Classical

Financial Management - FInancial Management Questions

21:  

The _________ decision involves determining the appropriate make-up of the right-hand side of the balance sheet.

A.

asset management

B.

financing

C.

investment

D.

capital budgeting

 
 

Option: B

Explanation :


22:  

Financial Management is the

A.

Application of Planning and Control Function to the Finance Function

B.

Application of cost plan in respect of production

C.

Application of costing system

D.

Art of recording

 
 

Option: A

Explanation :


23:  

The corporate finance theory implies that

A.

Owners have the primary interest in the firm

B.

The firm should accept only those investment which generate positive net present value

C.

The firm capital structure and dividend decisions are irrelevant as they are solely guided by efficient capital markets and management has no control over them

D.

All of the above

 
 

Option: D

Explanation :


24:  

What is a leveraged buyout?

A.

It is a type of joint venture.

B.

It is an acquisition in which a large acquirer has leverage through bargaining power over a small target.

C.

It is an acquisition which is funded from a relatively large amount of debt.

D.

It is an acquisition which is funded from a relatively low amount of debt.

 
 

Option: C

Explanation :


25:  

Working capital can be used for the purchase of

A.

machinery

B.

goodwill

C.

land & building

D.

raw material

 
 

Option: D

Explanation :




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