Financial Management MCQ - Financial Management Section 1

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

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Correct AnswerOption B

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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

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Correct AnswerOption A

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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

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Correct AnswerOption D

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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.

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Correct AnswerOption C

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25 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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