Financial Management | Chapter 1 | Part 2 | MBA MCQs | FM

Finacial Management MCQs

  

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1. The primary goal of the financial management is ____________.
   1.   to maximize profit..
   2.   to maximize the return
   3.   to minimize the risk.
   4.   to maximize the wealth of owners
2. Capital budgeting is related to ____________.
   1.   short term assets.
   2.   long terms assets.
   3.   long terms and short terms assets.
   4.   fixed assets
3. In his traditional role the finance manager is responsible for ____________.
   1.   effective management of capital.
   2.   arrange of utilization of funds.
   3.   arrangement of financial resources.
   4.   acquiring capital assets of the organization.
4. The cost of capital of a long term debt is generally ____________.
   1.   Lower than the owned funds
      .
   2.   More or less than owned funds.
   3.   Higher than that of owned funds.
   4.   Equal to that of owned funds.
5. Market value of the shares are decided by ____________.
   1.   share holders.
   2.   the investment market.
   3.   the respective companies.
      .
   4.   the government
6. Financial decisions involve ____________.
   1.   Investment, financing and dividend decisions.
   2.   Investment dividend decisions
   3.   Financing cash decisions.
   4.   Investment sales decisions.
7. Cost of retained earnings is equal to ____________.
   1.   Cost of bank loan.
   2.   Cost of term loans.
   3.   Cost of equity.
   4.   Cost of debt.
8. Present value takes ____________.
   1.   Compounding rate.
   2.   Discounting rate.
   3.   Inflation rate.
   4.   Deflation rate.
9. The expansion of CAPM is ________
   1.   Capital amount printing model
   2.   Capital asset pricing model.
   3.   Capital amount pricing model.
   4.   Capital asset printing model.
10. The companys average cost of capital is ____________.
    1.   the average cost of all sources of long-term funds
    2.   the average cost of short term funds..
    3.   the average cost of equity preference shares.
    4.   the average cost of equity shares and debentures
11. Financial Management is mainly concerned with ____________.
    1.   efficient Management of every business.
    2.   profit maximization
    3.   all aspects of acquiring and utilizing financial resources for firms activities
    4.   arrangement of funds
12. When a company uses debt fund in its financial structure, it will lead to a change in____________.
    1.   Operating leverage
    2.   Money market leverage.
    3.   Stock market leverage
    4.   Financial leverage.
13. The companys cost of capital is called ____________.
    1.   Leverage rate
    2.   Hurdle rate.
    3.   Risk rate.
    4.   Return rate
14. When few hold the shares of a public limited company it is called ____________.
    1.   Publicly traded company
    2.   Public and private company
    3.   Closely held company
    4.   Privately owned company
15. Traditional approach confines finance function only to ____________.
    1.   mobilizing
    2.   raising
    3.   utilizing
    4.   financing
16. The required rate of return for an investment project should ____________.
    1.   constant market price
    2.   leave the market price of the stock unchanged
    3.   reduce the market price.
    4.   increase the market price.
17. The most difficult to calculate is ____________.
    1.   the cost of retained earnings
    2.   the cost of equity and preference capital
    3.   the cost of equity capital.
    4.   the cost of preferred capital.
18. Interest on debt capital provides a ____________ to the equity share holders.
    1.   additional financial burden
    2.   tax shield.
    3.   dividend.
    4.   added profit.
19. Working capital management is managing ____________.
    1.   long term assets.
    2.   only short term assets.
    3.   long terms liabilities
    4.   short term assets and liabilities
20. Future value interest factor takes ____________.
    1.   Inflation rate.
    2.   Compounding rate
    3.   Discounting rate
    4.   Deflation rate.