Advanced Financial Management MCQs with Answers pdf

Advanced Financial Management MCQs with Answers pdf

Advanced Financial Management MCQs with Answers pdf. MCQ on Financial Management with answers pdf for MBA, BBA, MCOM, BCOM.

Are you looking for advanced Financial Management Multiple Choice Questions (MCQs) with answers? If so, this article is for you!

Here, we provide a comprehensive source of MCQs on advanced financial management topics with detailed answers to help you understand the concepts better. These questions are designed to test your knowledge and sharpen your understanding of the subject matter.

Advanced Financial Management MCQs

What is Advanced Financial Management

Advanced Financial Management refers to the process of managing an organization’s financial resources, including planning, budgeting, and forecasting.

Advanced Financial Management goes beyond basic accounting principles and involves making strategic financial decisions that will impact the long-term success of a business. This field requires a deep understanding of finance, economics, and accounting.

Advanced Financial Management is undertaken by financial managers who have extensive knowledge about investments and risk management. They also understand how to analyze financial data to make informed decisions about a company’s finances.

Some of the critical skills required include budgeting, financial analysis, tax planning, cash flow management, and investment strategies. These professionals use their expertise to determine the best ways for companies to invest their money in order to maximize profits while minimizing risks.

Finally, advanced Financial Management plays an essential role in ensuring that businesses remain financially stable and profitable over time.

Advanced Financial Management MCQs

1. The objective of financial management to increase the wealth of the shareholders means to
a. Increase the physical assets owned by the firm
b. Increase the market value of the shares of the firm
c. Increase the current assets of the firm
d. Increase the cash balance of the company
Ans: B

2. Retained earnings or plowed back profits is one of the best sources of raising long-term funds for the company
a. True
b. False
c. Cant’s say
d. None of the above
Ans: A

3. The amount that a company may realize if it sells its business after having terminated the same is called
a. Going concern value
b. Book value
c. Liquidation value
d. Replacement value
Ans: C

4. The present value of Rs 4500 receivable in 7 years at a discount rate of 15% is ___
a. 975
b. 1150
c. 1692
d. 1555
Ans: C

5. If you deposit Rs.10000 today at a 12% rate of interest, in how many years does this amount grow to double? Use the rule of 72.
a. 6 years
b. 6.5 years
c. 12 years
d. 14 years
Ans: A

6. Overcapitalization means
a. Total capital exceeds the true value of its assets
b. The total value of assets exceeds its debt value
c. Total capital is less than the warranted by its earning capacity
d. Increase in dividend rates
Ans: A

7. A has a perpetual bond of the face value of RS.1000 He receives an interest of Rs.60 annually. Its current value is Rs.600 what is the yield to maturity?
a. 10%
b. 15%
c. 12%
d. 13%
Ans: A

8. ___ is the fund created out of fixed payments each period to accumulate to future sum after a specified period.
a. Sinking fund
b. Debenture fund
c. Capital reserves
d. Perpetual reserve
Ans: A

9. ___ is the overall cost of all sources of finance.
b. Total cost
c. Cost of finance
d. Cost of Equity
Ans: A

10. Profitability index is also known as ___
a. Benefit ratio
b. Profit-sharing ratio
c. Benefit cash ratio
d. None of the above
Ans: C

11. The time value of money use ___ to translate cash flows occurring at different periods into a comparable value at zero periods.
a. Required rate of return
b. Coupon rate
c. Treasury bill rate
d. Bank rate
Ans: A

12. ABC system is known as ___ because the items are classified in order of their relative importance in terms of value.
a. Value analysis
b. Proportional value analysis
c. ABC analysis
d. None of the above
Ans: B

13. Which of the following is a function of the finance manager?
a. Mobilizing funds
b. Risk return trade-off
c. Deployment of funds
d. All of the above
Ans: D

14. The symptom of low capacity utilization will be shown by
a. Asset turnover ratio
b. Fixed asset turnover ratio
c. Current ratio
d. Acid test ratio
Ans: B

15. When IRR is ___ than the risk-adjusted discount rate, the project would be accepted.
a. Less
b. Greater
c. Equal
d. None of the above
Ans: B

16. Analyzing the change in the project’s NPV or IRR on account of a given change in one of the variables is called ___
a. Profitability index
b. Sensitivity analysis
c. Certainty equivalent
d. None of the above
Ans: B

17. ___ is the length of time between the firm’s actual cash expenditure and its own cash receipts.
a. Inventory conversion period
b. Cash conversion period
c. Receivable conversion period
d. None of the above
Ans: B

18. ___ is the method to increase the number of outstanding shares by proportionately reducing the face value of a share.
a. Stock split
b. Stock issue
c. Right share
d. None of the above
Ans: A

19. The firm incurs this cost when the customer fails to pay the amount to it on the expiry of the credit period.
a. Collection cost
b. Recovery cost
c. Delinquency cost
d. None of the above
Ans: C

20. ___ Method prices the issues at the value at which it can be procured from the market.
a. Standard price
b. Replacement price
c. Weighted average
d. None of the above
Ans: B

21. There is some lag between the sale of finished goods and the collection of dues from customers. This lag is known as ___
a. Sale lag
b. Collection lag
c. Production lag
d. Creation lag
Ans: A

22. ___ method prices the issues at the value at which it can be procured from the market
a. Weighted average
b. Standard cost
c. Replacement method
d. None of the above
Ans: C

23. Capital Budgeting decisions are strategic in nature because
a. They evaluate the profitability of the project & hence the profile of the organization.
b. They evaluate the profitability of the products & services.
c. They evaluate the budgeting of fixed costs.
d. They create wealth for the management employees.
Ans: A

24. Which among the following is the ordering cost?
a. Receiving, Inspecting & Receiving at the warehouse
b. Insurance
c. Taxes
d. Obsolescence
Ans: A

25. ___ in liabilities involves the outflow of funds
a. Increase
b. Decrease
c. Division
d. None of the above
Ans: B

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