5678

1. Which of the following is not an objective of cash management?
a. Maximization of cash balance

b. Minimization of cash balance
c. Optimization of cash balance
d. Zero cash balance
2. Net working capital is equal to
a. Current assets-current liabilities
b. Fixed assets- current assets
c. Current assets- cash
d. Long term loans- short term loans
3. Capital budgeting is a part of
a. Investment decision
b. Working capital management
c. Marketing management
d. Capital structure
4. Capital budgeting decisions are based on
a. Incremental profit
b. Incremental cash flow
c. Incremental assets
d. Incremental capital
5. A proposal is not a capital budgeting proposal if it
a. Is related to fixed assets
b. Bringing long term benefits
c. Brings short-term benefits only
d. Has very large investment
6. The net present value method of capital budgeting assumes that cash flows are reinvested at
a. The risk-free rate
b. The cost of debt
c. The rate of return of the project
d. The discount rate used in the analysis
7. The payback period is the period
a. A project takes to pay back the loan taken to purchase the capital assets
b. Equal to the useful life of the machine
c. A project takes to recover its initial cash outflow
d. Over which the project will be getting operating cash inflows
8. Gross working capital is equal to ?
a. Fixed assets
b. Current assets
c. Fictitious assets
d. Stock
9. no. of month finished goods in stock = finished goods stock / __________X 12
a. Cost of finished goods sold
b. Cost of goods produced
c. Cost of WIP
d. Cost of raw material
10. The long-run objective of financial management is to:

a. maximize earnings per share.
b. maximize the value of the firm's common stock.
c. maximize return on investment.
d. maximize market share.
11. Amounts due from customers when goods are sold on credit are called _____________.
a. Trade balance
b. Trade debits
c. Trade discount
d. Trade off
12. Which of the following are not among the daily activities of financial management?
a. sale of shares and bonds
b. credit management
c. inventory control
d. the receipt and disbursement of funds
13. ECQ is the quantity that minimizes
a. Total ordering cost

b. Total inventory cost
c. Total Interest cost
d. Safety Stock level
14. Inventory is generally valued as lower of
a. Market price and replacement cost

b. Cost and net realizable value
c. Cost and sales value
d. Sales Value and profit
15. The result of the economic order quantity formula indicate the
a. Annual quantity of the inventory to be carried

b) Annual usage of the material during the year
c) Variability of sale decreases
d) Quantity of each individual order during the year
16. Price per unit Rs.150, annual consumption 2,000 units, ordering cost Rs. 300 per order and other
charges 20% of cost. What should be the quantity of each order ?
a).150 units
b) 200 units
c) 225 units
d) 140 units
17. The classification on fixed and variable has a special significance in the preparation of
a. Flexible budget
b) Cash budget
c) Capital budget
d) zero based budget
18. A budget that gives a summary of all the functional budgets is known as
a) capital Budget
b) Flexible budget
c) Master Budget
d) fixed budget
19. ABC ltd uses the following flexible budget formula for annual maintenance cost:
Total Cost+Rs.6,720 + Rs. 0.64 per machine hour

The current month budget is based on 20,000 hours of planned machine time. The maintenance
cost included in this flexible budget for the current month is
a) Rs. 12,240
b) Rs.12,800
c) Rs. 13,360
d) Rs.13,600
20. To achieve wealth maximization, the finance manager has to take careful decision in respect of
a) Investment
b) financing
c) Dividend
d) (a) , (b) & (c)
21. which of the following is not an element of credit policy?
a) Credit Terms
b) collection Policy
c) cash Discount Terms
d) Sales Price
22. If the sales of the firm are Rs. 60,00,000 and the average debtors are debtors are Rs.15,00,000 then the
receivables turnover is
a) 4 times
b) 25%
c) 400%
d) 0.25 times
23. What is the annual benefit for a firm with daily sales of Rs. 30,000 that speeds up collections by 3 days,
assuming a 6% p.a. of cost of funds?
a) Rs. 90,000
b) Rs. 7,200
c) Rs. 5,400
d) Rs. 1,800
24) Which of the statement is true respect to ABC analysis?

a) It is a technique for analysis of the inventories on the basis of their quality
b) This idea can be used by the beginners for the study of “inventory management”
c) This technique analyses the inventory requirements on the basis of essentiality
d) It helps to achieve a better control for the inventories
25. If A= Annual requirement, O = order cost and C+ Carrying Cost per unit per annum, Then EOQ
a) (2AO /(C)2
b) √
c) 2AO/OC
d) 2AO
26. Basic characteristics of short-term marketable securities
a. High return
b. High risk
c. High marketability
d. High safety
27. Cash budget does not include
a. Dividend payable
b. Postal expenditure
c. Issue of capital
d. Total sales figure
28. Which of the following types of factoring does not carry the service elements of factoring?
a. Resources factoring
b. Full factoring
c. Maturity factoring
d. Invoice discounting
29. Which of the following is not an item of current liabilities?
a. Sundry creditors
b. Advance from customers
c. Hire purchase dues
d. Debentures
30. The amount of funds invested in current assets is called_____
a. Gross working capital
b. Net working capital
c. Surplus capital
d. None of these
31. Capital budgeting is a part of
a. Investment decision
b. Working capital management
c. Marketing management
d. Capital structure
32. Cash inflow for capital budgeting decisions mean
a. Accounting profit – depreciation+ tax
b. Accounting profit + tax – depreciation
c. Accounting profit – tax + depreciation
d. Accounting profit – depreciation – tax
33. The payback period is the period
a. A project takes to pay back the loan taken to purchase the capital assets
b. Equal to the useful life of the machine
c. A project takes to recover its initial cash outflow
d. Over which the project will be getting operating cash inflows
34. Profitability index
a. PV of cash inflows less cost of investment
b. PV of cash inflows÷ PV of cash outflows
c. (Net cost of machine÷ 2 ) + salvage value of machine + initial working capital
d. Total cash inflows less cost of investment
35. .A ltd.’ 6 days cash outflow in the month of april are : Rs.6,000, Rs.5,000, Rs.7,000, Rs.4,000,
Rs.5,000, Rs. 3,000. The company desires to have sufficient cash to cover payments for 4 days
during peak periods. The safety level of cash is
a. Rs.10,000
b. Rs.15,000
c. Rs.19,000
d. Rs.20,000
36. net working capital is equal to?
a. Current assets – current liability
b. Fixed assets – current liability
c. Fixed assets – long term liability
d. Current assets – long term liability
37. the estimated monthly sales for a company is as follow

 April Rs.16000
 May Rs.28000
 June Rs.24000
 July Rs.40000
if cash sales of company is 20% and credit sales is 80% . what is the monthly credit sale of june is :
a. Rs.19200
b. Rs.20000
c. Rs. 4800
d. Need more information to calculate
38. What is the total cost of maintaining inventory if the annual consumption is 1,250 units, the carrying
cost per unit is Rs. 4, the cost per order is Rs. 12 and there are 5 orders per year?
a) Rs.320
b) Rs. 500
c) Rs. 600
d) Rs. 560
39. Cost of not carrying sufficient inventory is known as

a. Carrying cost
b. Holding cost
c. Total cost
d. Stock out cost
40. What is economic order quantity?

a) Cost of an order
b) Cost of stock
c) Reorder level
d) Optimum order size
41. Which of following is not included in cost of inventory

a) Purchase cost
b) Transport in cost
c) Import duty
d) selling cost
42. Which of the following is not an advantage of ABC system of inventory management ?
a) Its facilitates a better control on costlier items
b) It analyses the items of inventory according to their importance in production process
c) It helps the usage of scientific system for the inventory management
d) It helps in achieving inventory control at minimum cost
43. Just in time manufacturing philosophy reduce the following except

a) Inventory
b) Setup time
c) Lead time
d) Overhead costs
44. If ECQ is 400 units, the ordering cost is Rs.0.20, thee carrying cost is Rs.20, how many
orders are placed per year
a) 1
b) 5
c) 2
d) 4
45. The annual demand of a certain component bought from the market is 1,000 units. The cost of
placing an order is Rs.60 and the carrying cost per unit is Rs. 3 p.a. the economic order quantity for the
item is _____
a) 200
b) 400
c) 600
d) 300
46. The classification on fixed and variable has a special significance in the preparation of
a) Flexible budget
b) Cash budget
c) Capital budget
d) zero based budget
47. When preparing a production budget, the quantity to be produced equals

a) Sales quantity + opening stock + closing stock
b) Sales quantity - opening stock + closing stock
c) Sales quantity - opening stock - closing stock
d) Sales quantity + opening stock - closing stock
48. Total Cost+Rs.6,720 + Rs. 0.64 per machine hour

The current month budget is based on 20,000 hours of planned machine time. The
maintenance cost included in this flexible budget for the current month is
a) Rs. 12,240
b) Rs.12,800
c) Rs. 13,360
d) Rs.13,600
49. Profit maximization does not take into consideration

a) Risk and cash flow
b) cash flow and stock price
c) Risk and EPS
d) EPS and stock price

5678

Uploaded by

Copyright:

Available Formats

5678

Uploaded by

Document Information

Original Description:

Copyright

Available Formats

Share this document

Share or Embed Document

Sharing Options

Did you find this document useful?

Is this content inappropriate?

Copyright:

Available Formats

5678

Uploaded by

Copyright:

Available Formats

1. Which of the following is not an objective of cash management?

a. Maximization of cash balance

10. The long-run objective of financial management is to:

13. ECQ is the quantity that minimizes

a. Total ordering cost

14. Inventory is generally valued as lower of

a. Market price and replacement cost

a. Annual quantity of the inventory to be carried

Total Cost+Rs.6,720 + Rs. 0.64 per machine hour

21. which of the following is not an element of credit policy?

24) Which of the statement is true respect to ABC analysis?

37. the estimated monthly sales for a company is as follow

39. Cost of not carrying sufficient inventory is known as

40. What is economic order quantity?

41. Which of following is not included in cost of inventory

43. Just in time manufacturing philosophy reduce the following except

47. When preparing a production budget, the quantity to be produced equals

48. Total Cost+Rs.6,720 + Rs. 0.64 per machine hour

49. Profit maximization does not take into consideration

You might also like