Financial Management | Chapter 3 | Part 2 | MBA MCQs | FM

Finacial Management MCQs

  

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1. If a company issues bonus shares the debt equity ratio will
   1.   Will improve
   2.   none of the above
   3.   Remain unaffected
   4.   Will be affected
2. In last year the current ratio was 3:1 and quick ratio was 2:1.Presently current ratio is 3:1 but quick ratio is 1:1.This indicates comparably
   1.   higher stock
   2.   lower stock
   3.   high liquidity
   4.   low liquidity
3. __________ is concerned with the branch of economics relating the behavior of principals and their agents
   1.   Agency theory
   2.   Social responsibility
   3.   Financial management
   4.   Profit maximization
4. Which of the following is not normally a responsibility of the treasurer of the modern corporation but rather the controller?
   1.   Budgets and forecasts
   2.   Asset management
   3.   Financing management
   4.   Investment management
5. Authorised capital of a company is Rs.5 lac, 40% of it is paid up. Loss incurred during the year is Rs.50,000. Accumulated loss carried from last year is Rs.2 lac. The company has a Tangible Net Worth of
   1.   (-)Rs.50,000
   2.   Nil
   3.   Rs.2.50 lac
   4.   Rs.1 lac.
6. __________ is concerned with the maximization of a firm's earnings after taxes.
   1.   Shareholder wealth maximization
      .
   2.   EPS maximization
   3.   Stakeholder maximization
   4.   Profit maximization
7. Quick assets do not include
   1.   Book debts
   2.   Advance for supply of raw materials
   3.   Govt.bond
   4.   Inventories.
8. Banks generally prefer Debt Equity Ratio at
   1.   1:1
   2.   3:1
   3.   1:3
   4.   2:1
9. __________ is concerned with the acquisition, financing, and management of assets with some overall
   1.   Social responsibility
   2.   Financial management
   3.   Agency theory
   4.   Profit maximization
10. Current ratio is 4:1.Net Working Capital is Rs.30,000.Find the amount of current Assets
    1.   Rs.40,000
    2.   Rs.6,000
    3.   Rs.10,000
    4.   Rs.24,000
11. Which of the following statements is correct regarding profit maximization as the primary goal of the firm?
    1.   Profit maximization considers the firm's risk level.
    2.   Profit maximization will not lead to increasing short-term profits at the expense of lowering expected future profits.
    3.   Profit maximization is concerned more with maximizing net income than the stock price
    4.   Profit maximization does consider the impact on individual shareholder's EPS.
12. Current ratio of a concern is 1,its net working capital will be
    1.   Positive
    2.   Nil
    3.   Negative
    4.   None of the above
13. Current ratio is 2:5.Current liability is Rs.30000.The Net working capital is
    1.   Rs.45,000
    2.   Rs.(-)18000
    3.   Rs.(-) 45,000
    4.   Rs.18,000
       .
14. Proprietary ratio is calculated by
    1.   Proprietors’’ Funds/Total
    2.   Total assets/Total outside liability
    3.   Fixed assets/Long term source of fund
    4.   Total outside liability/Total tangible assets
15. A concept that implies that the firm should consider issues such as protecting the consumer, paying fair wages, maintaining fair hiring practices, supporting education, and considering environmental issues.
    1.   Agency theory
    2.   Financial management
    3.   Social responsibility
    4.   Profit maximization
16. Jensen and Meckling showed that __________ can assure themselves that the __________ will make optimal decisions only if appropriate incentives are given and only if the __________ are monitored.
    1.   principals; agents; principals
    2.   agents; principals; agents
    3.   agents; principals; principals
    4.   principals; agents; agents
17. In the balance sheet amount of total assets is Rs.10 lac, current liabilities Rs.5 lac & capital & reserves are Rs.2 lac .What is the debt equity ratio?
    1.   none of the above.
    2.   2:1
    3.   1;1
    4.   1.5:1
18. The ideal quick ratio is
    1.   None of the above
    2.   2:1
    3.   5:1
    4.   1:1
19. What is the most appropriate goal of the firm?
    1.   Profit maximization
    2.   Shareholder wealth maximization
       .
    3.   EPS maximization
    4.   Stakeholder maximization
20. An asset is a-
    1.   none of the above.
    2.   Inflow of funds
    3.   Use of fund
    4.   Source of fund