100 Solved MCQs of Mgt101 Financial Accounting pdf

76. Inflation, changes in interest ratio, and changes in economic conditions affect all firms and all industries. These factors are part of ___
a. International risk
b. Project risk
c. Industry risk
d. Market risk
Answer: (d)

77. When a firm imposes constraints on the total size of its capital budget, is known as ___.
a. Capital structure
b. Capita budgeting
c. Capital rationing
d. Capitalization
Answer: (c)

78. Capital-intensive industries with longer manufacturing processes will have ___ requirements of working capital.
a. Higher
b. Moderate
c. Power
d. Extremely low
Answer: (a)

79. According to Baumol’s model, the holding cost for cash management is calculated by –
a. K(C/2)
b. C(T/C)
c. √2CT/K
d. K(C/2) + C(T/C)
Answer: (a)

80. ___ is the order quantity that minimizes the total cost associated with inventory management.
a. TQM
b. EOQ
c. ABC
d. Re-Order
Answer: (c)

81. Which method prices the issues at the value at which can be procured from the market.
a. Standard price method
b. Weighted average
c. LIFO method
d. Replacement price method
Answer: (d)

82. IRR is also called:
a. Yield on investment
b. Managerial efficiency of capital
c. The marginal productivity of capital
d. All of the above
Answer: (d)

83. Higher the risk, the greater the premium.
a. True
b. False
Answer: (a)

84. The extra working capital required as per the changing production and sales levels of a firm is known as –
a. Fixed working capital
b. Networking capital
c. Temporary working
d. Permanent working capital
Answer: (c)

85. Which of the following is the assumption are made in Miller and Modigliani’s approach.
a. Perfect capital market
b. 100% dividend payout ratio
c. Both a & b
d. Personal tax 100%
Answer: (c)

86. Which of the following points are examined for the economic appraisal?
a. Cost of the project
b. Break-even point
c. Impact of the project on the environment
d. All of the above
Answer: (c)

87. The firm incurs ___ cost when the customer failed to pay the amount to it on the expiry of the credit period.
a. Administrative cost
b. Credit administrative
c. Delinquency
d. Opportunity cost
Answer: (c)

88. MIRR is a better indicator of the relative profitability of the project which is also defined as PV of cost.
a. True
b. False
Answer: (a)

89. The time gap between acquisition of resources & collection of each from customers is known as ___.
a. Operating cycle
b. Business cycle
c. Production gap
d. Cask conversion cycle
Answer: (a)

90. A firm that allows liberal credit to its customers will need more working capital.
a. True
b. False
Answer: (a)

91. Which of the following is the objective of cash management?
a. Meeting payment schedule
b. Minimizing funds held in the form of cash
c. Both a & b
d. Neither a & b
Answer: (c)

92. Obtaining finance is an important function of:
a. Finance controller
b. Financial accountant
c. Auditor
d. Treasurer
Answer: (d)

93. Implicit cost is not a visible cost.
a. True
b. False
Answer: (a)

94. Seasonal pack requirements to be met from ___ from banks.
a. Long firm loan
b. Short term loan
c. Medium-term
d. Debentures
Answer: (b)

95. A bond’s price moves ___ proportional to its 77m.
a. Direct
b. Straight
c. Inverse
d. None of the above
Answer: (c)

96. ___ is the mix of the long-term sources of funds like debenture loans, preference loans, preference shall & equity.
a. Capital rationing
b. Capital structure
c. Capital budgetary
d. Capitalization
Answer: (b)

97. Kt = Ke
a. True
b. False
Answer: (b)

98. The effect of overcapitalization is ___ and of undercapitalization is ___ dividend rates.
a. Fall, rise
b. Rise, fall
c. Rice, constant
d. Constant, rise
Answer: (a)

99. RADR is the sum of ___ and ___.
a. Risk assessment, discount rate
b. Rate of earning, debenture rate
c. The risk-free rate, the risk premium
d. Risky risk, discount rate
Answer: (c)

100. ___ is the process of buying a security at a lower price in one market & selling it in another market at a higher price bringing about ___.
a. Arbitrage, market value
b. WACC, equilibrium
c. Operating leverage, equilibrium
d. Arbitrage, equilibrium
Answer: (d)

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