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Worksheets

Brainy-wolves

Total questions: 30

Worksheet time: 11mins

Name
Class
Date
1.

Business finance is needed to

a)

Establish a business

b)

Run a business

c)

Expand a business

d)

All of the above

2.

Which of the following is not a tangible asset?

a)

Machinery

b)

 Trademarks

c)

Factories

d)

 Offices

3.

This decision relates to how the firm’s funds are invested in different assets,

a)

Investment decision

b)

Dividend decision

c)

Financing decision

d)

None of the above

4.

Primary aim of financial management is to

a)

Maximize shareholder’s wealth

b)

Wealth maximization concept

c)

Maximization of the market value of equity shares

d)

All of the above

5.

Financial Management aims at

a)

Reducing the cost of funds procured

b)

Keeping the risk under control

c)

Achieving effective deployment of such funds

d)

All of the above

6.

Purchasing a new machine to replace an existing one is an example of

a)

Financing decision

b)

Dividend decision

c)

Working capital decision

d)

Capital budgeting decision

7.

 The size of assets, the profitability and competitiveness are all affected by

a)

Working capital decision

b)

Capital budgeting decision

c)

Dividend decision

d)

Financing

decision

8.

These decisions affect the liquidity as well as profitability of a business

a)

Capital budgeting decision

b)

Financing decision

c)

Working capital decision

d)

Dividend decision

9.

This decision is about the quantum of finance to be raised from various long-term sources.

a)

Investment decision

b)

 Financing decision

c)

Dividend decision

d)

Capital budgeting decision

10.

The inability of a business to meet its fixed financial obligations, like payment of interest, is known as

a)

Business risk

b)

Financial risk

c)

Long-term risk

d)

Market risk

11.

Mr. Dev has two projects A and B in hand. The same amount of risk is involved in both the projects. If the rate of return of project A and B is 20% and 15% respectively, then under normal circumstance, which of the two projects is likely to be selected?

a)

Project A

b)

Project B

c)

Both project A and project B

d)

) None of the above

12.

Which of the following sources of capital should not be selected by a business if its fixed cost is high?

a)

Equity shares

b)

Preference shares

c)

Debentures

d)

All of the above

13.

When the stock market index is rising, a company may issue in order to meet its financial requirements.

a)

Debentures

b)

Bonds

c)

Equity shares

d)

None of the above

14.

The overall financial risk depends upon the

a)

Proportion of debt in the total capital

b)

Proportion of equity in the total capital

c)

Both of the above

d)

None of the above

15.

This decision determines the overall cost of capital and the monetary risk of the enterprise

a)

Dividend decision

b)

Capital budgeting decision

c)

Investment decision

d)

Financing decision

16.

A company is likely to declare higher dividends if

a)

Tax rates are high

b)

Tax rates are relatively lower

c)

Tax rate has no effect on dividend declaration

d)

None of the above

17.

When the stock market is bearish, a company may depend upon in order to raise the required funds.

a)

Debentures

b)

Equity shares

c)

Preference shares

d)

All of the above

18.

Who is the current chairman of SEBI ?

a)

Ajay Tyagi

b)

G. N. Bajpai

c)

Madhabi Puri Buch

d)

U K Sinha

19.

Name the financial decision which relates to disposal of profits.

a)

 Investment decision

b)

Financing decision

c)

Dividend decision

d)

Capital budgeting decision

20.

. Under which of the following circumstances a company is not likely to declare a higher dividend?

a)

When the earnings of the company are high

b)

When a company has a lucrative forthcoming business opportunity

c)

When the cash flow position of the company is strong

d)

None of the above

21.

It is essentially the preparation of a financial blueprint of an organization’s future operations. Identify the related concept.

a)

Financial management

b)

Financial planning

c)

Financial decision

d)

Financial forecasting

22.

A company must adhere to the provisions of the Companies Act while taking the dividend decision. Identify the related factor of dividend decision being mentioned in the above line.

a)

Contractual constraints

b)

Legal constraints

c)

Access to capital market

d)

Preferences of shareholders

23.

Name the process that enables the management to foresee the fund requirements, both the quantum as well as the timing.

a)

Financial planning

b)

Capital budgeting decisions

c)

Financial management

d)

Dividend decision

24.

The short-term financial plans are known as

a)

Objectives

b)

Budgets

c)

Programs

d)

Policies

25.

The financial plans are drawn by taking into consideration

a)

Growth prospects

b)

Performance of the organization

c)

Investments

d)

All of the above

26.

Which term refers to the extent to which the current assets of a business exceed the current liabilities of that business?

a)

growth

b)

liquidity

c)

solvency

d)

profitability

27.

Which of the following is not an objective of financial planning?

a)

Ensuring enough funds are available at the right time

b)

Ensuring excess availability of funds at the right time

c)

Ensuring smooth business operations

d)

All of the above

28.

A company issues shares directly to investors,usually an institution, rather than making a public offering.

What type of equity finance is this?

a)

placement

b)

new issue

c)

rights issue

d)

share purchase plan

29.

Which ONE of the following relates to the ability of a business to pay its debts as they fall due?

a)

growth

b)

liquidity

c)

efficiency

d)

profitability

30.

Which financial institution is most likely to issue debentures as a method of raising finance?

a)

unit trust

b)

investment bank

c)

public company

d)

superannuation fund