This quiz works best with JavaScript enabled. Home > Class 12 > Class 12 Business Studies Chapter 9 Financial Management – Quiz 7 🏠 Homepage 📘 Download PDF Books 📕 Premium PDF Books Class 12 Business Studies Chapter 9 Financial Management Quiz 7 (25 MCQs) Quiz Instructions Select an option to see the correct answer instantly. 1. Growth in a business can be generated by: A) An increase of competitors in the market. B) Advances in technology and access to resources. C) An increase in size and value of a business. D) Opportunities to expand globally. Show Answer Correct Answer: C) An increase in size and value of a business. 2. A realistic and measurable way to reach goals for which you must plan and set aside resources A) Goal. B) Objective. C) Value. D) Need. Show Answer Correct Answer: B) Objective. 3. Present value interest factor (PVIF) are usually less than 1.0 A) True. B) False. C) All the above. D) None of the above. Show Answer Correct Answer: A) True. 4. What is a potential risk of financial decisions? A) They have no long-term effects. B) They only affect one department. C) They can impact all business operations. D) They can be easily reversed. Show Answer Correct Answer: C) They can impact all business operations. 5. The capital budgeting decision model that utilizes all the discounted cash flow of a project is the ..... model, which is one of the single most important models in finance. A) Net present value (NPV). B) Internal rate of return (IRR). C) Profitability index (PI). D) Discounted payback period. Show Answer Correct Answer: A) Net present value (NPV). 6. Decision relating to quantum of funds to be raised from varions long term A) Dividend decision. B) Financing decision. C) All the above. D) None of the above. Show Answer Correct Answer: B) Financing decision. 7. A way to analyze whether debt or lease financing would be preferable is to: A) Compare the net present values under each alternative, using the cost of capital as the discount rate. B) Compare the net present values under each alternative, using the after-tax cost of borrowing as thediscount rate. C) Compare the payback periods for each alternative. D) Compare the effective interest costs involved for each alternative. Show Answer Correct Answer: B) Compare the net present values under each alternative, using the after-tax cost of borrowing as thediscount rate. 8. Inventories can be classified into A) Product, material, item. B) Raw material, work in progress, and finished good. C) Stationaries, and other goods. D) None. Show Answer Correct Answer: B) Raw material, work in progress, and finished good. 9. Mixture of different investment is called A) Capital structure. B) Financial system. C) Mixture of Investment. D) None of these. Show Answer Correct Answer: C) Mixture of Investment. 10. Financial blueprints are determined by A) Financial Planning. B) Financial Leverage. C) Financial Decision. D) Capital Structure. Show Answer Correct Answer: A) Financial Planning. 11. What type of loan requires both principal and interest payments as you go by making equal payments each period? A) Amortized loan. B) Interest-only loan. C) Discount loan. D) Compound loan. Show Answer Correct Answer: A) Amortized loan. 12. What topics are typically covered in financial management training? A) Strategic management methods. B) Personal financial planning. C) Data mining techniques. D) Market analysis and forecasting. Show Answer Correct Answer: B) Personal financial planning. 13. The major securities traded in the capital markets are ..... A) Stocks and bonds. B) Bonds and commercial paper. C) Commercial paper and Treasury bills. D) Treasury bills and certificates of deposit. Show Answer Correct Answer: A) Stocks and bonds. 14. What does the principle of diversification in financial management primarily aim to achieve? A) Concentrate all investments in a single high-growth asset. B) Maximize short-term profits regardless of risk. C) Spread financial risk across various sources. D) Ensure immediate liquidity for all assets. Show Answer Correct Answer: C) Spread financial risk across various sources. 15. The "time value of money" means that A) Money paid out today less value than if the money is paid out in the future. B) Money received today is worth more than the same amount of money received in the future. C) The more time a person has to save, the lower the return on the money. D) The longer money is held, the less likely it will be spent. Show Answer Correct Answer: B) Money received today is worth more than the same amount of money received in the future. 16. Higher Operating Leverage is related to the use of higher ..... A) Debt. B) Equity. C) Fixed Cost. D) Variable Cost. Show Answer Correct Answer: C) Fixed Cost. 17. Comparing alternatives against criteria is an accurate way of A) Financial Planning. B) Decision making. C) Setting a Goal. D) Making a Value. Show Answer Correct Answer: B) Decision making. 18. Which of the following would be considered an advantage of the SOLE PROPRIETORSHIP form of business organization? A) Unlimited life. B) Wide access to capital. C) Income taxed at only one level. D) Pooled expertise. Show Answer Correct Answer: C) Income taxed at only one level. 19. Optimum capital structure is at which ..... is minimum and value of firm is maximum? A) A. EBIT. B) B. Weighted average cost of capital. C) Tax rate. D) None of these. Show Answer Correct Answer: B) B. Weighted average cost of capital. 20. In Malaysia, the only financial institution that specializes in long-term money market operations is the discount house. A) TRUE. B) FALSE. C) All the above. D) None of the above. Show Answer Correct Answer: B) FALSE. 21. The process of calculating present value of future cash flows A) Compounding. B) Discounting. C) Both compounding and discounting. D) None of the above. Show Answer Correct Answer: B) Discounting. 22. What is the main purpose of the cash flow statement? A) To show a company's profitability. B) To report a company's cash inflows and outflows during a period. C) To provide a summary of a company's long-term investments. D) None of the above. Show Answer Correct Answer: B) To report a company's cash inflows and outflows during a period. 23. It means planning, organizing, directing and controlling the financial activities such as procurement and utilization of funds of the enterprise. A) Financial Statement. B) Financial Markets. C) Financial Management. D) Financial Institutions. Show Answer Correct Answer: C) Financial Management. 24. Which of the following statements describes the main objective of financial management? A) Efficient acquisition and deployment of financial resources to ensure achievement of objectives. B) Providing information to management for day to day functions of control anddecision making. C) Providing information to external users about the historical results of the organisation. D) Maximisation of shareholder wealth. Show Answer Correct Answer: A) Efficient acquisition and deployment of financial resources to ensure achievement of objectives. 25. A ratio that measures the ability of the company to meet financial obligations as they come due, without disrupting the normal ongoing operations. A) Liquidity Ratio. B) Profitability Ratio. C) Leverage Ratio. D) Asset Utilization Ratio. Show Answer Correct Answer: A) Liquidity Ratio. ← 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 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