This quiz works best with JavaScript enabled. Home > Class 12 > 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 (25 MCQs) Quiz Instructions Select an option to see the correct answer instantly. 1. Which of the following is not an advantage of issuing bonds? A) Management retains control. B) Interest paid is tax deductable. C) Bonds are only a temporay source of finance. D) None of the above. Show Answer Correct Answer: D) None of the above. 2. The capital redemption reserve is created for the following reasons A) To maintain the capital intact. B) To safeguard the interest company's creditors. C) Both of the above. D) None of the above. Show Answer Correct Answer: C) Both of the above. 3. It is the efficient allocation of funds to specific assets. A) Investment. B) Financing. C) Value. D) Dividend. Show Answer Correct Answer: A) Investment. 4. Describe the purpose of a cash flow statement. A) To provide a detailed analysis of the company's market share. B) To track the company's inventory levels over time. C) To summarize a company's revenue for the year. D) The purpose of a cash flow statement is to provide insight into a company's cash inflows and outflows over a specific period. Show Answer Correct Answer: D) The purpose of a cash flow statement is to provide insight into a company's cash inflows and outflows over a specific period. 5. A Business created as a distinct legal entity and treated as a legal 'person' is called a: A) Corporation. B) Sole proprietorship. C) Partnership. D) Unlimited liability company. Show Answer Correct Answer: A) Corporation. 6. Modi Gilani and Miller argue that when the form has no acceptable investment opportunities it should A) Close its doors. B) Distribute the needed funds to owners. C) Lowest cost of capital. D) Retain the funds until an acceptable project arises. Show Answer Correct Answer: B) Distribute the needed funds to owners. 7. It estimates the overall debt status of the firm in light of its asset base and earning power. A) Liquidity. B) Asset utilization. C) Debt-Utilization. D) Profitability. Show Answer Correct Answer: C) Debt-Utilization. 8. What is the main focus of financial policy? A) Managing financial resources to achieve objectives. B) Maximizing employee productivity. C) Reducing operational costs. D) Increasing market competition. Show Answer Correct Answer: A) Managing financial resources to achieve objectives. 9. Select the correct formula for Financial Leverage. A) Contribution / EBIT. B) EBT/EBIT. C) EBIT/EBT. D) EBT X EBIT. Show Answer Correct Answer: C) EBIT/EBT. 10. What is the primary function of financial modeling? A) To represent the performance of financial assets. B) To create marketing strategies. C) To manage human resources. D) To analyze customer behavior. Show Answer Correct Answer: A) To represent the performance of financial assets. 11. Sophie earns $ 500 per month. She spends 15% on food/snacks. How much is she spending? A) $ 75. B) $ 100. C) $ 15. D) None of the above. Show Answer Correct Answer: A) $ 75. 12. What is the term for a financial tool to evaluate long-term investment proposals? A) Net present value (NPV). B) Retained earnings. C) Financial capital. D) Line of credit. Show Answer Correct Answer: A) Net present value (NPV). 13. A fee paid by a borrower to the lender for the use of borrowed money; typically interest is calculated as a percentage of the principal (original loan amount) A) Interest. B) Credit. C) Debt. D) Loan. Show Answer Correct Answer: A) Interest. 14. In which of the following markets, are the outstanding (already issued) long-term financial instruments traded? A) Money market. B) Forex market. C) Primary capital market. D) Secondary capital market. Show Answer Correct Answer: D) Secondary capital market. 15. Which financial statement shows a company's financial position at a specific point in time? A) Income Statement. B) Cash Flow Statement. C) Statement of Retained Earnings. D) Balance Sheet. Show Answer Correct Answer: D) Balance Sheet. 16. The cost of debt capital is calculated on the basis of ..... A) Net proceeds. B) Annual Interest. C) Annual Depreciation. D) Capital. Show Answer Correct Answer: B) Annual Interest. 17. Merchandise Inventory A) Debit. B) Credit. C) All the above. D) None of the above. Show Answer Correct Answer: A) Debit. 18. SW Co has a barrel of chemicals in its warehouse that it purchased for a project a while ago at a cost of $ 1, 000. It would cost $ 400 for a professional disposal company to collect the barrel and dispose of it safely. However, the chemicals could be used in a potential project which is currently being assessed.What is the relevant cost of using the chemicals in a new project proposal? A) $ 1, 000 cost. B) $ 400 benefit. C) $ 400 cost. D) $ Nil. Show Answer Correct Answer: B) $ 400 benefit. 19. The formula of EBIT = ..... A) Sales-Variable cost. B) Contribution-Fixed cost. C) Sales-Fixed cost. D) All the above. Show Answer Correct Answer: B) Contribution-Fixed cost. 20. If Employee A, works 37 hours in one week and their hourly pay rate is:$ 10.25; what is their gross pay for the week? A) $ 300.25. B) $ 380.00. C) $ 379.25. D) $ 37.95. Show Answer Correct Answer: C) $ 379.25. 21. Ploughing back of profits is related to A) Capital Structure Decisions. B) Capital Budgeting Decisions. C) Dividend Decisions. D) Working Capital Management Decisions. Show Answer Correct Answer: C) Dividend Decisions. 22. What is the role of a CFO in financial management? A) The CFO oversees financial operations, including planning, budgeting, reporting, and risk management. B) The CFO focuses on product development. C) The CFO is responsible for marketing strategies. D) The CFO manages human resources. Show Answer Correct Answer: A) The CFO oversees financial operations, including planning, budgeting, reporting, and risk management. 23. What is an example of a FIXED expense? A) New shoes. B) Groceries. C) Rent. D) None of the above. Show Answer Correct Answer: C) Rent. 24. Which of the following statements concerning net income is MOST correct? A) Net income represents cash available to pay dividends. B) Net income represents sales minus operating expenses at a specific point in time. C) Negative net income reduces a company's cash balance. D) Net income represents income that may be reinvested in the firm or distributed to its owners. Show Answer Correct Answer: D) Net income represents income that may be reinvested in the firm or distributed to its owners. 25. Features of international business that a organization may be exposed to A) Exchange rates. B) Political risks. C) Foreign economic condition. D) All of the above. Show Answer Correct Answer: D) All of the above. ← PreviousNext →Related 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 8Class 12 Business Studies Chapter 9 Financial Management Quiz 9Class 12 Business Studies Chapter 9 Financial Management Quiz 10 🏠 Back to Homepage 📘 Download PDF Books 📕 Premium PDF Books