Financial Management MCQ Questions and Solutions with Explanations | Commerce

A. EBIT ÷ Contribution

B. EBIT ÷ PBT

C. EBIT ÷ Sales

D. EBIT ÷ Variable Cost

A. Cash down payment

B. Cash price outstanding

C. Hire purchase price

D. None of the above

A. Share price goes up if dividend is paid

B. Share price goes down if dividend is not paid

C. Market value is unaffected by Dividend policy

D. All of the above

A. Lessor

B. Lessee

C. Any of the two

D. None of the two

A. Interest is tax-deductible

B. It reduces WACC

C. Does not dilute owners control

D. All of the above

A. Adjusting the cash flows

B. Adjusting the discount rate

C. Adjusting the life

D. All of the above

A. Internal Rate of Return

B. Profitability Index

C. Feasibility Set Approach

D. All of the above

A. Tax Shield of Depreciation

B. After-tax Operating Profits

C. Raising of Funds

D. Both A and B

A. Sale and Leaseback

B. Direct Lease

C. Inverse Lease

D. Leveraged Lease

A. Capital budgeting is related to asset replacement decisions

B. Cost of capital is equal to minimum required return

C. Existing investment in a project is not treated as sunk cost

D. Timing of cash flows is relevant