Business Finance MCQ Questions and Solutions with Explanations

Business Finance MCQ Questions and Solutions with Explanations | Commerce

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-9 section-3

Which of the following is the systematic risk?

A) Market risk B) Purchasing power risk C) Interest rate risk D) All of these

Discuss

Answer & Solution

Answer: Option D

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

Match the items of List-I with the items of List-II, and find out the correct matching.

List-I	List-II
a. $$\frac{{{\text{Contribution}}}}{{{\text{EBIT}}}}$$	1. Financial leverage
b. $$\frac{{{\text{EBIT}}}}{{\left( {{\text{Earning before tax}}} \right){\text{EBT}}}}$$	2. Super-leverage EBIT
c. $$\frac{{{\text{Contribution}}}}{{{\text{EBIT}}}}$$	3. Operating leverage

A) a-1, b-3, c-2 B) a-1, b-2, c-3 C) a-3, b-2, c-1 D) a-2, b-1, c-3

Discuss

Answer & Solution

Answer: Option A

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

Investment in machines require

A) short-term finance B) long-term finance C) Both A and B D) None of these

Discuss

Answer & Solution

Answer: Option B

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

Statement-I: In the payback period method, the risk of the project is adjusted by lessening the target payback period.
Statement-II: Sensitivity analysis helps in the calculation of the net present value of the proposal.

A) Statement-I is correct, but statement-II isincorrect B) Statement-I is incorrect, but statement-II is correct C) Statement-I and statement-II are correct D) Statement-I and statement-II are incorrect

Discuss

Answer & Solution

Answer: Option A

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

Which combination of the following two statements (A) and (R) is correct?
Assertion (A): The IRR of a project is the discount rate which reducesits NPV to zero.
Reason (R): A project is worth accepting if the IRR exceeds the cost of capital.

A) (A) is right, but (R) is wrong B) Both (A) and (R) are correct C) (A) is wrong, but (R) is correct D) Both (A) and (R) are wrong

Discuss

Answer & Solution

Answer: Option B

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

Match the following:

List-I	List-II
a. Matching approach	1. Dividend Policy
b. Structural ratios	2. Inventory Management
c. Ordering quantity	3. Financing Working Capital
d. Bonus shares	4. Capital Structure

A) a-1, b-2, c-3, d-4 B) a-3, b-4, c-1, d-2 C) a-3, b-4, c-2, d-1 D) a-2, b-1, c-3, d-4

Discuss

Answer & Solution

Answer: Option C

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

The single European currency, the euro, was adopted by 11 member nations on 1^st January, . . . . . . . .

A) 1984 B) 1991 C) 1999 D) 2001

Discuss

Answer & Solution

Answer: Option C

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

For a layman, factoring and forfaiting perform the same basic function. Factoring mostly deals with

A) Short-term receivables B) Long-term receivables C) Medium-term receivables D) All of the above

Discuss

Answer & Solution

Answer: Option A

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

Combined leverage can be used to measure the relationship between

A) PAT and EPS B) Sales and EBIT C) EBIT and EPS D) Sales and EPS

Discuss

Answer & Solution

Answer: Option D

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

Assertion (A): Acompany should pay a minimum dividend to its shareholders.
Reason (R): Dividends are heavily taxed than capital gains.

A) Both (A) and (R) are correct B) Both (A) and (R) are incorrect C) (A) is incorrect, but (R) is correct D) (A) is correct, but (R) is incorrect

Discuss

Answer & Solution

Answer: Option A

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