Financial Management MCQ Questions and Solutions with Explanations | Commerce

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81.
In case of Gordon's Model, the MP for zero payout is zero. It means that:

A. Shares are not traded

B. Shares available free of cost

C. Investors are not ready to offer any price

D. None of the above

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82.
In Traditional Approach, which one is correct?

A. k_c rises constantly

B. k_d decreases constantly

C. k₀ decreases constantly

D. None of the above

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83.
Which of the following is true?

A. Under Traditional Approach, overall cost of capital remains same

B. Under NI Approach, overall cost of capital remains same

C. Under NOI Approach, overall cost of capital remains same

D. None of the above

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84.
If there is no inflation during a period, then the Money Cashflow would be equal to:

A. Present Value

B. Real Cash flow

C. Real Cash flow + Present Value

D. Real Cash flow - Present Value

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85.
Marketable securities are primarily:

A. Equity shares

B. Preference shares

C. Fixed deposits with companies

D. Short-term debt investments

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86.
Which of the following is not a benefit of carrying inventories?

A. Reduction in ordering cost

B. Avoiding lost sales

C. Reducing carrying cost

D. Avoiding production shortages

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87.
If A = Annual Requirement, O = Order Cost and C = Carrying Cost per unit per annum, then EOQ:

A. $${\left( {\frac{{2{\text{AO}}}}{{\text{C}}}} \right)^2}$$

B. $$\sqrt {\frac{{2{\text{AO}}}}{{\text{C}}}} $$

C. 2A ÷ OC

D. 2AOC

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88.
If a firm has k_e > r the Walter's Model suggests for:

A. 0% Payout

B. 100% Payout

C. 50% Payout

D. 25% Payout

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89.
Use of safety stock by a firm would:

A. Increase Inventory Cost

B. Decrease Inventory Cost

C. No effect on Cost

D. None of the above

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90.
In Capital Budgeting, Sunk cost is excluded because it is:

A. of small amount

B. not incremental

C. not reversible

D. All of the above

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Financial Management MCQ Questions and Solutions with Explanations | Commerce

81. In case of Gordon's Model, the MP for zero payout is zero. It means that:

Answer & Solution

82. In Traditional Approach, which one is correct?

Answer & Solution

83. Which of the following is true?

Answer & Solution

84. If there is no inflation during a period, then the Money Cashflow would be equal to:

Answer & Solution

85. Marketable securities are primarily:

Answer & Solution

86. Which of the following is not a benefit of carrying inventories?

Answer & Solution

87. If A = Annual Requirement, O = Order Cost and C = Carrying Cost per unit per annum, then EOQ:

Answer & Solution

88. If a firm has ke > r the Walter's Model suggests for:

Answer & Solution

89. Use of safety stock by a firm would:

Answer & Solution

90. In Capital Budgeting, Sunk cost is excluded because it is:

Answer & Solution

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81.
In case of Gordon's Model, the MP for zero payout is zero. It means that:

82.
In Traditional Approach, which one is correct?

83.
Which of the following is true?

84.
If there is no inflation during a period, then the Money Cashflow would be equal to:

85.
Marketable securities are primarily:

86.
Which of the following is not a benefit of carrying inventories?

87.
If A = Annual Requirement, O = Order Cost and C = Carrying Cost per unit per annum, then EOQ:

88.
If a firm has k_e > r the Walter's Model suggests for:

89.
Use of safety stock by a firm would:

90.
In Capital Budgeting, Sunk cost is excluded because it is: