Business Finance MCQ - Business Finance Section 2

51 Financial Management is the

A
Application of Planning and Control Function to the Finance Function
B
Application of cost plan in respect of the production
C
Application of costing system
D
Art of recording

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Correct AnswerOption A

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52 The corporate finance theory implies that

A
Owners have the primary interest in the firm
B
The firm should accept only those investment which generates a 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

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Correct AnswerOption D

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53 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.

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Correct AnswerOption C

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54 Working capital can be used for the purchase of

A
machinery
B
goodwill
C
land & building
D
raw material

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Correct AnswerOption D

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55 Capital budgeting is the process of making investment decisions in the

A
Cash
B
Sales Planning
C
Sales
D
Capital Expenditure

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Correct AnswerOption D

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