The concept that represents what you give up as a result of making an alternative decision is called: A. Purchase price B. Financing cost C. Opportunity cost D. Liquidity need Correct answer is: C. Opportunity cost 📖 Read Detailed Explanation → Financial Management Mcqs Leave a Comment | Umar
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 📖 Read Detailed Explanation → Financial Management Mcqs Leave a Comment | Umar
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 📖 Read Detailed Explanation → Financial Management Mcqs Leave a Comment | Umar
Which of the following is NOT considered a credit management decision? A. Financing your house with a mortgage B. Using credit cards to pay utility bills C. Obtaining a bank loan to purchase a boat D. Investing money in a bank deposit Correct answer is: D. Investing money in a bank deposit 📖 Read Detailed Explanation → Financial Management Mcqs Leave a Comment | Umar
A. Financing your house with a mortgage B. Using credit cards to pay utility bills C. Obtaining a bank loan to purchase a boat D. Investing money in a bank deposit
The net working capital of a firm measures its: A. Profitability B. Liquidity C. Credibility D. Solvency Correct answer is: B. Liquidity 📖 Read Detailed Explanation → Financial Management Mcqs Leave a Comment | Umar
The excess of current assets over current liabilities is known as: A. Gross working capital B. Permanent working capital C. Temporary working capital D. Net working capital Correct answer is: D. Net working capital 📖 Read Detailed Explanation → Financial Management Mcqs Leave a Comment | Umar
A. Gross working capital B. Permanent working capital C. Temporary working capital D. Net working capital
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 📖 Read Detailed Explanation → Financial Management Mcqs Leave a Comment | Umar
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 📖 Read Detailed Explanation → Financial Management Mcqs Leave a Comment | Umar
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
Who among the following makes the broadest use of accounting information? A. Accountants B. Financial Analysts C. Auditors D. Marketers Correct answer is: B. Financial Analysts 📖 Read Detailed Explanation → Financial Management Mcqs Leave a Comment | Umar
Finance is vital for which of the following business activities? A. Marketing Research B. Product Pricing C. Design of marketing and distribution channels D. All of the given options Correct answer is: D. All of the given options 📖 Read Detailed Explanation → Financial Management Mcqs Leave a Comment | Umar
A. Marketing Research B. Product Pricing C. Design of marketing and distribution channels D. All of the given options
Financial decisions involve: A. Investment decision only B. Financing decision only C. Dividend decision only D. All of the above: Investment, financing, and dividend decisions Correct answer is: D. All of the above: Investment, financing, and dividend decisions 📖 Read Detailed Explanation → Financial Management Mcqs Leave a Comment | Umar
A. Investment decision only B. Financing decision only C. Dividend decision only D. All of the above: Investment, financing, and dividend decisions
The job of a finance manager is confined to: A. Raising funds B. Management of cash C. Raising of funds and their effective utilization D. Preparing financial statements Correct answer is: C. Raising of funds and their effective utilization 📖 Read Detailed Explanation → Financial Management Mcqs Leave a Comment | Umar
A. Raising funds B. Management of cash C. Raising of funds and their effective utilization D. Preparing financial statements
An investment which gives the holder a regular income in return for one initial payment may be known as a(n): A. Ordinary share B. Annuity C. Return D. Discount factor Correct answer is: B. Annuity 📖 Read Detailed Explanation → Financial Management Mcqs Leave a Comment | Umar
Which of the following is NOT a key component of a complete personal financial plan? A. Plan to manage your liquidity B. Budget plan C. Plan for working at a major brokerage firm D. Plan for financing (managing credit and loans) Correct answer is: C. Plan for working at a major brokerage firm 📖 Read Detailed Explanation → Financial Management Mcqs Leave a Comment | Umar
A. Plan to manage your liquidity B. Budget plan C. Plan for working at a major brokerage firm D. Plan for financing (managing credit and loans)
If your income exceeds the amount that you wish to spend, you should ____________ your investments or ____________ loans. A. reduce; repay existing B. increase; repay existing C. increase; obtain more D. reduce; obtain more Correct answer is: B. increase; repay existing 📖 Read Detailed Explanation → Financial Management Mcqs Leave a Comment | Umar
A. reduce; repay existing B. increase; repay existing C. increase; obtain more D. reduce; obtain more
____________ is access to funds to cover any short-term cash deficiencies. A. Liquidity B. Credit management C. Money management D. Cash management Correct answer is: A. Liquidity 📖 Read Detailed Explanation → Financial Management Mcqs Leave a Comment | Umar
One limitation of the ____________ is that it is based on historical costs. A. Income statement B. Statement of cash flows C. Balance sheet D. Budget Correct answer is: C. Balance sheet 📖 Read Detailed Explanation → Financial Management Mcqs Leave a Comment | Umar
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 📖 Read Detailed Explanation → Financial Management Mcqs Leave a Comment | Umar
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
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 📖 Read Detailed Explanation → Financial Management Mcqs Leave a Comment | Umar
The number of units in excess of the break-even point is known as the: A. Net contribution B. Area of profit C. Margin of safety D. Volume of production Correct answer is: C. Margin of safety 📖 Read Detailed Explanation → Financial Management Mcqs Leave a Comment | Umar
Which of the following would increase the break-even output level? A. Lower fixed costs B. Higher selling prices per unit C. Higher production costs per unit of output D. Lower output level Correct answer is: C. Higher production costs per unit of output 📖 Read Detailed Explanation → Financial Management Mcqs Leave a Comment | Umar
A. Lower fixed costs B. Higher selling prices per unit C. Higher production costs per unit of output D. Lower output level
The value of an option at the time of expiration is a function of: A. Volatility and interest rate B. Stock price and exercise price C. Interest rate and stock price D. Exercise price and volatility Correct answer is: B. Stock price and exercise price 📖 Read Detailed Explanation → Financial Management Mcqs Leave a Comment | Umar
A. Volatility and interest rate B. Stock price and exercise price C. Interest rate and stock price D. Exercise price and volatility
The return that lenders receive on bonds is called: A. Dividends B. Interest C. Capital gain D. Rent Correct answer is: B. Interest 📖 Read Detailed Explanation → Financial Management Mcqs Leave a Comment | Umar
Which of the following is an example of a current asset? A. Machinery B. Patents C. Debtors (Accounts Receivable) D. Goodwill Correct answer is: C. Debtors (Accounts Receivable) 📖 Read Detailed Explanation → Financial Management Mcqs Leave a Comment | Umar
In finance, risk is commonly measured by calculating the: A. Mean B. Variance C. Standard deviation D. Kurtosis Correct answer is: C. Standard deviation 📖 Read Detailed Explanation → Financial Management Mcqs Leave a Comment | Umar