This quiz works best with JavaScript enabled. Home > Cbse > Class 12 > Commerce > Business Studies > Class 12 Business Studies Chapter 9 Financial Management – Quiz 11 🏠 Homepage 📘 Download PDF Books 📕 Premium PDF Books Class 12 Business Studies Chapter 9 Financial Management Quiz 11 (60 MCQs) Quiz Instructions Select an option to see the correct answer instantly. 1. The net profit margin measures: A) The revenue a firm earns per employee. B) The profit a firm earns on each dollar of revenue. C) The liquidity of a firm's assets. D) A firm's reliance on debt financing. Show Answer Correct Answer: B) The profit a firm earns on each dollar of revenue. 2. Investment in current assets for longer duration is called fixed capital. A) True. B) False. C) All the above. D) None of the above. Show Answer Correct Answer: B) False. 3. Which financial concept refers to the process of determining how to invest funds in long-term assets that will generate returns over time? A) Capital budgeting. B) Financial leverage. C) Cost of capital. D) Working capital management. Show Answer Correct Answer: A) Capital budgeting. 4. Keputusan Investasi yang dilakukan Manajer Keuangan perusahaan, tergambar pada neraca bagian? A) Earning Per Share. B) Aktiva. C) Pasiva. D) Balance Sheet. Show Answer Correct Answer: B) Aktiva. 5. Find the operating leverage from the following data:Sales Rs.50, 000; Variable Cost 60%; Fixed Cost Rs.12, 000. A) 5.5. B) 2.5. C) 2.2. D) 5.2. Show Answer Correct Answer: B) 2.5. 6. Purchase of treasury stock A) Investing Activities. B) Financing Activites. C) Operating Activities. D) None of the above. Show Answer Correct Answer: B) Financing Activites. 7. .... is the valueof business in assets and liabilities as per the balance sheet. A) Market value. B) Book value. C) Intrinsic value. D) Salvage value. Show Answer Correct Answer: B) Book value. 8. One of the three fundamental financial statements and is key to both financial modeling and accounting. A) Management. B) Equity. C) Assets. D) Balance Sheet. Show Answer Correct Answer: D) Balance Sheet. 9. Which of the following statements about Value for Money is correct? A) Economy is minimising the input costs of the organisation. B) Effectiveness is minimising the costs of meeting the organisation's objectives. C) Enhancement is maximising the input/output ratio. D) Efficiency is minimising the output/input ratio. Show Answer Correct Answer: A) Economy is minimising the input costs of the organisation. 10. When was Byju's founded? A) 2011. B) 2013. C) 2010. D) 2012. Show Answer Correct Answer: A) 2011. 11. Agency problems are least likely to arise in which organizational form? A) Corporation. B) Subchapter S corporation. C) Sole proprietorship. D) Limited partnership. Show Answer Correct Answer: C) Sole proprietorship. 12. Analisa ratio keuangan yang sering dipakai dalam perusahaan adalah: A) Turn over ratio, cash ratio, Debt of equity ratio. B) Activity ratio, rentability ratio, turn over ratio. C) Liquidity ratio, leverage ratio, cash ratio. D) Activity ratio, liquidity ratio, profitability ratiio. Show Answer Correct Answer: D) Activity ratio, liquidity ratio, profitability ratiio. 13. The goal of wealth maximization takes into consideration A) Risk related to uncertainty of returns. B) Timing of expected returns. C) Amount of returns expected. D) All of the above. Show Answer Correct Answer: D) All of the above. 14. Information systems involve: A) Only computers. B) People and processes. C) Only technology. D) Only processes. Show Answer Correct Answer: B) People and processes. 15. What type of skills is financial management training designed to help cultivate? A) Financial planning and analysis. B) Cost analysis and budgeting. C) Risk management and forecasting. D) Marketing and customer service. Show Answer Correct Answer: A) Financial planning and analysis. 16. Which of the following are correct advantages of the IRR approach to investment appraisal, and which are not?1. Clear decision rule2. Takes into account the time value of money3. Assumes funds are reinvested at the IRR4. Considers the whole project A) Incorrect, , Correct, Incorrect, Correct,. B) Correct, Incorrect, Correct, Correct. C) Correct, Correct, Incorrect, Incorrect. D) Incorrect, Correct, Correct, Correct. Show Answer Correct Answer: A) Incorrect, , Correct, Incorrect, Correct,. 17. Who might provide expert advice on tax planning and financial strategies to a business? A) Management Consultant. B) Financial Analyst. C) Human Resources Manager. D) Operations Manager. Show Answer Correct Answer: B) Financial Analyst. 18. Your firm intends to finance the purchase of a new construction crane. The cost is $ 1, 500, 000. What is the size of the first payment if the crane is financed with an interest-only loan at an annual rate of 8.50%? A) $ 228, 611.56. B) $ 127, 500.00. C) $ 3, 391, 475.16. D) $ 127, 550.00. Show Answer Correct Answer: B) $ 127, 500.00. 19. Which technique in financial management enable us to take investment/expansion decisions? A) Capital Structure. B) Capital Budgeting. C) Working Capital Management. D) Ratio Analysis. Show Answer Correct Answer: B) Capital Budgeting. 20. How does effective cash flow management impact a company's growth? A) It allows for reinvestment in business opportunities. B) It reduces the need for customer service. C) It has no impact on growth. D) It increases the number of employees. Show Answer Correct Answer: A) It allows for reinvestment in business opportunities. 21. Higher Inventory to be maintained when more working capital is required. A) True. B) False. C) All the above. D) None of the above. Show Answer Correct Answer: A) True. 22. Earning interest on interest is called A) Simple Interest. B) Compound Interest. C) Inflation Interest. D) Extra Interest. Show Answer Correct Answer: B) Compound Interest. 23. What agency is responsible for collecting federal income taxes for the US government? A) Internal Revenue Service (IRS). B) NC Department of Revenue. C) NC Department of Agriculture. D) None of the above. Show Answer Correct Answer: A) Internal Revenue Service (IRS). 24. Assets that are depleted in one run revolve in the production process and turnover process in a short time is called ..... A) Current assets. B) Fixed capital. C) Fixed assets. D) Capital. Show Answer Correct Answer: A) Current assets. 25. Cash Management is part of A) Dividend Decisions. B) Capital Budgeting Decisions. C) Working Capital Management Decisions. D) Capital Structure Decisions. Show Answer Correct Answer: C) Working Capital Management Decisions. 26. It is considered to be the expansive goal of the firm. A) Valuation Approach. B) Ethical Behavior. C) Social Responsibility. D) Maximization of Shareholder's Wealth. Show Answer Correct Answer: D) Maximization of Shareholder's Wealth. 27. Main objective is to keep down ..... in inventories A) A. Capital investment. B) B. Excessive carrying cost. C) C. Risk of liquidity. D) D . None of above. Show Answer Correct Answer: A) A. Capital investment. 28. Why is financial management training important? A) It can help increase profits. B) It is a waste of resources. C) It can help enhance corporate and personal wealth. D) It can help reduce department costs. Show Answer Correct Answer: A) It can help increase profits. 29. Cost of capital is also known as A) Rate of investment. B) Rate of return. C) Accounting rate of return. D) Required rate of return. Show Answer Correct Answer: D) Required rate of return. 30. The document that lenders ask for as a guarantee that a loan will be paid. A) Advanced Payment. B) Interest. C) Collateral. D) References. Show Answer Correct Answer: C) Collateral. 31. Which of the following figure is irrelevant while calculating cost of redeemable preference shares? A) Net proceeds. B) EPS. C) Discount. D) Floatation cost. Show Answer Correct Answer: B) EPS. 32. It is a kind of bank with the motive of profit earning, and for this purpose, it performs the functions of accepting the deposits of the public and lends them the loan. A) Universal Bank. B) Thrift Bank. C) Commercial Bank. D) Rural Bank. Show Answer Correct Answer: C) Commercial Bank. 33. It means that the main goal of financial management is to maximize not profit alone, but the maximization of overall value of the firm. A) VALUATION APPROACH. B) MAXIMIZATION OF SHAREHOLDERS' WEALTH. C) All the above. D) None of the above. Show Answer Correct Answer: A) VALUATION APPROACH. 34. The Payback Period (PBP) will always select the investment that A) Gives the highest rate of return. B) Returns the cost of investment first. C) Has the highest total net cash flow. D) None of the above. Show Answer Correct Answer: B) Returns the cost of investment first. 35. What is Repayment Capacity? A) The term of a loan. B) A borrower's ability to repay a loan based on income and existing debts. C) The total amount of a loan. D) The interest rate on a loan. Show Answer Correct Answer: B) A borrower's ability to repay a loan based on income and existing debts. 36. Currency appreciation occurs when: A) The value of one currency rises relative to another currency. B) The value of all currencies rise relative to gold. C) The value of one currency falls relative to another currency. D) The value of all currencies fall relative to gold. Show Answer Correct Answer: A) The value of one currency rises relative to another currency. 37. What does a "SMART" goal in financial planning stand for? A) Simple, Manageable, Active, Real, Time-free. B) Specific, Measurable, Achievable, Relevant, Time-bound. C) Savings, Money, Assets, Risk, Taxes. D) Secure, Maintainable, Accurate, Reliable, Tested. Show Answer Correct Answer: B) Specific, Measurable, Achievable, Relevant, Time-bound. 38. Which one of the following is least likely to be an agency problem? A) Increasing the size of a firm. B) Concentrating on maximizing current profits. C) Closing a division with net losses. D) Increasing the market value of the firm's shares. E) Obtaining a patent for a new product. Show Answer Correct Answer: D) Increasing the market value of the firm's shares. 39. Returns after tax and before depreciation is taken in A) Urgency and ARR method. B) ARR method. C) PBP method. D) PBP and Urgency method. Show Answer Correct Answer: D) PBP and Urgency method. 40. What is the differences of money market and capital market? A) No differences. B) Types of funds. C) One is short-term and the other is long-term. D) Both are suppliers of funds. Show Answer Correct Answer: C) One is short-term and the other is long-term. 41. Why is it important to save money? A) Because your parents say so. B) Saving for a goal or something special in the future. C) Its not a good idea to save money. D) So you can spend it faster. Show Answer Correct Answer: B) Saving for a goal or something special in the future. 42. Financing decision mainly concerns A) Use of profits. B) Raising short-term and long-term funds. C) Dividend distribution. D) Cost control. Show Answer Correct Answer: B) Raising short-term and long-term funds. 43. What is the primary goal of Strategic Financial Management? A) Creating profits for the business over the long run. B) Increasing employee satisfaction. C) Minimizing operational costs. D) Maximizing short-term profits. Show Answer Correct Answer: A) Creating profits for the business over the long run. 44. Which of the following product is NOT traded in derivatives market? A) Forward. B) Mutual funds. C) Futures. D) Options. Show Answer Correct Answer: B) Mutual funds. 45. Money is used as a ..... because it's the intermediary in the exchange process. A) Payment. B) Store of value. C) Medium of exchange. D) Standard of value. Show Answer Correct Answer: C) Medium of exchange. 46. Discounting is the process of calculating the: A) Future value of future cash flows. B) Present value of future cash flows. C) Future value of present cash flows. D) Present value of preset cash flows. Show Answer Correct Answer: B) Present value of future cash flows. 47. This is the last component of Shareholder's Equity A) Additional Paid-In Capital. B) Reserves. C) Share Capital. D) Retained Earnings. Show Answer Correct Answer: D) Retained Earnings. 48. If net sales are RM1, 500, 000 and accounts receivable amount to RM300, 000, how long is the average collection period? A) 45.00 days. B) 36.00 days. C) 64.00 days. D) NOT IN THE CHOICES. E) 72.00 days. Show Answer Correct Answer: E) 72.00 days. 49. Which ONE of the following statements correctly describes the contents of the Statement of Financial Position? A) A list of ledger balances shown in debit and credit columns. B) A list of all the assets owned and all the liabilities owed by a business. C) A record of income generated and expenditure incurred over a given period. D) A record of the amount of cash generated and used by a company in a given period. Show Answer Correct Answer: B) A list of all the assets owned and all the liabilities owed by a business. 50. Which technique of financial management enables to manage day to day activities? A) Ratio Analysis. B) Capital Structure. C) Capital Budgeting. D) Working Capital Management. Show Answer Correct Answer: D) Working Capital Management. 51. A person's financial plan is failed to be carried out if the person is A) Patient. B) Over spending. C) Flexible. D) Discipline. Show Answer Correct Answer: B) Over spending. 52. What are the three primary pro forma financial statements in a financial plan? A) Debt financing, equity financing, internal funds. B) Start-up capital, venture capital, risk capital. C) Cash flow statement, income statement, balance sheet. D) Sales of fixed assets, reduction of working capital, account receivable. Show Answer Correct Answer: C) Cash flow statement, income statement, balance sheet. 53. Bombay Stock Exchange was established in the year ..... ? A) 1875. B) 1975. C) 1947. D) 1951. Show Answer Correct Answer: A) 1875. 54. Property is anything of value that is owned or controlled. A) True. B) False. C) All the above. D) None of the above. Show Answer Correct Answer: A) True. 55. It determines the economic worth in the exchange process. A) Money as a standard of value. B) Money as a medium of exchange. C) Money as a store of value. D) Money as a payment. Show Answer Correct Answer: A) Money as a standard of value. 56. What is influenced by the financing decision? A) Market price of shares. B) Cost of capital. C) Both (a) and (b). D) None of these. Show Answer Correct Answer: C) Both (a) and (b). 57. A financial statement that shows the "Gross Profit, Operating Expenses, and Net Income over a year's time is a: A) Balance Sheet. B) Income Statement. C) Payroll Sheet. D) None of the above. Show Answer Correct Answer: B) Income Statement. 58. What does it mean when financial managers doing financial control? A) Comparing actual revenues, costs & expenses with its budget planning. B) Estimating the company's short and long term financial needs. C) Setting income forecast and allocating the use of the company's financial resources. D) None of the above. Show Answer Correct Answer: A) Comparing actual revenues, costs & expenses with its budget planning. 59. Which of the following is not the key components of SMART financial goals? A) Realistic. B) Salary. C) Measurable. D) Attainable. E) Time-bounded. Show Answer Correct Answer: B) Salary. 60. A ..... is a person who relies on another person, usually a family member, for financial support. A) Taxpayer. B) Dependent. C) Community. D) None of the above. Show Answer Correct Answer: B) Dependent. ← PreviousNext →Related QuizzesCommerce QuizzesClass 12 QuizzesClass 12 Business Studies Chapter 9 Financial Management Quiz 1Class 12 Business Studies Chapter 9 Financial Management Quiz 2Class 12 Business Studies Chapter 9 Financial Management Quiz 3Class 12 Business Studies Chapter 9 Financial Management Quiz 4Class 12 Business Studies Chapter 9 Financial Management Quiz 5Class 12 Business Studies Chapter 9 Financial Management Quiz 6Class 12 Business Studies Chapter 9 Financial Management Quiz 7Class 12 Business Studies Chapter 9 Financial Management Quiz 8 🏠 Back to Homepage 📘 Download PDF Books 📕 Premium PDF Books