Financial Management
351. In ABC inventory management system, class A items may require
- Higher Safety Stock
- Frequent Deliveries
- Periodic Inventory system
- Updating of inventory records
Correct answer: (A)
Higher Safety Stock
352. If A = Annual Requirement, O = Order Cost and C = Carrying Cost per unit per annum, then EOQ
- (2AO/C) 2
- 2AO/C
- 2A÷OC
- 2AOC
Correct answer: (B)
2AO/C
353. System of procuring goods when required, is known as,
- Free on Board (FOB)
- always Butter Control (ABC)
- Jest in Time (JIT)
- Economic Order Quantity
Correct answer: (C)
Jest in Time (JIT)
354. Commercial paper is a type of
- Fixed coupon Bond
- Unsecured short-term debt
- Equity share capital
- Government Bond
Correct answer: (B)
Unsecured short-term debt
355. Cash discount terms offered by trade creditors never be accepted because
- Benefit in very small
- Cost is very high
- No sense to pay earlier
- None of the above
Correct answer: (D)
No sense to pay earlier
356. A lease which is generally not cancellable and covers full economic life of the asset is known as
- Sale and leaseback
- Operating Lease
- Finance Lease
- Economic Lease
Correct answer: (C)
Finance Lease
357. Which of the following is not true for a "Lease decision for the lessee?
- Helps in project selection
- Helps in project financing
- Helps in project location
- All of the above
Correct answer: (B)
Helps in project financing
358. If the intrinsic value of a share is less than the market price, which of the most reasonable?
- That shares have lesser degree of risk
- That market is over valuing the shares
- That the company is high dividend paying
- That market is undervaluing the share
Correct answer: (B)
That market is over valuing the shares
359. Net Profit Ratio Signifies:
- Operational Profitability
- Liquidity Position
- Solvency
- Profit
Correct answer: (A)
Operational Profitability
360. Debt to Total Assets Ratio can be improved by:
- Borrowing More
- Issue of Debentures
- Issue of Equity Shares
- Redemption of Debt
Correct answer: (D)
Redemption of Debt