Nature & Scope of Financial Management – Financial and Strategic Management MCQ

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Nature & Scope of Financial Management – Financial and Strategic Management MCQ

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ABCL Company has issued debentures of ₹ 50 lakhs to be repaid after 7 years. How much should the company invest in a sinking fund earning 12% in order to be able to repay debentures?

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Assuming that the discount rate is 7% per annum, how much would you pay to receive ₹ 50, growing at 5%, annually, forever?

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Ramu wants to retire and receive ₹ 3,000 a month. He wants to pass this monthly payment to future generations after his death. He can earn an interest of 8% compounded annually. How much will he need to set aside to achieve his perpetuity goal?

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Determine the present value of ₹ 700 each paid at the end of each of the next 6 years. Assume an 8% interest.

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Y bought a TV costing ₹ 13,000 by making a down payment of ₹ 3,000 and agreeing to make an equal annual payment for 4 years. How much would be each payment if the interest on the unpaid amount by 14% compounded annually?

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₹ 200 is invested at the end of each month in an account paying interest of 6% per year compounded monthly. What is the amount of this annuity after the 10th payment? Given that (1.005)10= 1.0511

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If 18% is the best risk-free return available, then you would be indifferent to receiving ₹ 100 now or ₹ 118 in one year’s time

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A person is required to pay 4 equal annual payments of ₹ 5,000 each in his deposit account that pays 8% interest per year. Find out the future value of the annuity at the end of 4 years.

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Find the amount of an annuity if payment of ₹ 500 is made annually for 7 years at an interest rate of 14% compounded annually.

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Find out the present value of 12,000 received after in 10 years, if the discount rate is 8%.

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What is the present value of 11 to be received after 2 years compounded annually at 10%?

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Ram has taken a 20-month car loan of ₹ 6,00,000. The rate of interest is 12% p.a. What will be the amount of monthly loan amortization?

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Determine the compound interest on ₹ 1,000 at 6% compounded semiannually for 6 years. Given that (1+i) n = 1.42576 for i = 3% and n = 12.

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₹ 2,000 is invested at an annual rate of interest of 10%. What is the amount after 2 years if the compounding is done monthly?

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₹ 2,000 is invested at an annual rate of interest of 10%. What is the amount after 2 years if the compounding is done semi-annually?

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₹ 2,000 is invested at an annual rate of interest of 10%. What is the amount after 2 years if the compounding is done annually?

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Determine the compound interest for an investment of ₹ 7,500 at 6% compounded half-yearly. Given that (1+i)n for = 0.03 and n= 12 is 1.42576.

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Find the rate of interest if the amount owed after 6 (n) months is ₹ 1,050 (A), the borrowed amount being ₹ 1,000 (Po).

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₹ 2,000 is deposited in a bank for 2 years at a simple interest of 6%. How much will be the balance at the end of 2 years?

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If you invest ₹ 10,000 (P0) m a bank at simple interest of 7% p.a., what will be the amount at the end of 3 (n) years?

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Find out the present value of projects cash flow from the following data if the cost of capital of the firm is 12%:

Year Cash flow PV Factor
1 20,000 0.893
2 20,000 0.797
3 20,000 0.712
4 20,000 0.636
5 20,000 0.567

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Find out the present value of projects cash flow from the following data if the cost of capital of the firm is 12%:

Year Cash flow
1 10,000
2 12,000
3 14,000
4 16,000
5 22,000

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What is the annuity factor for 13% at 5 years?

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What is the present value factor for 10% at 6 years?

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If the ‘Profit Maximization’ concept is applied then which of the following Product will be selected?Nature & Scope of Financial Management – Financial and Strategic Management MCQ 2

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Optimal investment decisions need to be made taking into consideration such factors as___

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Investment decisions encompass___

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Which of the following is/are a major aspect of the investment decision-making process?

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Financial Management can be judged by the study of the nature of___

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Financial management is broadly concerned with___

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Higher the level of financial gearing___

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High financial gearing will___

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Using _in the capital structure of a company is called financial gearing.

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A permanent_____may lead an organization to the chaotic state

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Assertion (A):Profit maximization, as an objective is too narrow.
Reason (R):It ignores the timing of returns and also fails to take into account the social considerations as also the obligations to various interests of workers, consumers, society, ethical trade practices.

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______means the organization can no longer meet its financial obligations with its lender or lenders as debts become due.

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_____is a condition where a company cannot meet or has difficulty paying off, its financial obligations to its creditors, typically due to high fixed costs, illiquid assets, or revenues sensitive to economic downturns.

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Under inflationary conditions, the value of money expressed in terms of its purchasing power over goods and services

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Profit maximization –

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Assertion (A):Profit maximization as an objective does not take into account the time pattern of returns.
Reason (R):The finance managers will accept highly risky proposals if they give high profits by applying the profit maximization concept.

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FinancialManagementis concerned with –

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_____consistent with the object of maximizing the owner’s economic welfare.

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For which of the following reason(s) profit maximization concept is criticized –1. It is vague conceptually.2. It ignores the timing of returns.3. It ignores the risk factor4. Its emphasis is generally on short-run projects.Select the correct answer from the options given below.

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______ensures that the firm utilizes its available resources most efficiently under conditions of competitive markets.

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Investment decisions are concerned with –

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The purpose of financial markets is to:

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Money market mutual funds –

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Which of the following is not a function of a finance manager?

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A 30-year bond issued by Reliance Ltd. in 2007 would now trade in the –

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Financial management is –

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The funds raised by the issue of____are the best from the risk point of view for the company.

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Statement (I):Since funds can be obtained from different sources, therefore, their procurement is always considered a complex problem by business concerns.
Statement (II):Funds produced from different sources have different characteristics in terms of risk, cost, and control.

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The decision function of financial management can be broken down into decisions.

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A business organization can obtain funds from –

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The focal point of financial management in a firm is____

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Which of the following is/are the basic aspects of financial management?(1) Procurement of funds.
(2) Appointment of capable financial personnel.
(3) Effective use of funds to achieve business objectives.
(4) Increase the national resources.

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The market price of a share of common stock is determined by:

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Procurement of funds inter alia includes___(a) Identification of sources of finance
(b) Determination of finance mix
(c) Raising of funds
(d) Division of profits between dividends and retention of profits of internal funds generation

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Financial Management is concerned with___

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The long-run objective of financial management is to___

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To increase a given present value, the discount rate should be adjusted –

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Financial Management is study –(I) Of the process of procuring and judicious use of financial resources
(II) Undertaken to maximize the value of the firm/owners.

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“Shareholder wealth” in a firm is represented by___

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______is the lifeblood of a business.

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