periodic expense. C) Fixed expense. D) Random expense. Show Answer Correct Answer: C) Fixed expense. 20. What is the ideal maximum limit for our monthly debt installments compared to our income? A) 20%. B) 30%. C) 40%. D) None of above. Show Answer Correct Answer: B) 30%. ← PreviousNext →Related QuizzesManagement QuizzesFinancial Management Quiz 1Financial Management Quiz 2Financial Management Quiz 4Financial Management Quiz 5Financial Management Quiz 6Financial Management Quiz 7Financial Management Quiz 8Financial Management Quiz 9Financial Management Quiz 10 🏠 Back to Homepage 📘 Download PDF Books 📕 Premium PDF Books