This quiz works best with JavaScript enabled. Home > Cbse > Class 12 > Commerce > Business Studies > Class 12 Business Studies Chapter 9 Financial Management – Quiz 29 🏠 Homepage 📘 Download PDF Books 📕 Premium PDF Books Class 12 Business Studies Chapter 9 Financial Management Quiz 29 (60 MCQs) Quiz Instructions Select an option to see the correct answer instantly. 1. According to International Accounting Standards(IAS 1) the objective of general purpose financial statements is to provide information about the financial position, financial performance, and cash flows of an entity that is useful to a wide range of users in making economic decisions. A) True. B) False. C) All the above. D) None of the above. Show Answer Correct Answer: A) True. 2. The cost of equity share capital is greater than the cost of debt because ..... A) Equity shares carry a higher risk than debts. B) Equity shares are not easily saleable. C) Equity shares do not provide a fixed dividend rate. D) The face value of equity shares is lower than the face values of debentures in most cases. Show Answer Correct Answer: A) Equity shares carry a higher risk than debts. 3. For a company, ke = 16%, kd = 8%, kp = 10%, weights are 0.5, 0.3, 0.2 respectively. Find WACC. A) 10.4%. B) 11.6%. C) 13%. D) 12.8%. Show Answer Correct Answer: B) 11.6%. 4. Costs that changedisproportionatelywith changes inoutput levels. A) Fixed Costs. B) Variable Costs. C) Semi Variable Costs. D) None of the above. Show Answer Correct Answer: C) Semi Variable Costs. 5. Average U.S. wages in 1990 were $ 28, 960, far larger than the average wage in 1930 of $ 1, 970. What was the average annual increase in wages over this 60-year period? A) 4.58%. B) 2.45%. C) 24.50%. D) 3.31%. Show Answer Correct Answer: A) 4.58%. 6. Safe mode by which firms perform worldwide business is A) Establishment of new subsidiary. B) Licencing. C) Franchising. D) International trade. Show Answer Correct Answer: D) International trade. 7. Which of the following cannot be the reason for any company to offer themselves for a sale. A) Utilisation of resources. B) Option 5. C) Tax benefit. D) Difference in culture. E) To gain economies of Scale. Show Answer Correct Answer: D) Difference in culture. 8. Financial management contributes to organizational success by: A) Ensuring efficient use of financial resources. B) Avoiding financial risks completely. C) Increasing product prices only. D) Reducing workforce size. Show Answer Correct Answer: A) Ensuring efficient use of financial resources. 9. Explain the concept of working capital in entrepreneurial finance. A) Working capital is the amount of money a company has in its bank account. B) Working capital is the total assets of a company. C) Working capital is the difference between current assets and current liabilities. D) Working capital is the long-term investments of a company. Show Answer Correct Answer: C) Working capital is the difference between current assets and current liabilities. 10. Profitability refers to: A) How much money is made on selling your products. B) The ability to make a financial return from business activities. C) The main driving purpose for running a business. D) The return on capital and growth in sales. Show Answer Correct Answer: B) The ability to make a financial return from business activities. 11. Yang bukan termasuk ke dalam operating expenses adalah A) Biaya umum & adm. B) Biaya Pemasaran. C) Biaya bunga. D) Biaya Penjualan. Show Answer Correct Answer: C) Biaya bunga. 12. Which among the following figures is not relevant while calculating the cost of the redeemable preference shares? A) Earnings per share. B) Flotation cost. C) Discount. D) None of the above. Show Answer Correct Answer: A) Earnings per share. 13. Which financial concept refers to the separation of ownership and control in a corporation? A) Corporate governance. B) Financial leverage. C) Shareholder activism. D) Stakeholder management. Show Answer Correct Answer: A) Corporate governance. 14. Which of the following is considered as cash inflow from the point of view of Lessor? A) Tax on Annual lease rent. B) Refund of initial deposit. C) Annual lease rentals. D) Cost of Asset. Show Answer Correct Answer: C) Annual lease rentals. 15. Which of the following is a significant challenge in financial management? A) Consistent market stability. B) Predictable currency exchange rates. C) Regulatory changes. D) Abundant and low-cost capital. Show Answer Correct Answer: C) Regulatory changes. 16. Leverage refers to the effects that variable costs have on the returns that shareholders earn A) True. B) False. C) All the above. D) None of the above. Show Answer Correct Answer: B) False. 17. It pertains to the ability of the firm to yield a sufficient amount of return on company sales asset and invested capital. A) LIQUIDITY. B) PROFITABILITY. C) All the above. D) None of the above. Show Answer Correct Answer: B) PROFITABILITY. 18. What does the term 'APR' stand for in finance? A) Average Payment Rate. B) Adjustable Payment Rate. C) Annual Percentage Rate. D) Annual Payment Rate. Show Answer Correct Answer: C) Annual Percentage Rate. 19. A B C analysis is useful for analyzing the inventories? A) Based on their quality. B) Based on physical volume. C) Based on their usage and value. D) All the above. Show Answer Correct Answer: C) Based on their usage and value. 20. .... is a motive of holding cash? A) A. Transaction motive. B) B. Precaution motive. C) C. Capital investment. D) None of the above. Show Answer Correct Answer: B) B. Precaution motive. 21. Short term or current assets Decisions are known as: A) Short term investment decisions. B) Working capital decisions. C) Both. D) None. Show Answer Correct Answer: C) Both. 22. Which of the following is the characteristics of the money market instruments? A) Long term maturity. B) High liquidity. C) Issued by the Governments only. D) High risk and high return. Show Answer Correct Answer: B) High liquidity. 23. Optimal capital structure consists of both the mix of debt and equity A) True. B) False. C) All the above. D) None of the above. Show Answer Correct Answer: A) True. 24. A new project being considered by BLW Co would require 1, 000 hours of skilled labour. The current workforce is already fully employed but more workers can be hired in at a cost of $ 20 per hour. The current workers are paid $ 15 per hour on a project that earns a contribution of $ 10 per hour.What is the relevant cost of labour to be included in the project appraisal? A) $ 20, 000. B) $ 25, 000. C) $ 10, 000. D) $ 15, 000. Show Answer Correct Answer: A) $ 20, 000. 25. Jose wants to buy a new pair of Air Jordan 11's. They cost $ 300. He wants to buy them in 4 months. How much money should he save each month in order to buy the shoes? A) $ 100. B) $ 50. C) $ 75. D) None of the above. Show Answer Correct Answer: C) $ 75. 26. The Appropriate objectives of enterprises is A) Maximization of sales. B) Maximization of owner's wealth. C) Maximization of profits. D) None of the above. Show Answer Correct Answer: B) Maximization of owner's wealth. 27. The cost of equity is higher than cost of debt because: A) Dividend is not tax deductible. B) Interest is tax deductible. C) Equity is more risky. D) All of the above. Show Answer Correct Answer: D) All of the above. 28. What does the term 'risk-adjusted discount rates' refer to? A) Rates adjusted for project risk. B) Rates adjusted for inflation. C) Rates adjusted for market competition. D) Rates adjusted for operational costs. Show Answer Correct Answer: A) Rates adjusted for project risk. 29. Didalam Analisa Laporan Keuangan ada beberapa alat analisa, yaitu sbb: A) Semua Jawaban Benar. B) Analisa Rasio. C) Analisa Vertikal atau Analisa Common Size. D) Analisa Horizontal atau Analisa Komparatif. Show Answer Correct Answer: A) Semua Jawaban Benar. 30. Full form of PAC- A) Public Accounts Committee. B) Primary Accounts Committee. C) Private Accounting Committee. D) Personal Accounting Committee. Show Answer Correct Answer: A) Public Accounts Committee. 31. Current Ratio is computed as: A) Total Current Assets. B) Product of Current Assets and Current Liabilities. C) Current Assets/ Current Liabilities. D) Quick Assets and Quick Liabilities. Show Answer Correct Answer: C) Current Assets/ Current Liabilities. 32. Where do you put your signature on a check you just wrote? A) None of them. B) Bottom left corner on the line. C) Top right corner on the line. D) Bottom right corner on the line. Show Answer Correct Answer: D) Bottom right corner on the line. 33. What is the purpose of financial planning? A) Tracking spending habits. B) Managing budgets over time. C) Developing strategies to increase wealth. D) Calculating taxes owed. Show Answer Correct Answer: C) Developing strategies to increase wealth. 34. Which of the following is the wrong key component in SMART financial goals? A) A-Achievable. B) T-Time-bound. C) R-Realistic. D) S-Systematic. E) M-Measureable. Show Answer Correct Answer: D) S-Systematic. 35. The following are all methods of investment appraisal, EXCEPT A) Net present value using discounted cash flows. B) Balance sheet return. C) Average rate of return. D) Payback period. Show Answer Correct Answer: B) Balance sheet return. 36. Minimum rate of return that a project must earn to increase firm value A) Cost of capital. B) Cost of opportunity. C) Implicit cost. D) Quality cost. Show Answer Correct Answer: A) Cost of capital. 37. Speed at which a firm converts various accounts into sales or cash A) Market Ratios. B) Profitability Ratios. C) Activity Ratios. D) Debt Ratios. Show Answer Correct Answer: C) Activity Ratios. 38. The net profits decision has to be made by the finance manager. This can be done in two ways:Dividend declaration or Retained profits A) Management of cash. B) Choice of sources of funds. C) Disposal of surplus. D) Investment of funds. Show Answer Correct Answer: C) Disposal of surplus. 39. It is the increase in shareholders' equity in harmony with the objectives associated with clients, workers and other interest groups. A) Production. B) Basic financial objective. C) Value added. D) Monetary Politics. Show Answer Correct Answer: B) Basic financial objective. 40. This is the money that is spend on goods, services, and bills. A) Impulse buying. B) Long term goals. C) Expenditures. D) Needs. Show Answer Correct Answer: C) Expenditures. 41. Shriram Industries Ltd. issued 10, 000, 10% Debentures of Rs.100 each. The tax rate is 50%. what would be the after-tax cost of debt if the debentures are issued at a discount of 10%? A) 55.6%. B) 5.56%. C) 6.54%. D) 5.65%. Show Answer Correct Answer: B) 5.56%. 42. Which of the following statements are correct? (1) Capital market securities are assets for the seller but liabilities for the buyer (2) Financial markets can be classified into exchange and over-the-counter markets (3) A secondary market is where securities are bought and sold by investors A) 1 and 2 only. B) 1 and 3 only. C) 2 and 3 only. D) 1, 2 and 3. Show Answer Correct Answer: C) 2 and 3 only. 43. In NC the insurances required by all people are A) Car insurance. B) Life insurance. C) Home insurance. D) All of the answers are correct. Show Answer Correct Answer: A) Car insurance. 44. Two projects intersect, in terms of NPV, at a discount rate labeled the ..... A) Discount rate. B) Yield to maturity. C) Crossover rate. D) Internal rate of return. Show Answer Correct Answer: C) Crossover rate. 45. Which term describes net income reinvested in the firm? A) Line of credit. B) Financial capital. C) Liquidity ratios. D) Retained earnings. Show Answer Correct Answer: D) Retained earnings. 46. A company is evaluating an investment project with the following forecast cash flows:Time 0 1 2 3 4Cash flow ($ m) (6.5) 2.4 3.1 2.1 1.8Using discount rates of 15% and 20%, what is the internal rate of return of the investment project? (to one decimal place) A) 17.7%. B) 17.8%. C) 17.6%. D) None. Show Answer Correct Answer: B) 17.8%. 47. Q3) Financial structure refers to ..... A) Short-term resources. B) All the financial resources. C) Long-term resources. D) All of these. Show Answer Correct Answer: B) All the financial resources. 48. ..... are documents that are used to report information about the business at the end of the accounting cycle. A) Current assets. B) Income statements. C) Financial statements. D) Accounts payables. Show Answer Correct Answer: C) Financial statements. 49. What do you mean by indifference point? A) Level of EBIT at which there is no profit no loss to equity share holders. B) Level of EBIT at which company has same EPS in all financial plans. C) When EBIT is zero. D) None of these. Show Answer Correct Answer: B) Level of EBIT at which company has same EPS in all financial plans. 50. Means of transferring ownership A) Conveyance. B) Means of Deferred Payment. C) Store of Value. D) Standard of Value. Show Answer Correct Answer: A) Conveyance. 51. What is the main objective of corporate planning? A) Directing and controlling the future of the company. B) Maximizing employee productivity. C) Maximizing short-term revenue. D) Minimizing long-term liabilities. Show Answer Correct Answer: A) Directing and controlling the future of the company. 52. Which of the following is included in a complete set of financial statements? A) Value added statement. B) A statement of changes in equity. C) Summarized statements of financial position for the last five years. D) A statement by the board of directors of compliance with local legislation. Show Answer Correct Answer: B) A statement of changes in equity. 53. "Needs" are things you must have to survive, while "wants" are things you desire but can live without A) True. B) False. C) All the above. D) None of the above. Show Answer Correct Answer: A) True. 54. Calculate the present value of Rs.1, 000 to be received at the end of 8 years. Assume an interest rate of 7%. A) 531.82. B) 5971.30. C) 582.00. D) 1718.19. Show Answer Correct Answer: C) 582.00. 55. Mm approach assumes A) The dividend payout ratio is 100% that is there is no retained earnings. B) Capital markets are assumed to be perfect. C) Investors act rationally. D) All of the above. Show Answer Correct Answer: D) All of the above. 56. Nominal interest rates are the sum of two major components. These components are ..... A) The real interest rate and expected inflation. B) The risk-free rate and expected inflation. C) The real interest rate and default premium. D) The real interest rate and the T-bill rate. Show Answer Correct Answer: A) The real interest rate and expected inflation. 57. The method that converts the amount of present cash into an amount of cash of equivalent value in future is A) Budgeting. B) Discounting method. C) Both. D) Compounding method. Show Answer Correct Answer: B) Discounting method. 58. One way to prepare and file your federal income tax return is online. Filing your taxes online is called ..... A) Government file. B) E-File. C) Manual file. D) None of the above. Show Answer Correct Answer: B) E-File. 59. Data analytics tools can improve financial decision-making A) True. B) False. C) All the above. D) None of the above. Show Answer Correct Answer: A) True. 60. It is anything generally accepted as a means of paying for goods and services and for paying off debts or liabilities. A) Coins. B) Bills. C) Money. D) Finance. Show Answer Correct Answer: C) Money. ← 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