MBA Financial Management MCQ Set 8 MBA MCQs: multiple choice questions and answers,Mock Tests and Practice Papers

Question:

A proposal is not a Capital Budgeting proposal if it:

1.is related to Fixed Assets

2.brings long-term benefits

3.brings short-term benefits only

4.has very large investment

Question:

A sound Capital Budgeting technique is based on:

1.Cash Flows

2.Accounting Profit

3.Interest Rate on Borrowings

4.Last Dividend Paid

Question:

At Indifference level of EBIT, different capital have

1.Same EBIT

2.Same EPS

3.Same PAT

4.Same PBT

Question:

Capital Budgeting deals with:

1.Long-term Decisions

2.Short-term Decisions

3.Both (a) and (b)

4.Neither (a) nor (b)

Question:

Capital Budgeting Decisions are based on:

1.Incremental Profit

2.Incremental Cash Flows

3.Incremental Assets

4.Incremental Capital

Question:

Cost of Capital for Bonds and Debentures is calculated on:

1.Before Tax basis

2.After Tax basis

3.Risk-free Rate of Interest basis

4.None of the above

Question:

Difference between between the bank balance as per Cash Book and Pass Book may be due to:

1.Overdraft

2.Float

3.Factoring

4.None of the above

Question:

Dividend Payout Ratio is:

1.PAT Capital

2.DPS ÷ EPS

3.Pref. Dividend ÷ PAT

4.Pref. Dividend ÷ Equity Dividend

Question:

Evaluation of Capital Budgeting Proposals is based on Cash Flows because:

1.Cash Flows are easy to calculate

2.Cash Flows are suggested by SEBI

3.Cash is more important than profit

4.None of the above

Question:

Feasibility Set Approach to Capital Rationing can be applied in:

1.Accept-Reject Situations

2.Divisible Projects

3.Mutually Exclusive Projects

4.None of the above

Question:

Financial decision involve;

1.Investment, financing and dividend decision

2.Investment, financing and sales decision

3.Financing, dividend and cash decision

4.None of these

Question:

For a lesser, a lease is a

1.Investment decision

2.Financing decision

3.Dividend decision

4.None of the above

Question:

Higher FL is related the use of:

1.Higher Equity

2.Higher Debt

3.Lower Debt

4.None of the above

Question:

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

1.0% payout

2.100% Payout

3.50% Payout

4.25% Payout

Question:

If no information is available, the General Rule for valuation of stock for balance sheet is

1.Replacement Cost

2.Realizable Value

3.Historical Cost

4.Standard Cost

Question:

If the Money Discount Rate is 19% and Inflation Rate is 12%, then the Real Discount Rate is:

1.7%

2.5%

3.5.70%

4.6.25%

Question:

If the sales of the firm are. 60,00,000 and the average debtors are. 15,00,000 then the receivables turnover is

1.4 times

2.25%

3.400%

4.0.25 times

Question:

In Current Ratio, Current Assets are compared with:

1.Current Profit

2.Current Liabilities

3.Fixed Assets

4.Equity Share Capital

Question:

In India, Commercial Papers are issued as per the guidelines issued by

1.Securities and Exchange Board of India

2.Reserve Bank of India

3.Forward Market Commission

4.None of the above

Question:

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

1.Cost of Debt and Equity

2.Arbitrage Process

3.Decreasing k0

4.All of the above

Question:

In order to calculate Weighted Average Cost of weights may be based on:

1.Market Values

2.Target Values

3.Book Values

4.All of the above

Question:

In order to find out cost of equity capital under CAPM, which of the following is not required:

1.Beta Factor

2.Market Rate of Return

3.Market Price of Equity Share

4.Risk-free Rate of Interest

Question:

Inventory is generally valued as lower of

1.Market Price and Replacement Cost

2.Cost and Net Realizable Value

3.Cost and Sales Value

4.Sales Value and Profit

Question:

MM Model of Dividend irrelevance uses arbitrage between

1.Dividend and Bonus

2.Dividend and Capital Issue

3.Profit and Investment

4.None of the above

Question:

NPV of a proposal, as calculated by RADR real CE Approach will be:

1.Same

2.Unequal

3.Both (a) and

4.(d) None of (a) and (b)

Question:

Operating Leverage is calculated as:

1.Contribution ÷ EBIT

2.EBIT÷PBT

3.EBIT ÷Interest

4.EBIT ÷Tax

Question:

Process of Financial Planning ends with:

1.Preparation of Projected Statements

2.Preparation of Actual Statements

3.Comparison of Actual with Projected

4.Ordering the employees that projected figures m come true

Question:

Profitability Index, when applied to Divisible Projects, impliedly assumes that:

1.Project cannot be taken in parts

2.NPV is linearly proportionate to part of the project taken up

3.NPV is additive in nature

4.Both (b) and (c)

Question:

Ratio of Net Income to Number of Equity Shares known as:

1.Price Earnings Ratio

2.Net Profit Ratio

3.Earnings per Share

4.Dividend per Share

Question:

Relationship between change in sales and change m is measured by:

1.Financial leverage

2.Combined leverage

3.Operating leverage

4.None of the above

Question:

Risk in Capital budgeting implies that the decision-maker knows ________________ of the cash flows.

1.Variability

2.Probability

3.Certainty

4.None of the above

Question:

Risk in Capital budgeting is same as:

1.Uncertainty of Cash flows

2.Probability of Cash flows

3.Certainty of Cash flows

4.Variability of Cash flows

Question:

Risk-Return trade off implies

1.Minimization of Risk

2.Maximization of Risk

3.Ignorance of Risk

4.Optimization of Risk

Question:

Shares of face value of 10 are 80% paid up. The company declares a dividend of 50%. Amount of dividend per share is

1.5

2.4

3.80

4.50

Question:

The basic objective of Tandon Committee recommendations is that the dependence of'industry on bank should gradually

1.Increase

2.Remain Stable

3.Decrease

4.None of the above

Question:

The Real Cashflows must be discounted to get the present value at a rate equal to:

1.Money Discount Rate

2.Inflation Rate

3.Real Discount Rate

4.Risk free rate of interest

Question:

The Traditional Approach to Value of the firm m that:

1.There is no optimal capital structure

2.Value can be increased by judicious use of leverage

3.Cost of Capital and Capital structure are m dent

4.Risk of the firm is independent of capital structure

Question:

The type of collateral (security) used for short-term loan is

1.Real estate

2.Plant & Machinery

3.Stock of good

4.Equity share capital

Question:

Under the provisions of AS-19 'Leases', a leased asset is shown is the balance sheet of

1.Manufacturer

2.Lessor

3.Lessee

4.Financing bank

Question:

Which element of the basic NPV equation is adjusted by the RADR?

1.Denominator

2.Numerator

3.Both

4.None

Question:

Which is not a service of a factor?

1.Administrating Sales Ledger

2.Advancing against Credit Sales

3.Assuming bad debt losses

4.None of the above

Question:

Which of the following has the highest cost of capital?

1.Equity shares

2.Loans

3.Bonds

4.Preference shares

Question:

Which of the following is not a generally accepted approach for Calculation of Cost of Equity?

1.CAPM

2.Dividend Discount Model

3.Rate of Pref. Dividend Plus Risk

4.Price-Earnings Ratio

Question:

Which of the following is not a type of dividend payment?

1.Bonus Issue

2.Right Issue

3.Share Split

4.Both (B) and (C)

Question:

Which of the following is not a usual type of lease arrangement?

1.Sale & leaseback

2.Goods on Approval

3.Leverage Lease

4.Direct Lease

Question:

Which of the following is not applicable to commercial paper

1.Face Value

2.Issue Price

3.Coupon Rate

4.None of the above

Question:

Which of the following is not followed in capital budgeting?

1.Cash flows Principle

2.Interest Exclusion Principle

3.Accrual Principle

4.Post-tax Principle

Question:

Which of the following is not true of cash budget ?

1.Cash budget indicates timings of short-term borrowing

2.Cash budget is based on accrual concept

3.Cash budget is based on cash flow concept

4.Repayment of principal amount of law is shown in cash budget

Question:

Which of the following is true for Net Income Approach?

1.Higher Equity is better

2.Higher Debt is better

3.Debt Ratio is irrelevant

4.None of the above

Question:

Which of the following statements is correct?

1.A Higher Receivable Turnover is not desirable

2.Interest Coverage Ratio depends upon Tax Rate

3.Increase in Net Profit Ratio means increase in Sales

4.Lower Debt-Equity Ratio means lower Financial Risk

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MBA/MBA Financial Management MCQ Set 8 Sample Test,Sample questions

Question: A proposal is not a Capital Budgeting proposal if it:

Question: A sound Capital Budgeting technique is based on:

Question: At Indifference level of EBIT, different capital have

Question: Capital Budgeting deals with:

Question: Capital Budgeting Decisions are based on:

Question: Cost of Capital for Bonds and Debentures is calculated on:

Question: Difference between between the bank balance as per Cash Book and Pass Book may be due to:

Question: Dividend Payout Ratio is:

Question: Evaluation of Capital Budgeting Proposals is based on Cash Flows because:

Question: Feasibility Set Approach to Capital Rationing can be applied in:

Question: Financial decision involve;

Question: For a lesser, a lease is a

Question: Higher FL is related the use of:

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

Question: If no information is available, the General Rule for valuation of stock for balance sheet is

Question: If the Money Discount Rate is 19% and Inflation Rate is 12%, then the Real Discount Rate is:

Question: If the sales of the firm are. 60,00,000 and the average debtors are. 15,00,000 then the receivables turnover is

Question: In Current Ratio, Current Assets are compared with:

Question: In India, Commercial Papers are issued as per the guidelines issued by

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

Question: In order to calculate Weighted Average Cost of weights may be based on:

Question: In order to find out cost of equity capital under CAPM, which of the following is not required:

Question: Inventory is generally valued as lower of

Question: MM Model of Dividend irrelevance uses arbitrage between

Question: NPV of a proposal, as calculated by RADR real CE Approach will be:

Question: Operating Leverage is calculated as:

Question: Process of Financial Planning ends with:

Question: Profitability Index, when applied to Divisible Projects, impliedly assumes that:

Question: Ratio of Net Income to Number of Equity Shares known as:

Question: Relationship between change in sales and change m is measured by:

Question: Risk in Capital budgeting implies that the decision-maker knows ________________ of the cash flows.

Question: Risk in Capital budgeting is same as:

Question: Risk-Return trade off implies

Question: Shares of face value of 10 are 80% paid up. The company declares a dividend of 50%. Amount of dividend per share is

Question: The basic objective of Tandon Committee recommendations is that the dependence of'industry on bank should gradually

Question: The Real Cashflows must be discounted to get the present value at a rate equal to:

Question: The Traditional Approach to Value of the firm m that:

Question: The type of collateral (security) used for short-term loan is

Question: Under the provisions of AS-19 'Leases', a leased asset is shown is the balance sheet of

Question: Which element of the basic NPV equation is adjusted by the RADR?

Question: Which is not a service of a factor?

Question: Which of the following has the highest cost of capital?

Question: Which of the following is not a generally accepted approach for Calculation of Cost of Equity?

Question: Which of the following is not a type of dividend payment?

Question: Which of the following is not a usual type of lease arrangement?

Question: Which of the following is not applicable to commercial paper

Question: Which of the following is not followed in capital budgeting?

Question: Which of the following is not true of cash budget ?

Question: Which of the following is true for Net Income Approach?

Question: Which of the following statements is correct?

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Question:
A proposal is not a Capital Budgeting proposal if it:

Question:
A sound Capital Budgeting technique is based on:

Question:
At Indifference level of EBIT, different capital have

Question:
Capital Budgeting deals with:

Question:
Capital Budgeting Decisions are based on:

Question:
Cost of Capital for Bonds and Debentures is calculated on:

Question:
Difference between between the bank balance as per Cash Book and Pass Book may be due to:

Question:
Dividend Payout Ratio is:

Question:
Evaluation of Capital Budgeting Proposals is based on Cash Flows because:

Question:
Feasibility Set Approach to Capital Rationing can be applied in:

Question:
Financial decision involve;

Question:
For a lesser, a lease is a

Question:
Higher FL is related the use of:

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

Question:
If no information is available, the General Rule for valuation of stock for balance sheet is

Question:
If the Money Discount Rate is 19% and Inflation Rate is 12%, then the Real Discount Rate is:

Question:
If the sales of the firm are. 60,00,000 and the average debtors are. 15,00,000 then the receivables turnover is

Question:
In Current Ratio, Current Assets are compared with:

Question:
In India, Commercial Papers are issued as per the guidelines issued by

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

Question:
In order to calculate Weighted Average Cost of weights may be based on:

Question:
In order to find out cost of equity capital under CAPM, which of the following is not required:

Question:
Inventory is generally valued as lower of

Question:
MM Model of Dividend irrelevance uses arbitrage between

Question:
NPV of a proposal, as calculated by RADR real CE Approach will be:

Question:
Operating Leverage is calculated as:

Question:
Process of Financial Planning ends with:

Question:
Profitability Index, when applied to Divisible Projects, impliedly assumes that:

Question:
Ratio of Net Income to Number of Equity Shares known as:

Question:
Relationship between change in sales and change m is measured by:

Question:
Risk in Capital budgeting implies that the decision-maker knows ________________ of the cash flows.

Question:
Risk in Capital budgeting is same as:

Question:
Risk-Return trade off implies

Question:
Shares of face value of 10 are 80% paid up. The company declares a dividend of 50%. Amount of dividend per share is

Question:
The basic objective of Tandon Committee recommendations is that the dependence of'industry on bank should gradually

Question:
The Real Cashflows must be discounted to get the present value at a rate equal to:

Question:
The Traditional Approach to Value of the firm m that:

Question:
The type of collateral (security) used for short-term loan is

Question:
Under the provisions of AS-19 'Leases', a leased asset is shown is the balance sheet of

Question:
Which element of the basic NPV equation is adjusted by the RADR?

Question:
Which is not a service of a factor?

Question:
Which of the following has the highest cost of capital?

Question:
Which of the following is not a generally accepted approach for Calculation of Cost of Equity?

Question:
Which of the following is not a type of dividend payment?

Question:
Which of the following is not a usual type of lease arrangement?

Question:
Which of the following is not applicable to commercial paper

Question:
Which of the following is not followed in capital budgeting?

Question:
Which of the following is not true of cash budget ?

Question:
Which of the following is true for Net Income Approach?

Question:
Which of the following statements is correct?