Top 550+ Solved Financial Management MCQ Questions Answer
Q. In the _______________, the future value of all cash inflow at the end of time horizon ata particular rate of interest is calculated.
a. Risk-free rate
b. Compounding technique
c. Discounting technique
d. Risk Premium
Q. ______________ is the price at which the bond is traded in the stock exchange.
a. Redemption value
b. Face value
c. Market value
d. Maturity value
Q. _____________ enhance the market value of shares and therefore equity capital is notfree of cost.
a. Face value
b. Dividends
c. Redemption value
d. Book value
Q. In _______________ approach, the capital structure decision is relevant to the valuation of the firm.
a. Net income
b. Net operating income
c. Traditional
d. Miller and Modigliani
Q. When __________ is greater than zero the project should be accepted.
a. Internal rate of return
b. Profitability index
c. Net present value
d. Modified internal rate of return
Q. ____________ is defined as the length of time required to recover the initial cash out-lay.
a. Payback-period
b. Inventory conversion period
c. Discounted payback-period
d. Budget period
Q. _______________ refers to the amount invested in various components of current assets.
a. Temporary working capital
b. Net working capital
c. Gross working capital
d. Permanent working capital
Q. ____________ is the length of time between the firm’s actual cash expenditure and itsown cash receipt.
a. Net operating cycle
b. Cash conversion cycle
c. Working capital cycle
d. Gross operating cycle
Q. _______________ refers to a firm holding some cash to meet its routine expenses that areincurred in the ordinary course of business.
a. Speculative motive
b. Transaction motive
c. Precautionary motive
d. Compensating motive
Q. _______________ refers to the length of time allowed by a firm for its customers tomake payment for their purchases.
a. Holding period
b. Pay-back period
c. Average collection period
d. Credit period
Q. Amounts due from customers when goods are sold on credit are called _____________.
a. Trade balance
b. Trade debits
c. Trade discount
d. Trade off
Q. ____________________ and __________________________ are the two versions of goals of the financial management of the firm.
a. Profit maximisation, Wealth maximization
b. Production maximisation, Sales maximisation
c. Sales maximisation, Profit maximization
d. Value maximisation, Wealth maximisation
Q. Consider the below mentioned statements: 1. A company is considered to be overcapitalised when its actual capitalisation is lower than the proper capitalisation as warranted by the earning capacity 2. Both over-capitalisation and under-capitalisation are detrimental to the interests of the society. State True or False:
a. 1-True, 2-True
b. 1-False, 2-True
c. 1-False, 2-False
d. 1-True, 2-False
Q. Consider the below mentioned statements: 1. The dividends are not cumulative for equity shareholders, that is, they cannot be accumulated and distributed in the later years. 2. Dividends are taxable. State True or False:
a. 1-True, 2-True
b. 1-False, 2-True
c. 1-False, 2-False
d. 1-True, 2-False
Q. ____________ and____________ carry a fixed rate of interest and are to be paid offirrespective of the firm’s revenues.
a. Debentures, Dividends
b. Debentures, Bonds
c. Dividends, Bonds
d. Dividends, Treasury notes