Accounting and Financial Management 18

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Objective Questions and Answers of MBA: Accounting and Financial Management 18

Subject: Objective Questions and Answers of MBA: Accounting and Financial Management 18

Part 18: Objective questions and answers of Accounting and Financial Management

 

Q1. Which of the following represents passive dividend policy?

a) That dividend is paid as a % of eps

b) That dividend is paid as a constant amount

c) That dividend is paid after retaining profits for reinvestment

d) All of the above

 

Q2. 'Constant dividend per share' policy is considered as:

a) Increasing dividend policy

b) Decreasing dividend policy

c) Stable dividend policy

d) None of the above

 

Q3. Concentration banking helps in

a) Reducing idle bank balance

b) Increasing collection

c) Increasing creditors

d) Reducing bank transactions

 

Q4. Out of the following, what is not true in respect of factoring?

a) Continuous arrangement between factor and seller

b) Sale of receivables to the factor

c) Factor provides cost free finance to seller

d) None of the above

 

Q5. Which of the following is related to receivables management?

a) Cash budget

b) Economic order quantity

c) Ageing schedule

d) All of the above

 

Q6. If a = annual requirement, o = order cost and c = carrying cost per unit per annum, then eoq

a) (2ao/c) 2

b) 2ao/c

c) 2a÷oc

d) 2aoc

 

Q7. Commercial paper is a type of

a) Fixed coupon bond

b) Unsecured short-term debt

c) Equity share capital

d) Government bond

 

Q8. A lease which is generally not cancellable and covers full economic life of the asset is known as

a) Sale and leaseback

b) Operating lease

c) Finance lease

d) Economic lease

 

Q9. If the intrinsic value of a share is less than the market price, which of the most reasonable?

a) That shares have lesser degree of risk

b) That market is over valuing the shares

c) That the company is high dividend paying

d) That market is undervaluing the share

 

Q10. Debt to total assets ratio can be improved by:

a) Borrowing more

b) Issue of debentures

c) Issue of equity shares

d) Redemption of debt

 

Q11. Financial planning starts with the preparation of:

a) Master budget

b) Cash budget

c) Balance sheet

d) None of the above

 

Q12. Which of the following is not true with reference capital budgeting?

a) Capital budgeting is related to asset replacement decisions

b) Cost of capital is equal to minimum required return

c) Existing investment in a project is not treated as sunk cost

d) Timing of cash flows is relevant

 

Q13. In case of the indivisible projects, which of the following may not give the optimum result?

a) Internal rate of return

b) Profitability index

c) Feasibility set approach

d) All of the above

 

Q14. In risk-adjusted discount rate method, which one is adjusted?

a) Cash flows

b) Life of the proposal

c) Rate of discount

d) Salvage value

 

Q15. In case of partially debt-financed firm, k0 is less

a) Kd

b) Ke

c) Both (a) and (b)

d) None of the above

 

Q16. Tax-rate is relevant and important for calculation of specific cost of capital of:

a) Equity share capital

b) Preference share capital

c) Debentures

d) (a) and (b) above

 

Q17. Financial leverage is calculated as:

a) Ebit÷ contribution

b) Ebit÷ pbt

c) Ebit÷ sales

d) Ebit ÷ variable cost

 

Q18. In order to calculate eps, profit after tax and preference dividend is divided by:

a) Mp of equity shares

b) Number of equity shares

c) Face value of equity shares

d) None of the above

 

Q19. Financial planning deals with:

a) Preparation of financial statements

b) Planning for a capital issue

c) Preparing budgets

d) All of the above

 

Q20. Depreciation is incorporated in cash flows because it:

a) Is unavoidable cost

b) Is a cash flow

c) Reduces tax liability

d) Involves an outflow

 

Part 18: Objective questions and answers of Accounting and Financial Management

 

Q1. Answer c

 

Q2. Answer c

 

Q3. Answer b

 

Q4. Answer c

 

Q5. Answer c

 

Q6. Answer b

 

Q7. Answer b

 

Q8. Answer c

 

Q9. Answer b

 

Q10. Answer d

 

Q11. Answer d

 

Q12. Answer c

 

Q13. Answer c

 

Q14. Answer c

 

Q15. Answer b

 

Q16. Answer c

 

Q17. Answer b

 

Q18. Answer b

 

Q19. Answer c

 

Q20. Answer c

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