Human Resource Management (HRM) MCQS

Multiple choice Questions on Human Resource Management. Practice for fpsc ppsc exams

Which ratio measures a firm’s liquidity?

A. Debt-equity ratio
B. Current ratio
C. Gross profit ratio
D. Return on equity
Correct answer is: B. Current ratio

What is the cost of retained earnings compared to cost of equity?

A. Always higher
B. Always lower
C. Generally equal but no flotation cost
D. Zero
Correct answer is: C. Generally equal but no flotation cost

Which of the following is a capital budgeting decision?

A. Deciding credit terms
B. Inventory management
C. Buying a new factory
D. Issuing dividends
Correct answer is: C. Buying a new factory

What does WACC stand for?

A. Weighted Average Cost of Capital
B. Working Average Cost of Capital
C. Weighted Average Capital Cost
D. Western Average Cost of Capital
Correct answer is: A. Weighted Average Cost of Capital

Which theory suggests dividend policy affects firm value?

A. Dividend irrelevance theory (MM)
B. Bird-in-hand theory
C. Clientele effect
D. All of the above
Correct answer is: D. All of the above

What is the formula for operating leverage?

A. Contribution / EBIT
B. EBIT / Sales
C. Fixed cost / Contribution
D. Sales / EBIT
Correct answer is: A. Contribution / EBIT

Which of the following is NOT a current asset?

A. Cash
B. Inventory
C. Machinery
D. Accounts receivable
Correct answer is: C. Machinery

What is the objective of working capital management?

A. Maximize current liabilities
B. Maintain optimal balance of current assets and liabilities
C. Maximize fixed assets
D. Minimize cash balance
Correct answer is: B. Maintain optimal balance of current assets and liabilities

What is the primary goal of financial management?

A. Maximize sales
B. Maximize profit
C. Maximize shareholder wealth
D. Minimize costs
Correct answer is: C. Maximize shareholder wealth

Which of the following is a long-term source of finance?

A. Trade credit
B. Bank overdraft
C. Equity shares
D. Commercial paper
Correct answer is: C. Equity shares
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