Financial Management MCQ Questions and Solutions with Explanations | Commerce

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Section 1 Section 2 Section 3 Section 4 Section 5 Section 6 Section 7 Section 8 Section 9 Section 10 Section 11 Section 12 Section 13

11.
Which of the following assumes constant k_d and k_c?

A. Net Income Approach

B. Net Operating Income Approach

C. Traditional Approach

D. MM Model

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12.
Combined leverage can be used to measure the relationship between:

A. EBIT and EPS

B. PAT and EPS

C. Sales and EPS

D. Sales and EBIT

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13.
Feasibility Set Approach to Capital Rationing can be applied in:

A. Accept-reject situations

B. Divisible projects

C. Mutually exclusive projects

D. None of the above

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14.
Which of the following is not an objective of cash management?

A. Maximization of cash balance

B. Minimization of cash balance

C. Optimization of cash balance

D. Zero cash balance

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15.
Cost of not carrying sufficient inventory is known as:

A. Carrying Cost

B. Holding Cost

C. Total Cost

D. Stock-out Cost

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16.
Which of the following is a risk factor in capital budgeting?

A. Industry specific risk factors

B. Competition risk factors

C. Project specific risk factors

D. All of the above

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17.
In MM-Model, irrelevance of capital structure is based on:

A. Cost of Debt and Equity

B. Arbitrage Process

C. Decreasing k₀

D. All of the above

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18.
Financial break-even level of EBIT is:

A. Intercept at Y-axis

B. Intercept at X-axis

C. Slope of EBIT-EPS line

D. None of the above

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19.
Which of the following is not an element of credit policy?

A. Credit Terms

B. Collection Policy

C. Cash Discount Terms

D. Sales Price

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20.
Real Discount Rate is equal to:

A. (1 + Inf. Rate) (1 + Money D Rate) - 1

B. (1 + Money D Rate) + (1 + Inf. Rate) - 1

C. (1 + Money D Rate) 4 - (1 + Inf. Rate) - 1

D. (1 + Money D Rate) - (1 + Inf. Rate) - 1

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Financial Management MCQ Questions and Solutions with Explanations | Commerce

11. Which of the following assumes constant kd and kc?

Answer & Solution

12. Combined leverage can be used to measure the relationship between:

Answer & Solution

13. Feasibility Set Approach to Capital Rationing can be applied in:

Answer & Solution

14. Which of the following is not an objective of cash management?

Answer & Solution

15. Cost of not carrying sufficient inventory is known as:

Answer & Solution

16. Which of the following is a risk factor in capital budgeting?

Answer & Solution

17. In MM-Model, irrelevance of capital structure is based on:

Answer & Solution

18. Financial break-even level of EBIT is:

Answer & Solution

19. Which of the following is not an element of credit policy?

Answer & Solution

20. Real Discount Rate is equal to:

Answer & Solution

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11.
Which of the following assumes constant k_d and k_c?

12.
Combined leverage can be used to measure the relationship between:

13.
Feasibility Set Approach to Capital Rationing can be applied in:

14.
Which of the following is not an objective of cash management?

15.
Cost of not carrying sufficient inventory is known as:

16.
Which of the following is a risk factor in capital budgeting?

17.
In MM-Model, irrelevance of capital structure is based on:

18.
Financial break-even level of EBIT is:

19.
Which of the following is not an element of credit policy?

20.
Real Discount Rate is equal to: