Multiple Choice Questions on Financial Management
1- In case of Mortgage, the party who transfers the interest is called ________
(A) Transferor
(B) Mortgager
(C) Lender
(D) Bearer
2- Operating cost incurred by the company can be classified into
(A) Variable cost , Fixed cost , Semi-fixed cost
(B) Variable cost , Fixed cost , Semi-variable cost
(C) Variable cost , Semi-fixed cost , Semi-variable cost
(D) Variable cost, Fixed cost
3- The cost of individual items of capital is termed as
(A) Individual cost
(B) Composite cost
(C) Component cost
(D) Capital cost
4- The objective of the management in the investment decisions is in the form of ________
(A) Maximisation of the wealth of the shareholders
(B) Maximising fixed assets of the company
(C) both (A) and (B)
(D) None of the above
5- In the case of Over capitalisation ________ is the worst affected class
(A) Company
(B) Shareholders
(C) Workers
(D) All of the above
6- The ratio which compares the dividend per share with the market price of the share is termed as
(A) Dividend payout ratio
(B) Dividend yield ratio
(C) Yield ratio
(D) None of the above
7- The trading Account consists of the following item(s)
(A) Purchases
(B) Closing stock
(C) Both (A) and (B)
(D) Rent
8- Project(s) for which profitability is not the criterion is (are)
(A) Service Department projects
(B) Welfare projects
(C) Educational projects
(D) All of the above
9- The current ratio of ________ is considered to be standard
(A) 1:1
(B) 1:2
(C) 2:1
(D) 3:1
10- The function(s) of a Finance Controller is (are):
(A) Budgeting
(B) Record Keeping
(C) Annual Reporting
(D) All of the above
11- Depreciation is sometimes treated as ________ funds.
(A) source
(B) no flow
(C) reducing
(D) None of the above
12- Factor(s) determining the required cash balance is (are)
(A) Surplus cash balance costs
(B) Procurement and Management cost
(C) Shortage of cash cost
(D) All of the above
13- The most accepted interpretation of the term ‘funds’ is in the form of ______.
(A) Current assets
(B) Working capital
(C) Cash flow
(D) None of the above
14- The amount of profit earned after recovering the interest on long term sources of capital is referred to as ______.
(A) Profit after interest
(B) Profit before taxes
(C) both (A) and (B)
(D) None of the above
15- ______ will be shown as source of funds net of proposed dividend.
(A) Operating profit
(B) Earning after tax
(C) Both (A) and (B)
(D) None of the above
16- Measurement of cost of capital can be done through
(A) Cost of Debt
(B) Cost of Preference shares
(C) Cost of Equity shares
(D) All of the above
17- A wrong decision in respect of capital expenditure proposals may disturb the entire ______ structure of the organisation.
(A) organisation
(B) financial
(C) functional
(D) none of the above
18- The combined or weighted average cost of capital of the various individual components is termed as
(A) Composite cost
(B) Component cost
(C) Variable cost
(D) Fixed cost
19- Situation of capital rationing may involve problem(s) in the form of
(A) Project Indivisibility
(B) Mutually dependent project
(C) Multi period projects
(D) All of the above
20- A liquid ratio of ________ is supposed to be standard.
(A) 2:1
(B) 3:1
(C) 1:2
(D) 1:1
ANSWERS:
1-(A), 2-(B), 3-(C), 4-(A), 5-(B), 6-(B), 7-(C), 8-(D), 9-(C), 10-(D), 11-(A), 12-(D), 13-(B), 14-(B), 15-(A), 16-(D), 17-(B), 18-(A), 19-(D), 20-(D)