Business Finance MCQs

Question 1

Match the following. List-I List-II a. Qualitative 1. . . . . . . . . involves raising funds on the security of the company's. b. Gross working capital 2. Gross working capital is the . . . . . . . . approach. c. Commercial Banks 3. Total of current assets is called as . . . . . . . . d. Factoring 4. . . . . . . . . are also principal sources of working capital.

Accepted Answer

a-2, b-3, c-4, d-1

Answer

a-4, b-3, c-2, d-1

Answer

a-2, b-1, c-4, d-3

Answer

a-3, b-1, c-4, d-2

Question 2

The internal sources of finance do not include:

Accepted Answer

Ordinary shares

Answer

Retained earnings

Answer

Better management of working capital

Answer

Trade credit

Question 3

Which of the following statement is/are correct?

Accepted Answer

Both A and B

Answer

Public deposits have been very popular among Indian companies

Answer

Central and State Governments provide short-term finance on easy terms

Answer

All of the above

Question 4

The form of a discount allowed on the issue of debentures is in the nature of

Accepted Answer

Capital loss

Answer

Deferred Revenue Expenditure

Answer

Revenue loss

Answer

Current loss

Question 5

. . . . . . . . is long-term planning for making and financing proposed capital outlays.

Accepted Answer

Capital budgeting

Answer

Working capital management

Answer

Planning for capital

Answer

None of the above

Question 6

Three forms of trade credit include

Accepted Answer

All of the above

Answer

purchase on open account

Answer

purchasing on furnishing a promote for specified period

Answer

purchase on trade acceptance

Question 7

What are the main benefits given to participating preference shareholders?

Accepted Answer

They may be paid surplus profits

Answer

They are first paid a variable rate of dividend

Answer

Their mode of payment of a dividend is never mentioned in the Articles of Association

Answer

All of the above

Question 8

. . . . . . . . varies inversely with profitability.

Accepted Answer

Risk

Answer

Liquidity

Answer

Return

Answer

Loss

Question 9

Assertion (A): When two or more investment proposals are mutually exclusive, ranking the proposals on the basis of IRR, NPV, and PI methods may give contradictory results. Reason (R): The contradictory results in the ranking are due to differing dimensions relating to the scale of investments, cash flow patterns, and project lives. Indicate the correct answer.

Accepted Answer

(A) is true, (R) is a necessary condition, but not a sufficient condition

Answer

Both (A) and (R) are true

Answer

Both (A) and (R) are false

Answer

Both (A) and (R) are true, and (R) explains the reason sufficiently