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Free download in PDF Financial Management Multiple Choice Questions and Answers for competitive exams. These short objective type questions with answers are very important for Board exams as well as competitive exams like UPSC, NDA, SSC etc. These short solved questions or quizzes are provided by Gkseries./p>
(1)
Return on assets can be computed by
[A]
Annual Net Income/Average total Assets
[B]
Sales/Cost of Sales x 100
[C]
Income/Sales x 100
[D]
Sales/Net Income
Answer: Annual Net Income/Average total Assets
(2)
Capital Employed is
[A]
Cash + Bank
[B]
Shareholders Funds + Long Funds
[C]
Assets + Cash
[D]
Bank
Answer: Shareholders Funds + Long Funds
(3)
Which is a capital expenditure?
[A]
Research and Development Project
[B]
Project Generation
[C]
Project Expansion
[D]
All of the above
(4)
Which of the following recognises risk in capital budgeting analysis by adjusting estimated cash flows and employs risk-free rate to discount the adjusted cash flows?
[A]
Cash
[B]
Certainty Equivalent Approach
[C]
Pay-back Period
[D]
Inventory
Answer: Certainty Equivalent Approach
(5)
The term "capital structure" refers to:
[A]
long-term debt, preferred stock, and common stock equity.
[B]
current assets and current liabilities.
[C]
total assets minus liabilities.
[D]
shareholders' equity.
Answer: long-term debt, preferred stock, and common stock equity.
(6)
The ______ method provides correct rankings of mutually exclusive projects, when the firm is not subject to capital rationing.
[A]
net present value
[B]
internal rate of return
[C]
payback period
[D]
profitability index
Answer: net present value
(7)
Price Ratio Method is
[A]
Earning Yield Method
[B]
Growth Method
[C]
Dividend Yield Method
[D]
Asset Method
Answer: Earning Yield Method
(8)
Which is Walter formula, for dividend policy?
[A]
Vc = D + Ra/Rc (E - D)/Rc
[B]
Vc = D + Ra/Rc/Rc
[C]
Vc = D + Rc/E - D
[D]
Vc = E - D/Rc
Answer: Vc = D + Ra/Rc (E - D)/Rc
(9)
Operating leverage can be computed by
[A]
%change in EBIT/% change in Sales
[B]
EBIT/Fixed Cost x Capital Employed
[C]
Sales/EBIT
[D]
Fixed Cost/EBIT
Answer: %change in EBIT/% change in Sales
(10)
________ is concerned with the maximization of a firm's stock price.
[A]
Shareholder wealth maximization
[B]
Profit maximization
[C]
Stakeholder welfare maximization
[D]
EPS maximization
Answer: Shareholder wealth maximization
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