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Financial Management MCQ Questions and Solutions with Explanations | Commerce

Financial Management 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. Financial Management 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-10 section-2

Each section contains 100 MCQs on Financial Management .
91
In which of the following sections of a balance sheet are "Inventories" listed?
Discuss
Answer & Solution
Answer: Option A
Solution:
In Current assets sections of a balance sheet are "Inventories" are listed. Inventory is commonly thought of as the finished goods a company accumulates before selling them to end users.
92
________ decision relates to the determination of total amount of assets to be held in the firm.
Discuss
Answer & Solution
Answer: Option B
Solution:
Investment decision begins with a determination of the total amount of assets needed to be held by the firm. In other words, investment decision relates to the selection of assets, on which a firm will invest funds.
93
The key item for investors on the income statement is______________.
Discuss
Answer & Solution
Answer: Option D
Solution:
The key item for investors on the income statement is after-tax net income. Net income after taxes (NIAT) is simply the net income of a business less all taxes. It is the sum of all revenues minus all expenses, including cost of goods sold, depreciation, interest, and taxes.
94
Which of the following is a function of the finance manager?
Discuss
Answer & Solution
Answer: Option E
Solution:
Mobilizing funds, Risk returns trade off, Deployment of funds and Control over the uses of funds are the function of the finance manager.
95
Which of the following represents the rate at which a company can grow from internal sources?
Discuss
Answer & Solution
Answer: Option B
Solution:
Sustainable growth rate represents the rate at which a company can grow from internal sources. The sustainable growth rate (SGR) is the maximum rate of growth that a company can sustain without having to finance growth with additional equity or debt.
96
Which of the following techniques of project appraisal does not consider the time value of money?
Discuss
Answer & Solution
Answer: Option D
Solution:
Accounting Rate of Return techniques of project appraisal does not consider the time value of money. Under this method, the asset's expected accounting rate of return (ARR) is computed by dividing the expected incremental net operating income by the initial investment and then compared to the management's desired rate of return to accept or reject a proposal.
97
The sustainable growth rate of a firm can be calculated as the product of the_________.
Discuss
Answer & Solution
Answer: Option C
Solution:
The sustainable growth rate of a firm can be calculated as the product of the retention rate and the return on equity. The sustainable growth rate (SGR) is the maximum rate of growth that a company can sustain without having to finance growth with additional equity or debt.
98
Under trading means.
Discuss
Answer & Solution
Answer: Option D
Solution:
Under trading means low turnover of working capital. Under-trading is the reverse of over-trading. It means keeping funds idle and not using them properly. This is due to the under employment of assets of the business, leading to the fall of sales and results in financial crises.
99
One way to obtain earnings forecasts is the mechanical procedure known as___________.
Discuss
Answer & Solution
Answer: Option C
Solution:
One way to obtain earnings forecasts is the mechanical procedure known as time series analysis. Time series analysis is a statistical technique that deals with time series data, or trend analysis. Time series data means that data is in a series of particular time periods or intervals.
100
In modern investment analysis, the risk for a stock is related to its_____________.
Discuss
Answer & Solution
Answer: Option C
Solution:
In modern investment analysis, the risk for a stock is related to its beta coefficient. In finance, the beta (β or beta coefficient) of an investment is a measure of the risk arising from exposure to general market movements as opposed to idiosyncratic factors.