Financial Management MCQs and Notes

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📊 Financial Management
Q. Which of the following recognizes risk in capital budgeting analysis by adjusting estimated cash flows and employs risk free rate to discount the adjusted cash flows?
  • (A) Pay back period
  • (B) Certainty equivalent approach
  • (C) Cash
  • (D) Inventory
💬 Discuss
✅ Correct Answer: (B) Certainty equivalent approach
📊 Financial Management
Q. Factoring involves ----------------
  • (A) Provision of specialized services relating to credit investigation
  • (B) Sales ledger management
  • (C) Purchase and collection of debts
  • (D) All of these
💬 Discuss
✅ Correct Answer: (D) All of these
📊 Financial Management
Q. Factoring is a ----------------
  • (A) Cost of sales
  • (B) Production plan
  • (C) Financial planning
  • (D) New financial service
💬 Discuss
✅ Correct Answer: (D) New financial service
📊 Financial Management
Q. The interest rate on commercial paper is determined by -------------
  • (A) RBI
  • (B) SEBI and Market Force
  • (C) SBI
  • (D) Market Force
💬 Discuss
✅ Correct Answer: (D) Market Force
📊 Financial Management
Q. In India commercial paper is regulated by -------------------
  • (A) RBI
  • (B) SEBI
  • (C) SBI
  • (D) Indian companies act 1956
💬 Discuss
✅ Correct Answer: (A) RBI
📊 Financial Management
Q. Commercial paper effective from ---------------------
  • (A) 1-1-1980
  • (B) 1-1-1990
  • (C) 1-1-1975
  • (D) 1-1-1995
💬 Discuss
✅ Correct Answer: (B) 1-1-1990
📊 Financial Management
Q. When an option is allowed to be exercised only on maturity date is called --------------
  • (A) Indian option
  • (B) European option
  • (C) American option
  • (D) Option
💬 Discuss
✅ Correct Answer: (B) European option
📊 Financial Management
Q. Book building --------------------
  • (A) Is a plant
  • (B) Is a profit cum expenses
  • (C) Is a process used for marketing a public offer of equity shares of a company
  • (D) Is a cost
💬 Discuss
✅ Correct Answer: (C) Is a process used for marketing a public offer of equity shares of a company
📊 Financial Management
Q. Which is the objective of a firm’s finance management?
  • (A) The maximization of firm’s profit
  • (B) The maximization of firm’s value
  • (C) The maximization of firm’s wealth
  • (D) All of these
💬 Discuss
✅ Correct Answer: (D) All of these
📊 Financial Management
Q. The investment of long term funds is made after a careful assessment of the various projects through -------------------
  • (A) Cost of capital
  • (B) Fund flow
  • (C) Capital budgeting by sales
  • (D) Marketing planning
💬 Discuss
✅ Correct Answer: (C) Capital budgeting by sales

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