Financial Management MCQ Questions and Solutions with Explanations

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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-4 section-12

Each section contains 100 MCQs on Financial Management .

Baumol's Model of Cash Management attempts to:

A) Minimise the holding cost B) Minimization of transaction cost C) Minimization of total cost D) Minimization of cash balance

Discuss

Answer & Solution

Answer: Option C

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

Which of the following is not applied in capital budgeting?

A) Cash flows be calculated in incremental terms B) All costs and benefits are measured on cash basis C) All accrued costs and revenues be incorporated D) All benefits are measured on after-tax basis

Discuss

Answer & Solution

Answer: Option C

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

Which of the following is not a type of dividend payment?

A) Bonus Issue B) Right Issue C) Share Split D) Both B and C

Discuss

Answer & Solution

Answer: Option C

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

Risk-aversion of an investor can be measured by:

A) Market Rate of Return B) Risk-free Rate of Return C) Portfolio Return D) None of the above

Discuss

Answer & Solution

Answer: Option D

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

Which of the following is not a usual type of lease arrangement?

A) Sale & Leaseback B) Goods on Approval C) Leverage Lease D) Direct Lease

Discuss

Answer & Solution

Answer: Option B

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

In MM Model with taxes, where 'r' is the interest rate, 'D' is the total debt and 't' is tax rate, then present valued shields would be:

A) r × D × t B) r × D C) D × t D) $$\frac{{\text{D} \times \text{r}}}{{\text{l} - \text{t}}}$$

Discuss

Answer & Solution

Answer: Option C

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

Working Capital Turnover measures the relationship of Working Capital with:

A) Fixed Assets B) Sales C) Purchases D) Stock

Discuss

Answer & Solution

Answer: Option A

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

An implicit cost of increasing proportion of debt is:

A) Tax should would not be available on new debt B) P.E. Ratio would increase C) Equity shareholders would demand higher return D) Rate of Return of the company would decrease

Discuss

Answer & Solution

Answer: Option C

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

Which of the following appearing in the balance, generates tax advantage and hence affects the c, structure decision?

A) Reserves and Surplus B) Long-term Debt C) Preference Share Capital D) Equity Share Capital

Discuss

Answer & Solution

Answer: Option B

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

Relationship between change in sales and change in EPS is measured by:

A) Financial leverage B) Combined leverage C) Operating leverage D) None of the above

Discuss

Answer & Solution

Answer: Option B

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

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Financial Management MCQ Questions and Solutions with Explanations | Commerce