Financial management primarily aims to:
Correct answer is: C. Maximize shareholder wealth
The main goal is wealth maximization of shareholders.
Financial Management Mcqs
here are key Multiple Choice Questions (MCQs) on Financial Management, covering core topics like capital budgeting, cost of capital, and financial analysis.
Which decision is related to capital budgeting?
Correct answer is: C. Long-term investment decision
It involves long-term investment planning.
Which is a long-term source of finance?
Correct answer is: C. Equity shares
Equity is long-term financing.
Time value of money means:
Correct answer is: B. Money gains value over time
Money today is worth more than future.
Cost of capital is:
Correct answer is: A. Return expected by investors
It reflects investor expectations.
Risk-return tradeoff means:
Correct answer is: C. High risk high return
Higher risk gives higher return.
A positive NPV indicates:
Correct answer is: C. Profitability
Positive NPV means project is profitable.
Financial planning involves:
Correct answer is: C. Both short and long term
It covers all financial decisions.
Which is a short-term financing source?
Correct answer is: C. Trade credit
Trade credit is short-term.
Which ratio measures profitability?
Correct answer is: C. Net profit margin
It shows earning efficiency.
Working capital is:
Correct answer is: B. Current assets minus current liabilities
It represents liquidity.
Which is not a function of finance manager?
Correct answer is: C. Production decision
Production is not finance function.
Liquidity refers to:
Correct answer is: B. Ability to pay short-term obligations
Liquidity ensures short-term solvency.
Which ratio measures liquidity?
Correct answer is: B. Current ratio
Current ratio measures liquidity.
Capital structure refers to:
Correct answer is: B. Debt and equity mix
It shows financing sources mix.
Which source is cheapest?
Correct answer is: D. Retained earnings
Retained earnings have no explicit cost.