This quiz works best with JavaScript enabled. Home > Cbse > Class 12 > Commerce > Business Studies > Class 12 Business Studies Chapter 9 Financial Management – Quiz 16 🏠 Homepage 📘 Download PDF Books 📕 Premium PDF Books Class 12 Business Studies Chapter 9 Financial Management Quiz 16 (60 MCQs) Quiz Instructions Select an option to see the correct answer instantly. 1. What is the purpose of a "master budget" in financial management? A) Monitoring day-to-day expenses. B) Estimating overall company profitability. C) Controlling long-term investments. D) Analyzing short-term market trends. Show Answer Correct Answer: B) Estimating overall company profitability. 2. What do financing decisions in financial management primarily involve? A) Determining employee compensation packages. B) Selecting new market entry points. C) Choosing between debt, equity, or hybrid instruments to raise funds. D) Deciding on product pricing strategies. Show Answer Correct Answer: C) Choosing between debt, equity, or hybrid instruments to raise funds. 3. Which type of bank is FOR PROFIT and run by its shareholders? A) Credit unions. B) Commercial Banks. C) All the above. D) None of the above. Show Answer Correct Answer: B) Commercial Banks. 4. Sara wants to save up to buy a kindle for reading. A kindle costs about $ 104.00 If Sara earns $ 10 a week for watering her neighbors trees how many weeks does Sara have to work to earn enough money? A) 20 weeks. B) 11 weeks. C) 15 weeks. D) 10 weeks. E) 5 weeks. Show Answer Correct Answer: B) 11 weeks. 5. .... is an agreement between two parties whereby an owner of the Asset grants another person use of the asset for specified period in consideration of a payment of a charge. A) Lease. B) Hire purchase. C) Installment purchase. D) Loan. Show Answer Correct Answer: A) Lease. 6. Compound Value also Called A) Present Value. B) Future Value. C) Net Value. D) Both a & b. Show Answer Correct Answer: B) Future Value. 7. Treasurer performs the functions of which of the following functions: A) Credit management. B) Cash management. C) Procurement of essential funds. D) All of these. Show Answer Correct Answer: D) All of these. 8. Hasnah wants to buy a refrigerator costs RM2 300 in 5 months. Calculate the amount of money she need to save each month. A) RM360. B) RM420. C) RM460. D) RM480. Show Answer Correct Answer: C) RM460. 9. It is known as the ability of a company to obtain the greatest profit and performance in its operations. A) Monetary Politics. B) Basic financial objective. C) Profit maximization. D) Value added. Show Answer Correct Answer: C) Profit maximization. 10. A project's profitability index is calculated as: A) Future value of cash flows minus initial investment. B) Present value of cash inflows divided by initial investment. C) Total cash flows divided by project life. D) Annual profit divided by initial investment. Show Answer Correct Answer: B) Present value of cash inflows divided by initial investment. 11. Are the following statements true or false? True False 1. Maximising market share is an example of a financial objective. 2. Shareholder wealth maximisation is the primary financial objective for a company listed on a stock exchange. 3. Financial objectives should be quantitative so that their achievement can be measured. A) False, True, True. B) True, True, True. C) True, False, True. D) True, False, False. Show Answer Correct Answer: A) False, True, True. 12. If the Demand for money increases, what will happen to the Interest Rate? A) Decrease. B) Increase. C) No Change. D) None of the above. Show Answer Correct Answer: B) Increase. 13. Jeremiah wants to save for a $ 750.00 stereo over 6 months, what will he need to save each month to make his goal? A) $ 105.00. B) $ 130.00. C) $ 125.00. D) $ 120.00. Show Answer Correct Answer: C) $ 125.00. 14. Financial leverage is intended to A) Increase return on capital employed. B) Increase net equity returns. C) Decrease volatility in return. D) Increase return on capital employed and net equity. Show Answer Correct Answer: D) Increase return on capital employed and net equity. 15. There are checks in the checkbook, so there must be money in the checking account A) Fact. B) Fiction. C) All the above. D) None of the above. Show Answer Correct Answer: B) Fiction. 16. A government follows an expansionary monetary policy.How would this typically affect businesses? A) Higher demand from customers, lower interest rates on loans and increased availability of credit. B) A contraction in demand from customers, higher interest rates and less available credit. C) Lower taxes, higher demand from customers but less government subsidies/available contracts. D) Lower interest rates, lower exchange rates and higher tax rates. Show Answer Correct Answer: A) Higher demand from customers, lower interest rates on loans and increased availability of credit. 17. How is financial viability of an organization typically assessed? A) Market Share. B) Financial Statements. C) Customer feedback. D) Employee satisfaction. Show Answer Correct Answer: B) Financial Statements. 18. Govt. cheque remains valid for- A) 4 months. B) 6 months. C) 2 months. D) 3 months. Show Answer Correct Answer: D) 3 months. 19. Nancy made 600 widgets in 8 hours, what is her production rate? A) 70. B) 75. C) 80. D) 60. Show Answer Correct Answer: B) 75. 20. Which of the following is NOT considered a core financial decision-making area? A) Financing decisions. B) Marketing decisions. C) Dividend decisions. D) Investment decisions. Show Answer Correct Answer: B) Marketing decisions. 21. Freely floating exchange rates perform which of the following functions? A) They tend to correct a lack of equilibrium between imports and exports. B) They make imports cheaper and exports more expensive. C) They impose constraints on the domestic economy. D) They eliminate the need to hedge against fluctuations in foreign exchange rates. Show Answer Correct Answer: A) They tend to correct a lack of equilibrium between imports and exports. 22. You have had a credit card that you always pay off for 10 years A) Improve your credit score. B) Hurt your credit score. C) All the above. D) None of the above. Show Answer Correct Answer: A) Improve your credit score. 23. What is return on investment (ROI)? A) ROI is calculated as (Net Profit / Cost of Investment) x 100. B) ROI is calculated as (Total Investment / Net Profit) x 100. C) ROI is the total revenue generated from an investment. D) ROI measures the time taken to recover an investment. Show Answer Correct Answer: A) ROI is calculated as (Net Profit / Cost of Investment) x 100. 24. From investment, profit will be earned that eventually will lead to business growth. A) Risk Return Trade Off. B) Market Prices Reflect Information. C) Cash Flows Are Source Of Values. D) Money Has Time Value. Show Answer Correct Answer: C) Cash Flows Are Source Of Values. 25. Which is a low-risk investment? A) Savings account. B) Startups. C) Cryptocurrency. D) Stocks. Show Answer Correct Answer: A) Savings account. 26. Issued by persons drawn against their own current/checking account with a bank A) Business Check. B) Certified Check. C) Traveler's Check. D) Personal Check. Show Answer Correct Answer: D) Personal Check. 27. Oldest of all forms of money, described as mankind's first working capital asset A) Cowrie shell. B) Cattle. C) Metals. D) Wampum. Show Answer Correct Answer: B) Cattle. 28. We bought a second home to rent. A) Spending. B) Saving. C) Donating. D) Investing. Show Answer Correct Answer: D) Investing. 29. The following are all characteristeristics of a security finance except: A) Repayment is very limited. B) Also called debt capital. C) Major part of company's total capitalization. D) Long-term source of finance. Show Answer Correct Answer: B) Also called debt capital. 30. Your family income can be increased by reducing your personal expenses like: A) Use public transport instead of a car/motorcycle. B) Borrow books from library. C) No impulse buying. D) All of the above. Show Answer Correct Answer: D) All of the above. 31. Wait Company reported the following on its income statement:Income before taxes:P 400, 000Income tax expense:100, 000Net income:P 300, 000An analysis of the income statement revealed that interest expense was P100, 000. Wait Company's times interest earned (TIE) was A) 5 times. B) 3 times. C) 2 times. D) 4 times. Show Answer Correct Answer: A) 5 times. 32. Agency problem refers to conflict between A) Government and Management. B) SEBI and RBI. C) Management and Shareholders. D) Big shareholders and minority shareholders. Show Answer Correct Answer: C) Management and Shareholders. 33. Its main role is to act as financial intermediary. A) Financial Management. B) Financial Institution. C) Finance. D) Evaluating Investments. Show Answer Correct Answer: B) Financial Institution. 34. Struktur Modal (Capital Structure) adalah A) Kombinasi dari pembiayaan ekuitas jangka panjang dan pembiayaan utang. B) Kombinasi dari pembiayaan jangka panjang. C) Kombinasi dari pembiayaan ekuitas jangka panjang dan pembiayaan jangka pendek. D) Kombinasi dari pembiayaan besar jangka panjang dan pembiayaan utang. Show Answer Correct Answer: A) Kombinasi dari pembiayaan ekuitas jangka panjang dan pembiayaan utang. 35. Which statement best describes the IMF's primary role among member countries? A) Owning and operating central banks across 184 nations. B) Acting as a forum to promote trade and stabilize exchange rates. C) Providing long-term project grants to private enterprises. D) Financing infrastructure through interest-free credits and loans. Show Answer Correct Answer: B) Acting as a forum to promote trade and stabilize exchange rates. 36. What is the importance of existing agency relationships on a firm's financial management policy? A) It is essential for a firm's financial management policy. B) It only affects personal financial decisions. C) It has no impact on financial management policy. D) It is essential for strengthening business relationships. Show Answer Correct Answer: A) It is essential for a firm's financial management policy. 37. What is another word for currency? A) Money. B) Paper. C) Candy. D) Bank. Show Answer Correct Answer: A) Money. 38. Balance of capital reduction is transferred to ..... A) Security premium. B) Capital reserve. C) Share capital. D) Profit and loss account. Show Answer Correct Answer: B) Capital reserve. 39. How does an income statement help in evaluating the financial performance of a business? A) It lists the company's employee salaries and benefits. B) It details the company's marketing strategies and campaigns. C) It provides a summary of the company's customer satisfaction levels. D) It provides a summary of the company's revenues, expenses, and profits over a specific period of time. Show Answer Correct Answer: D) It provides a summary of the company's revenues, expenses, and profits over a specific period of time. 40. What is the primary goal of finance? A) To minimize risks. B) To maximize liquidity. C) To maximize profit. D) None of the above. Show Answer Correct Answer: C) To maximize profit. 41. Which is a better example of budgeting? A) Spending randomly. B) Tracking income and expenses. C) Investing in stocks. D) Shopping online. Show Answer Correct Answer: B) Tracking income and expenses. 42. Keeping in view the high rate of Income Tax the company should give priority to ..... capital. A) Owner. B) Preference. C) Debt. D) Equity. Show Answer Correct Answer: C) Debt. 43. This ratio is used to measure the liquidity of the firm's receivable. A) Quick Ratio. B) Inventory Turnover Ratio. C) Current Ratio. D) Accounts Receivable Turnover Ratio. Show Answer Correct Answer: D) Accounts Receivable Turnover Ratio. 44. If the if the company has ideal fund that means there is large amount of ..... ? A) Inventory. B) Working capital. C) Cost of capital. D) Cash. Show Answer Correct Answer: B) Working capital. 45. Replacement of machinery is an example of ..... A) Growth of business. B) Change in technique. C) Technological Upgradation. D) None of the above. Show Answer Correct Answer: C) Technological Upgradation. 46. Bank Of Sweden issued the first paper money in Europe, began issuing promissory notes A) 1988. B) 1983. C) 17th Century. D) 1996. Show Answer Correct Answer: C) 17th Century. 47. If the cost of capital is 12%, what is the discount factor for 3 years A) 0.89. B) 0.71. C) 0.64. D) 0.80. Show Answer Correct Answer: B) 0.71. 48. What is the monthly investment amount in the compound interest example? A) $ 25. B) $ 50. C) $ 75. D) $ 100. Show Answer Correct Answer: B) $ 50. 49. Of the following, which is NOT an activity engaged in by a financial intermediary? A) Matching borrowers and lenders. B) Bearing risk. C) Managing retirement portfolios for large classes of employees. D) All of the above are activities of financial intermediaries. Show Answer Correct Answer: D) All of the above are activities of financial intermediaries. 50. How many months are in 4 years? A) 36. B) 48. C) 24. D) 60. Show Answer Correct Answer: B) 48. 51. Which of the following is the liability of the bank? A) Junk Bonds. B) Commercial Papers. C) Treasury Bills. D) Certificate of Deposits. Show Answer Correct Answer: D) Certificate of Deposits. 52. Mirzatul has a monthly budget of RM1, 500 for household expenses. If she wants to reduce her spending by 15%, what is the maximum amount she can spend each month? A) RM1, 350. B) RM1, 275. C) RM1, 200. D) RM1, 500. Show Answer Correct Answer: B) RM1, 275. 53. Allows owners to buy prodcuts and services on credit from diff establishments, widely used (stretch their budget) A) Cash Card. B) Prepaid Cash Card. C) Credit Card. D) Debit Card. Show Answer Correct Answer: C) Credit Card. 54. The overall financial risk depends upon the A) Proportion of debt in the total capital. B) Proportion of equity in the total capital. C) Both of the above. D) None of the above. Show Answer Correct Answer: A) Proportion of debt in the total capital. 55. The five basic principles of finance include all of the following EXCEPT A) Cash flow is what matters. B) Incremental profits determine value. C) Money has a time value. D) Risk requires a reward. Show Answer Correct Answer: B) Incremental profits determine value. 56. Financial ratios that tell how well a company can pay off its short-term debts and meet unexpected needs for cash. A) Leverage ratios. B) Liquidity ratios. C) Profitability ratios. D) Efficiency ratios. Show Answer Correct Answer: B) Liquidity ratios. 57. Traditional approach gave importance to ..... A) Procurement of funds. B) Utilization of funds. C) Wise use of funds. D) All of the above. Show Answer Correct Answer: A) Procurement of funds. 58. Benchmarking is the continuous process of measuring products, services, and practices against the toughest competitors or those companies recognized as industry leaders A) True. B) False. C) All the above. D) None of the above. Show Answer Correct Answer: A) True. 59. Mm model irrelevance of capital structure is based on A) Cost of Dept. B) Cost of equity. C) Arbitrage process. D) All of the above. Show Answer Correct Answer: C) Arbitrage process. 60. Apa yg terjadi ketika suatu perusahaan 'profitable' tetapi collectionnya lebih lama dari payment ke suppliers? A) Cash Flow statement akan menunjukkan angka negatif. B) OK-karena masih menguntungkan. C) Perusahaan perlu focus ke EBIT. D) Perusahaan bermasalah dan bisa bangkrut. Show Answer Correct Answer: A) Cash Flow statement akan menunjukkan angka negatif. ← 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