This quiz works best with JavaScript enabled. Home > Class 12 > Class 12 Business Studies Chapter 9 Financial Management – Quiz 3 🏠 Homepage 📘 Download PDF Books 📕 Premium PDF Books Class 12 Business Studies Chapter 9 Financial Management Quiz 3 (25 MCQs) Quiz Instructions Select an option to see the correct answer instantly. 1. What percentage of your income is recommended to be allocated for savings to achieve financial stability? A) 20%. B) 30%. C) 10%. D) 50%. Show Answer Correct Answer: C) 10%. 2. This statement presents the result of the firm's operation or performance for a given time A) Statement of Financial Position. B) Income Statement. C) Statement of Comprehensive Income. D) Statement of Changes in Equity. Show Answer Correct Answer: B) Income Statement. 3. Commercial paper is the instrument of ..... A) Secondary market. B) Primary market. C) Capital market. D) Money market. Show Answer Correct Answer: D) Money market. 4. How do you know when abusive lending is taking place? A) When the lender is pressuring you to take a loan. B) When you have done your "due diligence" and the loan office does not badger you to sign for the loan. C) All the above. D) None of the above. Show Answer Correct Answer: A) When the lender is pressuring you to take a loan. 5. The granting of a loan and the creation of debt; any form of deferred payment. A) Credit. B) Loan. C) Economy. D) Debt. Show Answer Correct Answer: A) Credit. 6. Computing the future value of an amount of money for any specified time period requires knowledge of the amount of principal and the interest rate A) True. B) False. C) All the above. D) None of the above. Show Answer Correct Answer: A) True. 7. Cost of retained earnings is A) Opportunity cost of capital. B) Explicit cost. C) Historical cost. D) Marginal cost. Show Answer Correct Answer: A) Opportunity cost of capital. 8. In debenture, interest payable is A) Transferred to general reserve. B) Transferred to falling fund investment account. C) Charged against the firms profit. D) Appropriation of the company's profit. Show Answer Correct Answer: C) Charged against the firms profit. 9. ..... is at the heart of corporate finance, because it is concerned with making the best choices about project selection. A) Capital structure budgeting. B) Capital structure. C) Capital budgeting. D) Short-term budgeting. Show Answer Correct Answer: C) Capital budgeting. 10. Capital budgeting technique is a fundamental requirement of ..... ? A) Cost of debt. B) Cost of capital. C) Capital structure. D) All the above. Show Answer Correct Answer: B) Cost of capital. 11. Dividend policy must be formulated considering two basic objectives namely A) Delaying the tax liability of the stockholders and information content. B) Maximizing shareholders wealth and delaying the tax liability of the stockholders. C) Maximizing shareholders wealth and providing for sufficient financing. D) Maintaining liquidity and minimising the weighted average cost of capital. Show Answer Correct Answer: C) Maximizing shareholders wealth and providing for sufficient financing. 12. ..... is the satisfaction that results from the ownership and utilization of goods and services. A) Psychic income. B) Barter system. C) Fringe benefits. D) Money income. Show Answer Correct Answer: C) Fringe benefits. 13. A company issued 10, 000, 10% Debentures of Rs. 100 each on 1.4.2020 to be matured on 1.4.2025. The company wants to know the current cost of its existing debt and the market price of the debenture is Rs. 80. Compute the cost of existing debenture assuming 35 % tax rate using NPV Method or IRR Method A) Around 12.21 %. B) Around 14.21 %. C) Around 9.21 %. D) None of these. Show Answer Correct Answer: A) Around 12.21 %. 14. Current assets are assets that are except: A) Expected to be realised in the entity's normal operating cycle. B) Held primarily for the purpose of trading. C) Expected to be realised within 12 months after the reporting period. D) Cash and cash equivalents (restricted). Show Answer Correct Answer: D) Cash and cash equivalents (restricted). 15. According to the traditional approach cost of capital affected by A) Debt-equity mix. B) Debt-capital mix. C) Equity expenses mix. D) Debt-interest mix. Show Answer Correct Answer: A) Debt-equity mix. 16. A result in the reduction in value or loss of any of the organization's financial assets. A) Risk. B) Investment Proposal. C) Returns. D) None of the above. Show Answer Correct Answer: A) Risk. 17. X ltd issues Rs. 50, 000 8% debentures at a discount of 5%. The tax rate is 50% the cost of debt capital is ..... A) 4%. B) 4.2%. C) 4.6%. D) 5%. Show Answer Correct Answer: B) 4.2%. 18. The use of budgets to control a firm's activities is called: A) Budget planning. B) Budgetary control. C) Master budget allocation. D) Budget costing. Show Answer Correct Answer: B) Budgetary control. 19. Kelayakan suatu proyek investasi dapat dikaji dengan mempergunakan A) Pendekatan Nilai Waktu dari Uang. B) Pendekatan Penganggaran Modal (Capital Budgeting). C) Besarnya Depresiasi. D) Jawaban a dan b benar. Show Answer Correct Answer: D) Jawaban a dan b benar. 20. Which one of the following is a primary market transaction? A) Sale of existing outstanding stock by a dealer to an individual investor. B) Sale of a new share of stock to an individual investor. C) Stock ownership is transferred from one shareholder to another shareholder. D) Gift of stock from one shareholder to another shareholder. E) Gift of stock by a shareholder to a family member. Show Answer Correct Answer: B) Sale of a new share of stock to an individual investor. 21. Financial statement analysis is the process of analyzing a company's financial statements for decision-making purposes. A) True. B) False. C) All the above. D) None of the above. Show Answer Correct Answer: A) True. 22. Which of the following statements about NPV and IRR is accurate? A) Two NPV calculations are needed to estimate the IRR using linear interpolation. B) The graphical approach to IRR is only an estimate; linear interpolation using the formula is required for a precise answer. C) The IRR is unique. D) An IRR graph with NPV on the 'Y' axis and discount rate on the 'X' axis will have a negative slope. Show Answer Correct Answer: A) Two NPV calculations are needed to estimate the IRR using linear interpolation. 23. When is a private investor considered an angel investor? A) When the investor provides equity finance to a charity. B) When the investor lends money at a lower interest than the banks. C) When a private investor provides equity finance to a private company in the start up stage. D) None of the above. Show Answer Correct Answer: C) When a private investor provides equity finance to a private company in the start up stage. 24. Wealth maximization aims at A) Short-term profits. B) Increasing sales volume. C) Increasing the value of the firm. D) Minimizing employee wages. Show Answer Correct Answer: C) Increasing the value of the firm. 25. Cash discount terms offered by trade creditors never be accepted because A) Benefit in very small. B) Cost is very high. C) No sense to pay earlier. D) None of the above. Show Answer Correct Answer: D) None 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 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 10Class 12 Business Studies Chapter 9 Financial Management Quiz 11 🏠 Back to Homepage 📘 Download PDF Books 📕 Premium PDF Books