This quiz works best with JavaScript enabled. Home > Management > Financial Management > Financial Management – Quiz 37 🏠 Homepage 📘 Download PDF Books 📕 Premium PDF Books Financial Management Quiz 37 (20 MCQs) Quiz Instructions Select an option to see the correct answer instantly. 1. Ethical behavior A) Is the fifth basic principles of finance. B) Cannot be a concern to managers who are expected to maximize shareholder value. C) In the corporate world means not breaking any laws. D) Is essential in business because unethical behavior destroys trust and business relationships. Show Answer Correct Answer: D) Is essential in business because unethical behavior destroys trust and business relationships. 2. Q2) All constituencies with a stake in the fortunes of the company are known as ..... A) Shareholders. B) Stakeholders. C) Creditors. D) Customers. Show Answer Correct Answer: B) Stakeholders. 3. The following are popular form of capital structure except one: A) Equity and capital shares only. B) Equity and debentures only. C) Equity shares, preference shares and debentures. D) Equity shares only. Show Answer Correct Answer: A) Equity and capital shares only. 4. The agency problem takes place between A) Shareholders and creditors. B) Managers and employees. C) Employees and customers. D) Shareholders and managers. Show Answer Correct Answer: D) Shareholders and managers. 5. A company's internal source of equity capital can be generated from retained earnings.What does a retained earning mean? A) It's a sum of money paid regularly by a company to its shareholders out of its profits. B) It's an asset account on the balance sheet that represents money due to a company in the short-term. C) It's the amount of net income left over for the business after it has paid out dividends to its shareholders. D) None of above. Show Answer Correct Answer: C) It's the amount of net income left over for the business after it has paid out dividends to its shareholders. 6. A company is evaluating an investment project with the following forecast cash flows:Time 0 1 2 3 4Cash flow ($ m) (6.5) 2.4 3.1 2.1 1.8Using discount rates of 15% and 20%, what is the internal rate of return of the investment project? (to one decimal place) A) 17.7%. B) 17.8%. C) 17.6%. D) None. Show Answer Correct Answer: B) 17.8%. 7. Capital that comes from the creditor, a debt for the company concerned is called ..... A) Own capital. B) Venture capital. C) Foreign capital. D) Company capital. Show Answer Correct Answer: C) Foreign capital. 8. Profitability and liquidity are two main objectives of ..... ? A) Cash management. B) Inventory management. C) Receivable management. D) All of these. Show Answer Correct Answer: A) Cash management. 9. Open-end credit is A) Revolving credit. B) One time only credit. Show Answer Correct Answer: A) Revolving credit. 10. Integrity is an ethical requirement for all financial managers. One aspect of integrity requires A) Performance of professional duties in accordance with applicable laws. B) Avoiding of conflict of interest. C) Refraining from improer use of inside information. D) Maintenance of an appropriate level of professional competence. Show Answer Correct Answer: B) Avoiding of conflict of interest. 11. Which of the following statements about the corporate form of business organization is true? A) The corporate form has the disadvantage of double taxation relative to a sole proprietorship. B) The corporate form is preferred over the sole proprietorship because a corporation is easier to form and faces less regulation. C) Sole proprietorships are the most common form of business organization because liability is limited to the amount invested in the business by the sole proprietor. D) The corporate form has the advantage of unlimited liability. Show Answer Correct Answer: A) The corporate form has the disadvantage of double taxation relative to a sole proprietorship. 12. What are the types of credit? A) Cash Credit, Sales Credit, Secured Credit, Revolving Credit, Single payment Credit, Installment Credit, I.O.U. B) Cash Credit, Savings account, Secured Credit, Revolving Credit, Single payment Credit, Installment Credit, I.O.U. C) Cash Credit, Checking Account, Secured Credit, Revolving Credit, Single payment Credit, Installment Credit, I.O.U. D) Cash Credit, Your parents, Secured Credit, Revolving Credit, Single payment Credit, Installment Credit, I.O.U. Show Answer Correct Answer: A) Cash Credit, Sales Credit, Secured Credit, Revolving Credit, Single payment Credit, Installment Credit, I.O.U. 13. If the Demand for money increases, what will happen to the Interest Rate? A) Decrease. B) Increase. C) No Change. D) None of above. Show Answer Correct Answer: B) Increase. 14. Cost of capital is the maximum rate of return expected by the investors A) True. B) False. Show Answer Correct Answer: B) False. 15. Steve works the same amount of hours each month. Steve worked 100 hours in the last pay period. He earns $ 22 per hour. What is Steve's gross pay? A) $ 1200. B) $ 1250. C) $ 2100. D) $ 2200. Show Answer Correct Answer: D) $ 2200. 16. What type of training do most business owners need to participate in? A) Financial literacy training. B) Investment training. C) Personnel management training. D) Financial forecasting training. Show Answer Correct Answer: A) Financial literacy training. 17. Exchange rates in the foreign exchange market represent the value of a currency relative to another currency. A) TRUE. B) FALSE. Show Answer Correct Answer: A) TRUE. 18. Two projects intersect, in terms of NPV, at a discount rate labeled the ..... A) Crossover rate. B) Internal rate of return. C) Discount rate. D) Yield to maturity. Show Answer Correct Answer: A) Crossover rate. 19. The formula of EBIT = ..... A) Sales-Variable cost. B) Contribution-Fixed cost. C) Sales-Fixed cost. D) All the above. Show Answer Correct Answer: B) Contribution-Fixed cost. 20. Which of the following identities is FALSE? A) Change in Equity = Paid-in-Surplus-Net New Borrowing from Creditors. B) Net New Borrowing = Ending Long-term Liabilities-Beginning Long-Term Liabilities. C) Cash Flow to Owners = Dividends-Net New Borrowing from Owners. D) Net New Borrowing from Owners = Change in Equity. Show Answer Correct Answer: A) Change in Equity = Paid-in-Surplus-Net New Borrowing from Creditors. ← 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