Financial Management | Chapter 2 | Part 4 | MBA MCQs | FM

Finacial Management MCQs

  

 

1. Fixed cost per unit ____________.
   1.   changes according to volume of production
   2.   remains constant. .
   3.   does not change with volume of production.
   4.   be flexible according to the rate of interest.
2. Variable cost in an organization ____________.
   1.   be fixed according to the rate of growth.
   2.   remains constant. .
   3.   does not change with volume of production.
   4.   be flexible according to the rate of interest.
3. Variable cost per unit ____________.
   1.   varies with the level of output.
   2.   changes with the growth of the firm.
   3.   remains constant irrespective of the level of output.
   4.   does not change with volume of production
4. Financial leverage measures ____________.
   1.   no change with EBIT and EPS.
   2.   sensitivity of EPS with respect to 1% change in level of EBIT.
   3.   no change with EBIT and EPS.
   4.   1% variation in the level of production
5. Operating leverage measures ____________.
   1.   the business risk.
   2.   production risk.
   3.   both risks.
   4.   financial risk.
6. Financial leverage helps one to estimate ____________.
   1.   the business risk
   2.   production risk.
   3.   both risks
   4.   the financial risk.
7. Financial leverage is also known as ____________.
   1.   Trading on equity
   2.   Interest on debt
   3.   Interest on equity .
   4.   Trading on debt .
8. A firm will have favorable leverage if its _____ are more than the debt cost
   1.   interest.
   2.   equity.
   3.   earnings.
   4.   debt
9. Operating leverage x financial leverage= _____.
   1.   fixed leverage
   2.   operating composite leverage.
   3.   composite leverage.
   4.   financial composite leverage.
10. Operating leverage = ______.
    1.   contribution less profit.
    2.   contribution less total expenses
    3.   contribution less sales.
    4.   contribution less operating profit.
11. Cost of capital is the _____ rate of return expected by its investors
    1.   minimum
    2.   maximum.
    3.   equal.
    4.   higher.
12. According to the traditional approach cost of capital affected by _____.
    1.   debt-equity mix.
    2.   debt-interest mix
    3.   equity expenses mix.
    4.   debt-capital mix
13. Shares having no face value are known as ____.
    1.   debt equity stock.
    2.   equal stock.
    3.   at par stock
    4.   no par stock.
14. A fixed rate of ____________is payable on debentures
    1.   dividend
    2.   brokerage
    3.   interest
    4.   commission
15. Effective cost of debentures is ____________as compared to shares
    1.   higher
    2.   medium
    3.   equal
    4.   lower
16. Ownership securities are represented by ____________.
    1.   securities .
    2.   equities
    3.   debt
    4.   debentures .
17. Corporation is not a part of ____________finance .
    1.   Public
    2.   Organization.
    3.   Public & private
    4.   Private
18. ____________management is the important task of the finance manager.
    1.   Debt
    2.   Profit .
    3.   Equity
    4.   Cash
19. Finance function is one of the most important functions of ____________.
    1.   business
    2.   debt .
    3.   marketing .
    4.   financial.
20. Nominal rate is the rate compounded ____________.
    1.   One time in 2 years
    2.   Twice in 2 years
    3.   More than once in an year
    4.   More than two years .