Financial Management Test

Result

Financial Management Test - 12

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Weekly Quiz Competition

Question 1
1 / -0

The cost of funds raised through debt in the form of_____________.

A
Debentures

B
Loans from financial institurions

C
Debentures or loan from financial institutions

D
All of the above.

Solution

The cost of funds raised through debt will be in the debentures or loan from financial institutions. Debentures and loans are debt for the company, as they have to be repaid over a period of time and are interest bearing.
Question 2
1 / -0

The cost of capital is related to the firm's objective of__________.

A
Worth maximisation

B
Sales maximisation

C
output maximisation

D
Cost reduction

Solution

The cost of capital is related to the firm's objective of Worth Maximisation because the capital structure of a company is a combination of owners' fund (equity) and borrowed funds (debt). The cost of capital of business affects both the profitability and financial risk of the business. A capital structure is said to be better when the proportion of debt and equity is such that it results in the increase of shareholder's wealth.
Thus the correct answer is A.
Question 3
1 / -0

Permanent working capital is the ________________.

A
difference between current assets and current liabilities

B
amount of funds invested in the various components of current assets

C
minimum amount of current assets which is needed to conduct a business even during the dullest season

D
additional assets which are required at different times during the operating year

Solution

Permanent working capital refers to the minimum amount of working capital i.e. the amount of current assets over current liabilities which is needed to conduct a business even during the dullest period.
Question 4
1 / -0

If on account of inadequacy of profits, a company wants to pay dividends out of previous year's reserves, it has to follow the rules made by

A
Central Government

B
State Government

C
Articles of Association

D
Memorandum of Association
Question 5
1 / -0

More working capital is required during the period of _______.

A
depression

B
recession

C
recovery

D
prosperity
Question 6
1 / -0

'Dividend' is defined under the fol1lowing section if Income Tax Act, 196

A
Section 2(20)

B
Section 2(22)

C
Section 5(22)

D
Section 5(33)
Question 7
1 / -0

Dividend warrants must be posted within ______ days from the date of declaration of dividend.

A
24

B
34

C
30

D
45
Question 8
1 / -0

Factors determining working capital:

A
Nature of Industry and the nature of business

B
Demand of creditors and volume of sales

C
Cash requirements and inventory turnover

D
All the above
Question 9
1 / -0

The dividend policy of a company is evolved within the framework of ___________.

A
corporate law

B
taxation

C
managerial considerations

D
All the above
Question 10
1 / -0

Which of the following is not a principle of working capital management?

A
Principle of risk variation

B
Principle of equity position

C
Principle of cost of capital

D
Principle of liquidity

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Re-Attempt Weekly Quiz Competition

Financial Management Test - 12

Result

Financial Management Test - 12

Score

-

Rank

-

SHARING IS CARING

Question 1

Debentures

Loans from financial institurions

Debentures or loan from financial institutions

All of the above.

Solution

Question 2

Worth maximisation

Sales maximisation

output maximisation

Cost reduction

Solution

Question 3

difference between current assets and current liabilities

amount of funds invested in the various components of current assets

minimum amount of current assets which is needed to conduct a business even during the dullest season

additional assets which are required at different times during the operating year

Solution

Question 4

Central Government

State Government

Articles of Association

Memorandum of Association

Question 5

depression

recession

recovery

prosperity

Question 6

Section 2(20)

Section 2(22)

Section 5(22)

Section 5(33)

Question 7

24

34

30

45

Question 8

Nature of Industry and the nature of business

Demand of creditors and volume of sales

Cash requirements and inventory turnover

All the above

Question 9

corporate law

taxation

managerial considerations

All the above

Question 10

Principle of risk variation

Principle of equity position

Principle of cost of capital

Principle of liquidity

User

Question Analysis

My Perfomance

Score

-

Rank

-

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