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-5 section-11

Each section contains 100 MCQs on Financial Management .

Financial Leverage is calculated as:

A) EBIT ÷ Contribution B) EBIT ÷ PBT C) EBIT ÷ Sales D) EBIT ÷ Variable Cost

Discuss

Answer & Solution

Answer: Option B

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

In lease system, interest is calculated on:

A) Cash down payment B) Cash price outstanding C) Hire purchase price D) None of the above

Discuss

Answer & Solution

Answer: Option B

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

Which of the following is not true for MM Model?

A) Share price goes up if dividend is paid B) Share price goes down if dividend is not paid C) Market value is unaffected by Dividend policy D) All of the above

Discuss

Answer & Solution

Answer: Option C

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

Under income-tax provisions, depreciation on lease asset is allowed to:

A) Lessor B) Lessee C) Any of the two D) None of the two

Discuss

Answer & Solution

Answer: Option A

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

Advantage of Debt financing is:

A) Interest is tax-deductible B) It reduces WACC C) Does not dilute owners control D) All of the above

Discuss

Answer & Solution

Answer: Option D

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

Risk of a Capital budgeting can be incorporated:

A) Adjusting the cash flows B) Adjusting the discount rate C) Adjusting the life D) All of the above

Discuss

Answer & Solution

Answer: Option D

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

In case of the indivisible projects, which of the following may not give the optimum result?

A) Internal Rate of Return B) Profitability Index C) Feasibility Set Approach D) All of the above

Discuss

Answer & Solution

Answer: Option C

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

Cash Inflows from a project include:

A) Tax Shield of Depreciation B) After-tax Operating Profits C) Raising of Funds D) Both A and B

Discuss

Answer & Solution

Answer: Option D

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

Lease which includes a third party (a lender) is known as:

A) Sale and Leaseback B) Direct Lease C) Inverse Lease D) Leveraged Lease

Discuss

Answer & Solution

Answer: Option D

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

Which of the following is not true with reference capital budgeting?

A) Capital budgeting is related to asset replacement decisions B) Cost of capital is equal to minimum required return C) Existing investment in a project is not treated as sunk cost D) Timing of cash flows is relevant

Discuss

Answer & Solution

Answer: Option C

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