Financial Management

What is the primary goal of financial management?

• Maximizing shareholder wealth

• Maximizing profits

• Minimizing costs

• Maximizing sales revenue

Which financial ratio measures a company's ability to meet its short-term obligations?

• Current ratio

• Return on equity (ROE)

• Debt-to-equity ratio

• Gross profit margin

Which of the following financial statements provides information about a company's financial position at a specific point in time?

• Income statement

• Balance sheet

• Statement of cash flows

• Statement of retained earnings

What is the formula to calculate the return on investment (ROI)?

• ROI = Net Income / Total Assets

• ROI = Net Income / Shareholder Equity

• ROI = Earnings Before Interest and Taxes (EBIT) / Total Assets

• ROI = Earnings Before Interest and Taxes (EBIT) / Shareholder Equity

What is the time value of money (TVM)?

• The concept that money available today is worth more than the same amount in the future

• The concept that money available in the future is worth more than the same amount today

• The concept that money has a constant value over time

• The concept that money should be invested in stocks for long-term growth

FINANCING DECISIONS RELATE TO THE

• DIVIDEND DECISIONS

• ASSETS PROCUREMENT

• RESREVE BUILDING

• ACQUISITION OF CAPITAL

What is the formula to calculate the weighted average cost of capital (WACC)?

• WACC = Cost of Debt + Cost of Equity

• WACC = (Cost of Debt × Debt proportion) + (Cost of Equity × Equity proportion)

• WACC = (Cost of Debt × Equity proportion) + (Cost of Equity × Debt proportion)

• WACC = Cost of Debt × Cost of Equity

BANK OVERDRAFT IS A FORM OF

• SHORT TERM FUNDS

• LONG TERM FUNDS

• BOTH

• NONE OF THE ABOVE

External sources of funds are

• (A) Funds from long term loans

• (B) Sale of fixed assets

• (C) Both (A) and (B)

• (D) None of the above

IF THE SALES OF A FIRM IS RS 10,00,000 AND CONTRIBUTION IS RS 2,00,000 THEN VARIABLE COSTS ARE

• RS 5,00,000

• RS 8,00,000

• RS 12,00,000

• RS 20,00,000