CHAPTER 9 – FINANCIAL MANAGEMENT

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worksheet 7 quiz 2

1. ………………………………………… required for carrying out business activities is called business finance.

1 point

a) Resources

b) Money

c) Loan

Clear selection

2. Financial management aims at reducing the cost of funds procured keeping risk under control and achieving effective ……………………………………….

1 point

a) Deployment of funds

b) Input of funds

c) Reduction of cost

Clear selection

3. An increase in the investment of fixed assets will also lead to an ………………………

1 point

a) Increase in fixed capital requirement.

b) Increase in management efficiency.

c) Increase in working capital requirement.

Clear selection

4. Higher amount of equity capital may entail higher …………………………..

1 point

a) Payment of interest

b) Payment of dividend

c) Payment of EMI

Clear selection

5. Financial management aims at ………………………………

1 point

a) Profit maximization

b) Wealth maximization

c) Cost maximization

Clear selection

6. A long term investment is called a ……………………………..

1 point

a) Capital budget decision

b) Fiscal budget decision.

c) Revenue budget decision.

Clear selection

7. Efficient cash management, inventory management and receivables management are all essential ingredients of sound ……………………………………….

1 point

a) Working capital management

b) Fixed capital management

c) Cost management.

Clear selection

8. Cash flow involves a series of -------------------------------------

1 point

a) Cash receipt and payments

b) Cash incoming and cash outgoing.

c) Cash at hand and cash at bank.

Clear selection

9. Equity capital and retained earnings contribute towards ………………………………..

1 point

a) Dividend fund

b) Equity fund

c) Shareholders fund

Clear selection

10. Financial risk means the …………………………………

1 point

a) Risk of non-payment of dividend

b) Risk of default on payment.

c) Risk of capital loss.

Clear selection

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