Financial Management MCQ Questions and Solutions with Explanations

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-1 section-12

Which of the following sources of funds has an Implicit Cost of Capital?

A) Equity Share Capital B) Preference Share Capital C) Debentures D) Retained earnings

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Answer & Solution

Answer: Option D

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A firm has inventory turnover of 6 and cost of goods sold is Rs. 7,50,000. With better inventory management, the inventory turnover is increased to 10. This would result in:

A) Increase in inventory by Rs. 50,000 B) Decrease in inventory by Rs. 50,000 C) Decrease in cost of goods sold D) Increase in cost of goods sold

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Answer & Solution

Answer: Option B

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Risk in Capital budgeting is same as:

A) Uncertainty of Cash flows B) Probability of Cash flows C) Certainty of Cash flows D) Variability of Cash flows

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Answer & Solution

Answer: Option D

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Which of the following is not followed in capital budgeting?

A) Cash flows Principle B) Interest Exclusion Principle C) Accrual Principle D) Post-tax Principle

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Answer & Solution

Answer: Option C

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ABC Analysis is used in:

A) Inventory Management B) Receivables Management C) Accounting Policies D) Corporate Governance

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Answer & Solution

Answer: Option A

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Which of the following generally not result in increase in total dividend liability?

A) Share-split B) Right Issue C) Bonus Issue D) All of the above

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Answer & Solution

Answer: Option A

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Concept of Maximum Permissible Bank finance was introduced by:

A) Kannan Committee B) Chore Committee C) Nayak Committee D) Tandon Committee

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Answer & Solution

Answer: Option D

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Dividend Distribution Tax is payable by:

A) Shareholders to Government B) Shareholders to Company C) Company to Government D) Holding to Subsidiary Company

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Answer & Solution

Answer: Option C

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Which of the following does not effect cash flows proposal?

A) Salvage Value B) Depreciation Amount C) Tax Rate Change D) Method of Project Financing

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Answer & Solution

Answer: Option D

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In Certainty-equivalent approach, adjusted cash flows are discounted at:

A) Accounting Rate of Return B) Internal Rate of Return C) Hurdle Rate D) Risk-free Rate

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Answer & Solution

Answer: Option D

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