Accounting and Financial Management 24

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Objective Questions and Answers of MBA: Accounting and Financial Management 24

Subject: Objective Questions and Answers of MBA: Accounting and Financial Management 24

Part 24: Objective questions and answers of Accounting and Financial Management

 

Q1. In India, dividend distribution tax is paid on

a) Equity share

b) Preference share

c) Debenture

d) Both (a) and (b)

 

Q2. The transaction motive for holding cash is for

a) Safety cushion

b) Daily operations

c) Purchase of assets

d) Payment of dividends

 

Q3. Which of the following is not a technique of receivables management?

a) Funds flow analysis

b) Ageing schedule

c) Days sales outstanding

d) Collection matrix

 

Q4. Securitization is related to conversion of

a) Receivables

b) Stock

c) Investments

d) Creditors

 

Q5. Use of safety stock by a firm would

a) Increase inventory cost

b) Decrease inventory cost

c) No effect on cost

d) None of the above

 

Q6. Which of the following is not a benefit of carrying inventories?

a) Reduction in ordering cost

b) Avoiding lost sales

c) Reducing carrying cost

d) Avoiding production shortages

 

Q7. Commercial paper are generally issued at a pries

a) Equal to face value

b) More than face value

c) Less than face value

d) Equal to redemption value

 

Q8. From the point of view of the lessee, a lease is a:

a) Working capital decision

b) Financing decision

c) Buy or make decision

d) Investment decision

 

Q9. Working capital turnover measures the relationship of working capital with:

a) Fixed assets

b) Sales

c) Purchases

d) Stock

 

Q10. Which of the following is a measure of debt service capacity of a firm?

a) Current ratio

b) Acid test ratio

c) Interest coverage ratio

d) Debtors turnover

 

Q11. Which of the following is not incorporated in capital budgeting?

a) Tax-effect

b) Time value of money

c) Required rate of return

d) Rate of cash discount

 

Q12. Savings in respect of a cost is treated in capital budgeting as:

a) An inflow

b) An outflow

c) Nil

d) None of the above

 

Q13. Nominal rate ÷ inflation rate

a) (1 + inf. Rate) (1 + money d rate)-1

b) (1 + money d rate) + (1 + inf. Rate)-1

c) (1 + money d rate) 4- (1 + inf. Rate)-1

d) (1 + money d rate) – (1 + inf. Rate)-1

 

Q14. Which is the most expensive source of funds?

a) New equity shares

b) New preference shares

c) New debts

d) Retained earnings

 

Q15. Advantage of debt financing is

a) Interest is tax-deductible

b) It reduces wacc

c) Does not dilute owners control

d) All of the above

 

Q16. Business risk can be measured by:

a) Financial leverage

b) Operating leverage

c) Combined leverage

d) None of the above

 

Q17. If a firm has no preference share capital, financial break-even level is defined as equal to 

a) Ebit

b) Interest liability

c) Equity dividend

d) Tax liability

 

Q18. Which one is true for net operating income approach?

a) Vd = vf – ve

b) Ve = vf + vd

c) Ve = vf – vd

d) Vd = vf + ve

 

Q19. Which of the following is incorrect for noi?

a) K0 is constant

b) Kd is constant

c) Ke is constant

d) Kd & k0 are constant

 

Q20. In case of gordon's model, the mp for zero payout is zero. It means that

a) Shares are not traded

b) Shares available free of cost

c) Investors are not ready to offer any price

d) None of the above

 

Part 24: Objective questions and answers of Accounting and Financial Management

 

Q1. Answer d

 

Q2. Answer b

 

Q3. Answer a

 

Q4. Answer a

 

Q5. Answer a

 

Q6. Answer c

 

Q7. Answer c

 

Q8. Answer b

 

Q9. Answer a

 

Q10. Answer c

 

Q11. Answer d

 

Q12. Answer a

 

Q13. Answer c

 

Q14. Answer a

 

Q15. Answer d

 

Q16. Answer b

 

Q17. Answer b

 

Q18. Answer c

 

Q19. Answer c

 

Q20. Answer c

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