Financial Management

641. Financial management involves decisions about which of the following:

  1. Which projects to fund
  2. How to minimize taxation
  3. What type of capital should be raised
  4. All of these
Correct answer: (D)
All of these

642. The money markets deal with ______________.

  1. securities with a life of more than one year
  2. short-term securities
  3. securities such as common stock
  4. none of the above
Correct answer: (B)
short-term securities

643. If interest expenses for a firm rise, we know that the firm has taken on more ______________

  1. Financial Leverage
  2. Operating Leverage
  3. Fixed Assets
  4. None of the above
Correct answer: (A)
Financial Leverage

644. Insufficient working capital results in

  1. Block of cash
  2. Loosing interests
  3. Lack of production
  4. Lack of smooth flow of production
Correct answer: (D)
Lack of smooth flow of production

645. The investment in total current assets is known as

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

646. The time period required for the conversion of raw materials into finished goods

  1. Operating cycle period
  2. Inventory conversion period
  3. Receivable conversion period
  4. None
Correct answer: (B)
Inventory conversion period

647. Financial Management is mainly concerned with ______________.

  1. arrangement of funds
  2. all aspects of acquiring and utilizing financial resources for firm's activities
  3. efficient Management of every business
  4. profit maximization
Correct answer: (B)
all aspects of acquiring and utilizing financial resources for firm's activities

648. The gross working capital is a ______________ concern concept.

  1. Going
  2. money measurement
  3. revenue concept
  4. cost concept
Correct answer: (B)
money measurement

649. Which of the following is not a function performed by a financial system?

  1. Savings function
  2. Liquidity function
  3. Risk function
  4. Social function
Correct answer: (D)
Social function

650. The policy concerning quarters of profit to be distributed as dividend is termed as ______________.

  1. Profit policy
  2. Dividend policy
  3. Credit policy
  4. Reserving policy
Correct answer: (B)
Dividend policy
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