Human Resource Management (HRM) MCQS

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

Which of the following is most likely to be a fixed cost?

A. Power costs
B. Raw materials
C. Direct labor
D. Directors' remuneration
Correct answer is: D. Directors' remuneration

Planning that involves determining how much you should set aside each year for retirement is called:

A. Tax planning
B. Retirement planning
C. Estate planning
D. Investment planning
Correct answer is: B. Retirement planning

What is the cost of debt generally lower than cost of equity?

A. Higher risk for equity holders
B. Tax deductibility of interest
C. Longer maturity
D. Regulatory requirement
Correct answer is: B. Tax deductibility of interest

What does the term “cost of capital” mean?

A. Cost of equity
B. Minimum return required by investors
C. Interest rate on loans
D. Cost of issuing shares
Correct answer is: B. Minimum return required by investors

An increase in the value of a sunk cost should have which effect on investment appraisal calculations?

A. Lengthen the payback period
B. Reduce the NPV
C. Increase the NPV
D. Have no effect
Correct answer is: D. Have no effect

Maximizing shareholders’ wealth means maximizing the:

A. Value of the firm’s assets
B. Amount of the firm’s cash
C. Total market value of the firm’s common stock
D. Value of the firm’s investments
Correct answer is: C. Total market value of the firm’s common stock

With fixed overheads at £16,000 per period, variable cost at £7.50 per unit, and selling price at £10 per unit, the break-even point (in units) is:

A. 6,400 units
B. 2,134 units
C. 40,000 units
D. 1,600 units
Correct answer is: A. 6,400 units

Which of the following is a cash outflow from financing activities?

A. Purchase of machinery
B. Payment of dividends
C. Increase in inventory
D. Sale of investments
Correct answer is: B. Payment of dividends

Which of the following increases a firm’s financial risk?

A. High operating leverage
B. High debt in capital structure
C. High current ratio
D. High inventory turnover
Correct answer is: B. High debt in capital structure

The discount rate that results in a Net Present Value (NPV) of zero is known as the:

A. Break-even point
B. Discount factor
C. Internal Rate of Return (IRR)
D. Payback period
Correct answer is: C. Internal Rate of Return (IRR)
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