Financial Management

741. The asset which can be converted into cash when ever required with out loosing its value is

  1. Current asset
  2. Current liability
  3. Fixed asset
  4. Variable asset
Correct answer: (A)
Current asset

742. The regular funds invested in the working capital known as

  1. Net working capital
  2. Fixed working capital
  3. Temporary working capital
  4. Gross working capital
Correct answer: (D)
Gross working capital

743. Above permanent working capital which is required by the firm is knows as

  1. Gross working capital
  2. Permanent working capital
  3. Temporary working capital
  4. Net working capital
Correct answer: (C)
Temporary working capital

744. In his traditional role the finance manager is responsible for ______________.

  1. arrange of utilization of funds
  2. arrangement of financial resources
  3. acquiring capital assets of the organization
  4. effective management of capital
Correct answer: (D)
effective management of capital

745. The rate of return on investment ______________ with the shortage of working capital.

  1. falls
  2. going
  3. constant
  4. change
Correct answer: (B)
going

746. Which of the following is/are the problem(s) encountered in financial statement analysis?

  1. Development of benchmarks
  2. Window dressing
  3. Interpretation of results
  4. All of the above
Correct answer: (D)
All of the above

747. The overall financial condition of the organization is listed in the

  1. income statement
  2. profit and loss statement
  3. balance sheet
  4. statement of cash flows
Correct answer: (C)
balance sheet

748. If capital expense is recorded as revenue expense then which calculation will be wrong ?

  1. Bank Balance
  2. Debtors
  3. Creditors
  4. Net profit
Correct answer: (D)
Net profit

749. The Company's cost of capital is called

  1. Leverage rate
  2. Hurdle rate
  3. Risk rate
  4. Return rate
Correct answer: (A)
Leverage rate

750. If a company reports a net loss, it

  1. may still have a net increase in cash
  2. will not be able to pay cash dividends
  3. will not be able to get a loan
  4. will not be able to make capital expenditures
Correct answer: (A)
may still have a net increase in cash
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