Financial Management-MCQ

MULTIPLE CHOICE QUESTIONS

CHAPTER 9: Financial management

1. Financial management is concerned with managerial activities relating to
   (a) Planning
   (b) Procurement and administration of funds
   (c) Optimum utilization of funds
   (d) All of the above


2. Which of the following factors affect financial decision?
   (a) Cost
   (b) Risk
   (c) Cash flow position
   (d) All of the above


3. _________ refers to planning regarding financial needs of the enterprise various sources of raising funds and their optimum utilization.
   (a) Financial planning
   (b) Capital structure
   (c) Financial management


4. Which of the following is not a feature of a financial plan?
   (a) Simplicity
   (b) Cost
   (c) Flexibility
   (d) Foresight


5. _____ is the decision related to composition of capital structure & also depends upon ability of the business to generate cash.
   (a) Market condition
   (b) Flexibility
   (c) Cash flow ability
   (d) Control


6. Rate of return on capital is exceptionally high in
   (a) Under – capitalization
   (b) Over – capitalization
   (c) Working capital
   (d) Fixed capital


7. Which of the factors affect dividend decisions?
   (a) Preference of shareholders
   (b) Earning
   (c) Stability of dividend
   (d) All of the above


8. _____ refers to the structure of total capital funds raised by the company.
   (a) Fixed capital
   (b) Capital structure
   (c) Capital requirements
   (d) Under capitalization

Answer Keys

1

d

2

d

3

a

4

b

5

c

6

a

7

d

8

b