Accounting and Financial Management 28

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Objective Questions and Answers of MBA: Accounting and Financial Management 28

Subject: Objective Questions and Answers of MBA: Accounting and Financial Management 28

Part 28: Objective questions and answers of Accounting and Financial Management

 

Q1. Which of the following is true?

a) Retained earnings are cost free

b) External equity is cheaper than internal equity

c) Retained earnings are cheaper than external equity

d) Retained earnings are costlier than external equity

 

Q2. Combined leverage is obtained from ol and fl by their:

a) Addition

b) Subtraction

c) Multiplication

d) Any of these

 

Q3. Which of the following is correct?

a) Cl= ol + fl

b) Cl=ol-fl

c) Ol= ol × fl

d) Ol=ol÷fl

 

Q4. For a constant ebit, if the debt level is further increased then

a) Eps will always increase

b) Eps may increase

c) Eps will never increase

d) None of the above

 

Q5. 'That personal leverage can replace corporate leverage' is assumed by:

a) Traditional approach

b) Mm model

c) Net income approach

d) Net operating income approach

 

Q6. Residuals theory argues that dividend is a

a) Relevant decision

b) Active decision

c) Passive decision

d) Irrelevant decision

 

Q7. Every company should follow

a) High dividend payment

b) Low dividend payment

c) Stable dividend payment

d) Fixed dividend payment

 

Q8. Miller-orr model deals with

a) Optimum cash balance

b) Optimum finished goods

c) Optimum receivables

d) All of the above

 

Q9. Bad debt cost is not borne by factor in case of

a) Pure factoring

b) Without recourse factoring

c) With recourse factoring

d) None of the above

 

Q10. If a company sells its receivable to another party to raise funds, it is known as

a) Securitization

b) Factoring

c) Pledging

d) None of the above

 

Q11. Eoq determines the order size when

a) Total order cost is minimum

b) Total number of order is least

c) Total inventory costs are minimum

d) None of the above

 

Q12. Which of the following is not a spontaneous source of short-term funds?

a) Trade credit

b) Accrued expenses

c) Provision for dividend

d) All of the above

 

Q13. Lease which includes a third party (a lender) is known as

a) Sale and leaseback

b) Direct lease

c) Inverse lease

d) Leveraged lease

 

Q14. The term 'eva' is used for:

a) Extra value analysis

b) Economic value added

c) Expected value analysis

d) Engineering value analysis

 

Q15. Capital budgeting decisions are:

a) Reversible

b) Irreversible

c) Unimportant

d) All of the above

 

Q16. Noi approach advocates that the degree of debt financing is:

a) Relevant

b) May be relevant

c) Irrelevant

d) May be irrelevant

 

Q17. The formula for the capital asset pricing model (capm) is:

a) Kj = rf + β (rf – rm)

b) Kj = rf + β (rm – rf)

c) K = r + β (r – m)

d) K = r + β (r – r)

 

Q18. Balance sheet shows the:

a) Profit earned by the business

b) Total capital employed

c) Financial position of the business

d) Trading results of the business

 

Q19. A company's ability to meet its short-term financial obligations is referred to as:

a) Stability

b) Efficiency

c) Effectiveness

d) Liquidity

e) Profitability

 

Q20. Which of the following selections correctly matches the financial statement with its description?

a) Income statement/tells how much a firm is making or losing

b) Income statement/depicts the structure of a firm's assets and liabilities

c) Balance sheet/tells how much a firm is making or losing

d) Statement of cash flows / depicts the structure of a firm's assets and liabilities

 

Part 28: Objective questions and answers of Accounting and Financial Management

 

Q1. Answer c

 

Q2. Answer c

 

Q3. Answer c

 

Q4. Answer b

 

Q5. Answer b

 

Q6. Answer c

 

Q7. Answer c

 

Q8. Answer a

 

Q9. Answer c

 

Q10. Answer b

 

Q11. Answer c

 

Q12. Answer c

 

Q13. Answer d

 

Q14. Answer b

 

Q15. Answer b

 

Q16. Answer c

 

Q17. Answer b

 

Q18. Answer c

 

Q19. Answer d

 

Q20. Answer a

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