Top 550+ Solved Financial Management MCQ Questions Answer
Q. EBIT= Rs. 1120000, PBT= Rs. 320000, Fixed Costs= Rs. 700000, Operating Leverage =
a. 1.625
b. 2.625
c. 6.625
d. 3.625
Q. Which of the following is not a Source of Fund?
a. Issue of Capital
b. Issue of Debenture
c. Decrease in working capital
d. Increase in working capital
Q. Determinants of credit policy relates to:
a. Credit standards
b. Credit terms
c. Collection Procedures
d. All of the above
Q. The following is not a Discounted Cash Flow Technique:
a. NPV
b. PI
c. Accounting of Average rate of return
d. IRR
Q. ROI (Return on Investment) can be decomposed into the following ratios:
a. Overall Turnover Ratio and Current Ratio
b. Net Profit Ratio and Fixed Assets Turnover
c. Working Capital Turnover Ratio and Net Profit Ratio
d. Net Profit Ratio and Overall Turnover Ratio
Q. Which one of the following activities is outside the purview of dividend decision infinancial management?
a. Identification of the profit after taxes
b. Measurement of the cost of funds
c. Deciding on the pay-out ratio
d. Considering issue of bonus shares to equity shareholders
Q. Which of the following does not help to increase Current Ratio?
a. Issue of Debentures to buy Stock
b. Issue of Debentures to pay Creditors
c. Sale of Investment to pay Creditors
d. Avail Bank Overdraft to buy Machine
Q. Which of the following statements is correct?
a. A higher Receivable Turnover is not desirable.
b. Interest Coverage Ratio depends upon Tax Rate.
c. Increase in Net Profit Ratio means increase in Sales
d. Lower Debt Equity Ratio means lower Financial Risk
Q. “Shareholders Wealth” in a firm is reflected by:
a. the number of people employed in the firm
b. the book value of the firm’s assets less the book value of its liabilities
c. the amount of salary paid to its employees
d. the market price per share of the firm
Q. The excess of Current Assets over Current Liabilities is called:
a. Net Current Assets
b. Net Working Capital
c. Working Capital
d. All of the above
Q. Profit Maximization is the main objective of business because:
a. Profit acts as a measure of efficiency and
b. It serves as a protection against risk
c. Both
d. none
Q. Stock holder’s wealth = ____________
a. No. of shares owned x Current stock price per share
b. No. of shares owned x Current stock price per share
c. No. of shares owned x Current stock price per share
d. none
Q. Working Capital Management refers to a Trade-off between _____________andProfitability.
a. Liquidity
b. Risk
c. Both of the above
d. None of the above
Q. Which one of the following is a medium term source?
a. Public Deposits
b. Lease Financing
c. Euro Debt Issue
d. All of the above