MCQ on Strategic Financial Management 3

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Objective Questions and Answers of MBA: MCQ on Strategic Financial Management 3

Subject: Objective Questions and Answers of MBA: MCQ on Strategic Financial Management 3

Part 3: List for questions and answers of Strategic Financial Management

 

Q1. Which ratio is considered as safe margin of solvency?

a) Liquid ratio

b) Quick ratio

c) current ratio

d) None of the above

 

Q2. The ideal level of current ratio is

a) 4:2

b) 2:1

c) both a and b

d) None of the above

 

Q3. Current ratio is stated as a crude ratio because

a) it measures only the quantity of current assets

b) It measures only the quality of current assets

c) Both a and b

d) Offerings dimension

 

Q4. Stock is considered as a liquid asset as anytime it can be converted into cash immediately

a) Yes

b) no

 

Q5. The ideal level of liquid ratio is

a) 3:3

b) 4:4

c) 5:5

d) All of the above

 

Q6. Debt-equity ratio is a sub-part of

a) Short-term solvency ratio

b) long-term solvency ratio

c) Debtors turnover ratio

d) None of the above 

 

Q7. Liquid assets is determined by

a) current assets-stock-prepaid expenses

b) Current assets +stock+ prepaid expenses

c) Current assets +prepaid expenses

d) None of the above

 

Q8. Which of the following is not included in current assets?

a) Debtors

b) stock

c) Cash at bank

d) Cash in hand

 

Q9. Higher the ratio, the more favorable it is, doesn’t stands true for

a) operating ratio

b) Liquidity ratio

c) Net profit ratio

d) Stock turnover ratio

 

Q10. The most precise test of liquidity is

a) Quick ratio

b) Current ratio

c) absolute liquid ratio

d) None of the above

 

Q11. Quick ratio is 1.8:1, current ratio is 2.7:1 and current liabilities are rs 60,000. Determine value of stock

a) rs 54,000

b) Rs 60,000

c) Rs 1, 62,000

d) None of the above

 

Q12. Collection of debtors

a) decreases current ratio

b) Increases current ratio

c) Has no effect on current ratio

d) None of the above 

 

Q13. Which statement is prepared in the process of funds flow analysis?

a) schedule of changes in working capital

b) Funds flow statement

c) Both a and b

d) None of the above

 

Q14. Funds flow statement is prepared on the basis of data of pand l statement and two consecutive balance sheets

a) true

b) False

c) Value delivery

d) None of the above

 

Q15. If reserve for bad and doubtful debts is mentioned in the question of funds flow statement preparation, it can be shown as

a) In the schedule by deducting from total debtors under current assets

b) In the schedule separately under the heading of capital liabilities

c) both a and b

d) None of the above

 

Q16. Funds flow statement is also known as

a) Statement of funds flow

b) Statement of sources and application of funds

c) Statement of sources and uses of funds

d) all of the above

 

Q17. Given net profit for the year rs 2, 50,000 transferred to general reserves rs 40,000 and old machinery bought for rs 50,000 was sold for rs 20,000. Calculate funds from operations

a) rs 2, 80,000

b) Rs 2, 20,000

c) Rs 2, 90,000

d) Rs 3, 00,000

 

Q18. Finance functions are

a) Planning for funds

b) Raising of funds

c) Allocation of resources

d) all of the above 

 

Q19. Time value of money supports the comparison of cash flows recorded at different time period by

a) Discounting all cash flows to a common point of time

b) Compounding all cash flows to a common point of time

c) using either a or b

d) None of the above

 

Q20. If the nominal rate of interest is 10% per annum and there is quarterly compounding, the effective rate of interest will be

a) 10% per annum

b) 10.10 per annum

c) 10.25%per annum

d) 10.38% per annum

 

Part 3: List for questions and answers of Strategic Financial Management

 

Q1. Answer: c

Q2. Answer: c

Q3. Answer: a

Q4. Answer: b

Q5. Answer: a

Q6. Answer: b

Q7. Answer: a

Q8. Answer: b

Q9. Answer: a

Q10. Answer: c

Q11. Answer: a

Q12. Answer: a

Q13. Answer: a

Q14. Answer: a

Q15. Answer: c

Q16. Answer: d

Q17. Answer: a

Q18. Answer: d

Q19. Answer: c

Q20. Answer: d