Business Finance MCQ Questions and Solutions with Explanations

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Business Finance MCQ Questions and answers with easy and logical explanations. Commerce provides you all type of quantitative and competitive aptitude mcq questions with easy and logical explanations. Business Finance MCQ is important for exams like B.COM, M.COM, BBA, BBM, CA, CS, CMA, CPA, CFA, UPSC, NET, Banking and other commerce department exam. Page-2 section-7

Each section contains 100 MCQs on Business Finance .

Debt financing is a cheaper source of finance because of

A) Time value of money B) Rate of interest C) Tax deductibility of interest D) Dividends are not payable to lenders

Discuss

Answer & Solution

Answer: Option C

No explanation is given for this question. Let's Discuss on Board

Which of the following is not included in the assumptions on which Myron Gordon proposed a model on stock valuation?

A) Retained earnings the only source of financing B) Finite life of the firm C) Taxes do not exist D) Constant rate of return on the firm's investment

Discuss

Answer & Solution

Answer: Option B

No explanation is given for this question. Let's Discuss on Board

Under the terms of finance lease

A) the lessor is responsible for service and maintenance of the asset B) it is cancellable C) legal title to the assets with the lessee D) the asset is capitalised in the balance sheet of the lessee

Discuss

Answer & Solution

Answer: Option D

No explanation is given for this question. Let's Discuss on Board

The potential effect of exchange rate fluctuations on FDI is expressed as

A) translation B) transaction C) conversion D) economic

Discuss

Answer & Solution

Answer: Option D

No explanation is given for this question. Let's Discuss on Board

We should keep our savings with banks because

A) it is safe B) earns interest C) can be withdrawn anytime D) All of the above

Discuss

Answer & Solution

Answer: Option D

No explanation is given for this question. Let's Discuss on Board

Government grants are generally offered to businesses in

A) prosperous areas B) cold areas C) economically deprived areas D) areas with high employment

Discuss

Answer & Solution

Answer: Option C

No explanation is given for this question. Let's Discuss on Board

The capital budgeting technique that explicitly incorporates an estimated interest rate into its basic computations is the

A) payback period method B) accounting rate of return method C) internal rate of return method D) NPV method

Discuss

Answer & Solution

Answer: Option D

No explanation is given for this question. Let's Discuss on Board

Which of the following can be defined as the prominent sources of variable working capital?
(i) Trade creditors
(ii) Bank loan
(iii) Commercial Papers
(iv) Depreciation
(v) Tax liabilities

A) (i), (ii), (iii), (iv) B) (i), (iii), (iv), (v) C) (ii), (iii), (iv), (v) D) (i), (ii), (iii), (iv), (v)

Discuss

Answer & Solution

Answer: Option D

No explanation is given for this question. Let's Discuss on Board

Which of the following can be defined as the variability of return on stocks or portfolios, not explained by general market movement. It is avoidable through diversification.

A) Systematic risk B) Standard deviation C) Unsystematic risk D) Coefficient of variation

Discuss

Answer & Solution

Answer: Option C

No explanation is given for this question. Let's Discuss on Board

Capital market line is

A) Capital allocation line of a market portfolio B) Capital allocation line of a risk free asset C) Both A and B D) Neither A nor B

Discuss

Answer & Solution

Answer: Option C

No explanation is given for this question. Let's Discuss on Board

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Business Finance MCQ Questions and Solutions with Explanations | Commerce