Finance Management (Computer's Eng..) MCQ's




Question 1 :
There is deterioration in the management of working capital of XYZ Ltd. What does it refer to?

  1. That the Capital Employed has reduced
  2. That the Profitability has gone up
  3. That debtors’ collection period has increased
  4. That Sales has decreased.
  

Question 2 :
Which is the following option fall under Intangible Asset?

  1. Goodwill
  2. Land
  3. Machinery
  4. Computer
  

Question 3 :
Deposit Rs.1,000 annually in a bank for 5 years with compound interest rate of 10 percent pa. What will be the value of this series of deposits (anannuity) at the end of 5 years?

  1. 6000
  2. 6105
  3. 6205
  4. 6250
  

Question 4 :
The focal point of financial management in a firm is

  1. The number and types of products or services provided by the firm
  2. The minimization of the amount of taxes paid by the firm
  3. The creation of value for shareholders
  4. The profits earned by the firm in Rs
  

Question 5 :
Equity market is the financial market for

  1. Residual claim
  2. Fixed claim
  3. Variable Claim
  4. 1 and 2
  

Question 6 :
Beta Represents the:

  1. Unsystematic risk
  2. Systemic Risk
  3. Systemic as well as unsystemic risks
  4. Foreign Exchange Risk
  

Question 7 :
EOQ is a company’s ________ order quantity that minimizes its total inventory costs.

  1. Minimum
  2. Maximum
  3. Optimal
  4. Not optimal
  

Question 8 :
What is PV of Rs 100 one year hence with discounting factor 25% ?

  1. Rs 125
  2. Rs 25
  3. Rs 250
  4. Rs 80
  

Question 9 :
The long-run objective of financial management is to

  1. Maximize earnings per share
  2. Maximize the value of the firm's common stock
  3. Maximize return on investment
  4. Maximize market share
  

Question 10 :
Which are the following options does not generate cash?

  1. Issue of security
  2. Redeem security
  3. Raises a bank loan
  4. Payment from firms customers
  

Question 11 :
Working Capital is also known as ___________

  1. Cash
  2. Current assets
  3. Invested Capital
  4. Assets
  

Question 12 :
To compute the required rate of return for equity in a company using the CAPM, it is necessary to know all of the following EXCEPT:

  1. The risk-free rate
  2. The beta for the firm
  3. The earnings for the next time period
  4. The market return expected for the time period
  

Question 13 :
NOPAT stands for

  1. Net Operating Profit after Taxes
  2. No operation on Project after Termination
  3. No Operating Profit after Taxes
  4. No Operating Profit after Termination
  

Question 14 :
Classification of financial markets by the maturity of claims are

  1. Money market and capital market
  2. Primary and secondary market
  3. Forward and future market
  4. option 2 and 3
  

Question 15 :
___________________ of a firm refers to the composition of its long-term funds and its capital structure.

  1. Capitalisation
  2. Over-capitalisation
  3. Under-capitalisation
  4. Market capitalization
  

Question 16 :
The process of calculating future values of cash flows is called

  1. Discounting
  2. Compounding
  3. Capital recovery
  4. Perpetuity
  

Question 17 :
PBIT stands for ___________

  1. Profit before Income taxes
  2. Profit before interest and taxes
  3. Payment before Income taxes
  4. Paid Interest because of Income tax.
  

Question 18 :
____________________ and __________________________ are the two versions of goals of the financial management of the firm

  1. Profit maximisation, Wealth maximization
  2. Production maximisation, Sales maximisation
  3. Sales maximisation, Profit maximization
  4. Value maximisation, Wealth maximisation
  

Question 19 :
Intermediaries who link buyers and sellers by buying and selling securities at stated prices are called

  1. investment bankers
  2. traders
  3. brokers
  4. dealers
  

Question 20 :
Which among the following is a current asset?

  1. Patents
  2. Plants - Equipment
  3. Goodwill
  4. Cash Balance
  

Question 21 :
In order to find out the present value of a sum of Rs. 10,000 to be received at the end of each year for the next 5 years at 10% rate, we use:

  1. Future value formula
  2. Present value formula
  3. Present value of annuity formula
  4. Future value of annuity formula
  

Question 22 :
Leverage ratio refers to ______________

  1. The final result of business operations
  2. As activity ratios or asset management raios, measure efficiently the assets are employed by a firm.
  3. The ability of a firm to meet its obligations in the short run, usually one year
  4. The use of debt finance
  

Question 23 :
Equity shareholders are called

  1. Owners of the company
  2. Partners of the company
  3. Executives of the company
  4. Guardian of the company
  

Question 24 :
The view that under a perfect market situation , the dividend policy of a firm is irrelevant, as it does not affect the value of the firm, is held by

  1. The bird-in-the-hand argument
  2. Gordon’s model
  3. Miller and Modigliani’s hypothesis
  4. Walter’s model
  

Question 25 :
Which of the following statements lends most support to the theory that dividend payments are irrelevant to the value of ordinary shares?

  1. Shareholders making homemade dividends face dealing costs
  2. Shareholders are concerned with total earnings rather than with the split between distributed and retained earnings.
  3. Investors' discount rates increase with time due to uncertainty.
  4. Firms have particular clienteles due to their dividend policy
  

Question 26 :
Which of the following is not considered as capital market security?

  1. equity share
  2. preferential share
  3. corporate bond
  4. 6-month treasury bill
  

Question 27 :
When current assets are less than current liabilities, then the net working capital is:

  1. Positive
  2. Negative
  3. Zero
  4. Can’t be calculated
  

Question 28 :
What is Gross Profit?

  1. Profit before interest and Tax.
  2. Difference between Net sales and the cost of goods sold.
  3. It represents profit from operations after considering the cost of goods sold and operating expenses.
  4. Non operating gains
  

Question 29 :
Ali purchased a stock for Rs. 6,000. At the end of the year the stockis worth Rs. 7,500. Ali was paid dividends of Rs. 260. Calculate the totalreturn received by Ali.

  1. 0.043
  2. 0.293
  3. 0.25
  4. 0.1
  

Question 30 :
What does liquidity refer?

  1. The ability of a firm to meet its obligation in one week.
  2. The ability of a firm to meet its obligation in one month.
  3. The ability of a firm to meet its obligation in one year.
  4. The ability of a firm to meet its obligation in ten Years.
  
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