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.

The money markets primarily deal with:

A. Securities with a life of more than one year

B. Long-term securities such as common stock

C. Short-term securities

D. Real estate investments

Correct answer is: C. Short-term securities

Which of the following statements about careers is INCORRECT?

A. The career choice is restricted to students completing their education

B. Many people change their career over time

C. A shift to a new career should be influenced by your views of satisfaction

D. Financial planning should align with career decisions

Correct answer is: A. The career choice is restricted to students completing their education

Which of the following is a method of capital budgeting?

A. Payback period

B. Internal Rate of Return

C. Net Present Value

D. All of the above

Correct answer is: D. All of the above

Which of these is a non-cash expense?

A. Rent expense

B. Salary expense

C. Depreciation

D. Interest expense

Correct answer is: C. Depreciation

The primary objective of financial management is to maximize ____________ wealth.

A. Stakeholders

B. Shareholders

C. Bondholders

D. Directors

Correct answer is: B. Shareholders

The return that lenders receive on bonds is called:

A. Dividends

B. Interest

C. Capital gain

D. Rent

Correct answer is: B. Interest

The liability which should be paid within a period of one year is known as a/an:

A. Current asset

B. Current liability

C. Fixed asset

D. Long-term liability

Correct answer is: B. Current liability

Having a level of future wealth (from more savings) requires you to sacrifice by having a level of spending today.

A. Lower; lower

B. Higher; lower

C. Higher; higher

D. Lower; higher

Correct answer is: B. Higher; lower

What does the term “beta” measure?

A. Liquidity risk

B. Market risk of a stock

C. Inflation risk

D. Credit risk

Correct answer is: B. Market risk of a stock

What is the main advantage of leasing?

A. Tax benefit

B. Ownership at end

C. No fixed payment

D. Low cost maintenance

Correct answer is: A. Tax benefit