Top 550+ Solved Financial Management MCQ Questions Answer
Q. Operating leverage helps in analysis of:
a. Business Risk
b. Financing Risk
c. Production Risk
d. Credit Risk
Q. Which of the following is studied with the help of financial leverage?
a. Marketing Risk
b. Interest Rate Risk
c. Foreign Exchange Risk
d. Financing risk
Q. Combined Leverage is obtained from OL and FL by their:
a. Addition
b. Subtraction
c. Multiplication
d. Any of these
Q. High degree of financial leverage means:
a. High debt proportion
b. Lower debt proportion
c. Equal debt and equity
d. No debt
Q. Operating leverage arises because of:
a. Fixed Cost of Production
b. Fixed Interest Cost
c. Variable Cost
d. None of the above
Q. Financial Leverage arises because of:
a. Fixed cost of production
b. Variable Cost
c. Interest Cost
d. None of the above
Q. Operating Leverage is calculated as:
a. Contribution ÷ EBIT
b. EBIT÷PBT
c. EBIT ÷Interest
d. EBIT ÷Tax
Q. Financial Leverage is calculated as:
a. EBIT÷ Contribution
b. EBIT÷ PBT
c. EBIT÷ Sales
d. EBIT ÷ Variable Cost
Q. Which combination is generally good for firms
a. High OL, High FL
b. Low OL, Low FL
c. High OL, Low FL
d. None of these
Q. Combined leverage can be used to measure the relationship between:
a. EBIT and EPS
b. PAT and EPS,
c. Sales and EPS,
d. Sales and EBIT
Q. Business risk can be measured by:
a. Financial leverage
b. Operating leverage
c. Combined leverage
d. None of the above
Q. Financial Leverage measures relationship between
a. EBIT and PBT
b. EBIT and EPS
c. Sales and PBT
d. Sales and EPS
Q. Use of Preference Share Capital in Capital structure
a. Increases OL
b. Increases FL
c. Decreases OL
d. Decreases FL
Q. Relationship between change in sales and change m is measured by:
a. Financial leverage
b. Combined leverage
c. Operating leverage
d. None of the above