Top 250+ Solved Functional Areas of Business MCQ Questions Answer
Q. The extent to which the firm has fixed financing costs arising from the use of debt is measured by
a. Combined leverage
b. Operating leverage
c. Financial leverage
d. None of the above
Q. Which of the following is not a component of current assets?
a. Cash
b. Debtors
c. Bills Payables
d. Inventories
Q. The modern approach to finance functions considers which of the following?
a. Investment decisions
b. Financing decisions
c. Dividend decisions
d. All of the above
Q. A firm should select a financing mix which maximizes its value and the shareholders’ wealth. Such is referred to as
a. Optimal Capital Ration
b. Optimal Capital Budget
c. Optimal Capital costs
d. Optimal Capital structure
Q. ________ varies with the volume of operations
a. Fixed/Permanent WC
b. Fluctuating/Temporary WC
c. Gross WC
d. Net WC
Q. A theory known as dividend irrelevance theory is:
a. Walter’s Model
b. Gordon’s Model
c. Modigliani & Miller’s Model
d. None of the above
Q. “_______________ of a company refers to the make-up of its capitalization and it includes all long-term capital resources viz., loans, reserves, shares and bonds. - Gerstenberg.
a. Capital Ration
b. Capital Budget
c. Capital costs
d. Capital structure
Q. Which of the following is not short-term source of capital/finance?
a. Bank overdraft
b. Trade credit
c. Debenture
d. Bills of exchange
Q. Trading on equity means
a. Taking advantage of equity share capital to borrow funds on reasonable basis
b. Taking advantage of the conditions prevailing in the capital market
c. Taking advantage of prevailing rate of interest
d. None of the above.
Q. A good financial structure should be
a. Flexible enough to have scope for expansion or contraction
b. Flexible enough to convert working capital
c. Flexible enough to lay down policies
d. None of the above
Q. Financial planning is concerned with
a. Financial control
b. Investing in assets needed permanently for the business
c. Developing business
d. Laying down of policies in regard to cash control, etc.
Q. ________ is traditionally considered as the main objective of the firm
a. Wealth maximization
b. Profit maximization
c. Customer satisfaction
d. Reduction in cost
Q. Funds needed for acquiring fixed assets are known as
a. short term finance
b. long term finance
c. medium term finance
d. public deposits
Q. Finance raised by ways of loans and credit from public, banks, and financial institutions is known as
a. public deposits
b. owned capital
c. permanent capital
d. borrowed capital