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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-7 section-4

Each section contains 100 MCQs on Financial Management .
61
Value of payment is Rs 25 and an interest rate is 2%, then present value will be
Discuss
Answer & Solution
Answer: Option C
No explanation is given for this question. Let's Discuss on Board
62
Collection of net income, amortization and depreciation is divided by common shares outstanding to calculate
Discuss
Answer & Solution
Answer: Option B
Solution:
Collection of net income, amortization and depreciation is divided by common shares outstanding to calculate cash flow per share. Cash flow per share can be calculated by dividing cash flow earned in a given reporting period (usually quarterly or annually) by the total number of shares outstanding during the same term. Because the number of shares outstanding can fluctuate, a weighted average is typically used.
63
In a statement of cash flows, a company investing in short-term financial investments and in fixed assets results in
Discuss
Answer & Solution
Answer: Option B
Solution:
In a statement of cash flows, a company investing in short-term financial investments and in fixed assets results in decreased cash.
64
Future value of annuity FVA(ordinary) is, if deposited value is Rs 100 and earn 5% every year of total three years will be
Discuss
Answer & Solution
Answer: Option A
No explanation is given for this question. Let's Discuss on Board
65
Total common equity divided by common shares outstanding which is used to calculate
Discuss
Answer & Solution
Answer: Option A
Solution:
Total common equity divided by common shares outstanding which is used to calculate book value of share. The book value per share formula is used to calculate the per share value of a company based on its equity available to common shareholders.
66
Prices of bonds will be increased if interest rates
Discuss
Answer & Solution
Answer: Option D
Solution:
Prices of bonds will be increased if interest rates declines. Bond price is the present discounted value of future cash stream generated by a bond. It refers to the sum of the present values of all likely coupon payments plus the present value of the par value at maturity.
67
Earnings that are not paid as dividends to stockholders and have cumulative amount are classified as
Discuss
Answer & Solution
Answer: Option C
Solution:
Earnings that are not paid as dividends to stockholders and have cumulative amount are classified as retained earnings. Retained earnings are the profits that a company has earned to date, less any dividends or other distributions paid to investors. This amount is adjusted whenever there is an entry to the accounting records that impacts a revenue or expense account.
68
In time value of money, periodic rate is
Discuss
Answer & Solution
Answer: Option B
Solution:
In time value of money, periodic rate is shown on timeline. A periodic interest rate can be charged on a loan or realized on an investment over a specific period of time.
69
Claim against assets are represented by
Discuss
Answer & Solution
Answer: Option B
Solution:
Claim against assets are represented by retained earnings. Retained earnings are the profits that a company has earned to date, less any dividends or other distributions paid to investors. This amount is adjusted whenever there is an entry to the accounting records that impacts a revenue or expense account.
70
Rate charged by bank 12.5% on credit loans and 3% semi-annually on instalment loans is considered as
Discuss
Answer & Solution
Answer: Option A
Solution:
Rate charged by bank 12.5% on credit loans and 3% semi-annually on instalment loans is considered as periodic rate. A periodic interest rate can be charged on a loan or realized on an investment over a specific period of time.