Financial Management

411. Which of the following is true for a company which uses continuous review inventory system

  1. Order Interval is fixed
  2. Order Interval varies
  3. Order Quantity is fixed
  4. Both (a) and (c)
Correct answer: (B)
Order Interval varies

412. Which of the following is not included in cost of inventory?

  1. Purchase cost
  2. Transport in Cost
  3. Import Duty
  4. Selling Costs
Correct answer: (D)
Selling Costs

413. What is Economic Order Quantity?

  1. Cost of an Order
  2. Cost of Stock
  3. Reorder level
  4. Optimum order size
Correct answer: (D)
Optimum order size

414. Concept of Maximum Permissible Bank finance was introduced by

  1. Kannan Committee
  2. Chore Committee
  3. Nayak Committee
  4. Tandon Committee
Correct answer: (D)
Tandon Committee

415. A short-term lease which is often cancellable is known as

  1. Finance Lease
  2. Net Lease
  3. Operating Lease
  4. Leverage Lease
Correct answer: (C)
Operating Lease

416. One difference between Operating and Financial lease is:

  1. There is often an option to buy in operating lease
  2. There is often a call option in financial lease
  3. An operating lease is generally cancelable by lease
  4. A financial lease in generally cancelable by lease
Correct answer: (C)
An operating lease is generally cancelable by lease

417. Basic objective of diversification is

  1. Increasing Return
  2. Maximising Return
  3. Decreasing Risk
  4. Maximizing Risk
Correct answer: (C)
Decreasing Risk

418. The job of a finance manager is confined to

  1. Raising funds
  2. Management of cash
  3. Raising of funds and their effective utilization
  4. None of these
Correct answer: (C)
Raising of funds and their effective utilization

419. Inventory Turnover measures the relationship of inventory with:

  1. Average Sales
  2. Cost of Goods Sold
  3. Total Purchases
  4. Total Assets
Correct answer: (B)
Cost of Goods Sold

420. Debt to Total Assets of a firm is.2. The Debt to Equity boo would be:

  1. 0.80
  2. 0.25
  3. 1.00
  4. 0.75
Correct answer: (B)
0.25
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