Financial Management MCQ Questions and Solutions with Explanations | Commerce

A. Total assets

B. Fixed assets

C. Current assets

D. Current assets minus current liabilities.

A. Measure its financial leverage

B. Does not affect the Earnings per share

C. Affects the dividend decision of the company

D. None of the above.

A. Financial risk

B. Interest rate risk

C. Purchasing power risk

D. Market risk

A. accounting income

B. cash flow

C. earnings

D. operating profit

A. Gross Working Capital is the sum of the total current assets

B. Net working capital represents current assets - current liablities

C. Net working capital can be negative

D. All the above

A. for a levered firm than an unlevered firm

B. for an unlevered firm than a levered firm

C. only levered firm

D. only unlevered firm

A. The IRR must be greater than 0.

B. The discount rate exceeds the cost of capital.

C. The profitability index equals 1

D. Accepting the project has an indeterminate effect on shareholders

A. business risk

B. financial risk

C. liquidity risk

D. inflation risk

A. accelerated depreciation

B. salvage value

C. tax rate changes

D. method of project financing used

A. taking sound financial decisions

B. proper use and allocation

C. improving the profitability of funds

D. all the above