MBA Financial Management MCQ Set 7 MBA MCQs: multiple choice questions and answers,Mock Tests and Practice Papers

MBA/MBA Financial Management MCQ Set 7 Sample Test,Sample questions

Question:

A Current Ratio of Less than One means:

1.Current Liabilities < Current Assets

2.Fixed Assets > Current Assets

3.Current Assets < Current Liabilities

4.Share Capital > Current Assets

Posted Date:-2021-11-26 03:40:30

Question:

A firm has inventory turnover of 6 and cost of goods sold is 7,50,000. With better inventory management, the inventory turnover is increased to 10. This would result in:

1.Increase in inventory by 50,000

2.Decrease in inventory by. 50,000

3.Decrease in cost of goods sold

4.Increase in cost of goods sold

Posted Date:-2021-11-26 04:11:07

Question:

ABC Analysis is useful for analyzing the inventories:

1.Based on their Quality

2.Based on their Usage and value

3.Based on Physical Volume

4.All of the above

Posted Date:-2021-11-26 03:34:31

Question:

Advantage of Debt financing is

1.Interest is tax-deductible

2.It reduces WACC

3.Does not dilute owners control

4.All of the above

Posted Date:-2021-11-26 03:48:01

Question:

Business risk can be measured by:

1.Financial leverage

2.Operating leverage

3.Combined leverage

4.None of the above

Posted Date:-2021-11-26 03:49:16

Question:

Cash Discount term 3/15, net 40 means

1.3% Discount if payment in 15 days, otherwise full payment in 40 days

2.15% Discount if payment in 3 days, otherwise full payment 40 days

3.3% Interest if payment made in 40 days and 15%,interest thereafter

4.None of the above

Posted Date:-2021-11-26 03:32:55

Question:

Commercial paper are generally issued at a pries

1.Equal to face value

2.More than face value

3.Less than face value

4.Equal to redemption value

Posted Date:-2021-11-26 03:36:28

Question:

Cost Capital for Equity Share Capital does not imply that:

1.Market Price is equal to Book Value of share

2.Shareholders are ready to subscribe to right issue

3.Market Price is more than Issue Price

4.AC of the three above

Posted Date:-2021-11-26 03:47:02

Question:

Cost of not carrying sufficient inventory is known as

1.Carrying Cost

2.Holding Cost

3.Total Cost

4.Stock-out Cost

Posted Date:-2021-11-26 04:10:05

Question:

Credit Policy of a firm should involve a trade-off between increased

1.Sales and Increased Profit

2.Profit and Increased Costs of Receivables

3.Sales and Cost of goods sold

4.None of the above

Posted Date:-2021-11-26 04:07:38

Question:

Dividend declared by a company must be paid in

1.20 days

2.30 days

3.32 days

4.42 days

Posted Date:-2021-11-26 03:24:48

Question:

Dividend irrelevance argument of MM Model is based on:

1.Issue of Debentures

2.Issue of Bonus Share

3.Arbitrage

4.Hedging

Posted Date:-2021-11-26 04:03:20

Question:

From the point of view of the lessee, a lease is a:

1.Working capital decision

2.Financing decision

3.Buy or make decision

4.Investment decision

Posted Date:-2021-11-26 03:38:45

Question:

If a firm has no debt, which one is correct?

1.OL is one

2.FL is one

3.OL is zero

4.FL is zero

Posted Date:-2021-11-26 03:49:55

Question:

If a firm has no Preference share capital, Financial Break even level is defined as equal to -

1.EBIT

2.Interest liability

3.Equity Dividend

4.Tax Liability

Posted Date:-2021-11-26 03:50:31

Question:

If the average balance of debtors has increased, which of the following might not show a change in general?

1.Total Sales

2.Average Payables

3.Current Ratio

4.Bad Debt loss

Posted Date:-2021-11-26 04:08:18

Question:

In case of Gordon's Model, the MP for zero payout is zero. It means that

1.Shares are not traded

2.Shares available free of cost

3.Investors are not ready to offer any price

4.None of the above

Posted Date:-2021-11-26 04:03:55

Question:

In case of Net Income Approach, the Cost of equity is:

1.Constant

2.Increasing

3.Decreasing

4.None of the above

Posted Date:-2021-11-26 03:51:11

Question:

In India, Dividend Distribution tax is paid on

1.Equity Share

2.Preference Share

3.Debenture

4.Both (a) and (b)

Posted Date:-2021-11-26 03:25:33

Question:

In Inventory Turnover calculation, what is taken in the numerator?

1.Sales

2.Cost of Goods Sold

3.Opening Stock

4.Closing Stock

Posted Date:-2021-11-26 03:42:00

Question:

Inventory holding cost may include

1.Material Purchase Cost

2.Penalty charge for default

3.Interest on loan

4.None of the above

Posted Date:-2021-11-26 04:09:27

Question:

Nominal Rate ÷ Inflation Rate

1.(1 + Inf. Rate) (1 + Money D Rate)-1

2.(1 + Money D Rate) + (1 + Inf. Rate)-1

3.(1 + Money D Rate) 4- (1 + Inf. Rate)-1

4.(1 + Money D Rate) - (1 + Inf. Rate)-1

Posted Date:-2021-11-26 03:45:11

Question:

Operating leverage arises because of:

1.Fixed Cost of Production

2.Fixed Interest Cost

3.Variable Cost

4.None of the above

Posted Date:-2021-11-26 03:48:38

Question:

Real rate of return is equal to:

1.Nominal Rate × Inflation Rate

2.Nominal Rate ÷ Inflation Rate

3.Nominal Rate - Inflation Rate

4.Nominal Rate + Inflation Rate

Posted Date:-2021-11-26 03:44:28

Question:

Receivables Management deals with

1.Receipts of raw materials

2.Debtors collection

3.Creditors Management

4.Inventory Management

Posted Date:-2021-11-26 04:08:50

Question:

Risk-aversion of an investor can be measured by

1.Market Rate of Return

2.Risk-free Rate of Return

3.Portfolio Return

4.None of the above.

Posted Date:-2021-11-26 03:39:17

Question:

Savings in respect of a cost is treated in capital budgeting as:

1.An Inflow

2.An Outflow

3.Nil

4.None of the above

Posted Date:-2021-11-26 03:43:54

Question:

Securitization is related to conversion of

1.Receivables

2.Stock

3.Investments

4.Creditors

Posted Date:-2021-11-26 03:32:06

Question:

Stock split is a form of

1.Dividend Payment

2.Bonus Issue

3.Financial restructuring

4.Dividend in kind

Posted Date:-2021-11-26 04:05:07

Question:

The Transaction Motive for holding cash is for

1.Safety Cushion

2.Daily Operations

3.Purchase of Assets

4.Payment of Dividends

Posted Date:-2021-11-26 03:27:08

Question:

Under income-tax provisions, depreciation on lease asset is allowed to

1.Lessor

2.Lessee

3.Any of the two

4.None of the two

Posted Date:-2021-11-26 03:38:09

Question:

Use of safety stock by a firm would

1.Increase Inventory Cost

2.Decrease Inventory Cost

3.No effect on cost

4.None of the above

Posted Date:-2021-11-26 03:33:39

Question:

Which is the most expensive source of funds?

1.New Equity Shares

2.New Preference Shares

3.New Debts

4.Retained Earnings

Posted Date:-2021-11-26 03:46:11

Question:

Which of the following assumes constant kd and ke?

1.Net Income Approach

2.Net Operating Income Approach

3.Traditional Approach

4.MM Model

Posted Date:-2021-11-26 03:52:29

Question:

Which of the following assumes constant kd and ke?

1.Net Income Approach

2.Net Operating Income Approach

3.Traditional Approach

4.MM Model

Posted Date:-2021-11-26 03:57:46

Question:

Which of the following generally not result in increase in total dividend liability ?

1.Share-split

2.Right Issue

3.Bonus Issue

4.All of the above

Posted Date:-2021-11-26 04:04:28

Question:

Which of the following is a liability of a bank?

1.Treasury Bills

2.Commercial papers

3.Certificate of Deposits

4.Junk Bonds

Posted Date:-2021-11-26 03:35:48

Question:

Which of the following is a measure of Debt Service capacity of a firm?

1.Current Ratio

2.Acid Test Ratio

3.Interest Coverage Ratio

4.Debtors Turnover

Posted Date:-2021-11-26 03:41:11

Question:

Which of the following is incorrect for NOI?

1.k0 is constant

2.kd is constant

3.ke is constant

4.kd & k0 are constant

Posted Date:-2021-11-26 03:58:26

Question:

Which of the following is not a benefit of carrying inventories

1.Reduction in ordering cost

2.Avoiding lost sales

3.Reducing carrying cost

4.Avoiding Production Shortages

Posted Date:-2021-11-26 03:35:11

Question:

Which of the following is not a motive to hold cash?

1.Transactionary Motive

2.Pre-scautionary Motive

3.Captal Investment

4.None of the above

Posted Date:-2021-11-26 04:05:43

Question:

Which of the following is not a technique of receivables Management?

1.Funds Flow Analysis

2.Ageing Schedule

3.Days sales outstanding

4.Collection Matrix

Posted Date:-2021-11-26 03:31:02

Question:

Which of the following is not an element of credit policy?

1.Credit Terms

2.Collection Policy

3.Cash Discount Terms

4.Sales Price

Posted Date:-2021-11-26 04:07:03

Question:

Which of the following is not an objective of cash management ?

1.Maximization of cash balance

2.Minimization of cash balance

3.Optimization of cash balance

4.Zero cash balance

Posted Date:-2021-11-26 04:06:21

Question:

Which of the following is not considered by Miller-Orr Model?

1.Variability in cash requirement

2.Cost of transaction

3.Holding cost

4.Total annual requirement of cash

Posted Date:-2021-11-26 03:27:46

Question:

Which of the following is not considered in Lintner's Model ?

1.Dividend payout ratio

2.Current EPS

3.Speed of Adjustment

4.Preceding year EPS

Posted Date:-2021-11-26 03:26:25

Question:

Which of the following is not incorporated in Capital Budgeting?

1.Tax-Effect

2.Time Value of Money

3.Required Rate of Return

4.Rate of Cash Discount

Posted Date:-2021-11-26 03:42:34

Question:

Which of the following is not true for capital budgeting?

1.Sunk costs are ignored

2.Opportunity costs are excluded

3.Incremental cash flows are considered

4.Relevant cash flows are considered

Posted Date:-2021-11-26 03:43:11

Question:

Which one is true for Net Operating Income Approach?

1.VD = VF - VE

2.VE = VF + VD

3.VE = VF - VD

4.VD = VF + VE

Posted Date:-2021-11-26 03:51:48

Question:

Working Capital Turnover measures the relationship of Working Capital with:

1.Fixed Assets

2.Sales

3.Purchases

4.Stock

Posted Date:-2021-11-26 03:39:55

Posted on by R4R Team

MBA/MBA Financial Management MCQ Set 7 Sample Test,Sample questions

Question: A Current Ratio of Less than One means:

Question: A firm has inventory turnover of 6 and cost of goods sold is 7,50,000. With better inventory management, the inventory turnover is increased to 10. This would result in:

Question: ABC Analysis is useful for analyzing the inventories:

Question: Advantage of Debt financing is

Question: Business risk can be measured by:

Question: Cash Discount term 3/15, net 40 means

Question: Commercial paper are generally issued at a pries

Question: Cost Capital for Equity Share Capital does not imply that:

Question: Cost of not carrying sufficient inventory is known as

Question: Credit Policy of a firm should involve a trade-off between increased

Question: Dividend declared by a company must be paid in

Question: Dividend irrelevance argument of MM Model is based on:

Question: From the point of view of the lessee, a lease is a:

Question: If a firm has no debt, which one is correct?

Question: If a firm has no Preference share capital, Financial Break even level is defined as equal to -

Question: If the average balance of debtors has increased, which of the following might not show a change in general?

Question: In case of Gordon's Model, the MP for zero payout is zero. It means that

Question: In case of Net Income Approach, the Cost of equity is:

Question: In India, Dividend Distribution tax is paid on

Question: In Inventory Turnover calculation, what is taken in the numerator?

Question: Inventory holding cost may include

Question: Nominal Rate ÷ Inflation Rate

Question: Operating leverage arises because of:

Question: Real rate of return is equal to:

Question: Receivables Management deals with

Question: Risk-aversion of an investor can be measured by

Question: Savings in respect of a cost is treated in capital budgeting as:

Question: Securitization is related to conversion of

Question: Stock split is a form of

Question: The Transaction Motive for holding cash is for

Question: Under income-tax provisions, depreciation on lease asset is allowed to

Question: Use of safety stock by a firm would

Question: Which is the most expensive source of funds?

Question: Which of the following assumes constant kd and ke?

Question: Which of the following assumes constant kd and ke?

Question: Which of the following generally not result in increase in total dividend liability ?

Question: Which of the following is a liability of a bank?

Question: Which of the following is a measure of Debt Service capacity of a firm?

Question: Which of the following is incorrect for NOI?

Question: Which of the following is not a benefit of carrying inventories

Question: Which of the following is not a motive to hold cash?

Question: Which of the following is not a technique of receivables Management?

Question: Which of the following is not an element of credit policy?

Question: Which of the following is not an objective of cash management ?

Question: Which of the following is not considered by Miller-Orr Model?

Question: Which of the following is not considered in Lintner's Model ?

Question: Which of the following is not incorporated in Capital Budgeting?

Question: Which of the following is not true for capital budgeting?

Question: Which one is true for Net Operating Income Approach?

Question: Working Capital Turnover measures the relationship of Working Capital with:

More MCQS

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Question:
A Current Ratio of Less than One means:

Question:
A firm has inventory turnover of 6 and cost of goods sold is 7,50,000. With better inventory management, the inventory turnover is increased to 10. This would result in:

Question:
ABC Analysis is useful for analyzing the inventories:

Question:
Advantage of Debt financing is

Question:
Business risk can be measured by:

Question:
Cash Discount term 3/15, net 40 means

Question:
Commercial paper are generally issued at a pries

Question:
Cost Capital for Equity Share Capital does not imply that:

Question:
Cost of not carrying sufficient inventory is known as

Question:
Credit Policy of a firm should involve a trade-off between increased

Question:
Dividend declared by a company must be paid in

Question:
Dividend irrelevance argument of MM Model is based on:

Question:
From the point of view of the lessee, a lease is a:

Question:
If a firm has no debt, which one is correct?

Question:
If a firm has no Preference share capital, Financial Break even level is defined as equal to -

Question:
If the average balance of debtors has increased, which of the following might not show a change in general?

Question:
In case of Gordon's Model, the MP for zero payout is zero. It means that

Question:
In case of Net Income Approach, the Cost of equity is:

Question:
In India, Dividend Distribution tax is paid on

Question:
In Inventory Turnover calculation, what is taken in the numerator?

Question:
Inventory holding cost may include

Question:
Nominal Rate ÷ Inflation Rate

Question:
Operating leverage arises because of:

Question:
Real rate of return is equal to:

Question:
Receivables Management deals with

Question:
Risk-aversion of an investor can be measured by

Question:
Savings in respect of a cost is treated in capital budgeting as:

Question:
Securitization is related to conversion of

Question:
Stock split is a form of

Question:
The Transaction Motive for holding cash is for

Question:
Under income-tax provisions, depreciation on lease asset is allowed to

Question:
Use of safety stock by a firm would

Question:
Which is the most expensive source of funds?

Question:
Which of the following assumes constant kd and ke?

Question:
Which of the following assumes constant kd and ke?

Question:
Which of the following generally not result in increase in total dividend liability ?

Question:
Which of the following is a liability of a bank?

Question:
Which of the following is a measure of Debt Service capacity of a firm?

Question:
Which of the following is incorrect for NOI?

Question:
Which of the following is not a benefit of carrying inventories

Question:
Which of the following is not a motive to hold cash?

Question:
Which of the following is not a technique of receivables Management?

Question:
Which of the following is not an element of credit policy?

Question:
Which of the following is not an objective of cash management ?

Question:
Which of the following is not considered by Miller-Orr Model?

Question:
Which of the following is not considered in Lintner's Model ?

Question:
Which of the following is not incorporated in Capital Budgeting?

Question:
Which of the following is not true for capital budgeting?

Question:
Which one is true for Net Operating Income Approach?

Question:
Working Capital Turnover measures the relationship of Working Capital with: