CUET 2024 Business Studies Chapter 9 - Financial Management MCQs

Business Studies Chapter 9 – Financial Management MCQ Question Answers for CUET 2024

1. The size of assets, the profitability and competitiveness are all affected by

a.Capital budgeting decision

b.Financing decision

c.Dividend decision

d.Working Capital decision

2. Current assets of business firms should be financed through___

a.Current liability only

b.Long term liability only

c.Fixed liabilities

d.Both sort and long term liabiities

3. Question

a.Assertion (A) is False but Reason (R) is true

b.Both Assertion (A) and Reason (R) are true and Reason (R) is not the correct explanation of Assertion (A)

c.Both Assertion (A) and Reason (R) are true and Reason (R) is the correct explanation of Assertion (A)

d.Assertion (A) is true but Reason (R) is False

4. Financial leverage is said to be favourable , if :

a.Return on Investment is lower than the dedt

b.ROI is higher than the cost of debt

c.Debt is easily availabe

d.f the degree of financial leverage is low

5. Under which of the following circumstances the fixed capital requirement of a business is not likely to be high?

a.When the financial alternatives are easily available

b.The growth prospects of a compam=ny a high

c.Capita intensice techniques of production are used

d.When the raw material is not easily available

6. Which of the following is not a tangible asset?

a.Offices

b.Factories

c.Machinery

d.Trademarks

7. Which one of the following is related to planning, organising, directing and controlling financial activities?

a.Capital structure

b.Financial decision

c.Financial Management

d.Investment decision

8. Financial Management aims at

a.Reducing the cost of funds procured

b.Keeping the risk under contro

c.Achieving effective deployment of such funds

d.All of the above

9. Companies with a higher growth potential are likely to ___

a.Dividends are not affected

b.None of these

c.Pay lower dividends

d.Pay higher dividends

10. Higher Working Capital usually works in

a.Lower current raio, higher risk and higher rofit

b.Higher equity, higher risk and higher profit

c.Higher current ratio, higher risk and higher profit

d.Lower quity, lower risk and high profit

11. A fixed asset should be financed through ___

a.Short Term liability

b.Long tern liability

c.None of these

d.Medium term liabiity

12. Question

a.Both Assertion (A) and Reason (R) are true and Reason (R) is the correct explanation of Assertion (A)

b.Assertion (A) is False but Reason (R) is true

c.Assertion (A) is true but Reason (R) is False

d.Both Assertion (A) and Reason (R) are true and Reason (R) is not the correct explanation of Assertion (A)

13. Other things remaining the same, an increase in the tax rate on corporate profit will

a.We can't say

b.Have no impact on cost of debt

c.Make the debt relatively cheaper

d.Make the debt reatively the dearer

14. Tata Steels stands at ___ position in the world among the largest producers

a.3rd

b.2nd

c.5th

d.4th

15. Dev has two projects A and B in hand. The same amount of risk is involved in both the projects. If the rate of return of project A and B is 20% and 15% respectively, then under normal circumstances, which of the two projects is likely to be selected?

a.Project A

b.Project B

c.Both projet A and project B

d.None of the above

16. The cheapest source of finance is ___

a.Preference share

b.Debenture

c.Equity share capital

d.Retained earning

17. Which of the following statements is not true with regard to the use of fixed capital?

a.A large number of funds are involved

b.It affects the long term growth of the business