This quiz works best with JavaScript enabled. Home > Class 12 > Class 12 Business Studies Chapter 9 Financial Management – Quiz 18 🏠 Homepage 📘 Download PDF Books 📕 Premium PDF Books Class 12 Business Studies Chapter 9 Financial Management Quiz 18 (25 MCQs) Quiz Instructions Select an option to see the correct answer instantly. 1. Ratios that measure the ability of the firm to pay its long-term financing and the extent of a firm's financing. A) Liquidity Ratio. B) Solvency Ratio. C) Profitability Ratio. D) Activity Ratio. Show Answer Correct Answer: B) Solvency Ratio. 2. What is an agreement between a lender and a borrower, who promises to repay the lender at a later date, with interest? A) Credit. B) Debt. C) Investment. D) Savings. Show Answer Correct Answer: A) Credit. 3. The time value of money means that money today is generally worth more than the same amount in the future A) True. B) False. C) All the above. D) None of the above. Show Answer Correct Answer: A) True. 4. Effective Working Capital Management is primarily concerned with: A) Ensuring the firm maintains an optimal mix of debt and equity. B) Maximizing the return on long-term capital investments. C) Managing current assets and current liabilities to ensure short-term liquidity. D) Reducing the cost of goods sold. Show Answer Correct Answer: C) Managing current assets and current liabilities to ensure short-term liquidity. 5. The government finance which includs the principles and practices relating to the Procurement and management of funds for Central Government, and Local bodies is known as: A) Public finance. B) Business Finance. C) Private Finance. D) All of these. Show Answer Correct Answer: A) Public finance. 6. Ke = D/MP x 100, is used for A) Reserve. B) Calculating capital structure. C) Depreciation. D) Calculating Cost of Equity Share Capital. Show Answer Correct Answer: D) Calculating Cost of Equity Share Capital. 7. The formula for compound value is: A) FVn = PV (1+i). B) FVn = PV/(1+i). C) FVn = PV (1+i)$^{n}$. D) FVn = (1+i)/PV. Show Answer Correct Answer: C) FVn = PV (1+i)$^{n}$. 8. Which of the following best describes commercial paper? A) Secured long-term loan notes issued by companies. B) Secured short-term loan notes issued by companies. C) Unsecured long-term loan notes issued by companies. D) Unsecured short-term loan notes issued by companies. Show Answer Correct Answer: D) Unsecured short-term loan notes issued by companies. 9. Risk management: A) Helps identify and mitigate financial risks. B) Protects a company's assets. C) Reduces the company's exposure to risk. D) All of the above. Show Answer Correct Answer: A) Helps identify and mitigate financial risks. 10. Q5) Which principle of sound financial planning relates to spreading investments across different asset types? A) Living beyond means. B) Accumulating excessive debt. C) Diversification. D) Ignoring budgeting. Show Answer Correct Answer: C) Diversification. 11. What would be the financial leverage if Sales is Rs.1, 000; Variable Cost Rs.400; Fixed Cost Rs.300; Interest Rs. 100 A) 2. B) 5.1. C) 1.5. D) 1. Show Answer Correct Answer: C) 1.5. 12. Q2) All constituencies with a stake in the fortunes of the company are known as ..... A) A. Shareholders. B) B. Stakeholders. C) C .Creditors. D) D. Customers. Show Answer Correct Answer: B) B. Stakeholders. 13. What is the main goal of profit maximization? A) Maximizing shareholder wealth. B) Increasing market share. C) Minimizing expenses. D) Enhancing employee skills. Show Answer Correct Answer: A) Maximizing shareholder wealth. 14. Which of the following is not included in the capital structure? A) Long term debt. B) Preferred stock,. C) Current assets. D) Retained earnings. Show Answer Correct Answer: C) Current assets. 15. Which financial tool helps identify a firm's cash surpluses or shortages? A) Liquidity ratio. B) Cash budget. C) Line of credit. D) Budgeted balance sheet. Show Answer Correct Answer: B) Cash budget. 16. Wealth maximization aims to increase what? A) The overall value of assets. B) The level of taxation. C) The number of employees. D) The amount of debt. Show Answer Correct Answer: A) The overall value of assets. 17. How does the 50/30/20 rule work? A) The 50/30/20 rule allocates 50% to savings, 30% to needs, and 20% to wants. B) The 50/30/20 rule divides income into 50% needs, 30% wants, and 20% savings/debt. C) The 50/30/20 rule divides income into 50% savings, 30% for emergencies, and 20% for discretionary spending. D) The 50/30/20 rule suggests spending 50% on entertainment, 30% on bills, and 20% on investments. Show Answer Correct Answer: B) The 50/30/20 rule divides income into 50% needs, 30% wants, and 20% savings/debt. 18. Dividend decision involves: A) Distribution of profit to shareholders. B) Determination of capital structure. C) Allocation of resources. D) Short-term financing. Show Answer Correct Answer: A) Distribution of profit to shareholders. 19. He/she is the one responsible for making investment, financial, and dividend policy-making decisions of a company A) Stockholder. B) Finance manager. C) Employee. D) Creditor. Show Answer Correct Answer: B) Finance manager. 20. This is one of the functions of a Financial Manager which include making decisions on how to fund long term investment and working capital. A) Financing. B) Investing. C) Operating. D) Dividend policies. Show Answer Correct Answer: A) Financing. 21. Tejado Supply has total equity of $ 1, 830, fixed assets of $ 2, 170, long-term debt of $ 740, and short-term debt of $ 430. What is the amount of Tejado's current assets? A) $ 660. B) $ 830. C) $ 400. D) None of the above. Show Answer Correct Answer: B) $ 830. 22. Explain the concept of 'working capital'. A) Working capital refers to the total value of a company's assets. B) Working capital is a measure of a company's long-term investments. C) Working capital is the difference between current assets and current liabilities, indicating a company's short-term financial health. D) Working capital is the amount of cash a company has on hand. Show Answer Correct Answer: C) Working capital is the difference between current assets and current liabilities, indicating a company's short-term financial health. 23. ..... REFERS TO THE INCREASE IN PROFITS EARNED BY THE EQUITY SHAREHOLDERS DUE TO THE PRESENCE OF FIXED FINANCIAL CHARGES A) TRADING ON EQUITY. B) EARNING PER SHARE. C) RETURN ON INVESTMENT. D) CAPITAL STRUCTURE. Show Answer Correct Answer: A) TRADING ON EQUITY. 24. Securities and Exchange Commission (SEC) A) Internal User. B) External User. C) All the above. D) None of the above. Show Answer Correct Answer: B) External User. 25. Which factor does not effect the dividend decision A) Rate of dividend. B) History of dividend. C) Rate of dividend of the competitor firm. D) Risk. Show Answer Correct Answer: D) Risk. ← 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