MCQ Test of Financial Management on Unit No.1

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“Shareholder wealth” in a firm is represented by:

the number of people employed in the firm.

the book value of the firm's assets less the book value of its liabilities.

the amount of salary paid to its employees.

the market price per share of the firm's common stock.

Clear selection

Which of the following is not identified as one of the four main financial objectives of a firm?

Profitability

Liquidity

Efficiency

Timeliness

Clear selection

A company’s ability to meet its short-term financial obligations is referred to as:

Stability

Efficiency

Effectiveness

Liquidity

Profitability

Clear selection

The appropriate objective of an enterprise is:

Maximisation of sale

Maximisation of owners wealth.

Maximisation of profits.

None of these

Clear selection

Financial decision involve;

Investment ,financing and dividend decision

Investment ,financing and sales decision

Financing , dividend and cash decision

None of these.

Clear selection

Maximising shareholders wealth means maximizing the

Value of the firm’s assets

Amount of the firm’s cash

Value of the firm’s investments

Total market value of the firm’s common stock

Clear selection

Planning for future growth is called:

Capital Budgeting

Working Capital Management

Financial Forecasting

None of the above

Clear selection

Which one of the following is NOT a tool of financial forecasting?

Cash budget

Capital budget

Pro forma Balance sheet

Pro forma Income statement

Clear selection

Financial Management is mainly concerned with _______.

arrangement of funds.

all aspects of acquiring and utilizing financial resources for firm’s activities.

efficient management of every business.

profit maximization.

Clear selection

In his traditional role the finance manager is responsible for _____.

arrange of utilization of funds.

arrangement of financial resources.

acquiring capital assets of the organization.

effective management of capital.

Clear selection

Finance function is one of the most important functions of __________management.

business.

marketing.

financial.

debt.

Clear selection

Financial Planning deals with the preparation of financial statements.

True

False

Clear selection

Cash planning is a part of long-term financial planning

True

False

Clear selection

Financial forecasting is followed by financial planning.

True

False

Clear selection

Financial planning is incomplete without cash budget.

True

False

Clear selection

Financial Planning deals with:

Preparation of Financial Statements,

Planning for a Capital Issue,

Preparing Budgets,

All of the above.

Clear selection

Process of Financial Planning ends with:

Preparation of Projected Statements,

Preparation of Actual Statements,

Comparison of Actual with Projected,

Ordering the employees that projected figures m come true.

Clear selection

The long-run objective of financial management is to:

maximize earnings per share.

maximize the value of the firm's common stock.

maximize return on investment.

maximize market share.

Clear selection

What are the earnings per share (EPS) for a company that earned Rs.100,000 last year in after-tax profits, has 200,000 common shares outstanding and Rs.1.2 million in retained earnings at the year end?

Rs.100,000

Rs.6.00

Rs.0.50

Rs. 6.50

Clear selection

The only feasible purpose of financial management is

Wealth Maximization

Sales Maximization

Profit Maximization

Assets maximization

Clear selection

Financial management process deals with

Investments

Financing decisions

Both Investments and Financing decisions

None of the above

Clear selection

Finance Function comprises

Safe custody of funds only

Expenditure of funds only

Procurement of finance only

Procurement & effective use of funds

Clear selection

The objective of wealth maximization takes into account

Amount of returns expected

Timing of anticipated returns

Risk associated with uncertainty of returns

All of the above

Clear selection

Financial management mainly focuses on

Efficient management of every business

Brand dimension

Arrangement of funds

All elements of acquiring and using means of financial resources for financial activities

Clear selection

Finance functions are

Planning for funds

Raising of funds

Allocation of Resources

All of the above

Clear selection

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