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WorksheetsMCQ (FINANCIAL MANAGEMENT )
Total questions: 20
Worksheet time: 7mins
1.Gross working capital refers to firms investment in____?
A. Current liability
B. Working capital
C. Current assets
D. None of these
2.The cost of capital plays a central role in FM because it provides link between____&financial decision of a firm?.
A. Capital structure
B. Investment
C. Cash
D. None of these
3.Under conventional method ____ enters into a calculation of working capital?.
A. Cash
B. Current assets
C. Inventories
D. Current liabilities
4.Capital budgeting technique is a fundamental requirement of ____?
A. Cost of debt
B. Cost of capital
C. Capital structure
D. All the above
5.optimum capital structure is at which______is minimum and value of firm is maximum?
A. EBIT
B. Weighted average cost of capital
Tax rate
None of these
6.____ model of cash management attempts to minimization of total cost?
A. S.F Bradley
B. Baumal's
C. Miller-orr
7. What is EOQ?
A. Cost of an order
B. Cost of stock
C. Optimum order size
D. None of them
8. ____ is a motive of holding cash?
A. Transaction motive
B. Precaution motive
C. Capital investment
9. A B C analysis is useful for analyzing the inventories?
A. Based on their quality
B. Based on physical volume
C. Based on their usage and value
D. All the above
10. If the if the company has ideal fund that means there is large amount of___?
A. Cost of capital
B. Cash
C. Working capital
D. Inventory
11.___ permanent capital and cannot be withdrawn during the lifetime of the company ?
A. Equity financing
B. Debt financing
C. Debt equity mix
D. None of above
12. The insurance premium against fire and theft of inventories is regarded of following cost?
A. Carrying cost
B. Ordering cost
C. Storage cost
D. All the above
13. Profitability and liquidity are two main objectives of___?
A. Cash management
B. Inventory management
C. Recieveable management
D. All of these
14. Which of the following is not true of cash budget?
A. Cash budgets indicates timing of short term borrowing
B. Cash budget is based on accrual concept
C. Cash budget is based on cash flow concept.
D. All of these
15. Ideal cash will not generate profit but cause loss of____?
A. Value of firm
B. Interest
C. None of these
16. Which one of the following statements concerning net working capital is correct ?
A. The degree in the cash balance is also decreases net working capital
B. Networking capital increases when inventory is bought for cash
C. Networking capital must be positive
D. All the above
17. Main objective is to keep down___in inventories
A. Capital investment
B. Excessive carrying cost
C. Risk of liquidity
D . None of above
18. Only revenue nature cash flow is shown in cash budget
A. True
B. False
C. Other
19. Accounts receivable management based on the principle,as liquidity increases the return decreases?
A. True
B. False
C. All of them
20. Offering cash discounts to customer results in___?
A. Reducing the average collection period
B. increasing sales
C. Increasing the average collection period
