Accounting and Financial Management 23

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Objective Questions and Answers of MBA: Accounting and Financial Management 23

Subject: Objective Questions and Answers of MBA: Accounting and Financial Management 23

Part 23: Objective questions and answers of Accounting and Financial Management

 

Q1. Dividend declared by a company must be paid in

a) 20 days

b) 30 days

c) 32 days

d) 42 days

 

Q2. Which of the following is not considered in linter’s model?

a) Dividend payout ratio

b) Current eps

c) Speed of adjustment

d) Preceding year eps

 

Q3. Which of the following is not considered by miller-orr model?

a) Variability in cash requirement

b) Cost of transaction

c) Holding cost

d) Total annual requirement of cash

 

Q4. Cash discount term 3/15, net 40 means

a) 3% discount if payment in 15 days, otherwise full payment in 40 days

b) 15% discount if payment in 3 days, otherwise full payment 40 days

c) 3% interest if payment made in 40 days and 15%,interest thereafter

d) None of the above

 

Q5. Abc analysis is useful for analyzing the inventories:

a) Based on their quality

b) Based on their usage and value

c) Based on physical volume

d) All of the above

 

Q6. Which of the following is a liability of a bank?

a) Treasury bills

b) Commercial papers

c) Certificate of deposits

d) Junk bonds

 

Q7. Under income-tax provisions, depreciation on lease asset is allowed to

a) Lessor

b) Lessee

c) Any of the two

d) None of the two

 

Q8. Risk-aversion of an investor can be measured by

a) Market rate of return

b) Risk-free rate of return

c) Portfolio return

d) None of the above.

 

Q9. A current ratio of less than one means:

a) Current liabilities < current assets

b) Fixed assets > current assets

c) Current assets < current liabilities

d) Share capital > current assets

 

Q10. In inventory turnover calculation, what is taken in the numerator?

a) Sales

b) Cost of goods sold

c) Opening stock

d) Closing stock

 

Q11. Which of the following is not true for capital budgeting?

a) Sunk costs are ignored

b) Opportunity costs are excluded

c) Incremental cash flows are considered

d) Relevant cash flows are considered

 

Q12. Real rate of return is equal to:

a) Nominal rate × inflation rate

b) Nominal rate ÷ inflation rate

c) Nominal rate – inflation rate

d) Nominal rate + inflation rate

 

Q13. Cost capital for equity share capital does not imply that:

a) Market price is equal to book value of share

b) Shareholders are ready to subscribe to right issue

c) Market price is more than issue price

d) Ac of the three above

 

Q14. Operating leverage arises because of:

a) Fixed cost of production

b) Fixed interest cost

c) Variable cost

d) None of the above

 

Q15. If a firm has no debt, which one is correct?

a) Ol is one

b) Fl is one

c) Ol is zero

d) Fl is zero

 

Q16. In case of net income approach, the cost of equity is:

a) Constant

b) Increasing

c) Decreasing

d) None of the above

 

Q17. Which of the following assumes constant kd and ke?

a) Net income approach

b) Net operating income approach

c) Traditional approach

d) Mm model

 

Q18. Dividend irrelevance argument of mm model is based on:

a) Issue of debentures

b) Issue of bonus share

c) Arbitrage

d) Hedging

 

Q19. Which of the following generally not result in increase in total dividend liability ?

a) Share-split

b) Right issue

c) Bonus issue

d) All of the above

 

Q20. Which of the following is not a motive to hold cash?

a) Transactionary motive

b) Pre-scautionary motive

c) Captal investment

d) None of the above

 

Part 23: Objective questions and answers of Accounting and Financial Management

 

Q1. Answer b

 

Q2. Answer d

 

Q3. Answer d

 

Q4. Answer a

 

Q5. Answer b

 

Q6. Answer c

 

Q7. Answer a

 

Q8. Answer d

 

Q9. Answer c

 

Q10. Answer b

 

Q11. Answer b

 

Q12. Answer b

 

Q13. Answer d

 

Q14. Answer a

 

Q15. Answer b

 

Q16. Answer a

 

Q17. Answer a

 

Q18. Answer c

 

Q19. Answer a

 

Q20. Answer c

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