MCQ on Strategic Financial Management 5

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Objective Questions and Answers of MBA: MCQ on Strategic Financial Management 5

Subject: Objective Questions and Answers of MBA: MCQ on Strategic Financial Management 5

Part 5: List for questions and answers of Strategic Financial Management

 

Q1. Refers to changes in total costs that occur due to changes in volume of production or sales, product system, product mix or from the adoption of an alternative course of action

a) differential costs

b) Marginal costs

c) Absorption costs

d) None of the above

 

Q2. As per j.m. clark, when a decision has to be made involving ___________ , the difference in cost between two policies may be considered to be the cost really incurred on account of these n-units of business

a) An increase of n-units of output

b) A decrease of n-units of output

c) an increase or decrease of n-units of output

d) None of the above

 

Q3. If the present value of cash inflows are greater than the present value of cash outflows, the project would be

a) accepted

b) Rejected with condition

c) Rejected with approval

d) Rejected

 

Q4. Which of the following statements are true?

a) Differential cost is also known as relevant cost

b) Differential costs are estimated future costs

c) Differential costs include only those costs which change as a result of the decision making being considered

d) all of the above

 

Q5. If direct labor is not affected by the change in the type of material, it will form a part of differential cost

a) True

b) false

 

Q6. The basic data used for differential cost analysis are

a) Cost

b) Revenue

c) Investment data

d) all of the above

 

Q7. The alternative which shows ____ difference between the incremental revenue and the differential cost is the one considered to be the best choice for selection

a) maximum

b) Minimum

c) No

d) None of the above

 

Q8. The break-even point of a company is that level of sales income which will equal the sum of its fixed cost

a) true

b) False

 

Q9. Which of the following are characteristics of b.e.p?

a) There is no loss and no profit to the firm

b) Total revenue is equal to total cost

c) Contribution is equal to fixed cost

d) all of the above

 

Q10. The basic data used for differential cost analysis are

a) Cost

b) Revenue

c) Investment data

d) all of the above

 

Q11. While measuring break-even analysis, it is considered that during a specific period there will be no change in general price level, i.e., labor, cost of material and other overheads

a) true

b) False

 

Q12. Which of the following are limitations of break-even analysis?

a) static concept

b) Capital employed is taken into account

c) Limitation of non-linear behavior of costs

d) Limitation of presence of perfect competition

 

Q13. Break-even analysis is used in “make or buy” decision

a) true

b) False

 

Q14. Using equation method, break-even point is calculated as

a) sales = variable expenses + fixed expenses + profit

b) Sales = variable expenses + fixed expenses – profit

c) Sales = variable expenses – fixed expenses + profit

d) None of the above

 

Q15. Given selling price is rs 10 per unit, variable cost is rs 6 per unit and fixed cost is rs 5,000. What is break-even point?

a) 500 units

b) 1,000 units

c) 1,250 units

d) None of the above

 

Q16. Contribution is also known as

a) contribution margin

b) Net margin

c) Both a and b

d) None of the above

 

Q17. Given selling price is rs 20 per unit, variable cost is rs 16 per unit contribution is

a) Rs 1.25 per unit

b) rs 4 per unit

c) Rs 0.8 per unit

d) None of the above 

 

Q18. P/v ratio can be calculated on the basis of variable cost ratio as

a) 1 – variable cost ratio

b) 1 + variable cost ratio

c) 1/variable cost ratio

d) None of the above

 

Q19. Determine p/v ratio if sales is rs 80,000 and variable cost is rs 60,000

a) 40%

b) 25%

c) 50%

d) None of the above

 

Q20. Determine p/v ratio if sales is rs 1,00,000, fixed cost is rs 30,000 and profit is rs 20,000

a) 25%

b) 50%

c) 45%

d) None of the above

 

Part 5: List for questions and answers of Strategic Financial Management

 

Q1. Answer: a

Q2. Answer: c

Q3. Answer: a

Q4. Answer: d

Q5. Answer: b

Q6. Answer: d

Q7. Answer: a

Q8. Answer: a

Q9. Answer: d

Q10. Answer: d

Q11. Answer: a

Q12. Answer: a

Q13. Answer: a

Q14. Answer: a

Q15. Answer: c

Q16. Answer: a

Q17. Answer: b

Q18. Answer: a

Q19. Answer: b

Q20. Answer: b