Financial management Archives - Page 2 of 112 - MCQ and Quiz for Exams

11. Net working capital is the excess of current asset over ____________.

Current liability

Net liability

Total payable

Total liability

Detailed SolutionNet working capital is the excess of current asset over ____________.

12. Tendency of measuring correlation of two variables is classified as

tendency coefficient

variable coefficient

correlation coefficient

double coefficient

Detailed SolutionTendency of measuring correlation of two variables is classified as

13. This type of risk is avoidable through proper diversification.

portfolio risk

systematic risk

unsystematic risk

total risk

Detailed SolutionThis type of risk is avoidable through proper diversification.

14. If payout ratio is 0.45 then retention ratio will be

0.55

1.45

1.82

0.45

Detailed SolutionIf payout ratio is 0.45 then retention ratio will be

15. Operating leverage works when:

Sales increases

Sales decreases

Both A and B

None of A and B

Detailed SolutionOperating leverage works when:

16. The Degree of Financial Leverage (DFL)

Measures financial risk of the firm

Is zero at financial break-even point

Increases as EBIT increases

Both a and b

Detailed SolutionThe Degree of Financial Leverage (DFL)

17. Gross Profit Ratio for a firm remains same but the Net Profit Ratio is decreasing. The reason for such behaviour could be:

Increase in Costs of Goods Sold

If Increase in Expense

Increase in Dividend

Decrease in Sales

Detailed SolutionGross Profit Ratio for a firm remains same but the Net Profit Ratio is decreasing. The reason for such behaviour could be:

18. In arbitrage pricing theory, higher required rate of return is usually paid on stock

higher market risk

higher dividend

lower dividend

lower market risk

Detailed SolutionIn arbitrage pricing theory, higher required rate of return is usually paid on stock

19. If common shares outstanding are 50,000,000 and book value per share is Rs 19.92 then total common equity will be

Rs 996,000,000.00

Rs 995,000,000.00

Rs 992,000,000.00

Rs 991,000,000.00

Detailed SolutionIf common shares outstanding are 50,000,000 and book value per share is Rs 19.92 then total common equity will be

20. Inventory is generally valued as lower of:

Market Price and Replacement Cost

Cost and Net Realizable Value

Cost and Sales Value

Sales Value and Profit

Detailed SolutionInventory is generally valued as lower of:

Page 1 Page 2 Page 3 Page 4 Page 5

Test 1 Test 2 Test 3 Test 4 Test 5 Test 6 Test 7 Test 8 Test 9 Test 10 Test 11 Test 12 Test 13 Test 14 Test 15 Test 16 Test 17 Test 18 Test 19 Test 20 Test 21 Test 22 Test 23

Exit mobile version