Which of the following is not applied in capital budgeting ?

All accrued cost and revenue be incorporated

A company is highly geared when it raised

More finance by debentures than by equity shares

A company's average cost of capital is the average of ___

Cost of shares and all sources of long term funds

What should be the long term focal point of financial management in a firm?

The creation of value for shareholders

Which of the following capitalStructure would you recommend for growth at faster rate?

Incorporate Debt in it's capital structure to a great extend

Which of the following statement is correct?

Lower Debt Equity means lower financial risk

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Quiz - Financial Management

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Questions 20

Answers

1
___ is a long term planning for financing proposed capital outlay
Sales Budgeting
None of these
Capital Budgeting
Cash Budgeting
2
Which of the following is not applied in capital budgeting ?
All cost & benefits are measured on cash basis
Cash flows be calculated in incremental terms
All accrued cost and revenue be incorporated
All benefits are measured on after tax basis
3
With the increase in the interest prevailing in an economy the present value of money paid in the future will
Present Value and Interest rates has no relation
Remain unchanged
Decrease
Increase
4
___ is the proportion of earnings that are paid to common shareholders in the form of a cash dividend?
Retention rate
None of the above
Dividend payout ratio
Growth rate
5
Financial leverage is zero if
EBIT = Fixed Cost
EBIT = preferential Dividend
EBIT = Interest
EBIT = Zero
6
Market value of the Shares are decided by ____
Shareholders
The respective company
The investment market
Government
7
The dividend policy of the firm and its market price is determined by
Dividend yield
Earnings per share
Price earning ratio
Book value
8
The real rate of interest reflect compensation of ____
Present Value of money
Future Value of money
Face Value of money
Time Value of money
9
CAPM stands for ___
CAPITAL AND PRICE MODEL
CAPITAL ASSET PRICING METHOD
CAPITAL AMOUNT PRICING METHOD
CAPITAL ASSET PRICING MODEL
10
A company is highly geared when it raised
More finance by debentures than by preference shares
Finance by equity capital
More finance by debentures than by equity shares
Finance by only debentures
11
" There's no corporate tax " is assumed in which approach?
All of these
Net Operating Income Approach
Traditional Approach
Net Income Approach
12
A company's average cost of capital is the average of ___
Cost of short term funds
Cost of shares and all sources of long term funds
Cost of equity and preference shares
Cost of equity shares and Debentures
13
Which of the following is not concerned with long term investment decision?
Management of fixed capital
Research and Development
Inventory management
Opening a new Branch
14
Depreciation is incorporated in cash flow because
It involves an outflow
It is unavoidable cost
It reduces Tax liability
It is a cash flow
15
The Market Value of a firm is a result of ____
None of the above
Financing decision
Investment decision
Risk Return trade off
16
What should be the long term focal point of financial management in a firm?
The creation of value for shareholders
The maximisation of the amount of taxes paid by the firm
The profit earned by the firm
The number and types of products and services offered by the firm.
17
A company can improve its debt - to - total assets ratio by doing ____
Shift long term to short term debts
Sell common stock
Shift short term to long term debts
Borrow more
18
What does Present Value take?
Inflation rate
Discounting rate
Compounding rate
Deflation rate
19
Which of the following capitalStructure would you recommend for growth at faster rate?
Pay more dividend to equity shareholders
Merge with other companies
Incorporate Debt in it's capital structure to a great extend
Incorporate more retained earnings out of P&L A/C
20
Which of the following statement is correct?
Interest Coverage Ratio depends upon tax rate
Lower Debt Equity means lower financial risk
Higher Receivable Turnover is not desirable
Increase in Net Profit Ratio means increase in sales

Quiz - Financial Management Flashcards | StudBud