Top 550+ Solved Financial Management MCQ Questions Answer
Q. Net income approach was suggested by
a. Modigliani and Miller
b. Durand
c. Walter
d. None of these
Q. To judge the comparative risk of projects having same cost and same NPV which method is used
a. Certainty equivalent method
b. Sensitivity technique
c. Standard deviation method
d. Coefficient of variation method
Q. While evaluating capital investment proposals, the time value of money is considered in case of
a. Pay back method
b. NPV
c. Accounting rate of return
d. None of these
Q. Depreciation is included in cost in case of
a. Pay back method
b. NPV
c. Accounting rate of return
d. Present value index
Q. Which of the following is/ are the assumptions of net income approach?
a. The cost of debt is less than the cost of equity
b. There are no taxes
c. The risk perception of investors is not changed by the use of debt
d. All of the above
Q. Capital gearing refers to the relationship between equity capital and-----
a. Long term debt
b. Short term debt
c. Preference capital
d. None of these
Q. A company should follow the policy of ----- gear during inflation or boom period
a. High gear
b. Low gear
c. Medium gear
d. Any of the above
Q. Which of the following factors is/ are considered when a capital structure decision is taken?
a. Cost of capital
b. Dilution control
c. Floatation cost
d. All of the above
Q. Which of the following is not a source of long term finance?
a. Equity capital
b. Preference capital
c. Commercial paper
d. Debenture capital
Q. A cumulative preference share is one
a. In which all the unpaid dividends are carried forward and payable.
b. Which can be converted into equity shares
c. Which can be redeemed
d. Which entitle the preference shareholders to participate in surplus profits and assets.
Q. Which of the following g is a determinant of working capital of a firm?
a. Depreciation policy
b. Taxes payable by the company
c. Production policy
d. All of the above
Q. Under trading means
a. Having low amount of working capital
b. High turnover of working capital
c. Sales are less compared to assets employed
d. Assets are less compared to sales generated
Q. which of the following was set up based on the recommendations of Vaghul Committee?
a. National Stock Exchange
b. Stock Holding Corporation of India Ltd
c. Discount and Finance House of India Ltd
d. National Securities Depository Ltd
Q. Shelf stock refers to
a. Perishable goods
b. Items that are to be packaged and sold
c. Stocks which is to be stored in the shelf
d. Items that are stored by the firm and sold with little or no modification
Q. Which of the following is not an assumption of EOQ model?
a. Cost of carrying is a fixed proportion of the average value of inventory
b. The demand is even throughout the year
c. The usage for one year can be anticipated
d. Cost per order is proportional to the size of the order