Financial Management mcqs with answers sem 5

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SEMESTER - 5

FINANCIAL MANAGEMENT

(FM)

MCQs - 2013

(1) Objective of financial management is:

(A) Management of Liquidity

(B) Management of fixed assets

(C) Maximisation of shareholder's wealth

(D) Maximisation of profits

(2) What is ignored in principle of profit Maximisation ?

(A) Risk

(B) Time value of money

(C) Wealth creation

(D) All of the above

(3) The EBIT of TROMMA ltd. is Rs. 20,00,000. It had taken 10% term loan form SBI of Rs.40,00,000. What is the interest coverage ration of the company ?

(A) 5 times

(B) 6.5 times

(C) 6 times

(D) 5.5 times

(4) Balance sheet of FLORA ltd. Indicates that it's current ratio is Rs. 2.5 times and it's net working capital is Rs.30,00,000. The current assets would be amount to:

(A) Rs. 50,00,000

(B) Rs. 5,00,000

(C) Rs. 45,00,000

(D) Rs. 4,50,000

(5) Which of the following appraisal criterion does not take into account the remaining cash flows once the initial investment is recorded ?

(A) Accounting rate of return

(B) Payback period

(C) Net present value

(D) Internal rate of return

(6) Which of the following is not correct:

(A) Cost of capital is the required rate of return to maintain the value of the firm

(B) WACC is the overall cost of capital of the firm

(C) Cost of debt and cost of preference share capital, both, require tax adjustment

(D) Equity shares has the highest cost of capital

(7) Price - Earning ration of the company is 9 times and it's Earning per share is Rs.5. what is the market price of the company's share ?

(A) Rs. 45

(B) Rs. 60

(C) Rs. 54

(D) Rs. 1.80

(8) Internal rate of return of a project is that rate net present value tends to:

(A) Zero

(B) Less then 1

(C) More than 1

(D) 1

(9) What is the present value of a 5 year annuity of Rs. 10,000 at 12% ?

(A) Rs. 36,500

(B) Rs. 36,050

(C) Rs. 36,550

(D) Rs. 36,055

(10) If the interest rate is 12%, what will be the doubling periods as per the rule 69?

(A) 6.1 years

(B) 5.9 years

(C) 6.0 years

(D) 5.8 years

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