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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-9 section-4

Each section contains 100 MCQs on Financial Management .
81
If deposited money Rs 10,000 in bank pays interest 10% annually, an amount after five years will be
Discuss
Answer & Solution
Answer: Option A
Solution:
FV = PV ( 1 + r/100 )ⁿ
= 10000 ( 1 + 10/100)⁵
= Rs 16,105.14
82
Student loans, mortgages and car loans are examples of
Discuss
Answer & Solution
Answer: Option B
Solution:
Student loans, mortgages and car loans are examples of deferred annuity. A deferred payment annuity is an insurance product that provides future payments to the buyer rather than an immediate stream of income.
83
An annuity with an extended life is classified as
Discuss
Answer & Solution
Answer: Option B
Solution:
An annuity with an extended life is classified as perpetuity. A perpetuity is an annuity that has no end, or a stream of cash payments that continues forever. There are few actual perpetuities in existence.
84
Periodic rate if it is multiplied with per year number of compounding periods is called
Discuss
Answer & Solution
Answer: Option D
Solution:
Periodic rate if it is multiplied with per year number of compounding periods is called nominal annual rate. The nominal interest rate is the interest rate before taking inflation into account, in contrast to real interest rates and effective interest rates.
85
Net income and depreciation is Rs 313,650,000 and common shares outstanding are 55,000,000 then cash flow per share would be
Discuss
Answer & Solution
Answer: Option A
Solution:
Cash Flow per Share = Net Income / Shares Outstanding
= 313650000 / 55000000 = Rs. 5.70
86
Finance company providing loans at 3% with five compounding periods per year, nominal annual rate is classified as
Discuss
Answer & Solution
Answer: Option A
Solution:
Finance company providing loans at 3% with five compounding periods per year, nominal annual rate is classified as 15.00% i.e, 3% × 5 = 15.00%.
87
Values of assets purchased or liabilities recorded as recorded by bookkeepers are considered as
Discuss
Answer & Solution
Answer: Option D
Solution:
Values of assets purchased or liabilities recorded as recorded by bookkeepers are considered as book values. Book value is also the net asset value of a company calculated as total assets minus intangible assets (patents, goodwill) and liabilities.
88
A stock which is hybrid and works as a cross between debt and common stock is considered as
Discuss
Answer & Solution
Answer: Option D
Solution:
A stock which is hybrid and works as a cross between debt and common stock is considered as preferred stock. Preferred stockholders have a higher claim to dividends or asset distribution than common stockholders.
89
Paid dividends to common stockholders Rs 67,600,000 and common shares outstanding 55,000,000 then dividend per share will be
Discuss
Answer & Solution
Answer: Option A
Solution:
Dividend per Share = Dividend Paid / Shares Outstanding
= 67600000 / 5500000 = Rs. 1.23
90
Procedure of finding present values in time value of money is classified as
Discuss
Answer & Solution
Answer: Option B
Solution:
Procedure of finding present values in time value of money is classified as discounting. Discounting is the process of determining the present value of a payment or a stream of payments that is to be received in the future. Given the time value of money, a dollar is worth more today than it would be worth tomorrow. Discounting is the primary factor used in pricing a stream of tomorrow's cash flows.