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Contents
1 FINANCIAL MANAGEMENT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
1.1 FINANCIAL MANAGEMENT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
1. FINANCIAL MANAGEMENT
NARAYAN CHANGDER
1.1 FINANCIAL MANAGEMENT
1. are the creditors’ claims to the assets 4. This is a legal business entity created by
of a business. the government.
A. Liabilities A. Sole Proprietorship
B. Owner’s equity B. Partnership
C. Equity
C. Corporation
D. Assets
D. Cooperative
2. What Is Finance?-In a business context, fi-
nance involves:(please, choose 3 correct 5. True or False, Clothing is usually consid-
answers) ered a want.
A. how firms raise money from investors A. True
B. how firms invest money in an attempt B. False
to earn a profit
C. how firms decide whether to reinvest 6. The term liquidity is the degree in which a
profits in the business or distribute them business can turn its assets into cash
back to investors A. True
D. how firms increase sales from market-
B. False
ing
3. Which is not a comparison shopping term? 7. Assets such as equipment and raw materi-
als are referred to as:
A. Quality over quantity
A. Dividends
B. Services
C. Discount amounts B. Securities
D. Saving in the long run C. Financial assets
E. Cryptocurrency D. Real assets
1. A 2. A 2. B 2. C 3. E 4. C 5. A 6. A 7. D 8. D
1.1 FINANCIAL MANAGEMENT 3
8. While liabilities refers to 13. The total money earned in your paycheck
A. expenses before taxes and deductions is

A. Gross Pay
B. loans or debts
B. Net Pay
C. bill payments or remittances
C. “The Bag”
D. All of the above.
D. none of above
9. A proper balance between risk and return
is 14. What is the present value of a stream of
annual end-of-the-year annuity cash flows
A. Liquidity if the discount rate is 0%, and the cash
B. Profitability flows of $50 last for 20 years?
C. Risk-Return trade off A. Less than $1, 000
D. Finance manager B. Exactly $1, 000
C. More than $1, 000
10. Alpha Company’s net accounts receivable
were P500, 000 at December 31, 2012 D. This question cannot be answered be-
and P600, 000 at December 31, 2013. cause we have an interest rate of 0.0%.
Net cash sales for 2012 were P200, 000.
15. A limited partnership provides limited lia-
The accounts receivable turnover for 2013
bility to
was 5.0. What were Alpha’s net sales for
2013? A. all general partners.
A. 2, 950, 000 B. only limited partners responsible for
day to day management of the firm.
B. 3, 000, 000
C. only to limited partners who do not par-
C. 3, 200, 000
ticipate in the management of the busi-
D. 5, 500, 000 ness.
D. all partners.
11. It is a financial statement that shows
the company’s cash receipts and cash pay- 16. Financial leverage refers to the rate of
ments during a specific period of time. change in earnings per share for a given
A. Balance Sheet Statement change in earnings
B. Income Statement A. Before tax.
C. Statement of stockholder’s Equity B. Before interest.
D. Statement of Cash Flow C. Before interest and tax.
D. After interest and tax.
12. It means that the main goal of financial
management is to maximize not profit 17. Which of the following is LEAST likely to
alone, but the maximization of overall fall within financial management?
value of the firm.
A. The dividend payment to shareholders
A. VALUATION APPROACH is increased
B. MAXIMIZATION OF SHAREHOLDERS’ B. Funds are raised to finance an invest-
WEALTH ment project
9. C 10. A 11. D 12. A 13. A 14. B 15. C 16. C 17. D

C. Surplus assets are sold off B. Income Statement

D. A report is produced comparing actual C. Startup Cost Statement
results to budget D. Payroll Sheet
18. Corporate spending function that trying to 23. Wait Company reported the follow-
get funds with minimal costs and the most ing on its income statement:Income be-
favourable terms is called fore taxes:P 400, 000Income tax ex-
A. The function to use pense:100, 000Net income:P 300, 000An
NARAYAN CHANGDER
B. The function to allocate analysis of the income statement revealed
that interest expense was P100, 000.
C. The function of meeting funding Wait Company’s times interest earned
D. The function of management (TIE) was
A. 5 times
19. The profit maximization objective has
been criticized on the basis of: B. 4 times
A. Ignore risk factor C. 3 times
B. Ignore time value of money D. 2 times
C. Ambiguity 24. Mixture of different investment is called
D. All of these A. Capital structure
20. What is DSCR? B. Financial system
A. Debenture Service Cover Ratio C. Mixture of Investment
B. Debt Service Coverage Ratio D. None of these
C. Debenture Service Coverage Ratio 25. A is a broad term describing any mar-
D. None ketplace where buyers and sellers partic-
ipate in the trade of assets such as equi-
21. What does it mean to create a barbell ties, bonds, currencies and derivatives
strategy are typically defined by having transpar-
A. Match high risk and low risk invest- ent pricing, basic regulations on trading,
ments costs and fees, and market forces deter-
mining the prices of securities that trade.
B. Take the high risk investments only
A. Market
C. Take the low risk investments only
B. Bank
D. Establish a 70/30 split of your invest-
metns C. Financial Market
E. Incorporate real estate into your in- D. Public Market
vestment portfolio
26. The cost of trade credit is defined as the
22. A financial statement that shows the “pro- cost of taking the cash discount.
jected costs” for things such as:Equipment
& Supplies, Furniture & Fixtures, Remod-
A.
eling, and Salaries/Legal Fees is called a:
A. Balance Sheet
18. C 19. D 20. B 21. A 22. C 23. A 24. C 25. C 26. B

32. TVM stands for what?
B. A. Total Valuable of Money

B. Time Value of Money
C. Total Value of Management
27. Lease D. Time Valuable of Management
A. contract to buy something
33. Which personal finance concept is correct?
B. contract to rent something
A. Do budgeting for expenses and income
C. bill of sale
B. Carry out proportional budgeting for
D. receipt
Social, Investment, Installment & Opera-
28. Keeping in view the high rate of Income tional posts
Tax the company should give priority to C. Carry out budgeting in managing in-
capital. vestments to support debt repayments
A. Debt D. Increase your social posts compared
B. Equity to your existing income each month
C. Preference E. Money is everything No Money No
D. Owner Party
29. Variable cost in an organization 34. Why should you keep bank records up to
date
A. be fixed according to the rate of
growth A. Tax purposes
B. changes with the volume of production B. You shouldn’t
C. does not change with volume of pro- C. So you could see your financial
duction progress
D. remains constant D. Grandpa Morris says so
30. The bank provides funds to their cus- E. So you have an understanding of the fi-
tomers by purchasing or discounting bills nancial system
of exchange.
35. The basic objective of finance manager is
A. overdraft
A. Maximising business’s profit
B. cash credit
B. Maximising size of organization
C. bills of exchange
C. Maximising wealth of organization
D. none of above
D. All of the above
31. What is the compound value if you invest
Rs. 1, 000 at 10% for 3 years? 36. is financial institution.
A. Rs. 1, 331 A. SEBI
B. Rs. 133.1 B. Commercial bank
C. Rs. 13.31 C. LIC
D. Rs. 1.331 D. RBI
27. B 28. A 29. B 30. C 31. A 32. B 33. B 34. A 35. C 36. B 37. A
37. Which of the following is a long-term fi- C. investment market

nancial goal? D. the respective companies
A. Buy a house.
43. Which is greater, the present value of a $1,
B. Invest shares in Bursa Malaysia. 000 five-year ordinary annuity discounted
C. Buy the latest model of Apple smart at 10%, or the present value of a $1, 000
phone. five-year annuity due discounted at 10%?
D. Vacation in other country for 10 days. A. The ordinary annuity is worth more
NARAYAN CHANGDER
with a present value of $3, 790.79.
38. This is one part of the Definition of Finan-
B. The annuity due is worth more with a
cial Reports, except:
past value of $4, 169.87.
A. The final result of the accounting cycle
C. The ordinary annuity is worth more
B. This is future information with a present value of $4, 169.87.
C. This is historical information D. The annuity due is worth more with a
D. Recorded in cash value present value of $4, 169.87.
39. What type of loan requires both principal 44. Doing this means my money is gone for
and interest payments as you go by mak- good. I won’t get it back.
ing equal payments each period? A. spending
A. Amortized loan B. saving
B. Interest-only loan C. earning
C. Discount loan D. investing
D. Compound loan 45. ROI is 9.65% and prevailing interest rate
40. Putting Money Away for Later * is 11%. The company is planning to raise
funds through issue of debentures. The
A. Savings company issue debentures.
B. Net Pay A. should not
C. Loan B. should
D. Interest C. Both the above are correct
41. Which of the following is an advantage of D. None of the above
preference shares?
46. A manufacturing company has credit sales
A. long-term sources of $10 million. It has a gross profit margin
B. fixed rate of interest of 65%. Payable days is 25 days (assume
365 days per year), Receivables days is
C. trade on equity
42 days and the operating cycle is 80 days.
D. redemptions What is the level of inventory?
42. In the share market, the market value of A. $124, 658

any share is decided by: B. $604, 110
A. shareholders C. $1, 121, 918
B. the government D. $1, 726, 027
38. B 39. A 40. A 41. D 42. C 43. D 44. A 45. A 46. B 47. C
47. Net Operating Income Approach believes objectives should be quantitative so that
that the is irrelevant and does not af- their achievement can be measured.
fect the value of the firm

A. True, False, True
A. Debt
B. True, True, True
B. Equity
C. True, False, False
C. Debt, Equity Mix
D. False, True, True
D. Debt, Equity Cost
52. Salary of our parents is
48. Convert 35% to a decimal
A. 3.5
B. 35.00
C. .35
D. none of above
A. Saving
49. The purpose of capital budgeting is
B. Investment
A. to help managers decide which inter-
national projects can bring more benefits C. Income
to the company after receiving funding D. Expenditure
B. to help managers fund all international
projects so that they can bring more ben- 53. The long-run objective of financial manage-
efits to the company after receiving funds ment is to:
C. to help managers fund all international A. maximize earnings per share.
projects in order to sell many shares of B. maximize the value of the firm’s com-
the company to investors mon stock.
D. to help managers fund all international C. maximize return on investment.
projects so that they can make a lot of
profit from the shares the company sells D. maximize market share.
to investors
54. EBIT refers to:
50. Which analysis depicts the relationship be- A. Earning Before Interest and Tax
tween two figures
B. Earning Before Income and Tax
A. Ratio Analysis
C. Earning Before Investment and Tax
B. Trend Analysis
D. Earning Before Installment and Tax
C. Cumulative figures and averages
D. Dividend Analysis 55. The major advantage of a regular partner-
ship or a corporation as a form of busi-
51. Are the following statements true or ness organisation is the fact that both of-
false? True False 1. Maximising market fer their owners limited liability, whereas
share is an example of a financial objective. proprietorship do not.
2. Shareholder wealth maximisation is the
A. True
primary financial objective for a company
listed on a stock exchange. 3. Financial B. False
48. C 49. A 50. A 51. D 52. C 53. B 54. A 55. B 56. C

56. Replacement of machinery is an example 61. Select the steps involved in financial plan-
of ning
A. Growth of business A. Establishing organizational goals and
objectives
B. Change in technique
B. Budgeting for financial needs
C. Technological Upgradation
C. Identify sources of funds
D. Choice of Technique
D. All of the above
NARAYAN CHANGDER
57. A ball costs $5. Tax is 6%. Find the
62. For an unlevered firm, the cost of capital
amount of tax for the ball.
can be determined by using the
A. .35 A. yield on the traded debt
B. .25 B. Capital Asset Pricing Model
C. .30 C. dividend yield
D. .31 D. preferred stock yield
58. Which of the following statements is/are 63. The Payback method of Investment Ap-
correct?1. Securitisation is the conversion praisal focuses on which option reimburses
of illiquid assets into marketable securi- its own coststhe quickest.True or false?
ties2. The reverse yield gap refers to eq-
uity yields being higher than debt yields3.
Disintermediation arises where borrowers
deal directly with lending individuals
A. 2 only
B. 1 and 3 only
C. 2 and 3 only
D. 1, 2 and 3
A. True
59. The customers can withdraw money easily
and quickly 24 hours a day. B. False
A. venture capital 64. All fixed assets and part of the perma-
nent will be financed by long-term financ-
B. automated teller machine
ing. The statement is best described for
C. telebanking
D. credit cards A. aggressive approach.
B. hedging approach.
60. decision are irreversible.
C. preserve approach.
A. Capital budgeting decision
D. conservative approach.
B. Working capital decisions
65. The excess of the present value of benefits
C. Both A and B
over the present value of costs of a course
D. None of these of
57. C 58. B 59. B 60. A 61. D 62. B 63. A 64. A 65. C 66. B
A. A.payoff 71. Leasing of machinery can be categorized

B. B. Benefits as

A. Fixed Asset
C. C. Wealth
B. Financing decision
D. D all of these
C. Investment decision
66. More value is preferred than D. Capital Budgeting decision
A. none
72. When Share prices are going up, it indi-
B. less cates
C. equal A. Bear Phase
D. all B. Stag Phase
C. Bull Phase
67. Source of Finance Through Less cost is
D. Correction the Market
A. Debenture
73. Suppose that general motors has made an
B. Equity share
offer to acquire general Mills ignoring po-
C. Preference share tential trust problems this mergers would
D. Retained earnings be classified as a
A. Monopolistic merger
68. What can be sources of credit?
B. Horizontal merger
A. Banks
C. Vertical merger
B. Retail Stores D. Conglomerate merger
C. Savings & Loans
74. the costs of operating a business
D. Credit Unions
A. expenses
E. Family members
B. budget
69. You just rented a new apartment and you C. inventory
pay $950.00 every month, this is a D. accounts
A. Variable expense
75. This is the money paid to the company’s
B. Periodic expense shareholders once profit earned
C. Fixed expense A. Retained earning
D. Random expense B. CapEx
C. Interest
70. What is the ideal maximum limit for our
monthly debt installments compared to our D. Dividend
income? 76. What does the T in SMART stand for?
A. 20% A. Thorough
B. 30% B. Testable
C. 40% C. Timely
D. none of above D. Terrific
67. D 68. A 68. B 68. C 68. D 68. E 69. C 70. B 71. B 72. C 73. D 74. A
75. D 76. C 77. B
77. The size of assets, the profitability and A. the ending net working capital must be
competitiveness are affected by one of the negative.
financial decisions. Name the decision
B. accounts payable and inventory in-
A. Working capital decision creased during the year.
B. Capital budgeting C. The ending net working capital can be
C. Dividend decision positive, negative, or equal to zero.
D. Financing decision D. none of above
NARAYAN CHANGDER
78. is money supplied by investors, banks,
83. Where do you put your signature on a
or owners of a business.
check you just wrote?
A. Equity
A. none of them
B. Capital
B. Bottom left corner on the line
C. Income statement
D. Property C. Top right corner on the line
D. Bottom right corner on the line
79. Original and additional investments of the
owner.
84. How will you earn more money over time
A. Drawings for your financial future?
B. Revenues A. Simple interest
C. Expenses
B. Compound interest
D. Capital
C. Simple yield
80. Commercial Banks offer which of the fol-
D. Compound yield
lowing services?
A. Savings Accounts E. Asset allocation
B. Loans 85. Name the concept which increases the re-

C. Checking Accounts turn on equity shares with a change in the
D. none of above capital structure of a company.
A. Capital structure
81. The function focuses on raising capital
to support a company’s operations and in- B. Capital budgeting
vestment programs.
C. Trading on equity
A. financing
D. Dividend decision
B. capital budgeting
C. corporate governance 86. What is ignored in profit maximisation?
D. risk management A. Dividend
82. A firm starts its year with positive net B. Time value
working capital. During the year, the firm
C. Risk
acquires more short-term debt than it does
short-term assets. This means that: D. Earnings
78. B 79. D 80. A 80. B 80. C 81. A 82. C 83. D 84. A 85. C 86. B 87. A
87. A government body uses measures based 91. Financial Decisions involve:
upon the ‘three Es’ to measure value for A. Investment, financing and dividend de-
money generated by a publicly funded hos-

cision
pital. Which of the following relates to ef-
ficiency? B. Investment, financing and sales deci-
sion
A. Cost per successfully treated patient
C. financing, dividend and cash decision
B. Cost per operation
D. None of these
C. Proportion of patients readmitted af-
ter unsuccessful treatment 92. Commercial papers
A. Short term debt
D. Percentage change in doctors’
salaries compared with previous year B. Long term debt
88. is the process of determining the 93. Net working capital is equal to
present value of a payment or a stream A. total assets minus total liabilities.
of payments that is to be received in the B. current assets minus total liabilities.
future
C. total operating capital minus net in-
A. Discounting come.
B. Compounding D. current assets minus current liabili-
C. Annuity ties.
D. Perpetuity 94. Which of these would require the highest

credit
89. It includes overseeing the funding for build- A. Approval for a credit card
ing grounds, employee salaries, student
programs, supplies, and technology. B. Paying your internet bill on credit
C. Getting a mortgage
A. Human Resource Management
D. Dining out on credit
B. Production Management
E. Going to the movies on credit
C. Financial Management
95. What is the process of budgeting?
D. none of above
A. Forecasting the future
90. Financial ratio analysis that is often used B. Allocating financial resources
in companies is:
C. Analyzing financial data
A. Liquidity ratio, leverage ratio, cash ra-
D. Creating financial reports
tio
B. Activity ratio, liquidity ratio, profitabil- 96. Count the money.
ity ratiio
C. Activity ratio, rentability ratio, turn
over ratio
D. Turn over ratio, cash ratio, Debt of eq-
uity ratio
88. A 89. C 90. B 91. A 92. A 93. D 94. C 95. B 96. C 97. B
A. $30.32 103. The data collected should be:

B. $32.25 A. Old
C. $32.30 B. unreliable
D. $31.30 C. Accurate
97. Traditional Approach is a(n) approach D. None
in between both NI and NOI approach
104. If existing share holders can share the
A. Integrating
NARAYAN CHANGDER
control then they may go for debt.
B. Intermediate
A. True
C. Improved
B. False
D. Improvised
105. What is the formula for Merchandise In-
98. Which of following does not a type of di-
ventory Turnover Ratio?
rect foreign investment?
A. Average Merchandise Inventory/Cost
A. Franchising
of Goods Sold
B. International trade
B. Cost of Goods Sold/Merchandise In-
C. Joint ventures ventory
D. Acquisition of existing operators
C. Merchandise Inventory/Cost of Goods
99. The form shows how much money you Sold
made and how much you paid in taxes D. Cost of Goods Sold/Average Merchan-
from the previous year. dise Inventory
A. D-400
106. The informations shows the total incomes
B. W-2 and total expenditures of Justin, Jun Hong
C. W-4 and Latif in a month. State who have pos-
D. none of above itive cash flow.
100. Higher Inventory to be maintained when

more working capital is required.
A. True
B. False
101. Asyraf have fixed expenses RM 1000
and variable expenses RM 300, so total A. Justin
there are RM 1300 total cash inflows
B. Jun Hong
A. True
C. Latif
B. False
D. Jun Hong Latif
102. Sales, expenses, and profits or losses for
a specific period are reported in a com- 107. Net working capital refers to excess of
pany’s income statement. current liabilities over current assets.
A. True A. True
B. False B. False
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108. Financial management aims at 114. Payment of cash dividends

A. ensuring availability of enough funds A. Investing Activities

B. reducing the cost of funds procured
B. Operating Activities
C. effective deployment of funds
C. Financing Activities
D. all of the above
D. none of above
109. Identification of investment proposals is
the first step in capital budgeting process 115. The facts that a proprietorship, as a busi-
A. True ness, pays no corporate income tax, and
B. False that it is easily and inexpensively formed,
are two key advantages to that form of
110. For potential claims of damage or harm business.
that result from a product. Coverage can
be tailored to specific types of products, A. True
such as toys or machinery. B. False
A. Business interruption insurance
116. All assets purchased by the firm can be
B. Vehicle insurance
financed in three ways, which are short-
C. Product liability insurance term financing, long-term financing and
D. Home-based businesses
111. What is the primary goal of financial man-
agement?
A. Maximizing sales
B. Maximizing shareholder wealth
C. Minimizing expenses
D. Increasing market share
112. The formula for compound value is:
A. FV = PV (1+i)
B. FV = PV/(1+i) A. immediate financing.
C. FV = PV (1+i)n B. spontaneous financing.
D. FVn= = (1+i)/PV C. impulsive financing.
113. take savings in the form of annualpremi- D. temporary financing.
ums; invest these funds in stocks, bonds,
real estate, andmortgages, and make pay- 117. Operating Expenses include all of the fol-
ments to the beneficiaries of the insured- lowing except
parties.
A. Advertising cost
A. mutual funds
B. Administration cost
B. life insurance company
C. pension funds C. R&D cost
D. credit unions D. Delivery dari Raw Materials

118. The firm has amount of cash reserved for B. Introductory rate
the unexpected event which unlikely to be
C. Balance transfers
happened is motive for holding cash.
D. Credit Limit
122. What does the “R” mean in SMART

goals?
A. Report
NARAYAN CHANGDER
B. Retain
C. Risk-Management
D. Results-Oriented
E. Risk
A. transaction 123. Which one of the following statements is
B. speculative correct concerning the payback period?
C. precautionary A. An investment is acceptable if its cal-
D. leisure culated payback period is less than some
pre-specified period of time.
119. Which is NOT a benefit of Goal Setting?
B. An investment should be accepted if
A. Provides clear picture of where you’re the payback is positive and rejected if it
headed is negative.
B. Helps you determine what you need to C. An investment should be rejected if the
do to get there payback is positive and accepted if it is
C. Keeps you focused on what you need negative.
to learn D. An investment is acceptable if its calcu-
D. You are always distracted and cannot lated payback period is greater than some
focus on it pre-specified period of time.
E. Provides a way to measure your
124. An increase in the debt ratio will gen-
progress
erally have no effect on which of these
120. Under this facility, the bank allows the items?
borrower to withdraw cash against cer- A. business risk
tain security.
B. total risk
A. overdraft
C. financial risk
B. cash credit
D. market risk
C. bills of exchange
D. none of above 125. Banking regulations are essentially the
same in all developed nations.
121. Transferring debt from one credit card to
another. A. True
A. Late-payment fee B. False

126. Capital markets are composed of and 132. Financial Planning Links
markets. A. Investment and Dividend decision

A. primary, secondary B. Dividend and financing Decisions
B. commodity, stock C. Investment and Financing Decisions
C. bonds, commodity D. None
D. primary, stock
133. What is money you owe called?
127. Funds are financial resources in the form
of:
A. Corporate capital
B. Business funds
C. Cash Equivalents
D. All of these A. debt
128. Present value interest factor (PVIF) are B. credit
usually less than 1.0 C. interest
A. True D. fee
B. False
134. the short-term liabilities that a business
129. Contains the account holder’s account owes to creditors
number and allows money (cash or check) A. assets
to be deposited into the correct account.
B. accounts payable
A. Debit card
C. owner’s equity
B. Deposit Slip
D. liabilities
C. Check Register
135. Among the following individuals, who
D. Check
sets the SMART goals?
130. Modigliani-Miller Model supports the A. Puan Hadirah intends to buy a laptop
which costs RM3, 000 as a birthday gift
A. Net Income Approach for her son. Therefore, she plans to save
RM300 a month for ten months
B. Net Operating Income Approach
B. Mr Hazry is a teacher with an income
C. Traditional Approach
of RM3, 000 and plans to get married in
D. Modern Approach two years’ time. The wedding expenses
131. Time value of money explains that: are estimated to be RM30, 000. There-
fore, he wants to save RM1, 000 a month
A. value of rupee received today is worth for a period of two years. Besides that, he
more than it is in the future also plans to get a loan for the wedding ex-
B. value of rupee received today is worth penses.
less than it is in the future C. Miss Hazwanyza wants to buy a house
C. value of rupee received today and at worth RM200, 000 if she has sufficient
some other time in future is equal amount of money
D. None of them D. none of above

136. You buy 6 pairs of socks for $10.98, 140. Compounding is the process of calculating
what is the unit price? the:
A. $1.83 A. Present value of future cash flows
B. $1.85 B. Future value of present cash flows
C. $1.90 C. Present value of preset cash flows
D. $1.38 D. Future value of future cash flows
NARAYAN CHANGDER
137. What is the purpose of a FICA tax? 141. Dividend Decision is related to
A. Right issue of share
A. It provides health insurance for people
who are retired or disabled. B. Reinvestment requirement
B. It helps the state government finance C. Cash flow statement
education projects. D. None of the above
C. It helps local councils finance develop-
142. Which of the following is NOT a common
ment projects.
way businesses pay employees?
D. none of above
A. yearly
138. Which one of the following statements B. monthly
concerning net working capital is correct? C. weekly
A. The degree in the cash balance is also D. bi-weekly
decreases net working capital
B. Networking capital increases when in- 143. Which financial institution usually has the
ventory is bought for cash highest interest rates on loans?
A. credit unions
C. Networking capital must be positive
B. payday loans
D. All the above
C. commercial banks
139. The promissory notes that commonly has D. none of above
long-term and viewed as debt instrument
which par value have been set at RM1, 144. Which of the following best identifies the
000. four main areas of finance?
A. Corporate finance, investments, finan-
cial institutions and markets, interna-
tional finance
B. Corporate finance, investments, capi-
tal structure, international finance
C. Exchange rate management, invest-
A. Preferred stock ments, financial institutions and markets,
international finance
B. Common stock
D. Corporate finance, capital budgeting,
C. Bond
financial institutions and markets, regula-
D. Derivative tion

145. Which one of the following is false re- 150. Choose the correct match.
garding simulations?

A. They can consider several variables
changing simultaneously
B. They have a clear decision rule
C. They give a better understanding of
risk
D. They describe a range and probability A. 1
of possible outcomes
B. 2
146. June 2015:The net profit of a company
is |2, 00, 000, preference dividend |25, C. 3
000, and taxes paid |15, 000. The num- D. 4
ber of equity shares is 1, 00, 000. The
earnings per share (EPS) is- 151. Finance Functions are
A. |1.5 A. Planning for funds
B. |1.6 B. Raising of funds
C. |2 C. Allocation of resources
D. |1.75 D. All the above
147. Long term financing is the money that
152. There is relation between operational
will be used for longer than one year.
expenditures and debt financing
A. True
A. Direct
B. False
B. Inverse
148. Average Sale Period can be computed by
C. No relation
dividing
A. 366 days/Accounts Receivable D. none of above
Turnover Ratio
153. The Bottom-up approach to setting goals
B. 365 days/Inventory Turnover Ratio is:
C. 365 days/Accounts Receivable A. Goal set by management
Turnover Ratio
B. goal set by financial manager
D. 366 days/Inventory Turnover Ratio
C. Goal set keeping in mind employees
149. Which of the following is NOT the charac-
D. all of above
teristics of agricultural finance?
A. Valuation of the firm. 154. Agency problem arises when managers
B. A sub-system of the business system deviate from the goal of maximization of
which has other subsystems shareholder wealth by placing their per-
sonal goals ahead of the goals of share-
C. Involves risk-return trade-off deci-
holders.
sions on investment
D. Financial affects the survival, growth A. True
and suitality of the firm. B. False

155. Setting up direct deposit can give you 161. Why is it important to save money?
faster access to your money A. Saving for a goal or something special
A. True in the future
B. False B. Because your parents say so
156. include banks, insurance companies, C. So you can spend it faster
and lending institutions, among others. D. Its not a good idea to save money
A. Financial management
NARAYAN CHANGDER
162. is the lifeblood of a business.
B. Finance
A. Finance Manager
C. Finance management
B. Finance
D. Financial institutions
157. Which of the following can be utilised for D. Corporate Financial Management
the redemption of preference shares of a
company out of profit 163. These are advantages for running a busi-
ness in the form of sole proprietorship, ex-
A. share forfeited account
cept
B. Dividend equalisation reserve
C. Capital redemption reserve account
D. Development rebate reserve account
158. This is one of the functions of a Financial

Manager which include making decisions
on how to fund long term investment and
working capital.
A. flexibility for owner
A. Financing
B. responsible to all activities
B. Investing
C. bounded by partnership
C. Operating
D. owner retains all profits
D. Dividend policies
164. With the help of financial planning capi-
159. This ratio is used to measure the liquidity
tal can be made available at cost.(a)
of the firm’s receivable.
(b) (c) (d)
A. Current Ratio
A. More
B. Accounts Receivable Turnover Ratio
B. Medium
C. Quick Ratio
C. Minimum
D. Inventory Turnover Ratio
D. Zero
160. Which one is source of raising of funds?
165. What financial statement provides a
A. Equity Shares snapshot of a company’s financial position
B. Preference Shares at a specific point in time?
C. Debentures A. Income statement
D. Tax B. Cash flow statement

C. Balance sheet C. Chief Executive Officer

D. Statement of retained earnings D. President

166. Name of state form to file your taxes for 171. An obligation of repayment owed by one
the year. party (the debtor/borrower) to a second
A. 1040EZ party (the creditor/lender); in most cases
this includes repayment of the original
B. W-2 loan amount plus interest
C. W-4
A. Debt
D. D-400
B. Debit
167. What does the agency problem refer to? C. Loan
A. The conflict that exists between the D. Credit
board of directors and the employees of
the firm 172. Which of the following is not a type of
charitable giving?
B. The problem associated with financial
managers and Internal Revenue agents. A. stocks and securities
C. The conflict that exists between stock- B. cash
brokers and investors. C. valuable assets
D. The problem that results from poten- D. planned giving
tial conflicts of interest between the man-
ager of a business and the stockholders. E. desired retirement age
168. Dillon works by stamping metal sheets 173. What is the primary goal of financial man-
into bumpers for cars. He gets payed agement?
$0.70 per bumper completed. If he com- A. To minimize the risk
pleted 120 bumpers in a 10 hour shift, B. To maximize the return
how much does he make?
C. To maximize the owner’s wealth
A. $84
D. To raise profit
B. $284
C. $120 174. The ratio to measure the effectiveness of
a company’s operations in generating prof-
D. none of above
its is:
169. If ICR is high, firm prefers A. Net Profit Margin
A. (a) Debt B. Debt to Asset Ratio
B. (b) Equity C. Liquidity Ratio
C. c) Both (a) and (b) D. Benefit Cost Ratio
D. (d) None of the above
175. Under this service, lockers are provided
170. The highest policy making body in a cor- to the public in various sizes on payment
poration. of fixed rent.
A. Shareholders A. locker service
B. Board of Directors B. credit card

C. venture capital 181. Which of the following is studied with the

D. Bancassurance help of operating leverage
A. Analysis of business risk
176. Which of the following is a way to meet
yout financial needs? B. Analysis of financial risk
A. Create a budget C. Analysis of production isk
B. Fully rely on your parents D. Analysis of credit risk
NARAYAN CHANGDER
C. Do nothing
182. Select the FOUR types of Financial Insti-
D. Don’t save your money tutions
E. Shop constantly A. Your piggy bank
177. Cooperation among departments is vi- B. Commercial Banks
tal to ensure the company move forward
C. Credit Unions
smoothly. Financial management covers
multidimensional approaches such as the D. Payday Loans
following: E. Savings and Loans
A. Financial management and economics
183. In hospitality organizations, the pricing
B. Financial management and human re-
of services offered should be precise in or-
source
der to maximize profits-this is related to
C. Financial management and marketing the concept of
D. All answers are correct A. Wealth maximization
178. varies inversely with profitability. B. Profit maximization
A. Liquidity. C. Funding operational expenses
B. Risk. D. Tax considerations
C. Accounts.
184. All of the following are classified as non-
D. Trade. bank financial intermediaries except
179. The company will have cash when A. stock brokerages.
A. Customers pay faster B. investment banks.
B. Account Receivable meningkat C. insurance companies.
C. Profits increase D. insurance companies.
D. Inventory menurun
185. How do you calculate your net worth?
180. Ideal cash will not generate profit but
cause loss of ? A. Liabilities-Assets
A. Value of firm B. Cash-Liabilities

B. Interest C. Assets AND Liabilities
C. None of these D. Assets-Liabilities
D. none of above E. Cash X Assets

186. Greater exposure bigger the 190. If the nominal rate of interest is 10% per
A. Spot rate annum and there is quarterly compounding,
the effective rate of interest will be:

B. Risk
A. 10% per year
C. Forward rate
B. 10.10 per year
D. Investment
C. 10.25% per annum
187. The financial management is generally D. 10.38% per year
concerned with procurement, allocation
and control of financial resources of a con- 191. Quick Assets do not include
cern.
A. Debtors
A. TRUE
B. Cash
B. FALSE
C. Bills Receivable
188. For employer’s the most important as-
D. Inventory
pect they look at when hiring is
A. Attitude 192. The form of business which has unlimited
number of shareholders and large scale
B. Intelligence
economic operations refers to:
C. Financial status
D. Physical strength
E. Ethnicity
189. The revenue of Lenovo for July 2019 is

Rs 10 lakhs, and its overhead charges are
Rs 5 lakhs, and its permanent expense is
Rs 2.5 lakhs find out its operating profit
A. Sole proprietorship
B. Corporation
C. Partnership
D. Small enterprise
A. 2.1 lakh 193. What type of budget describes the finan-
B. 2.3 lakhs cial plan for ongoing functions of the busi-
C. 2.5 lakhs ness for a specific period?
D. 2.7 lakhs A. direct

Explanation:sales 10, 00, 000.00variable B. balance
cost 5, 00, 000.00 contribution 5, 00,
C. start-up
000.00 fixed cost 2, 50, 000.00 EBIT 2, 50,
000.00 D. operating

194. Late installment payment will lead to ad- 199. Tax is a liability.
ditional interest charges and late payment A. TRUE
penalty.
B. FALSE
A. True
200. What would happen if your expenses are
B. False
greater than your income?
195. What is foreclosure? A. You would be rich
A. When an organization is unable to B. You would be in debt
NARAYAN CHANGDER
honor its financial obligations or make C. You could loan people money
payment to its creditors
D. You could save more money
B. When a portion of the borrower’s pay-
check goes to paying off the loan 201. According to modern approach, finance
function means
C. When the creditor would repossess
A. Procurement of Funds
the collateral and sell it
B. Investment of Funds
D. When collectors can sue the borrower
for a debt of any amount if they refuse to C. Income Management
pay D. All of above
E. When the borrower’s home is taken 202. The financial manager selects one or more
by the lender because they aren’t making sources of finance after proper taking into
payments on the mortgage loan Consideration of:
196. AA Enterprise borrow long term by sell- A. Cost of capital
ing bonds RM80, 000. This statement B. Control
shows that AA Enterprise utilizes
C. Risk
A. Sources of fund D. All of these
B. Uses of fund
203. The main objective of financial planning is
197. What does an increase in the current ra- to ensure
tio indicate about a company’s short-term A. Availability of the funds at the right
financial position? time
A. Improved liquidity B. Availability of raw material
B. Higher profitability C. Dividend is paid to share holders on
the right time.
C. Increased leverage
D. Availability of fixed assets
D. Declining solvency
204. Suppose that over the life of the loan, the
198. Which one is not the four factors influenc- total interest expense for a monthly loan
ing capital structure decisions? is $7, 000, while the total interest pay-
A. The firm’s tax position ment for an annual loan is $8, 000. Which
of the below statements is FALSE?
B. Government policies
A. The difference reflects the reduction
C. Business risk of the principal each month versus the an-
D. Financial flexibility nual reduction of the principal.

B. The more frequent the payment, the 209. What is the main purpose of corporate
lower the total interest expense over the governance? A T B C D t
life of the loan, even though the effective

A. To separate ownership and manage-
rate of the loan is lower. ment control of organisations
C. Reducing principal at a faster pace re- B. To maximise shareholder value
duces the overall interest paid on a loan.
C. To facilitate effective management of
D. The more frequent the payment, the organisations and to make organisations
lower the total interest expense over the more visibly accountable to a wider range
life of the loan, even though the effective of stakeholders
rate of the loan is higher.
D. To ensure that regulatory frameworks
205. The controller’s responsibilities are pri- are adhered to
marily in nature, while the treasurer’s re-
sponsibilities are primarily related to. 210. Financial services are the processes by
which consumers and businesses acquire fi-
A. operational; financial management nancial
B. financial management; accounting A. instruments
C. accounting; financial management B. support
D. financial management; operations C. goods
206. The amount an employee contributes D. advice
each pay period to a retirement plan.
211. Which agency regulate the money supply
A. Gross pay in india
B. Retirement Plan A. A. The government of india
C. Net pay B. B. Commercial bank
D. FICA C. C. Reserve bank of india
207. Manifestation of Focus values D. D none of the above
A. Agile and proactive to provide the best 212. A direct comparison of the benefit of the
B. understand goals, set priorities and project with its cost (Benefit-Costs), is the
look for new ways creatively and innova- meaning of
tively A. Net Present Value
C. putting first things first, establishing B. Profitability Index
quick wins and optimizing resources
C. Internal Rate of Return
D. long-term/visionary oriented, has
D. Payback Period
challenging targets and anticipates risks
213. Why is shareholder’s wealth maximiza-
208. Financial structure refers to tion more relevant than profit maximiza-
A. Short-term resources tion?
B. All the financial resources. A. It focuses on short-term goals
C. Long-term resources. B. It ignores risk and uncertainty
D. All of these. C. It considers the timing of returns

D. It favours the choice of increasing 218. From investment, profit will be earned
product prices to keep the margins as high that eventually will lead to business
as possible growth.
A. Money Has Time Value
214. . Traditional approach confines finance
function only to funds B. Risk Return Trade Off
A. raising C. Cash Flows Are Source Of Values
B. mobilizing D. Market Prices Reflect Information
NARAYAN CHANGDER
C. utilizing 219. The income statement begins with rev-
enue and subtracts various operating ex-
D. financing
penses until arriving at Earnings Before In-
terest and Taxes. Next, interest expense
215. In the NPV model, all cash flows are
is subtracted to find the taxable income for
stated
the period. Then the appropriate taxes are
A. in future value dollars, and the total in- calculated and subtracted. We finally ar-
flow is “netted” against the outflow to see rive at the , the so-called bottom line
if the net amount is positive or negative of the income statement.
B. in present value or current dollars, and A. after-tax income
the total inflow is “netted” against the ini-
B. before-tax income
tial outflow to see if the net amount is pos-
itive or negative C. net income
C. in present value or current dollars, and D. EBIT
the outflow is “netted” against the total in-
flow to see if the gross amount is positive 220. High Interest Coverage Ratio means com-
or negative panies can have more of borrowed funds.
A. True
D. in future dollars, and the initial outflow
is “netted” against the total inflow to see B. False
if the net amount is positive
221. money supplied by investors, banks, or
216. You should not think about long-term fi- owners of a business.
nancial decisions if you are only a student. A. property
A. True. B. equity
B. False. C. owner’s equity
D. capital
217. These loans are called back at any time.
Normally, these loans are taken by bill bro- 222. A person or organization that uses a
kers or stock brokers product or service
A. call loans A. Consumer
B. short term loans B. Debt
C. bills of exchange C. Interest
D. cash credit D. Economy

223. What is the fee paid for borrowing 228. The word credit comes from the Latin
money called? word

A. interest A. ‘CRED’ meaning ‘I trust’
B. credit B. ‘CRED’ meaning ‘I believe’
C. debit C. ‘CREDO’ meaning ‘I trust’

D. ‘CREDO’ meaning ‘I believe’
D. tax
229. Withdrawing more money from your
224. What is an example of a VARIABLE ex- debit or checking account than you have is
pense? called
A. Cable Bill
B. Water/electricity bill
C. Christmas gifts
D. none of above
A. draft
225. What is NOT a reason to save money
B. overdraft
A. Peace of mind
C. underdraft
B. Better future
D. withdraw
C. More Money
230. used to compare different firms at the
D. For children’s education
same point in time.
E. Family security in an emergency A. Industry comparative analysis
226. Q7) Which of the following is not a fi- B. Cross-sectional analysis
nance function? C. Trend analysis
A. Investment decisions D. Combined analysis
B. Cost management 231. Abbie, Baylee, and Jackson are running a
C. Human resource management small business. They are trying to under-
stand the concept of operating leverage.
D. Risk management Can you explain it to them?
227. How is the capital gearing ratio calcu- A. Operating leverage is a measure
lated? of how revenue growth translates into
growth in operating income. It is a mea-
A. Fixed Interest Bearing Debt / Equity sure of leverage, and of how risky, or
Capital volatile, a company’s operating income is.
B. By dividing the total equity by the total B. Operating leverage is the total amount
debt of fixed costs that a company has.
C. By multiplying the total debt by the to- C. Operating leverage is the total amount
tal equity of variable costs that a company has.
D. By subtracting the total debt from the D. Operating leverage and financial lever-
total equity age are the same thing in a business.

232. In Financial Report Analysis there are 238. NPV will be positive if
several analytical tools, namely as fol- A. companies work hard
lows:
B. discounted cash flows justify initial in-
A. Vertical Analysis or Common Size Anal- vestment
ysis
C. money is given
B. Horizontal Analysis or Comparative
Analysis D. they won’t be
NARAYAN CHANGDER
C. Ratio Analysis 239. Which of the following is the correct ex-
ample of asset and liability?
D. All Answers are Correct
A. Asset:LoanLiability:Credit card debts
233. The financial institutions are established
B. Asset:Unit TrustLiability:Instalment
by both State and central government
balance
A. True C. Asset:TaxLiability:Real estate
B. False D. Asset:SavingLiability:Property
234. withdrawing more money than you have 240. When an existing public corporation is-
A. draft sues new stocks this process is called ini-
tial public offering.
B. overdraft
A. True
C. underdraft
B. False
D. withdraw
241. The M in SMART Goal stands for
235. Which of the following is NOT an active
A. Meaningful
income?
B. Measurable
A. Salary
C. Merciful
B. Commission
D. none of above
C. Dividends
D. Fixed allowance 242. It is the basic salary device of accounting.
A. T-Account
236. A portfolio is
B. Account
A. Weighted average of squared devia-
C. Assets
tions
D. Liabilities
B. A collection of assets
243. This Act shall be known as the “Economic
237. Higher level of competition neccesitates and Financial Literacy Act”
A. more fixed capital A. Republic Act No. 10066
B. more working capital B. Republic Act No. 10665
C. no working capital C. Republic Act No. 10922
D. less working capital D. none of above

244. Financial ratios, which assess the prof- 249. Which of the following would NOT be con-
itability of a company, include all of the sidered a benefit?
following except the

A. unpaid vacation
A. Dividend yield ratio B. health insurance
B. Gross profit percentage C. paid vacation
C. Earnings per share ratio D. salary
D. Return on sales ratio 250. The total money you get to “take home”
from your paycheck after taxes and deduc-
245. What has the same meaning as negative tions is
cash flow?
A. Gross Pay
A. Deficit
B. Net Pay
B. Surplus C. “The Bag”
246. The following are NOT characteristics of D. none of above
VAT, namely: 251. According to the net operating income ap-
A. Existence of a tax invoice for the seller proach
(Output Tax Invoice) A. Financial mix is irrelevant and it does
B. Existence of a tax invoice for buyers not affect the value of the firm
(Input Tax Invoice) B. The business risk remains constant at
C. Both answers a and b are characteris- every level of Dept equity mix
tics of VAT C. Every capital is optimum capital struc-
ture as per NOI approach
D. There are event news from customers
D. All of the above
247. Dividend is that part of profit after tax
which is to the of the company 252. What is meant by diversification in in-
vestment?
A. Retained, shareholders
A. Investing all money in one type of as-
B. Distributed, company set
C. Distributed, Shareholders B. Investing money in various types of as-
sets
D. None of these
C. Investing money in foreign currency
248. Which of the following is/are usually D. Investing money in precious metals
seen as forms of market failure where reg-
ulation may be a solution? 1. Imperfect 253. Which of the following statements are
competition 2. Social costs or externalities correct
3. Imperfect information A. Mature Companies will show less divi-
A. 1 only dend payout
B. Mature Companies will show high divi-
B. 1 and 2 only
dend payout
C. 2 and 3 only
C. Growth Companies will show less divi-
D. 1, 2 and 3 dend payout

D. (b) and (c) 259. Reese’s gross pay is $1, 900.00. All of
his deductions total $550. What is his net
254. The sum of short term and long term pay?
sources of finance is known as: A. $680.00
A. Capital structure B. $19.99
B. Both of these C. $1350.00
C. Financial structure D. none of above
NARAYAN CHANGDER
D. None of these 260. If interest rates are currently 5 per cent
then the NPV of $100 received next year
255. Which of the following is an advantage will be $95
of a sole proprietorship?
A. True
A. Unlimited liability
B. False, it will be less
B. Ease of raising capital C. False, it will be more
C. Unlimited life D. This cannot be determined
D. Low cost and ease of formation
261. A smart shopper:
256. A contract between the issuer and the A. Compares prices before buying
lended specifying the terms of repayments B. Charges lots of things on a credit card
and interest to be charged.
C. Only uses an ATM card
A. Bond D. Throws away receipts immediately
B. Mortgage
262. The amount of money you earn before
C. Payables taxes are taken out is your
D. Revenues A. Net Income
B. Gross Income
257. How should you write your signature on
a check C. Savings
A. Print D. Balance
B. Cursive 263. Which formula is used to measure the de-

gree of financial leverage
C. Hebrew
A. EBT/EBIT
D. English
B. Contribution/EBIT
E. Italian C. EBIT/EBT
258. What is an example of a FIXED expense? D. EBIT/EBT
A. New shoes 264. Given the following cash flows, what is

the future value at year ten when com-
B. Groceries
pounded at an interest rate of 12.0%?
C. Rent
D. none of above

A. $10, 000.00 269. In debenture, interest payable is

B. $25, 287.31 A. Transferred to general reserve

C. $25, 277.31 B. Transferred to falling fund investment
account
D. $25, 267.31
C. Charged against the firms profit
265. The compensates the investor for the D. Appropriation of the company’s profit
additional risk that the loan will not be re-
paid in full. 270. Sophie earns $500 per month. She
spends 15% on food/snacks. How much
A. default premium
is she spending?
B. inflation premium A. $75
C. real rate B. $100
D. interest rate C. $15
266. Financial institutions are also known as D. none of above
271. In weighted average cost of capital, a

A. Financial organisation company can affect its capital cost through-
1. Policy of capital structure 2. Policy of
B. Financial intermediaries
dividends 3. Policy of investment
C. Financial system A. 1 only
D. All of the above B. 2 & 3
267. Cost of raising Funds C. 1 & 3
A. Fixed Cost D. All 1, 2 & 3
B. Fluctuating cost 272. Identify the function of stock exchange

C. Floatation Cost A. (a) Trading and settlement procedure
D. Variable cost B. (b) Dematerialisation
C. c) Pricing of securities
268. The degree of combined leverage is
D. (d) Depository participants
A. The percentage change in sales di-
vided by the percentage change in earn- 273. Helen has accumulated money from her
ings per share daily allowance. She is looking for the
best way to invest her money. She
B. The percentage change in earnings be- learned that Peter was in need of money
fore interest and taxes divided by the perfor the expansion of his business. In this
centages change in sales scenario, Peter is the
C. The degree of operating leverage di- A. User of Funds
vided by the degree of financial leverage
B. Sources of Funds
D. The percentage change in earnings per
share divided by the percentage change in C. owner
sales D. customer

274. Which of the following is NOT true about B. Measures the Solvency
the difference between credit cards and C. Lacks Qualitative Analysis
debit cards?
D. Makes a comparative study
278. When buying stocks, what’s the easiest

starting point
A. Buy what you know
NARAYAN CHANGDER
B. Buy the penny stocks
C. Buy the highest volume stock
D. Buy the most expensive stock
A. Purchases made with a debit card
come directly out of your bank account E. Buy stocks on the downswing
B. You must pay off your credit card bill 279. financial manger tries to identify invest-
monthly or there will be penalties ment opportunities that work more to the
C. You must have a bank/checking ac- firm then the cost to acquire it
count to use a debit card A. working capital Mangment
D. Credit cards use money from your sav- B. capital Budgeting decision
ings account
C. agency cost
275. A(n) would be an example of a princi- D. capital structure design
pal, while a(n) would be an example of an
agent. 280. Which of the following is not a basic
A. shareholder; manager need?
B. manager; owner A. food

C. accountant; bondholder B. holiday
D. shareholder; bondholder C. clothing
D. accomodation
276. The time value of money concept recog-
nizes that: 281. Below are the characteristics of exces-
A. Money today is worth more than the sive spending, EXCEPT
same amount in the future A. Cash is too large
B. Money in the future is worth more than B. So many people are unemployed
the same amount today
C. Cash is too small to pay its obligations
C. The value of money is constant over
D. Too much raw
time
D. The value of money is determined by 282. Which of the following is a hybrid form
inflation of security?
E. None of the above A. Equity shares
277. Financial analysis become useless be- B. Preference shares

cause it: C. Debentures
A. Measures the profitability D. None of these

283. The federal program that assists older C. To help decision makers become more
Americans with health insurance and in- effective
come is called?

D. To improve strategic financial planning
A. FICA
288. A series of cash flows that differ in each
B. EOC
period, is the meaning of
C. BBT
A. Annuities
D. FBI
B. Uneven Cash Flows
284. Fixed capital finance depends on the
C. Deferred Annuities
short term sources of finance.
D. Lump Sums
A. True
B. False 289. Which of the following is not approach of
finance function?
285. is a conflict of interest inherent in any re-
lationship where one party is expected to A. Traditional approach
act in another’s best interests B. Modern approach
C. Too-narrow approach
D. Too-wide approach
290. What should I do if my bank statement is

incorrect?
A. Ask Grandpa Morris
B. File a dispute
C. Check online
A. Agency theory D. Call your banker
B. Agency E. Nothing, it’s the banks problem.
C. Agency contract
291. High debt equity ratio implies
D. Agency problem
A. Less financial risk
286. The amount of money in a paycheck after
B. High financial risk
deductions?
C. High earnings/share
A. Gross Pay
D. High working risk
B. Net Pay
C. Year To Date 292. markets for intermediate-term or long-
D. Deductions term debt and corporate stocks.
A. futures market
287. What is the main purpose of financial
management training? B. spot markets
A. To reduce expenses C. capital markets
B. To cultivate entrepreneurial mindset D. money markets

293. A decision to acquire a new and modern C. $25, 304.90

plant to upgrade an old one is a D. none of above
A. financing decision
298. Working capital may be-
B. working capital decision
A. Positive
C. investment decision
B. Negative
D. none of the above
C. Zero
NARAYAN CHANGDER
294. What does a savings register do? D. Any one of them
A. Helps the bank keep track of your sav-
ings 299. The key objective of financial manage-
ment is
B. Helps you decide how you can spend
A. Profit Maximization
C. Allows you to keep track of your sav-
ings B. Wealth Management
D. Helps you make checks C. Asset Maximization
E. None D. Sales Maxmization
295. An is a review of accounting records 300. What is the primary advantage of a low
and procedures. capital gearing ratio?
A. income statement A. It indicates a company’s high financial
risk
B. financial statement
B. It shows a company’s high depen-
C. audit dence on equity financing
D. statement of cash flows C. It suggests a company’s high prof-
296. Financial Manager is: itability
A. Professional Person D. It signifies a company’s low depen-
dence on debt financing
B. Person having sufficient knowledge
C. Rational person 301. Justification for merger and acquisition
do not include
D. All of above
A. To increase risk
297. Use the W-2 above to answer question. B. To gain economics and scale
How much did Jackson pay in state income
taxes last year? C. To enter new markets
D. To achieve synergy
302. What is the differences of money market

and capital market?
A. no differences
B. types of funds
C. one is short-term and the other is long-
A. $1, 255.60 term.
B. $7, 236.86 D. both are suppliers of funds

303. need C. Debt

A. something you cannot live without D. Checking

B. something you do not have to have 309. Which is NOT a human behavior offset?
C. goal A. Make finances transactional
D. desire B. Pause
304. What does financial leverage measured? C. Stick to list
A. No change with EBIT and EPS D. Reflect-why shop
B. The sensibility of EBIT with % change E. Buy everything and all at once
with respect to output 310. Food, Shelter and Clothes are
C. The sensibility of EPS with % change in
the EBIT level
D. % variation in the level of production
305. Dividend can be distributed in which all

forms
A. Cash dividend
B. Stock dividend (Bonus shares)
C. Both (a) and (b) A.
D. None of these
306. Traditional approach gave importance to
A. Procurement of funds
B. Utilization of funds B.
C. Wise use of funds
D. All of the above
311. Participating in local causes or volunteer-
307. The analysis of actual movement of ing your time (and your staff’s time) in
money inflow and outflow in an organisa- community events says a lot about a com-
tion is called pany’s sincerity.
A. Cash Flow A. Volunteering
B. Fund flow B. Ethical labor practices
C. Capital Flow
312. ln Debtors Turnover Calculation, is
D. No flow taken in the numerator
308. Money that a person owes to another A. Credit Sales
person or bank/credit card company is B. Debtors
A. Credit C. Credit Purchase
B. Investment D. Creditors

313. Net working capital refers to C. Reserves

A. total assets minus fixed assets. D. Retained Earnings
B. current assets minus current liabili-
319. Why reviewing and revising the progress
ties.
of financial plan from time to time is impor-
C. current assetsets minus inventories. tant?
D. current assets A. To acheive our financial goals
NARAYAN CHANGDER
314. Below are the duties of the financial man- B. To make sure the cash flow always
ager, EXCEPT positive
A. Managing the flow of funds C. To avoid total expenses exceed total in-
B. Planning to obtain funds and use of come
funds D. All above
C. Responsible for obtaining funds
320. A comprehensive financial plan should
D. Giving funds to the company include wealth build-up, debts manage-
ments, insurance coverage, expenses and
315. Current Assets are those assets which
purification of property.
can be converted into cash within
A. One month A. TRUE
B. 3 months B. FALSE
C. 12 months 321. At optimal capital structure

D. 9 months A. Ko of firm is highest
316. Intangible fixed assets is B. Value of firm is maximum
A. Land C. Ko of firm is minimum
B. Patentright D. Both b and c
C. Machinery
322. What out of the following, financial plan-
D. Furniture ning helps to achieve?
317. What are the advantages of a sole pro- A. Arrangement of material
prietorship?
B. Financial control
A. Limited liability
C. Arrangement of machinery
B. Ease of raising capital
D. All of above
C. Unlimited life
D. Low cost and ease of formation 323. How does borrowing contribute to a com-
pany’s capital structure?
318. The shareholder’s equity of a corporation
A. Reduces capital
has three basic components. Which does
not belong to the group? B. Increases equity
A. Accounts Payable C. Adds to liabilities
B. Share Capital D. Lowers profitability

324. How to Correct Credit Errors? 329. What is a SHORT term goal?
A. 1. Circle the incorrect items on your A. A financial goal you can reach within 1

credit report. year or less than 12 months
B. 2. Write a letter to the reporting B. A financial goal you can achieve in
agency, telling them which information more than a year ( over 12 months)
you think is inaccurate. Provide support-
330. JCW Co is appraising an opportunity to in-
ing documentation.
vest in some new machinery that has the
C. 3. Send all material by certified mail. following cash flows.Initial investment-
D. 4. Send a similar letter to the creditor $40, 000Net cash inflows for 5 years
whose reports your disagree with. Their in advance-$12, 000 per annumDecom-
reporting agency will conduct an investi- missioning costs after 5 years-$15, 000
gation. What is the internal rate of return of the
project, calculated using discount factors
E. 5.All of the these are correct for 10% and 15% (to the nearest whole
%)?
325. The following are not advantages of in-
vestment instruments in the form of gold A. 11%
A. Hedge against inflation B. 13%
B. Aset safe haven C. 14

D. 12%
C. Does not generate income
D. Liquidity 331. Which is the best example of EARNED in-
come?
326. The greater net cash flows, the faster the A. Interest earned on a savings account.
payback period
B. Money earned from working at the
A. TRUE mall.
B. FALSE C. Money received from Social Security
327. It is a kind of bank which provides facili- D. Money inherited from a relative.
ties of more than one type of banking.
332. A debit card is the same thing as a credit
A. Commercial Bank card
B. Universal Bank A. True
C. Rural Bank B. False
D. Thrift Bank 333. Why is shareholder’s wealth maximiza-
tion more relevant than profit maximiza-
328. The major goal of financial management tion?
is
A. It focuses on short-term goals
A. wealth maximisation
B. It ignores risk and uncertainty
B. sales maximisation
C. It considers the timing of returns
C. profit maximisation
D. It emphasizes the efficient use of cap-
D. customer maximisation ital resources

334. Payroll taxes consist of income taxes, So- A. A cash inflow

cial Security, Medicare, and unemployment B. A cash outflow
taxes.
C. An addition to income
A. True
D. A deduction from income
B. False
340. Pool of institutions and procedures that
335. Tammy has a basic account that allows facilitate transactions in all types of finan-
her to deposit and withdraw money, write cial claims refer to
NARAYAN CHANGDER
checks, and receive a monthly statement
with no service charge if she manintains a
minimum balance of $25.00. This type of
account is called
A. Savings account
B. IRA
A. Banking institutions
C. Retirement Account
B. Financial market
D. Checking Account
C. Money market
336. Which does not belong to the group? D. Ministry of finance
A. Preference Share Capital 341. The means by which a company is fi-
B. Preference Share Redemption Fund nanced refers to the firm’s
C. Share Premium-Ordinary A. capital budgeting
D. Ordinary Shares B. capital structure
C. accounts receivable management
337. International financial managers need to
develop strategies for transferring funds D. working capital management
from parent companies to subsidiaries to 342. Why reviewing and revising the progress
A. optimize the company’s global opera- of a financial plan from time to time is very
tions important?
B. optimize company marketing A. to makesure the cash flow is always
positive
C. optimize company production
B. indirectly helps us to achieve our finan-
D. optimize company accounting
cial goals asplanned
338. Popular statistical measure used to mea- C. be prepared to change our financial
sure the risk of an asset is: goals if they are not realistic forour
A. Correlation monthly income
B. Standard deviation D. none of above
C. Mean 343. To establish good credit, you should:

D. Mode A. Pay your rent a few days late
B. Have lots of credit cards
339. Under the indirect method of computing
operating cash flows, decrease in trade re- C. Take out loans
ceivable is treated as D. Pay all of your bills on time

344. When cash reserve is low, companies can C. Debt financing

secure short-term fund from (check all D. Equity financing
the right boxes)

A. Trade credit 350. The current ratio is
B. Friends & family A. calculated by subtracting current liabil-
ities from current assets
C. Unsecured loan
B. used to evaluate a company’s solvency
D. Secured bonds and long-term debt paying ability
345. Your is the amount of money you C. calculated by dividing current liabili-
have left after taxes are taken out. ties by current assets
A. Taxes D. used to evaluate a company’s liquidity
B. Balance and short-term debt paying ability
C. Budget 351. Minor house improvement.

D. Net Income A. Long-term goal
B. Short-term goal
346. Operating profit is calculated by
A. Sales-Cost of Goods Sold 352. Which of the following is not a commonly
used method to collect payments on past
B. Gross Profit-Operating Cost
due accounts?
C. Sales-Operating Cost
A. Sending notices.
D. Gross Profit-Cost of Goods Sold
B. Taking legal action.
347. Charged if the account balance goes over C. Determining the applicant’s credit wor-
the set credit limit thiness.
A. Over-the-limit fee D. Employing a collection agency.
B. Penalty APR
353. Which of the following is one step in fi-
C. Annual fee nancial planning for a budget?
D. Late-payment fee A. Use percentages to see how much of
the total income should be set aside for
348. is a term for matters regarding the cre- each expense
ation, study andmanagement of money
and investments. B. Create a spending chart
A. Finance C. Create a table for cash gifts and gift
cards your received
B. Market
D. none of above
C. stock
D. allocation 354. How many percentages should a person
save from their monthly income? How
349. Which financing method typically in- many hundredths should a person save
volves an interest-bearing instrument? from his monthly salary?
A. Internal funds A. 5%
B. Venture capital B. 10%

C. 8% 359. Financial institution that gathers savings,

D. 20% paying interest or dividends to savers.
A. Savings Banks
355. What best defines a budget?
B. Thrift Banks
A. A plan people usually don’t follow.
C. Commercial Banks
B. Simply a good thing to have.
D. Rural Banks
C. A plan for earning and spending
money. 360. An investment is indifferent when:
NARAYAN CHANGDER
D. none of above A. The NPV to all capital providers is
equal to the weighted average cost of cap-
356. are relatively liquid, and are ex- ital
pected to be converted to cash within a
B. The NPV to all equity providers is equal
year.
to the cost of equity
C. Equity IRR is equal to the cost of equity
D. Equity IRR is equal to the weighted av-
erage cost of capital
361. SMART approach can help individuals in?
A. Current liabilities
B. Non-current liabilities
C. Current assets
D. Non-current assets A. identifying the needs and wants
357. Who is the financial manager of VNM B. writing the cash flow statement
Joint Stock Company? C. revising financial status from time to
A. Mr. Le Thanh Liem time
B. Ms. Mai Kieu Link D. achieving the financial goals
C. Mr. Vinh Tran 362. is at the heart of corporate finance,
D. Ms. Nguyen Thi Phuong because it is concerned with making the
best choices about project selection.
358. In financial analysis, what does the term
A. Capital structure budgeting
“working capital” refer to?
B. Capital structure
A. Long-term assets
C. Capital budgeting
B. Current assets minus current liabili-
ties D. Short-term budgeting
C. Total assets minus total liabilities 363. How to calculate Gross Profit margin?
D. Revenue minus expenses A. COGS (COGS) / revenue (income)
Explanation:The capital of a business B. Gross Profit / Net
which is used in its day-to-day trading op-
erations, calculated as the current assets C. Gross Profit / revenue
minus the current liabilities. D. Sales / Gross Profit

364. Debenture holders are 369. The trend of harmonization is

A. Debenture of the company A. a trend in which international compa-

nies try to use International Financial Re-
B. Creditors of the company
porting Standards (IFRS) in public com-
C. External users pany accounting
D. Owners of the company B. a trend in which international compa-
nies try to use Domestic Financial Report-
365. What is interest rate? ing Standards (DFRS) in public company
A. A percent that is added to your income accounting
B. a percent that is paid on money in a C. a trend in which international compa-

bank account or money owed. nies try to reduce transparency in public
company accounting
C. a percent that is taken out of your in-
come D. a trend in which international compa-
nies try to limit transparency in public
D. none of above company accounting
366. Bond backed by the various assets of the 370. The n i approach assumed
corporation is?
A. Ke is to be same and constant
A. Debenture
B. There are no taxes
B. Mortgage
C. K0 falls as the degree of leverage is in-
C. Convertible creased
D. Registered D. All of the above
367. What does the term ‘dividend decision’ in 371. There are three types of leverage that a
financial management refer to? firm may use, except
A. Deciding on the company’s capital A. Degree of Operating Leverage
structure B. Degree of Financial Leverage
B. Determining which investments to C. Degree of Combined Leverage
make
D. Degree of Investing Leverage
C. Deciding how much of the earnings to
distribute to shareholders 372. Select the THREE types of Expenses
D. Managing the day-to-day expenses of A. Fixed
the company
B. Constant
368. What does internal source mean? C. Variable
A. A source from outside the business D. Periodic
B. A source from within the business
373. Which of the following statements is
C. A source taken from international true?
funding
A. The finance manager uses the frame-
D. A source from a specific investor work of the income statement to find the

operating income of the company (an ac-

counting measure), which is also the true
cash flow from operations.
B. In accrual-based accounting, revenue
is recorded at the time of sale if the rev-
enue has been received in cash.
C. Three fundamental issues separate
A.
NARAYAN CHANGDER
net income and cash flow:accrual-based
accounting, noncash expense items, and
interest expense.
D. Generally accepted accounting princi-
ples (GAAP) in the United States do not al-
low the use of accrual-based accounting B.
to record revenue.
374. Common stockholders received fixed div-

idends, and have higher priority than pri- 377. What is the main responsibility of finan-
ority than preferred stockholders in event cial managers?
of liquidation of the firm. A. Deciding how to invest the firm’s funds
B. To review and verify the accuracy of
financial records and ensure that compa-
nies comply with tax laws.
C. Monitor organizations’ costs and cre-
ate reports for budgetary, pricing, and
cost analysis purposes.
D. Take, care of all financial matters
within a company, like keeping and inter-
A. True preting financial records
B. False 378. What does FICA stand for
A. Federal Insurance Contributions Act
375. According to Net Income Approach a firm
will have maximum value when the B. Federal Insurance Committee Associa-
minimum tion
C. Federal Income Collecting Association
A. Equity
D. Federal Income communications act
B. Debt
E. Financial Independent Corporation of
C. Cost of Equity America
D. WACC 379. The maximum amount of charges allwoed
to an account.
376. cash, savings, real estate investments,
fixed deposits, unit trust, company shares A. Annual fee
are B. Credit limit

C. Variable-rate APR 385. The functions of financial management

are as follows:
D. Annual Percentage Rate (APR)

A. Planning, budgeting, monitoring, re-
380. Which of these is not a way to cut ex- porting
penses?
B. Planning, budgeting, monitoring, re-
A. Create a budget porting
B. Lower discretionary expenses C. Planning, budgeting, controlling, audit-
C. Pay of debt ing & reporting
D. Join hustlers university D. Planning, buying, controliing, report-
ing
E. Open a savings account
386. A company selling a bond is money.
381. If an SME’s quick ratio is significantly
lower than its current ratio, what might A. borrowing
be a potential concern?
B. lending
A. Efficient inventory management
C. taking
B. High liquidity risk
D. reinvesting
C. Strong solvency position
D. Effective receivables management 387. The financial statements of a business en-
terprise include funds flow statement.
382. Current Assests A. True
A. Cash B. False
B. Inventory C. i don’t know
C. Prepaid Expenses D. none of above
D. Buildings
388. A share that you cannot redeem during
383. Permanent working capital is funded us- the lifetime of the business?
ing
A. Debenture Share
A. Bank Overdraft
B. Preference Share
B. Commercial Papers
C. Equity Share
C. working capital loans
D. none of above
D. long-term funds
389. It is essentially the preparation of a finan-
384. What do credit cards NOT offer? cial blueprint of an organisation’s future
A. Cash back operations. Identify the related concept.
B. low APR A. Financial management
C. Gas B. Financial planning
D. Merchandice (Disney) C. Capital budgeting decisions
E. Buy one Get one free D. Dividend decision

390. Which TWO of the following statements 394. It is possible that the company has prof-
are correct?1. Financial accounting is con- its but its cash flow is negative.
cerned with providing financial informa- A. True
tion to aid day to day control and decision
making.2. Management accounting is con- B. False
cerned with future analysis of costing data
395. Treasurer performs the functions of
to assist with decision making.3. Financial
which of the following functions:
accounting is concerned with providing in-
formation about the results of past plans A. Credit management
NARAYAN CHANGDER
and decisions.4. Financial strategy is con- B. Cash management
cerned with raising finance and allocating
C. Procurement of essential funds
resources to achieve corporate objectives.
D. All of these
A. 1, 2
B. 2, 3 396. Capital budgeting:
C. 3, 4 A. Involves evaluating investment oppor-
tunities to determine which projects will
D. 1, 4 generate the highest return on invest-
ment
391. FW Co is expecting a receipt of $10, 000
(in real terms) in 1 year’s time.If FW Co B. Helps businesses make informed fi-
expects inflation to increase, and receipts nancial decisions
are expected to rise in line with the gen- C. Both of the above
eral rate of inflation, what impact will this
D. Neither of the above
have on the present value of that receipt?
A. Nil 397. What is NOT a benefit of good credit
B. Reduce A. Cash back
C. Increase B. Airline miles
D. Cannot say C. Discounts

D. High interest rates on loans
392. . Long term fund sources are
E. Getting approved for loans
A. Retained earnings
398. current assets include
B. Debentures
A. land
C. Share capital
B. building
D. All of the above
C. inventory
393. A schedule of how much consumers are D. furniture
willing and able to buy at a price
399. A firm has common stock with a market
A. Needs price of $25 per share and an expected div-
B. Wants idend of $2 per share at the end of the com-
ing year. The growth rate in dividends has
C. Supply
been 5%. The cost of the firm’s common-
D. Demand stock equity is

A. 5% C. Sales
B. 8% D. Dividend

C. 10%
405. Common size analysis is also known as
D. 13% Analysis
400. Susan packages cotton candy at the fair. A. Vertical
If she can package 400 packages in 8 B. Horizontal
hours, what is her hourly production rate?
C. Parallel
A. 48
D. None
B. 50
C. 46 406. The Debt-to-Equity ratio is an indicator
of:
D. 52
A. The company’s profitability
401. All transactions including deposits,
B. The company’s liquidity
checks, debit card purchases, additional
fees, and ATM use should be recorded here C. The company’s financial leverage
immediately after completion. D. The company’s operational efficiency
A. Deposit Slip
407. Which of the following is a duty of a fi-
B. Check Register nancial manager in a business firm?
C. Reconciling A. developing marketing plans.
D. Checking Account B. controlling the stock price.
402. When bad position of the business is tried C. raising financial resources.
to be depicted as good, it is known as
D. auditing financial records.
A. Personal Bias
408. Which of the following is an example of
B. Price Level Changes
a current asset?
C. Window Dressing
A. Land
D. All of the Above
B. Machinery
403. Which of these is not a type of financial C. Building
bonds
D. Accounts receivable
A. Government
B. Municipal 409. What is the formula to calculate the re-
turn on investment (ROI)?
C. Bail
A. ROI = Net Income / Total Assets
D. Mortgage
B. ROI = Net Income / Shareholder Eq-
E. Corporate
uity
404. Which of the following is NOT a finance C. ROI = Earnings Before Interest and
function in financial management? Taxes (EBIT) / Total Assets
A. Investment D. ROI = Earnings Before Interest and
B. Financing Taxes (EBIT) / Shareholder Equity

410. Which of the followings is NOT the roles 415. What is the cost of capital?
of financial manager? A. Cost of the company funds
A. Forecasting and Planning B. Cumulative calculation of the capital
B. Deal with financial market structure
C. financing decision C. Cost of capital investment in the com-
pany
D. Advertise the product
D. Cost of the products or services of the
NARAYAN CHANGDER
411. Non-spontaneous financing can be di- company
vided into: 416. Retained earnings falls under
A. security loan and permanent loan A. Investment decision
B. temporary loan and permanent loan B. Financing decision
C. secured loan and unsecured loan C. Dividend decision
D. long-term loan and immediate loan D. Liquidity decision
412. A soda costs $1.75. Tax is 6.25%. Find 417. What are the three primary pro forma fi-
the amount of tax for the soda. nancial statements in a financial plan?
A. .12 A. Debt financing, equity financing, inter-

nal funds
B. .10
B. Cash flow statement, income state-
C. .13 ment, balance sheet
D. .11 C. Sales of fixed assets, reduction of
working capital, account receivable
413. What is NOT a major disadvantage of a
D. Start-up capital, venture capital, risk
bond?
capital
A. bonds pay out lower returns than
stocks 418. Debt Ratio can be computed by dividing
the?
B. companies can default on your bonds
A. Total Liabilities/Total Shareholder’s
C. hold the bond to maturity and get all Equity
your principal back
B. Total Liabilities/Total Assets
D. bond yields can fall C. Total Liabilities/Average Total Assets
414. What are the four key finance functions D. Total Assets/Total Liabilities
in financial management?
419. Fixed cost per unit
A. Investment, Profit, Capital, Liabilities A. does not change with volume of pro-
B. Investment, Financing, Liquidity, Divi- duction
dend B. be flexible according to the rate of in-
C. Marketing, Sales, Production, Human terest
Resources C. changes according to volume of pro-
D. Budgeting, Forecasting, Accounting, duction
Auditing D. not remains constant

420. Taxes are a governmental fee that 423. X ltd issues Rs. 50, 000 8% debentures
people to pay in order to live and work at a discount of 5%. The tax rate is 50%
in their state and the USA. the cost of debt capital is

A. Required A. 4%
B. Not Required B. 4.2%
C. Optional C. 4.6%
D. 5%
D. none of above
424. High operating leverage indicates a com-
421. The Fisher Effect tells us that the true pany has
nominal rate is actually made up of three
components. These three components are A. High fixed cost
B. Low variable cost
A. the nominal rate, the real rate, and the C. Both a and b
inflation rate D. None of the above
B. the real rate, the inflation rate, and the
425. The interest rate that may be charged af-
product of the real rate and the nominal
ter a credit card account is opened.
rate
A. Introductory rate
C. the real rate, the inflation rate, and the
product of the real rate and inflation B. Annual fee
C. Variable-rate APR
D. the real rate and the product of the
real rate and inflation D. Penalty APR
422. In the paint industry, various raw ma- 426. To make a profit, commercial banks
terials are mixed in different proportions on the money that they lend than the in-
with petroleum for manufacturing differ- terest they pay on savings accounts.
ent kinds of paints. One specific raw ma- A. charge more interest
terial is not readily and regularly avail- B. pay more interest
able to the paint manufacturing compa-
nies. Bonler Paints Company is also fac- C. charge less interest
ing this problem and because of this there D. pay less interest
is a time lag between placing the order
and the actual receipt of the material. 427. markets in which participants agree to-
But, once it receives the raw materials, it day to buy orsell an asset at some future
takes less time in converting it into fin- date.
ished goods.Identify the factor affecting A. spot markets
the working capital requirements of this
B. futures market
industry.
C. money markets
A. Availability of Raw Material
D. capital markets
B. production cycle
428. The following shows part of Mr Jason’s
C. Nature of business
financial management process.To save for
D. All of the above emergency fundTo buy a laptopTo buy a

terrace house in 10 years by paying RM60 C. Return maximization

000 as a down payment.What step in the D. All of these
financial management process did Mr Ja-
son take? 433. Sign the back of this card in the autho-
A. Evaluating financial status rized signature box.
B. Carrying out financial plan A. Debit Card
C. Setting financial goals B. Check
NARAYAN CHANGDER
C. Deposit Slip
D. Creating a financial plan
D. Check Register
429. You buy a copy of your favorite movie
for $23.45. You give the clerk $25. How 434. Securities exchange market and over-the-
much change will you receive? counter (OTC) market such as NASDAQ,
London Stock Exchange and New York
A. $1.50
Stock Exchange are the example of for
B. $1.55 Bursa Malaysia issuer.
C. .95 A. initial public offering
D. $1.56 B. secondary market
430. Using the paycheck stub below, how C. common stock
much did Grady pay in State Income Taxes D. preferred stock
during this pay period?
435. The objectives of financial management
are the following; Except
A. To ensure a regular and adequate sup-
ply of funds to the concern.
B. To ensure adequate returns to the
shareholders which will depend upon the
earning capacity, the market price of the
A. $31.15 share, expectations of the shareholders.
B. $66.75 C. To ensure safety on investment, i.e,

funds should be invested in safe ventures
C. $34.43 so that an adequate rate of return can be
D. none of above achieved.
D. To ensure optimum funds utilization.
431. Short-term solvency is another term for
Once the funds are procured, they should
A. Liquidity be utilized in the minimum possible way at
B. Stability the high cost.
C. Profitability 436. Financial planning and budgeting:
D. Marketability A. Helps businesses set financial goals,
allocate resources, and create budgets to
432. Objectives of financial management guide their operations
A. Profit maximization B. Ensures that a company has the re-
B. Wealth maximization sources it needs to achieve its goals

C. Both of the above 441. The net profits decision has to be made
D. Neither of the above by the finance manager. This can be done
in two ways:Dividend declaration or Re-

437. Q6) What external factor can influence tained profits
an individual’s financial plan in terms of in- A. Investment of funds
vestment decisions?
B. Disposal of surplus
A. Personal hobbies C. Choice of sources of funds
B. Family traditions D. Management of cash
C. Legislative changes
442. If actual achievements do not match the-
D. Spending habits standards, management can do:
438. Marco, Makenna, and Zach are study- A. Actual performance can be improved
ing for their financial management exam. to reach the standards,
They are discussing the concept of net B. strategiescan be revised
present value (NPV) in investment deci- C. performance standards can be low-
sions. Can you explain it to them? ered
A. Net present value is the difference be- D. All of above
tween the present value of cash inflows
and the present value of cash outflows 443. An annuity is a financial product that
over a period of time. pays out a stream of payments to an
individual, and these financial products are
B. Net present value is the total amount primarily used as an income stream for re-
of a company’s equity. tirees.
C. Net present value is not a concept in A. large
financial management.
B. small
D. Net present value is the total amount
C. fixed
of fixed costs that a company has.
D. variable
439. certificate of debt issued sold by institu-
444. What is NOT included in operating ex-
tion, company or bythe government as a
penses is
means of borrowing long-term funds
A. Sales Costs
A. capital
B. Marketing Costs
B. capital allocation
C. General & admin costs.
C. stock
D. Interest costs
D. bonds
445. is the main form used to file annual
440. The Quick Ratio excludes which asset income tax return
from the calculation? A. 1040
A. Cash B. W-2
B. Inventory C. 1099-MISC
C. Accounts Receivable D. 1009-INT
D. Prepaid Expenses E. 1009-DIV

446. This statement presents the result of B. PT Asia Inc rejects the project because
the firm’s operation or performance for a it has an NPV less than $10.
given time C. PT Asia Inc accepts the project be-
A. Statement of Financial Position cause it has an NPV greater than $18, 000.
B. Income Statement D. PT Asia Inc rejects the project because
it has an NPV less than $0.
C. Statement of Comprehensive Income
D. Statement of Changes in Equity 451. Receipts from contracts held for dealing
NARAYAN CHANGDER
and trading purposes
447. Of the following, which is NOT one of the
A. Operating Activities
four main areas of finance?
B. Financing Activities
A. International finance
C. Investing Activities
B. Corporate finance
D. none of above
C. All are considered main areas of fi-
nance 452. Its function is to provide quantitative
D. . Investments information primarily, financial in nature
about economic entities that is intended to
448. If fixed operating cost is high, a firm be useful in economic decisions.
should prefer A. Financial Management
A. (a) Debt B. Accounting
B. (b) Equity C. Accounting Principles
C. c) Both (a) and (b) D. Finance
453. The cost of equity share or debt is known
449. Operating leverage = as
A. contribution / EBIT A. The specific cost of capital
B. contribution / EBT B. The related cost of capital
C. contribution / total expenses C. The burden on the shareholder
D. contribution / operating PBT D. None of the above
450. PT Asia Inc is considering a project that 454. Sue works a 53 hour work week (40 is
has an initial after-tax outlay or after-tax a regular week), and makes $17.50 per
cost of $350, 000. The respective future hour-what is her gross pay with her over-
cash inflows from its five-year project for time?
years 1 through 5 are $75, 000 each year. A. $700.00
PT Asia Inc expects an additional cash flow
B. $341.25
of $50, 000 in the fifth year. The firm
uses the net present value method and has C. $1, 200.25
a discount rate of 10%. Will PT Asia Inc D. $1, 041.25
accept the project?
A. PT Asia Inc accepts the project be- 455. .... is a motive of holding cash?
cause it has an NPV greater than $5, 000. A. Transaction motive

B. Precaution motive C. C
C. Capital investment D. D

D. none of above 461. Cash flow from assets is derived from
456. is the time span between acquisition
of goods and realisation of sale proceeds. A. cash flow from creditors and cash flow
from investing activities
A. Working Capital
B. cash flow from operating activities and
B. Payback period cash flow from financing activities
C. Operating cycle C. cash flow from operating activities and
D. Account receivable period cash flow from investing activities
D. cash flow from financing activities and
457. To buy securities, i.e., share or deben-
cash flow from investing activities
tures, it is compulsory to open
A. (a) Current Account 462. What are the advantages of property in-
vestment?
B. (b) Demat Account
A. Property values tend to be stable
C. c) Fixed Deposit Account
B. The property does not require special
D. d) Recurring Account maintenance
458. What is the primary goal of finance? C. Property is easy to resell
A. To minimize risks D. Property does not require financial
planning
B. To maximize liquidity
C. To maximize profit 463. In calculating the Payback Period we al-
ways round down to the nearest day.True
D. none of above or false?
459. refers to a place where potential buyers
and sellers get together totrade goods and
services, as well as the transactions be-
tween them.
A. Finance
B. Market
C. allocation
D. bonds A. True
460. Choose the correct option B. False
464. Income Statement is a financial report
that summarizes:
A. Company business results
B. 3rd party loan proceeds
A. A C. Proceeds from the issuance of shares
B. B D. Answers a, b and c are all correct

465. which are not goal of financial manage- C. Profit

ment? D. Employees
A. maximize share price
471. Which of the following is NOT a financial
B. minimize firm value intermediary?
C. maximize share holder wealth A. banks
D. A and b B. government agencies
C. mutual funds
NARAYAN CHANGDER
466. When do we set aside the money for the
10% savings? D. stock exchange
A. After engaging the expenses 472. Profits are down so the controller de-
B. Before engaging the expenses cides to change the corporation’s account-
ing policy relating to inventory costing.
467. Farm Fresh Bhd has an 8 percent return The change will allow the corporation to
on total assets of RM 300, 000 and a net report higher income and higher assets,
profit margin of 5 percent. What are its although the physical inventory has not
sales? changed. Which of the following state-
A. RM 3, 750, 000 ments is MOST correct?
B. RM 480, 000 A. The stock price is likely to increase be-
cause income is higher.
C. RM 300, 000
B. The stock price is likely to be unaf-
D. RM 1, 500, 000 fected because the stock market is effi-
468. The meaning of capital structure relates cient.
to the percentage of sources. C. The stock price is likely to decrease be-
cause reported inventory is higher.
A. Long-term
D. If the stock price increases, the stock
B. Medium term
market is efficient.
C. Short-term
473. The rate of interest payable on a bond is
D. Current also caled:
469. Which of the following statements best A. Effective rate of interest
represents what finance is about? B. Yield to maturity
A. How political, social, and economic C. Coupon rate
forces affect corporations
D. Internal rate of return
B. Maximizing profits
474. Diagram above shows the process in fi-
C. The study of how people and busi-
nancial mangement. Name the missing
nesses make investment decisions and
process in diagram.
how to finance those decisions.
D. Reducing risk
470. is the main deriving force of business

A. Fixed capital
B. Working capital

A. Completing financial plan C. Profitability

B. Reviewing and revising the progress D. Current asset activity

C. Terminating the plan 480. Higher debt-equity ratio results in:
D. Preparing a new plan A. lower financial risk
475. The following are among the responsibil- B. higher degree of operating risk
ities of VP for Administration, EXCEPT: C. higher degree of financial risk
A. Coordinating functions of finance and D. higher Earning Per Share
marketing departments.
B. Providing assistance in payroll prepa- 481. The key participants in financial transac-
ration, payment of vendors, and collection tions are individuals, businesses, and gov-
of receivables. ernment. Individuals are net of funds,
and businesses are net of funds.
C. Identifying adequate and cheap raw
material suppliers. A. suppliers; users
D. Assisting other departments in hiring B. purchasers; sellers
employees. C. users;suppliers
476. What is NOT a reason to save money D. users; providers
A. Pursue dream career 482. Mr. X takes a loan of rs 50000 from
B. Make room for fun bank the rate of interest is 10% per an-
num. The first installment will be paid
C. Help others at the end of the year 5.Determine the
D. Leave a financial legacy amount of equal annual installment if mr.
E. Being able to buy what you want X wishes to repay the amount in 5 install-
ments
477. How many Americans are waiting for A. Rs 19500
their grandma/grandpa to kick the bucket
to inherit their money? B. Rs. 19400
A. 1 in 3 C. Rs 19310
B. 1 in 15 D. Nome of the above
C. 1 in 5 483. This measure the capacity to earn suf-

D. 1 in 2 ficient return on sales, total assets and
owner’s investment.
E. 1 in 100
A. Liquidity
478. Life insurance helps cover costs when B. Asset Utilization
a person dies.
C. Debt Utilization
A. funeral costs
D. Profitability
B. housing costs
484. Belle worked a 40 hour work week and
479. RoA and RoE are measures of makes $17.50 an hour, what was her
A. Solvency gross pay for the week?
B. Liquidity A. $700.00

B. $650.00 C. Investment decision

C. $705.oo D. None of the above
D. $710.00
491. Given below are two statements labeled
485. Brandy Sdn Bhd purchased new fixed as-
as Assertion (A) and reason (R) ASSER-
sets worth RM10, 000. This statement
TION (A):Investments may be in two types
shows that Brandy Sdn Bhd utilizes
of assets-physical assets and financial as-
A. Sources of fund sets. REASON(R):Savings, if put into bank
NARAYAN CHANGDER
B. Uses of fund accounts, post offices lead to the forma-
tion of financial assets. Select the most ap-
486. is a measure of the volatility-or sys- propriate answer from the options given
tematic risk-of a security or portfolio com- below.
pared to the market as a whole.
A. Both A and R are true and R is the cor-
A. Risk
rect explanation.
B. Return
B. Both A and R are true but R is not the
C. Alpha correct explanation.
D. Beta
C. A is true R is false.
487. Name the major determinant of a divi-
dend decision D. Both A and R are false.
A. Growth opportunities
492. The total amount of money earned during
B. Stability of earnings the pay period before deductions.
C. Earnings
A. Net Pay
D. Cash flow position
B. Take Home Pay
488. Paying the minimum on credit card bills is
a good money management practice. C. Gross Pay
A. Fact D. Working Pay
B. Fiction
493. Which of the following is the correct ex-
489. From the below-mentioned items which ample of asset and liability? Yang man-
are financial assets? akah merupakan contoh aset dan liabiliti
A. Machines yang betul?
B. Bonds A. Asset:Loans Liability:Credit card debts
C. Stocks
B. Asset:Unit Trust / Amanah Saham Li-
D. B &C ability:Installment balance / Installment
balance
490. Which financial decision help a business-
man in opening a new branch of its busi- C. Asset:Tax / cukai Liability:Real estate
ness. / hartanah
A. Financing decision D. Asset:Saving / SimpananLiabil-
B. Dividend decision ity:Property / harta

494. which of the following is NOT a criteria B. internal rate of return (IRR)
in financial management? C. profitability index (PI)

D. discounted payback period
499. This considered as the oldest, most com-

mon, and simplest form of business orga-
nization.
A. Sole Ownership
A. setting goals
B. Partnership
B. assessing the financial position
C. Sole Proprietorship
C. creating a financial plan
D. Corporation
D. collecting and analysing data
500. Which of the following is/are correct?
495. Which one of these is liquid?
A. short term financial goals can be
A. stocks
achieved less than 6 months
B. currencies
B. short term financial goals can be
C. loans achieved less than a year
D. a mutual fund C. long term financial goals usually take
E. bank accounts more than 3 years
496. ‘people act in their own financial inter- D. long term financial goals usually more
est’ pernyataan tersebut merupakan prin- than 10 years
sip keuangan self interest behavior.
501. Capital structure means the portion of
A. TRUE current assets and current liabilities.
B. FALSE A. True
497. Choose the correct way to review and re- B. False
vise the progress of a financial plan.
502. Who is a TA?
A. Financial management does not need
regular review. A. Nathan
B. Review effects of financial manage- B. Peter
ment on regular basis. C. Ms.lanz
C. Ask older people.
D. Dylan
D. Budget made must be followed despite
E. Rome
the changing in income and needs.
498. The capital budgeting decision model that 503. money you owe
utilizes all the discounted cash flow of a A. debt
project is the model, which is one of
B. credit
the single most important models in fi-
nance. C. interest
A. net present value (NPV) D. fee

504. What are the only two ways to finance a 508. represents the short-term liabilities
firm? that a business owes to creditors.
A. By the owner’s funds or funds from rel- A. Owner’s equity
atives B. Accounting equation
B. By government grants or tax subsidies C. Accounts payable
C. By selling assets or taking on a bank D. Financial statement
loan
NARAYAN CHANGDER
509. The is a financial report that shows
D. By raising equity or taking on debt
incoming and outgoing money during an ac-
505. In February 2020, Mr Daniel received a counting period (often a month, quarter, or
total income of RM4 500. His monthly year).
fixed expenses and variable expenses are A. financial forecast
RM2 880 and RMx respectively. There B. financial plan
is a negative cash flow of RM620. Calcu-
late the value of x? Pada bulan Februari C. statement of cash flows
2020, gaji Daniel ialah RM 4 500. Belanja D. income statement
tetap dan belanja beruabahnya ialah RM 2
880 dan RM X. Terdapat aliran tunai yang 510. Which of the following would be consis-
negatif sebanyak RM620. Sila cari nilai tent with a more aggressive approach to
bagi RM X. financing working capital?
A. 1 000 A. Financing short-term needs with short-
term funds.
B. 3 500
B. Financing permanent inventory
C. 2 240 buildup with long-term debt.
D. 3 880 C. Financing seasonal needs with short-
term funds.
506. These loans are sanctioned for a period
of more than 5 years D. Financing some long-term needs with
short-term funds.
A. short term loans
B. medium term loans 511. Used of fixed interest security in the cap-
ital structure is called
C. long term loans
Explanation:it includesOverdraft Cash A. Operating leverage
creditBills of Exchange B. Financial leverage
D. none of above C. Combined leverage
D. All of the above
507. This government agency enforces tax
laws. 512. FINANCING DECISIONS RELATE TO THE
A. PBS A. DIVIDEND DECISIONS
B. IRS B. ASSETS PROCUREMENT
C. DEA C. RESERVE BUILDING
D. OSHA D. ACQUISITION OF CAPITAL

513. The biggest accounting firms are known C. Financing decision

as the “Big Four.” these include, Pricewa- D. None of these
terhouseCoopers, Deloitte Touche Tomatsu,

Ernst & Young, and KPMG. 519. Net Operating Income Approach proposes
A. True that higher the debt higher the to
shareholders
B. False
A. Cost
514. Tom works a 35 hour work week and
B. Returns
makes $13.50 per hour, what is his gross
pay? C. Risk
A. $474.50 D. Firm Value
B. $472.50 520. What does the S in SMART stand for?
C. $470.00 A. spontaneous
D. $400.00 B. simple
515. A company has 10% perpetual debt of C. specific
Rs. 1, 00, 000. The tax rate is 35%. D. social
Which one of the following is the after-tax
cost of capital assuming that the debt is is- 521. Which among the following is not true
sued at 10% premium? about an operating lease1. Short term
A. 10% lease2. Irrevocable3. Lessee bears the
cost of maintenance and insurance 4. Re-
B. 5.91% vocable
C. 6.5% A. 2 & 3
D. 7.22% B. 2 & 4
516. Ratio to assess the company’s ability to C. Only 4
fulfill all financial obligations in the short D. 1 & 4
term. What is this ratio called?
A. Activity ratio 522. The financial statements of a business en-
terprise include:
B. Leverage ratio
A. Profit and loss account
C. Financial ratio
B. Balance sheet
D. Liquidity ratio
C. Cash flow statement
517. Guest-the one who offers the hospitality
D. All the above
products/services
A. True 523. Unearned income includes all except
B. False A. dividends
518. Fixed assets investment decision is called B. tips

C. interest
A. Management of working capital D. pensions
B. Capital budgeting E. annuities

524. Pam needs to take money out of her ac- B. Dividend decision
count from an ATM. What card will she C. Capital budgeting decision
use?
D. Working capital decision
529. IF THE SALES ARE RS 50, 00, 000 AND

VARIABLE COSTS ARE 30, 00, 000
A. CONTRIBUTION RS 80, 00, 000
NARAYAN CHANGDER
B. CONTRIBUTION RS 150, 00, 000
A. Credit Card C. CONTRIBUTION RS 15, 00, 000
B. Sam’s Card D. NONE OF THE ABOVE

C. Debit Card 530. Which instrument of money market is
D. Macy’s Card also called zero coupon bond?
A. (a) Call money
525. Jackson is preparing to file his D-400
state income tax form. A part of his B. (b) Commercial Paper
form is shown below. Jackson is single. C. c) Certificate of Deposit
What is the NC standard deduction that he
D. (d) Treasury Bill
should put on line 32?
531. Goodwin Transport paid $85 in dividends
and $110 in interest expense during a
given year. During that same year, the
firm issued $40 in new equity shares, is-
sued new debt of $65, and repaid $23 of
A. $5, 800
old debt. What is the cash flow to credi-
B. $3, 000 tors for that year?
C. $6, 000 A. $68
D. none of above B. $152
526. Less Liquid 532. Managers of corporations need to act in
A. Investment an ethical manner
B. Savings A. because ethics violations will be pun-
ished by the law.
527. Pam needs to take money out of her ac-
B. because a business must be trusted by
count from an ATM what card will she use?
investors, customer and the public if it is
A. Credit Card to succeed.
B. Sam’s Card C. because business managers must an-
C. Debit Card swer to a higher authority.
D. Macy’s Card D. because ethical behavior is its own jus-
tification.
528. Another name for long term investment
decision is 533. Portfolio Investment is dealing in
A. Financing decision A. Same securities

B. Short term investment 538. To develop a long term financial plan, the
C. Different security key aspects to be considered are

A. Inflation rate
D. None
B. Interest rate
534. Siskiyou, Inc. has total current assets of
C. Personal health
$1, 200, 000; total current liabilities of
$500, 000; and long-term assets of $800, D. All above
000. How much is the firm’s Total Liabili-
539. Under secondary market, sale of securi-
ties & Equity?
ties take place between
A. $2, 500, 000
A. (a) Company and Investors
B. $1, 300, 000
B. (b) Company and Company
C. $2, 000, 000
C. c) Investor and other investor
D. $1, 800, 000
535. A debt evidenced by a “note” which spec- 540. James is a rational investor wishing to
ifies the principal amount, interest rate, maximize his return over a 20-year pe-
and date of repayment. riod. The current yield curve is inverted
A. loan with one-year rates at 5.00% and 20-
year rates at 3.50%. James will invest
B. principal
in the lower-rate 20-year bonds if:
C. credit
A. he thinks rates will fall in the future
D. none of above and locking in long-term rates today may
provide the highest long-run average re-
536. Short term unsecured promissory notes turn.
that is generally sold by large corporation
on discount basis with the maturity period B. he thinks rates will rise in the future
from 1 to 270 days. The statement is best and locking in long-term rates today may
described for provide the lowest long-run average re-
turn.
A. bonds.
C. he thinks rates will remain flat at 5% in
B. commercial paper. the future and locking in long-term rates
C. preferred shares, today will prevent him from appearing
greedy to those without this investment
D. common stocks. opportunity.
537. At its most basic level, the function of fi- D. he thinks rates will rise in the future
nancial intermediaries is to and locking in long-term rates today may
provide the highest long-run average re-
A. track and report interest rates
turn.
B. move money from lenders to borrow-
ers and back again 541. Petrol cost $.10 per gallon in 1930. Over
the next 60 years, the price rose at an av-
C. report all financial transactions to the erage rate of 4.42% per year. Based on
federal government this information, what was the average
D. effect a transfer of wealth in society price of a gallon of petrol in 1990?

A. $2.75 per gallon 547. Taxes are fees that the government
B. $1.53 per gallon people to pay in order to live and work in
their state and the USA.
C. $2.65 per gallon
A. does not require
D. $1.34 per gallon
B. requires
542. It determines the economic worth in the
exchange process. 548. The following are factors that may affect
feasibility of a long-term financial plan ex-
NARAYAN CHANGDER
A. Money as a standard of value. cept
B. Money as a medium of exchange. A. government policy
C. Money as a store of value.
B. insurance
D. Money as a payment.
C. interest rate
543. Which of the following is/are the finan- D. inflation
cial management process?
549. Which of the following is/are correct?
A. setting goals
A. Fixed expense-dividends
B. evaluating financial status
B. Variable expense-rent
C. creating financial and revising the
progress C. Active income-Allowances
D. all the above D. Passive income-allowances
544. Which is not a major decision in Financial 550. RETURN ON INVESTMENT IS 15% AND
Management RATE OF INTEREST IS 20%. DEBT WILL BE
A. Investment Decision A. FAVOURABLE
B. Operations Decision B. UNFAVOURABLE
C. Financing Decision
551. Conditions for accepting an investment
D. Dividend Decision
A. IRR is greater than the reference rate
545. An advantage of a savings account is that B. NPV Positif
it earns more interest than most checking
C. Profitability Index is greater than 1
accounts.
D. All previous answers are correct
A. False
B. True 552. How do you Manage School Finances Ef-
fectively?
546. Mention 3 Correct Financial Planning Tar-
gets? A. Monitor data, public policy, and legis-
lation continuously
A. Financial Targets
B. Create a strategic three-to-five-year
B. Target Customer plan
C. Competitor Targets C. Minimize unnecessary administrative
D. Business Growth Targets costs
E. Heart Target D. All of the above

553. Credit card 559. What day are financial managent lectures
A. Short term debt A. Monday

B. Long term debt B. Tuesday
554. A long term investment decision is called C. Wednesday
A. working capital decision D. Thursday
B. capital budgeting decision E. Friday
C. financial decision 560. What is ignored in Principle of Profit
D. dividend decision Maximization?
555. Eddie buys new ear buds for $107.36, A. Time Value of Money
he gives the store clerk $120.00, what B. Risk
change should he get back? C. Wealth Creation
A. $11.64 D. All of the above
B. $9.46
561. Value for money is an important ob-
C. $12.64 jective for not-for-profit organizations.
D. $20.00 Which of the following actions is consis-
tent with increasing value for money?
556. Tejado Supply has total equity of $1, 830,
fixed assets of $2, 170, long-term debt of A. Using a cheaper source of goods and
$740, and short-term debt of $430. What thereby decreasing the quality of not-for-
is the amount of Tejado’s current assets? profit organization services
A. $660 B. Searching for ways to diversify the fi-
nances of the not-for-profit organization
B. $830
C. $400 C. Decreasing waste in the provision of a
service by the not-for-profit organization
D. none of above
D. Focusing on meeting the financial ob-
557. is the area of finance concerned with jectives of the not-for-profit organization
the activities of buying and selling finan-
cial assets such as stocks and bonds. 562. Which of the statement is not true?
A. Investments A. Debenture is a creditorship security
B. Corporate finance B. Ownership securities are represented
by debentures
C. International finance
C. Retained profit is an internal source of
D. Financial markets and institutions
financing
558. Net Income approach proposes that there D. All of the above
is a definite relationship between Capital
Structure and 563. Purchase of treasury stock
A. Value of the firm A. Investing Activities
B. Cost of Capital B. Financing Activites
C. Earnings C. Operating Activities
D. EBIT D. none of above

564. Which of the following is not an objective D. 2 years 8 months

of financial management?
567. The service industry usually provides in-
A. Maximization of wealth of sharehold- tangible products and services that cannot
ers be felt by touch but can be felt by seen or
B. Maximization of profits heard.
C. Mobilization of funds at an acceptable A. True
cost B. False
NARAYAN CHANGDER
D. Ensuring discipline in the organization
568. the traditional department store of fi-
565. Mr. Kamal receives monthly net salary of nanceserving a variety of savers and bor-
RM4300 and monthly travel allowance of rowers.
RM100. He sets a fixed saving of 15% A. commercial banks
from his monthly total incomes. The in-
formation below shows the monthly ex- B. investment banks
penditures of Mr. Kamal. Given that C. financial services corporation
the monthly net income of Mr. Kamal is D. none of above
RM1340, find the value of x.
569. Mr. Wong earned RM3000 as a graphic
designer in a company. He also works
as a feelancer in his free time and earned
an extra income of RM300 for the last
month. In the same month, Mr. Wong’s
total expenses was RM 1400. Calculate
Mr. Wong’s cash flow and status of his
A. 800 cash flow
B. 950 A. RM 1900, Positive Cash Flow
C. 1020 B. RM 1600, Positive Cash Flow
D. 1890 C. RM 1900, Negative Cash Flow
566. The initial investment is 5, 000. In the D. RM 1600, Negative Cash Flow
first year the firm paid back 1, 000 in the 570. Break-even point is that level of sales
second year 2, 000 and the third year 3, revenue at which there is
000. Calculate the payback period
A. Profit
B. Loss
C. No profit no loss
D. None of the above
571. Which item is not funded by your tax dol-
lars?
A. Public Library
A. 2 years B. Local Fire Department
B. 3 years C. Department of Transportation (road
C. 3 years 4 months crew)

D. Fast Food Restaurant C. Horizontal analysis analyzes ratio dif-

ferences occurring between companies
572. Forms of integrity values include:

D. Horizontal analysis can include the
A. enthusiastic, happy and earnest in
statement of cash flows
working to be the best
B. honestly behave positively and comply 577. What is installment credit?
with company rules and social norms
A. When you repay a loan over a set pe-
C. committed, dedicated and continues to riod of time with smaller payments to add
develop oneself to provide more value to up to a big payment.
work
B. When you have to pay off the balance
D. Trust each other and work together to
in full 30 days after you make the pur-
realize a shared vision
chase.
573. The is a report of the revenue, ex-
penses, and net income or net loss over an 578. What is not one of the three types of ex-
accounting period. penses
A. income statement A. Cosmetic payments
B. accounts payable B. Utility payment
C. owner’s equity
C. House payment
D. financial statement
D. Car payment
574. The real rate is 2.50% and inflation is
E. Hidden
3.25%. What is the approximate nominal
rate?
579. The arbitrary process is the behavioral
A. 5.15% foundation for the
B. 5.25% A. MM approach
C. 3.25%
B. XX approach
D. 5.75%
C. Gorder approach
575. is concerned with optimal procure-
D. Miller approach
ment as well as usage of finance.
A. Financial planning 580. How is it possible for a firm to be prof-
B. financial calculation itable and still go bankrupt?
C. financial management A. The firm has positive net income but
D. financial loss has failed to generate cash from opera-
tions.
576. Which of the following statements re-
garding horizontal analysis is false? B. Earnings have increased more rapidly
than sales.
A. Horizontal analysis can include more
than two years of financial data C. Net income has been adjusted for infla-
tion.
B. Horizontal analysis is facilitated by
computing peso and percentage changes D. Sales have not improved even though
in financial statement analysis credit policies have been eased.

581. A firm can reduce its cash conversion cy- C. $266.00

cle by
D. $265.00
A. increasing the average age of inven-
tory. 586. What financial decision focuses on deter-
B. increasing the average collection pe- mining the portion of earnings to be dis-
riod. tributed to shareholders as dividends and
what portion to retain for reinvestment?
C. increasing the average payment pe-
A. Investment Decision
NARAYAN CHANGDER
riod
D. decreasing the average payment pe- B. Financing Decision
riod C. Dividend Decision
582. What is the primary concern of the financ- D. Liquidity Decision
ing function in financial management?
587. And acquisition is the same thing as
A. Determining which investments to
make A. A takeover
B. Managing a company’s cash flow B. An amalgamation
C. Raising capital and managing debt C. A merger
D. Distributing profits to shareholders D. None of above
583. It is important to remember that the 588. Wages are paid by the
fundamental identity of accounting is the
debit and credit recording activity where A. week
debits equal credits. B. month
A. A. Always
C. hour
B. B. Rarely
D. minute
C. C Never
E. day
D. D. Sometimes
589. is the total amount of money owed
584. In financial management, which financial to a business
goal focuses on the long-term wealth of
the shareholders? A. Accounts payable
A. Profit Maximization B. Accounts receivable
B. Revenue Maximization C. Fixed assets
C. Wealth Maximization D. Equity
D. Market Share Maximization
590. Q3) Financial structure refers to
585. James worked 28 hours this week and A. Short-term resources.
is paid $9.50 per hour. What is his gross
pay for the week? B. All the financial resources.
A. $622.00 C. Long-term resources.
B. $270.00 D. All of these

591. “Shareholder wealth” in a firm is repre- 595. Which of the following is not usually con-
sented by sidered a need?

A. The number of people employed in the A. Food
firm B. Shelter (Somewhere to live)
B. The book value of the firm’s assets C. A Pair of Jordan 12’s
less the book value of its liabilities.
D. none of above
C. The amount of salary paid to its em-
ployees. 596. The planning done for next one to two
years is:
D. The market price per share of the
firm’s common stock. A. Long term planning
B. Strategic planning
592. What is the name of the American financ-
C. Short term planning
ing program we talked about?
D. None
597. Which of the following are all WANTS

A. Food, Clothing, Housing
B. Food, Video Games, Housing
C. Iphone 11, Video Games, Concert tick-
ets
D. none of above
A. Export Working Cash Financing
B. Export Capital Work Flow 598. Which of the following sources of capital
should not be selected by a business if its
C. Export Capital Work Financing fixed cost is high?
D. Export Working Capital Financing A. Equity shares
593. What is credit B. Preference shares

C. Debentures
A. Borrowed money
D. All of the above
B. Gold
C. A card in your wallet 599. Why firms pursue international business?
(You can choose more than one choice)
D. A form of karma
A. To seek comparative advantage
E. A report
B. To narrow the market
594. The inability of a business to meet its C. To avoid market restriction
fixed financial obligations, like payment of D. To achieve new market target
interest, is known as
A. Business risk 600. When shareholders appoint financial
managers to run firms and make invest-
B. Financial risk ment decisions, this is called:
C. Long-term risk A. Agency cost
D. Market risk B. Financing decision

C. Limited liability 605. For businesses that have operated for

D. Separation of ownership and control several years, the main source of budget
information is
601. A firm should consider vertical integra- A. the businesses’ financial records
tion when
B. the Internet
A. The competitive situation is highly
C. the Small Business Administration
volatile
D. business magazines and newspapers
B. Customer needs are evolving
NARAYAN CHANGDER
C. The forms suppliers willingly coopo- 606. lf the credit sales of the firm are Rs. 6,
rate with the firm 000, 000 and the average debtors are Rs.
1, 500, 000; then the receivables turnover
D. The form suppliers of raw materials is Times.
are often unable to maintain quality stan-
dards A. 2 times
B. 3 times
602. A financial manager’s primary activities
C. 4 times
include making investment and financing
decisions. D. 5 times
A. True 607. practical application of time value of
B. False money
A. preparation of loan repayment sched-
603. What time period does an income state- ule
ment usually cover?
B. sinking fund creation
A. 1-2 years
C. valuation problems
B. 1 week
D. all the above
C. 3-6 months or less
608. If cash discount is offered to customers,
D. 5 years then sales would increase.
604. What are the 6 questions to ask when A. True
applying for credit. B. False
A. What is the annual fee, What is the C. May be
annual percentage rate, When are pay-
D. none
ments due, What is the minimum payment
required each month, Is there a grace 609. Sixty percent of Perdana’ annual sales of
period, Are there other fees associated RM900, 000 is on credit. If its year-end
with the credit, such as minimum finance receivables turnover is 4.5, the average
charges. collection period and the year-end receiv-
B. What is the minimum payment re- ables are, respectively (Assume a 365-
quired each month, Is there a grace pe- day year).
riod, Are there other fees associated A. 81 days and RM120, 000
with the credit, such as minimum finance B. 73 days and RM120, 000
charges, Is there a penalty for early pay-
ment, you don’t need to ask questions-you C. 73 days and RM108, 000
just need to fill out the application. D. 81 days and RM108, 000

610. What is related to debt 616. Maximisation of Shareholders Wealth is

A. (a) Higher cost higher risk reflected in

A. Sales Maximization
B. (b) Lower cost higher risk
B. Number of Shareholders
C. c) High cost low risk
C. Market Price of Equity Shares
D. (d) Low cost low risk
611. It is known as the ability of a company to
obtain the greatest profit and performance 617. What is the primary purpose of a cash
in its operations. flow statement?
A. Value added A. to provide relevant information about
a company’s cash receipts and cash pay-
B. Profit maximization ments during an accounting period
C. Basic financial objective B. to generate positive future net cash
D. Monetary Politics flows
C. to meet its obligations and pay divi-
612. Transfer payments are payments
dends
A. one way
D. for external financing
B. two way
618. you and your friends went for shopping
C. back and forth
and you get discount, so discount is?
D. not
E. invisible
613. Revenue is described as money

A. Leaving an business’s account
B. coming into business
A. Saving
C. owed by the business to suppliers B. Expenditure
D. None of the above C. investment
614. Money is used as a because it’s the D. Earning
intermediary in the exchange process.
619. Eric buys a copy of his favorite video
A. payment game for $25.70. You give the clerk $30.
B. store of value How much change will you receive?
C. medium of exchange A. $4.20
D. standard of value B. $4.30
C. $4.40
615. Financial ratios for the statement of fi-
nancial position and the income statement D. none of above
are done.
620. The cost of raising money by selling secu-
A. TRUE rities, is the meaning of
B. FALSE A. Flotation Cost

B. Fixed Cost interest earned from the investment will

C. Variable Cost be used for his parents’ retirement.
D. Sunk Cost 625. is the area of finance concerned with

activities such as borrowing funds to fi-
621. In regard to the agency problem, are nance projects such as plant expansions or
the principal owners of a corporation. new product launches.
A. shareholders
A. Working capital management
NARAYAN CHANGDER
B. managers
B. International finance
C. employees
C. Investments
D. suppliers
D. Corporate finance
622. Financial leverage helps one to estimate
626. What is a credit referring to a checking
account?
A. Business Risk
A. Deposit or an addition to the account
B. Financial Risk
B. Subtraction or a minus to the account
C. Production Risk
C. What is on your credit report
D. Business and financial risk
D. When you enter your pin number
623. percent of US taxes are collected by
the federal government 627. A is a monthly plan that helps you
use your money correctly in order to pay
A. 15%
all your bills and still have money left over
B. 67% for savings or emergencies.
C. 20% A. Budget
D. 4% B. Income
E. 2% C. Economics
624. Ali is going to finish his study soon. He D. Savings
wants to start working to let his parents
live a comfortable life. Which of the fol- 628. Which of the following is not a criteria in
lowing is a specific goal for his aim using creating a financial plan?
the SMART approach?
A. Earn a lot of money to buy a big house
for his parents.
B. Set up his own business so that he can
have a million in 5 years.
C. Find a job with a salary of RM2 500
each month so that he can give RM1 000 A. Cash flow
to his parents as a monthly allowance.
B. Marketing
D. Find a job with a salary above RM3 000
every month. Then, invest the money in an C. Quality control system
equity fund that yields a high return. The D. Reflection

629. A yearly fee that may be charged for hav- 634. Deciding how to spend your money be-
ing a credit card. fore you actually spend it.

A. Credit limit A. Account
B. Annual fee B. Balance
C. Late-payment fee C. Budget
D. Balance transfer D. Cash
630. The systematic process of recording and 635. Financial controller is responsible
reporting the financial position of a person A. Cash management
or an organization is called,
B. Credit management
A. Accounts receivable C. Securities management
B. Accounting D. None of these
C. Generally accepted accounting princi-
pals (GAAP) 636. The following accounts are included in the
Balance Sheet, except:
D. Fixed assets
A. Account Receivable
631. Covers your business in the event you B. Inventories
have to limit or shut down because of dis-
C. Depreciation and Amortisation
aster or catastrophic event. The insur-
ance compensates a business for financial D. Patent & Godwill
losses.
637. limitation of analysis of financial state-
A. Business interruption insurance ments is
B. Vehicle insurance A. Affected by window dressing
C. Product liability insurance B. Difficulty in forecasting
D. Home-based businesses C. Do not reflect changes in price level
D. All of the Above
632. There exist a relationship between
the Bond Price and Interest rate 638. The service industry is defined as “a se-
A. Direct relationship ries of interactions between participants,
processes and physical elements”.
B. positive relationship
A. True
C. Inverse Relationship
B. False
D. No
639. Trading on equity takes place when:
633. The pay that is earned before deductions
A. ROI is less than rate of interest on
is taken out an employee’s pay is called:
debt.
A. Gross Pay
B. ROI is more than the rate of interest
B. Net Pay on debt.
C. Take Home Check C. ROI is less than the ROE.
D. Overtime D. ROI is more than the ROE.

640. With the help of the financial planning a 645. is defined in financial terms as the
situation of continuous can be main- chance that an outcome or investment’s ac-
tained. tual gains will differ from an expected out-
come or return
A. Minimum Capital
A. Annuity
B. Liquidity
B. Perpetuity
C. Maximum Capital
C. Risk
D. (b) and (c)
NARAYAN CHANGDER
D. Return
641. The finance field includes three main sub- 646. The cost of capital is:
categories: finance, finance, and
A. The required rate of return a company
public (government) finance.
must earn on its investments to satisfy its
A. private, corporate investors’ expectations
B. personal, corporate B. The amount of money a company must
pay to borrow money
C. individual, corporate
C. The amount of money a company must
D. family, corporate pay to raise equity capital
642. What is it called when you own a % of D. The amount of money a company must
the employer contributions? pay to its employees
A. Vested E. None of the above
B. Contribution match 647. The is a report of the revenue, ex-

penses, and net income or net loss over an
C. Employee match accounting period.
D. Roll over A. income statement
E. 401k B. accounts payable
C. owner’s equity
643. How can businesses typically finance
their growth? D. financial statement
A. Reducing product offerings 648. Which of the following is an example of

a liability?
B. Downsizing the workforce
A. Cash at bank
C. Borrowing capital
B. Rent (to pay)
D. Cutting marketing expenses
C. Bank loan
644. What is the goal of the firm according to D. Accounts receivable
shareholder’s wealth maximization?
649. An asset that derives value from a con-
A. Maximizing total earnings tractual Claim is called as
B. Emphasizing short-term targets A. Fictitious asset
C. Considering risk and uncertainty B. Financial asset
D. Increasing the market value of com- C. Tangible asset
mon stock D. Real asset

650. Intangibles 656. The efficient and effective management

of funds.
A. Cash

A. Finance
B. Licenses
B. Evaluating Investments
C. Patents
D. Copyrights
D. Financial Institution
651. Wealth Maximisation is directly linked
657. the difference between after-tax operat-
with
ingprofit and the total dollar cost of capi-
A. Factory Efficiency tal, including the cost of equity capital.
B. Employee Turnover
C. Market Capitalisation
D. JIT
652. Primary objective of financial manage-

ment is
A. Availability of funds
A. Market Value Added
B. Effective use of funds B. Economic Value Added
C. Safety of funds C. Net Operating Profit after Tax
D. maximizing shareholder’s wealth D. Free Cash Flow
653. It is considered to be the expansive goal 658. Difference in what is owned, called as-
of the firm. sets, and what is owed, called liabilities is
A. Valuation Approach considered:
A. Net Income
B. Maximization of Shareholder’s Wealth
B. Net Worth
C. Social Responsibility
C. Balance
D. Ethical Behavior
D. Interest
654. The movement of money from lender to
borrower and back again is known as 659. a set of documents that outline essential
financial facts about a new venture
A. the circle of life
A. financial plan
B. corporate finance
B. financial forecast
C. the cycle of money C. budget
D. money laundering D. owner’s equity
655. Investment in current assets for longer 660. Name the financial decision which relates
duration is called fixed capital. to disposal of profits.
A. True A. Investment decision
B. False B. Financing decision

C. Dividend decision C. Sarah says that financial ratios are ir-

D. Capital budgeting decision relevant in financial management.
D. They all agree that financial ratios
661. This transfer can take place in three (3)
help in analyzing and interpreting finan-
ways:
cial statements, assessing the financial
A. Direct Transfer health of a company, identifying areas of
B. Transfer through Investment Banks improvement, and making informed deci-
sions.
C. Transfer Through a Financial Interme-
NARAYAN CHANGDER
diary
666. Joe works 50 hours and makes $12.50
D. Markets an hour, what is his gross pay. (40 hrs. is
E. Financial market a regular work week)
662. We bought a second home to rent. A. $500.00

A. Spending B. $187.50
B. Investing C. $678.50
C. Saving D. $687.50
D. Donating
667. Which of the following is NOT one of the
663. Financial structure means
five major types of insurance?
A. Long term fund
A. Auto
B. Long term fund and current liabilities
B. House
C. Excess of liabilities over assets
D. None of the above C. Earthquake
D. none of above
664. The financial services sector is a
driver of a nation’s economy.
668. The income statement is sometimes called
A. tertiary a profit and loss (P & L) statement.
B. secondary
A. True
C. preliminary
B. False
D. primary
665. Isiah, Tessa, and Sarah are studying for 669. Choose the correct option
their financial management exam. They
are discussing the role of financial ratios.
According to their understanding, what is
the role of financial ratios in financial man-
agement?
A. Isiah believes that financial ratios are A. A
only useful for large corporations. B. B
B. Tessa thinks that financial ratios can
C. C
only be used for short-term financial anal-
ysis. D. D

670. represents the difference between the to- B. Repossession

tal marketvalue of a firm and the total
C. Foreclosure
amount of investor-supplied capital

D. Blackmail
E. Wage garnishment
675. Companies (A) and (B) are both prof-

itable, and they have the same total as-
sets (TA), Sales (S), return on assets
(ROA), and profit margin (PM). However,
Company (A) has the higher debt ratio.
Which of the following statements is COR-
RECT?Companies (A) and (B) are both
A. Market Value Added profitable, and they have the same total
assets (TA), Sales (S), return on assets
B. Economic Value Added (ROA), and profit margin (PM). However,
C. NOPAT Company (A) has the higher debt ratio.
D. Free Cash Flow Which of the following statements is COR-
RECT?
671. The company’s cost of capital is called A. Company (A) has a lower total assets
turnover than Company (B).
A. Leverage
B. Company (A) has a lower equity multi-
B. Hurdle rate plier than Company (B).
C. Risk rate C. Company (A) has a higher fixed assets
D. Return rate turnover than Company (B).
672. The M in SMART goals stands for: D. Company (A) has a higher ROE than
Company (B).
A. Material
B. Measurement 676. 2 types of bank accounts are:
C. Management A. Direct Deposit & Loan
D. None B. Checking & Direct Deposit
673. Cost of advertising and printing prospec- C. Checking & Savings
tus is called
D. Credit & Debit
A. Equity cost
B. Debt cost 677. When a corporation sells common stock
to the general public for the first time is
C. Dividend cost
called?
D. Floatation cost
A. Initial public offering
674. All of these are actions creditors can take B. Secondary market
when individuals don’t pay their loans EX-
CEPT C. Common stock
A. Suing the borrower D. Preferred stock

678. The time lag between procurement of C. Debt

raw material and its conversion into cash D. Growth
and cash equivalents, is called:
A. Production cycle 684. Which is not a part of investment de-
cision?a. Working capital managementb.
B. Processing cycle Cash managementc. Credit managementd.
C. Lead time Capital budgeting
D. Operating cycle A. c
NARAYAN CHANGDER
B. d
679. A legal document that functions like cash.
C. a & b
A. Debit Card
D. b & c
B. Credit Card
C. ATM 685. Keeping your money in a bank prevents
you from or
D. Check
A. saving it, depositing it, or withdrawing
680. Compute the EPS based on the given data it.
below:Shares Outstanding-100, 000Year-
B. losing it, spending it, or having it stolen
end Net income-750, 000
easily.
A. 7 per share C. giving it away, putting in a jar, or going
B. 7.50 per share on a trip around the world
C. 6 per share D. none of above
D. 5 per share 686. How much is Puan Sofia’s monthly saving
681. A Dependent is if she wanted to pay the down payment
for a RM650 000 house in six years?
A. a taxpayer
A. RM1111.78
B. a person who relies on another person
B. RM900.00
for financial support
C. RM1000.78
C. your husband or wife
D. RM902.78
D. your parent
687. The principal participants in in the finan-
682. In weighted average cost of capital, ris-
cial markets are
ing in interest rate leads to-
A. businesses, banks, government.
A. Increase in cost of debt
B. borrowers, savers, financial institu-
B. Increase the capital structure
tions.
C. Decrease in cost of debt
C. borrowers, savers, financial institu-
D. Decrease the capital structure tions.
683. What is a fundamental concept in finan- D. dealers, brokers, regulators
cial management? 688. Financial leverage measures
A. Frugality A. sensitivity of EBIT with respect of %
B. Investment change with respect to output

B. % variation in the level of production C. Investment Decision

C. sensitivity of EPS with respect to % D. Financial Planning

change in level of EBIT
693. Cindy wants to buy a refrigerator that
D. no change with EBIT and EPS costs RM2300 in 5 months. Calculate the
689. Trecor Co plans to buy a machine costing amount of money she needs to save each
$250, 000 which will last for 4 years and month.
then be sold for $5, 000.Depreciation is A. RM360
charged on a straight-line basis over the B. RM420
life of an asset.What is the payback pe-
riod for the machine (to the nearest whole C. RM460
month)? D. RM480
694. Cost of retained earnings is

A. Opportunity cost of capital
B. Explicit cost
C. historical cost
D. Marginal cost
695. International Financial Management is

A. 1 year(s) 12 month(s)
A. management of the financial activities
B. 1 year(s) 6 month(s) of an organization in an international situ-
C. 2 year(s) 11 month(s) ation
D. 1 year(s) 11 month(s) B. management of the financial activities
of an organization in critical situations
690. What is the most widely used liquidity
ratio? C. management of the financial activities
of an organization in a domestic situation
A. Quick ratio
D. management of the financial activities
B. Current ratio of an organization in a debt-ridden situa-
C. Inventory turnover tion
D. Debt ratio 696. markets in which corporations raise new
691. are bank loans, credit card debts, and capital. Thecorporation selling the newly
other financial obligations. And also out- created stock receives the proceeds from
standing payments such as unsettled rent, the salein a primary market transaction.
utility bills, credit card bills, and others. A. Primary markets
A. Assets B. spot markets
B. Liabilities C. futures markets
692. Stock Market condition is a factor related D. capital markets

to 697. The proposal is subject to technical viabil-
A. Financing Decision ity, social and financial viability during the
B. Dividend Decision A. project evaluation

B. project screening
C. project selection
D. review
698. Profit loss (income statement) mengukur
A. all answers are correct
NARAYAN CHANGDER
B. asset and liability
C. cash
A. Automated Teller Machine
D. profitability
B. Almost Time Machine
699. If Jonathan wants to save 20% of his in- C. Active Time Moment
come, how much money does he need save
D. A Time Machine
per month if he make $1, 600 per month.
A. $400 704. For the purpose of reducing completion
and increasing market share two compa-
B. $160 nies with the same product combined this
C. $320 statement is about
D. $200 A. Horizontal merger

B. Vertical merger
700. Family Mart collect RM2, 000 from SS
C. None of a and b
Company who is the customer. The state-
ment shows that Family Mart utilizes D. a and b
A. sources of fund 705. If an employee earns “$8.50” per hour,
B. uses of fund what is their “Overtime Rate”?
A. $12.50
701. Which one of these is NOT an asset?
B. $10.25
A. Liquid C. $12.75
B. Investments D. $8.50
C. Non-Liquid
706. is NOT a main category of financial
D. Stocks management.
E. Liabilities A. Capital budgeting
702. True or False:Income is money you earn
C. Accounts payable management
A. True
D. Working capital management
B. False
707. Which of the following is the correct or-
703. What does “ATM” stand for? der of financial management process? I)

Carrying out financial planII) Setting goal- 712. Merger and acquisition between an In-
sIII) Reviewing and revising the progres- dian and foreign company requires ap-
sIV) Evaluating financial statusV) Creating proval from the

financial plan A. Government of India
A. II, IV, V, I, III B. Reserve Bank of India
B. II, V, IV, III, I C. Government of India and reserve Bank
C. IV, I, II, V, III of India both
D. IV, II, V, I, III D. None of above
708. Which is not a money tip? 713. In case of One existing company
takes over the business of another com-
A. create a budget pany and no new company is formed
B. limit credit card usage A. Merger
C. Save some money each paycheck B. Amalgamation
D. track expenses C. Absorption
E. Spend every dollar of your paycheck on D. Demerger
wants
714. refers to a firm holding some cash
709. A balance sheet contains which of the fol- to meet its routine expenses that are in-
lowing three accounts: curred in the ordinary course of business.
A. assets, revenues, liabilities A. Speculative motive
B. assets, liabilities, owner’s equity B. Transaction motive
C. revenue, expenses, owner’s equity C. Precautionary motive
D. expenses, assets, revenue D. Compensating motive
715. What is the formula for calculating the

710. Costs that change at the same rate as the
Net Present Value (NPV) of a project or
firm’s sales, is the meaning of
investment?
A. Variable Cost
A. NPV = Initial Investment / Annual
B. Fixed Cost Cash Flow
C. Flotation Cost B. NPV = Future Value / Present Value
D. Sunk Cost C. NPV = Present Value-Initial Invest-
ment
711. Depreciation is a source of cash inflow be-
D. NPV = Total Revenue-Total Expenses
cause
A. it is a tax-deductible noncash expense 716. Capital structure shows
B. it supplies cash for future asset pur- A. debtor-creditor ratio
chases B. fixed assets-current assets ratio
C. it is a tax-deductible cash expense C. debt-equity ratio
D. it is a taxable expense D. interest coverage ratio

717. Net Present Value (NPV) is: A. commercial bank

A. Total discounted free cash flows to all B. credit unions
capital providers minus total invested cap- C. retirement accounts
ital
D. none of above
B. Total undiscounted free cash flows to
all capital providers minus total invested 721. If Employee A, works 37 hours in one
capital week and their hourly pay rate is:$10.25;
what is their gross pay for the week?
NARAYAN CHANGDER
C. Total discounted net profits minus to-
tal invested capital A. $300.25
D. Total discounted free cash flows to all B. $380.00
capital providers minus invested equity
C. $379.25
capital
D. $37.95
718. Investment Decision is also called
A. capital budgeting 722. Which THREE of the following will ad-
versely affect the reported earnings per
B. Current Decisions share of a profit-seeking company for an
C. Working capital decisions accounting period?1. A larger than ex-
pected tax liability for the period.2. In-
D. All Above
terest payable to creditors is higher than
719. HP company is pondering over what expected.3. A larger than usual divi-
would be its revenue before paying its dend declared for ordinary shareholders.4.
fixed statutory liability when the revenue The company issues some 7% preference
from operations is Rs 6 lakhs, its changing shares at the beginning of the accounting
expenses are Rs 3 lakhs, and its stable ex- period.5.The reversal of a provision made
penses are Rs 1 lakhs. It also possesses a in the previous accounting period.
10% debt for Rs 20000 A. 1, 2, 5
B. 2, 4, 5
C. 1, 2, 4
D. 2, 3, 4
723. How would payments for taxes be clas-

sified?
A. Operating outflow
B. Operating inflow
A. Rs 1.5 lakhs C. Investing inflow
B. Rs 1.8 lakhs D. Investing outflow
C. 1.7 lakhs 724. Which of the following statements are

D. 1.6 lakhs correct? (1) Share option schemes always
reward good performance by managers
720. A is a for profit institution that is run (2) Performance-related pay can encour-
by share holders. age dysfunctional behaviour (3) Value for

money as an objective in not-for-profit or- than one year, and money markets are
ganisations requires the pursuit of econ- markets for long term debt instruments
omy, efficiency and effectiveness. maturing in more than one year.

A. 1 and 2 only A. True
B. 1 and 3 only B. False
C. 2 and 3 only 729. the action or process of allocating or dis-
D. 1, 2 and 3 tributing something
A. capital
725. Which of the following is a financing de-
cision? B. allocation
A. Providing for doubtful debts C. bonds
B. Issuing a 5-year Bond D. stocks
C. Depreciating a fixed asset 730. Examples of cash outflows
D. none of above A. Salaries, dividend
726. Protection is very important. Which of B. Electricity, rent

these does not fall into the financial pro- C. Allowances, investment
tection category? D. interest, housebloan
A. Insurance
731. What happens if you don’t pay your
B. Hire Security Guards at Home Credit Card?
C. Emergency Fund A. your credit card gets revoked
D. none of above B. Nothing
727. Neveah, Samuel, and Stephen are study- C. you Impact your interest rate
ing for their financial management exam. D. your mom yells at you
They are discussing the concept of work-
E. you can’t use your credit card
ing capital. According to their understand-
ing, what is the role of working capital in 732. What is the EAR if the APR is 5% and
financial management? compounding is quarterly?
A. Neveah believes that working capital is A. Slightly above 5.09%
not important in financial management.
B. Slightly below 5.09%
B. Samuel thinks that working capital is
C. Under 5.00%
the difference between current assets
and current liabilities. D. Over 5.25%
C. Stephen says that working capital is 733. The table shows part of Encik Halim’s
the total amount of a company’s equity. monthly financial plan.Express p as a per-
D. They all agree that working capital is centage of the net income.
the amount of money a company has avail-
able to pay its short-term expenses.
728. Capital markets are markets for short

term debt instruments maturing in less

A. 25% 739. What does ARM stand for?

B. 20% A. An appendage from your torso with a
C. 15% hand and elbow.
D. 10% B. Adjustable rate mortgage.
734. financial leverage is intended to C. Adjustable rate money.
A. Increase return on capital employed D. Adjustable ratio mortgage.
NARAYAN CHANGDER
B. Increase net equity returns 740. Encik Sharul wants to buy a car in two
C. Decrease volatility in return years. His total monthly income is RM 5
D. Increase return on capital employed 600 and his total monthly fixed and vari-
and net equity able expenses is RM 3 800. He plans to
pay RM 8 400 as the down payment of
735. What is the major objective of financial the car. How much is his monthly savings
management? in order to achieve his financial goal?
A. Profit Maximization A. RM75
B. Wealth Maximization B. RM275
C. None of them C. RM350
D. none of above D. RM180
736. Positive cash flow is also known as
741. Which of these is not a part of Capital
A. Surplus Structure?
B. Deficit A. Equity Shares
737. Cash & Cash Equivalent-24, 890Held B. Short-term borrowings
for Trading-10, 000Trade and Other
C. Debentures
Receivables-16, 000Inventory-8, 960 If
total current liabilities amounted to 19, D. Bonds
900. How much is the quick assets?
742. Future value interest factor takes
A. 49, 850
B. 40, 890 A. Compounding
C. 24, 890 B. Inflation

D. 50, 890 C. Discounting
738. Which of the following is NOT in a bank D. Deflation

statement?
743. Which is NOT a good investment?
A. Deposits
A. Stocks
B. Charges
B. Cars
C. Withdrawals
C. Houses
D. Beginning and ending balance for the
period D. Real estate
E. Cash in hand E. solar panels

744. Keshawn wants to buy a new shirt for 748. Positive Leverage effect brings
$16.50, what would his total be with a
A. Gain for equity shareholders
sales tax of 7.5%?

B. Loss for equity shareholders
A. $17.50
C. None
B. $15.26
D. none of above
C. $17.74
749. Income not spent on current consumption
D. $17.47
A. Savings
745. The primary goal of a publicly owned cor-
B. Investment
poration is to
A. maximize dividends per share 750. What is the cost of raising funds called?
B. maximize shareholder wealth A. Flotation Cost
C. maximize earnings per share after B. Marginal Cost

taxes C. Fixed Cost
D. minimize shareholder risk D. Variable Cost
746. Which THREE of the following are the 751. Jose earns $1, 000 a month. He spends
main types of decision facing the financial 35% of his income on rent for his house.
manager in a company? A. Income decision How much money is Jose spending on
B. Investment decision C. Dividend decision rent?
D. Financing decision E. Appraisal decision A. $35
F. Budget decision
B. $300
A. A, B & D
C. $350
B. B, C & D
D. none of above
C. C, D, F
752. The term capital structure refers to
D. B, D & F
A. Long-term damped preferred stock
747. Choose the correct option and common stock equity
B. Current assets and current liability
C. Total assets minus liability
D. Shareholders equity
753. What is the formula in finding current ra-

tio?
current asset
A. Financial Management A. a. current liabilities
B. Financial Planning B. b. investor360

turnover
total liabilities
C. Capital Structure C. c. total assets
D. Capitalisation D. d. Gross Pr o f it
Net sales

754. Which of the following best describes B. free

why the Valuation Principle is a key con- C. businesses
cept in making financial decisions?
D. none of above
A. It shows how to assign monetary value
to intangibles such as good health and 758. “Discount pricing” means the discount
well-being. price is than the original price?
B. It allows fixed assets and liquid assets A. Higher
to be valued correctly. B. Lower
NARAYAN CHANGDER
C. It gives a good indication of the net C. The Same
worth of a person, item, or company and D. none of these
can be used to estimate any changes in
that net worth. 759. is also referred to as working capital
position or short-term financial position.
D. It shows how to make the costs and
benefits of a decision comparable so that A. LIQUIDITY
we can weigh them properly. B. PROFITABILITY
755. Which of the following is NOT true with 760. A project has the following projected
regard to an amortization table? cash inflows.Year 1-100, 000Year 2-125,
A. The interest payment for a period is 000Year 3-105, 000 Working capital is re-
equal to the periodic interest rate multi- quired to be in place at the start of each
plied by the beginning-of-the-period prin- year equal to 10% of the cash inflow
cipal balance. for that year.The cost of capital is 10%.
What is the present value of the working
B. The remaining principal balance at the capital?
end of a payment period is equal to the
A. $Nil
beginning-of-the-period principal less the
total payment. B. $(30, 036)
C. The total payment is calculated by us- C. $(2, 735)
ing the present value of an annuity for- D. $33, 000
mula.
761. Financial ratios that tell how much of
D. All of the above are true. each dollar of sales, assets, and owner’s
investments resulted in net profit:
756. markets for short-term highly liquid debt
securities. A. Liquidity ratios
A. money markets B. Efficiency ratios
B. capital markets C. Profitability ratios
C. spot markets D. Leverage ratios
D. futures market 762. If the if the company has ideal fund that
means there is large amount of ?
757. The NCDOR e-File for and e-File for
A. Cost of capital
fee website has a list of approved tax
preparation software for participating e- B. Cash
File providers. C. Working capital
A. fun D. Inventory

763. The symbol of unlevered beta 767. Inventory can be divided into 3 cate-
gories:
A. b

A. work-in process
B. UB
B. raw materials
C. bL
C. reserved stock
D. bu
D. finished goods
764. What happens when a business ex- 768. Types of expenditure in terms of funding
pands? source divided in
A. profits will increase A. External financing and Internal financ-
B. employees will likely be fired ing
C. marketing activities can be put on hold B. Own capital expenditure and foreign
forever spending
C. Internal expenditure and intensive
D. new factories and equipment may be
spending
needed
D. Expenditure and Foreign spending
765. When was EXIM established?
769. The government finance which includs the
principles and practices relating to the Pro-
curement and management of funds for
Central Government, and Local bodies is
known as:
A. Public finance
B. Business Finance
C. Private Finance
D. All of these
A. 1945 770. Projects are mutually exclusive if picking

one project eliminates the ability to pick
B. 1985 the other project. This mutually exclusive
C. 1925 situation can arise for different reasons.
Which of the statements below is NOT one
D. 1965 of these reasons?
766. it means distributing and investing a com- A. One project will always have a nega-
pany’s financial resources in ways that tive NPV.
will increase its efficiency, and maximize B. There is a scarce resource that both
its profits projects would need.
A. Capital allocation C. There is need for only one project, and
both projects can fulfill that current need.
B. capital
D. By using funds for one project, there
C. allocation
are not enough funds available for the
D. bonds other project.

771. Which is not a major Credit Card network A. Budgeting only helps in controlling the
company financial resources of their business.
A. Capital One B. Budgeting is not important in their fi-
B. Master Card nancial management.
C. American express C. Budgeting is only important for their
personal finance management.
D. Discover
D. Budgeting is important in their finan-
E. Visa
NARAYAN CHANGDER
cial management because it helps in
772. Which one is correct planning and controlling the financial re-
sources of their business.
A. Interest expense reduces our tax lia-
bility 775. What happens when a company is ‘prof-
B. Dividends are not tax deductible, so itable’ but the collection takes longer than
there is no tax impact on the cost of eq- payment to suppliers?
uity A. OK-because it’s still profitable
C. All above
B. The company is in trouble and could go
D. none of above bankrupt
773. Which of the statements below is FALSE? C. Companies need to focus on EBIT
A. Project A has a higher y-axis intercept D. The Cash Flow statement will show a
for its NPV profile than mutually exclusive negative number
Project B. As long as the profile of Project
A is above the profile of Project B, Project 776. You are allowed to invest in shares
A will have a higher NPV value for that par- of listed companies on the Johannesburg
ticular discount rate. Stock Exchange (JSE).
B. Project A has a higher y-axis intercept A. True.
for its NPV profile than mutually exclusive B. False.
Project B. This means that Project A has
a lower NPV than Project B when the dis- 777. Which 2 aspects below are costs of hold-
count rate is zero. ing stock?
C. Project A has a higher y-axis intercept A. Interest.
for its NPV profile than mutually exclu-
sive Project B. As we proceed past the B. Trasnportation cost.
crossover rate to the right on the x-axis, C. Insurance costs.
Project B’s profile will be above Project
D. Obsolescence.
A’s profile.
D. Project A and Project B are mutually 778. Which ratio measures the efficiency of a
exclusive. The two projects intersect in company’s inventory management?
terms of NPV at a discount rate labeled
A. Current Ratio
the crossover rate.
B. Debt Ratio
774. Nick, Amaya, and Mason are running a
C. Inventory Turnover Ratio
small business together. Why is budgeting
important in their financial management? D. Profit Margin Ratio

779. Something that you pay is called 783. The definition of Pph 22 is a form of with-
A. income holding or collection of tax carried out by
one party against the Taxpayer on income

B. an expense in connection with the following, EXCEPT:
C. a profit A. The sale of goods is very luxurious
D. savings
B. Purchase goods using APBN/APBD
780. It pertains to the ability of the firm to and non-APBN/APBD funds
yield a sufficient amount of return on com- C. Specialized labor transfer between
pany sales asset and invested capital. countries
A. LIQUIDITY D. Import of goods/services
B. PROFITABILITY
784. Powee Company uses the indirect
781. Santhosh Super store’s revenue from the method in determining the net cash pro-
operations is Rs 1 lakh; its fluctuating cost vided by operating activities. During the
is Rs 30, 000, its established expenses year, its net income was P105, 600, its
are 20, 000, and it has a 10% debt of Rs accounts payable decreased by P8, 000,
50, 000. Compute their operating lever- its inventory increased by P4, 800, and
age. its accounts receivable decreased by P9,
600. How much is the net cash provided
by operations?
A. P102, 400
B. P108, 800
C. P128, 000
D. P83, 200
785. The focal point of financial management

in a firm is:
A. 1.4 times A. the number and types of products or
B. 1.3 times services provided by the firm.
C. 1.2 times B. the minimization of the amount of
taxes paid by the firm.
D. 1.1 times
Explanation:Sales 1, 00, 000Variable C. the creation of value for shareholders.
cost 30, 000Contribution 70, 000Fixed D. the dollars profits earned by the firm.
cost 20, 000EBIT 50000Interest 5000EBT
45000Operating leverage = contribution/ 786. It refers to the system by which corpora-
EBIT i.e 70000/50000 = 1.4 times tions are managed and controlled.
782. What are the 2 types of credit cards?

A. Private Label and General Label
B. Private Label and Public Label
C. Public Label and General Label
D. Plastic and Metal A. corporate governance

B. corporate social responsibility 791. I am opening a new bank account today

C. corporate ethics to deposit my birthday money.
D. all of the given answer A. Spending

B. Saving
787. I am going to buy a new bike.
C. Earning
A. spending
D. Donating
B. saving
792. Advantages of Average rate of return are
NARAYAN CHANGDER
C. investing
(more than 1 correct answer)
D. donating A. It takes into account the full returns of
788. Bharat Express’ specialises in Courier a project over the life of the investment
Services and helps business firms to make B. The results allow easy comparison be-
sure that the goods are made le to the cus- tween projects and the opportunity cost of
tomers at the right place and at the right investment can clearly be seen
time. What will be the working capital re- C. ARR compares the returns to the initial
quirement of the company? cost showing the return on investment. In
A. High other words it shows the profitability of a
B. Low project
C. Moderate D. ARR calculates the average annual

profits therefore a project may be chosen
D. Depend on the volume of business. even though it only produces a return over
789. The capital structure decision involves: a long period of time
A. Determining the optimal mix of debt 793. This is the oldest and common and sim-
and equity financing plest form of business organization
B. Minimizing the cost of capital A. PARTNERSHIP
C. Maximizing shareholder value B. SOLE PROPRIETORSHIP
D. All of the above 794. offer members credit cards, checking
accounts, low-interest loans, and high in-
790. Choose the correct option terest savings accounts.
A. Commercial banks
B. Credit Unions
C. Mortgage Companies
D. Brokerage Firms
795. Fill in the Blank:Medicaid is a health
insurance program to help people who can-
not afford health care costs.
A. A A. Government
B. B B. Military
C. C C. Personal
D. D D. none of above

796. Jerry’s gross pay was $525.00. He had 801. What is credit?
the following deductions taken from his
A. Trust from a creditor/lender that you
pay check (Federal Income Tax $78.75,

will repay the funds borrowed.
State Income Tax $36.75, FICA $40.16)
What is his Net Pay? B. A small plastic card that allows you pay
A. $525.00 for something without using cash.
B. $369.34 C. Risk associated with borrowing

money.
C. $155.66
D. none of above D. Interest on good purchased.
797. What financial evaluation methods are 802. Who is a TA?

commonly used by financial managers to
A. Valentina
evaluate potential investments?
A. Market analysis and competitor com- B. Ryan reynolds
parison C. Zelda
B. Cost-benefit analysis and break-even D. Oprah
analysis
E. to give
C. Net Present Value (NPV) and Internal
Rate of Return (IRR) 803. The money that you receive for mow-
D. Customer segmentation and customer ing the lawn, babysitting or getting an al-
lifetime value analysis lowance is called
798. An is a review of the financial state-
ments of business and the accounting prac-
tices that were used to produce them
A. income statement
B. financial statement
C. audit
A. Income
D. statement of cash flows
B. Credit
799. An owner of shares in a company
C. Debt
A. Shareholders
B. Employer D. Interest
C. Employee 804. What financial concept deals with the re-

D. Labour lationship between risk and return and
is essential for making investment deci-
800. Which of the following is typically consid- sions?
ered an agency cost?
A. Net Present Value (NPV)
A. Consultant fees
B. Cost of goods sold B. Capital Budgeting
C. Audit C. Risk-Return Tradeoff
D. Taxes D. Working Capital Management

805. Business finance is a part of E. Single Entry contains calculations of

A. Corporate finance Assets & Receivables while Double Entry
does not
B. Private finance
C. Public finance 810. Type of income tax that is levied on in-
come of individuals, household’s partner-
D. Personal finance ship and sole-proprietorship.
806. What is different between shareholder A. Personal Income tax
NARAYAN CHANGDER
wealth maximization with profit maxi- B. Taxable Income
mization?
C. Average Tax Rate
A. In term of time horizon
D. Corporation Income Tax
B. In term on the risk
C. In term on timing of return 811. pertains to Current Assets and Liabilities
D. none of above A. Investing Activities

807. Which of the following bond that carries
high yield and high risk? C. Financing Activities
A. Zero Coupon Bond D. none of above
B. Junk Bond 812. is extra inventory to prevent stock-

C. Bunny Bond out in the firm’s warehouse.
D. Bearer Bond
808. The particular combination of debts & Eq-

uity
A. Capital
B. Capitalism
C. Capitalization
D. Capital structure
A. Safety stock
809. What is the difference between Single &
Double Entry financial recording? B. Reorder point
A. Double Entry reports are simpler than C. Lead time

Single Entry which involves 4 input compo- D. Total inventory cost
nents
813. Internal Rate of Return (IRR) to all capi-
B. Single Entry is suitable for large busi- tal providers is equal:
nesses that are always growing while
Double Entry is not A. The hurdle rate of return to all capital
providers
C. Double entry is useful for balancing
debits and credits while single entry is for B. The actual return on total capital
cash flow C. The cost of capital
D. Single for own business (single) Dou- D. The total discounted free cash flows to
ble for joint business (Couple) all capital providers

814. For which of the following reason(s) A. Musical instruments

profit maximization concept is criticized-1. B. Financial liabilities
It is vague conceptually.2. It ignores the

timing of returns.3. It ignores the risk fac- C. Financial instruments
tor4. Its emphasis is generally on short- D. All of the above
run projects. Select the correct answer
from the options given below. 819. The optimal capital structure is the one
that the price of the firm’s stock, and
A. 1 this generally calls for a Debt/Capital Ra-
B. 1 & 2 tio that is the one that maximizes ex-
C. 1, 2 & 3 pected EPS.
D. 1, 2, 3 &4 A. minimizes; lower than
B. maximizes; greater than
815. returns after tax and before depreciation
is taken in C. minimizes; greater than
A. urgency and ARR method D. maximizes; lower than
B. ARR method 820. If net credit sales for a given year are
C. PBP method RM600, 000 and the average accounts re-
ceivable is RM60, 000, what is the aver-
D. PBP and Urgency method age days to collect receivables? (assume
816. The board of directors is responsible for 360-days per year)
managing day to day operation of business A. 10
and carrying out the policies established B. 60
by CEO.
C. 31
A. TRUE
D. 36
B. FALSE
Explanation:False. Financial manager 821. At what rate of Corporate Income Tax
(chief financial officer, treasurer, con- (CIT) for 2015/2016 has been set to?
troller, and respective department heads)
A. 19%
are responsible for the policy making func-
tions. On the other hand, day to day func- B. 10%
tions are carried out by lower level staff C. 28%
of respective departments.
D. 15%
817. How many ‘C’s are taken into the consid-
822. How much is the net cash flow from op-
eration while deciding the credit policy of
erating activities?
customer?
A. Two
B. Three
C. Four
D. Five
818. Stocks, bonds and swaps are examples A. 780, 000

of B. 730, 000

C. 740, 000 A. income statement, balance sheet, and

D. 750, 000 cash flow statement
B. budget report, expense sheet, and in-
823. What is the present value annuity due vestment summary
factor of $1 at a discount rate of 15% for
15 years? C. tax report, liability statement, and in-
ventory report
A. $5.8474
D. profit statement, equity statement,
B. $6.7245
NARAYAN CHANGDER
and revenue statement
C. 7.1324
828. The current price at which an Assest or
D. 8.5143 services can be brought or sold
824. Which of the following is/are correct? A. Marketing
Which of the following statements is true? B. Present value
A. Fixed expenses-dividends / Fixed C. Market price
expenses-dividends
D. Price structure
B. Variable expense-rent / Expenditure
changes-rent 829. A fee paid by a borrower to the lender
C. Active income-Allowances / Pendap- for the use of borrowed money, typically
atan aktif-elaun calculated as a percentage of the original
loan amount.
D. Passive income-allowances / Passive
income-allowances A. principal
B. interest
825. . A firm will have favourable leverage if
it C. rate
A. debt D. none of above
B. interest 830. Capital intensive business organisations

C. equity require
D. earnings A. huge working capital

B. huge fixed capital
826. Property that a borrower forfeits to the
bank providing the loan if he or she de- C. no fixed capitalno working capital
faults on the loan. D. none of above
A. Collateral 831. retirement plans funded by corporations
B. Secured Loan orgovernment agencies for their workers
C. Unsecured Loan and administered primarily by thetrust de-
partments of commercial banks or by life
D. Home insurance companies.
827. Delilah, Nabiel, and Johnny are study- A. pension funds
ing for their financial management exam. B. life insurance companies
They come across a question:‘What are
the three main financial statements used C. mutual funds
in business?’ D. credit union

832. Which of the following are financial in- 837. When people buy property and agree to
termediaries?(1) Venture capital organisa- pay for it later, they are buying on
tion(2) Pension fund(3) Merchant bank

A. credit
A. 2 only
B. debit
B. 1 and 3 only
C. 2 and 3 only 838. A sole proprietorship is a business owned
by one person or more and operated for
D. 1, 2 and 3 their profit.
833. financial claims to all assets A. True
A. property B. False
B. equity
839. A quality customer to grant credit refers
C. owner’s equity to the customer’s strength and creditwor-
D. capital thiness.
834. Which does not belong to the group?

A.
A. Advances to officers not currently col-
lectible
B. Long-term refundable deposit
C. Land held for speculation
B.
D. Prepaid Expenses
835. The furniture store offers you no-money-

down on a new set of living room furni-
840. There are 3 scopes of financial manage-
ture. Further, you may pay for the furni-
ment, namely:
ture in three equal annual end-of-the-year
payments of $1, 000 each with the first A. Funding decisions, budgeting deci-
payment to be made one year from today. sions, investment decisions
If the discount rate is 6%, what is the B. Investment decisions, allocation deci-
present value of the furniture payments? sions, asset management decisions
A. $3, 183.60
C. Funding decisions, investment deci-
B. $2, 673.01 sions and management decisions
C. $2, 833.39 D. funding decisions, asset allocation de-
D. $2, 678.01 cisions, budgeting decisions
836. Who is a TA? 841. Which of the following are the main func-
A. Regan tions of finance?
B. josh A. Listing Decision

C. poodpa B. Investation decision
D. Mr.Beast C. Partnership Decisions
E. Diego D. Management Decisions

842. For the year 200B, Twilight Company’s C. Income

income statement shows operating ex- D. Expenditure
penses of P204, 800. The following
information is also available:Prepaid ex- 846. Which of the following should be consid-
penses, January 1, 200B-P12, 000Ac- ered when developing a long-term finan-
crued expenses payable, January 1, 200B- cial plan? Apakah aspek yang perlu diam-
33, 600Prepaid expenses, December 31, bil kira semasa membina pelan kewangan
200B-16, 800Accrued expenses payable, jangka panjang?
December 31, 200B 28, 000How much
NARAYAN CHANGDER
A. Inflation Rate / inflation rate
was the cash paid for operating expenses?
B. Interest Rate / interest rate
A. 204, 800
C. Personal Health
B. 194, 400 D. Liabilities / Liabiliti
C. 193, 600
847. What is meant by the term “financial”
D. 215, 200 based on the material presented?
843. What are the essential ingredients of A. Covers investments only
sound working capital management? B. All matters relating to financial man-
A. Efficient cash, inventory and receiv- agement to achieve financial goals
ables management C. Covers only risk management
B. Efficient capital contribution and D. Vision to achieve financial goals
debtors management
848. Count the money.
C. Efficient creditors and debtors man-
agement.
D. None of these.
844. Wealth maximisation as the goal of the

firm implies enhancing the wealth of The
Board of Directors.
A. TRUE
B. FALSE
845. You participate in competition and win A. $1.17

prize B. .95
C. $1.07
D. $1.05
849. Financial Manager is:
A. Rational Decision Maker
B. Professional Person
C. Should have sufficient knowledge of
A. Saving accounting
B. Investment D. All of the above

850. Variable cost per unit. 855. The following are popular form of capital
A. varies with the level of output structure except one:

B. remains constant irrespective of the A. equity and capital shares only
level of output B. equity and debentures only
C. changes with the growth of the firm C. equity shares, preference shares and
D. does not change with volume of pro- debentures
duction
D. equity shares only
851. The following are the 3Ts so that savings
can be guaranteed by LPS, except: 856. The agency problem takes place between
A. Recorded on the Bank’s books A. shareholders and creditors
B. Interest rate < LPS guarantee inter- B. managers and employees
est
C. employees and customers
C. Regularly pay installments
D. shareholders and managers
D. Do not perform actions that are detri-
mental to the bank 857. A company’s internal source of equity
capital can be generated from retained
852. Ethical behavior
earnings.What does a retained earning
A. is the fifth basic principles of finance. mean?
B. cannot be a concern to managers who A. it’s a sum of money paid regularly by
are expected to maximize shareholder a company to its shareholders out of its
value. profits
C. in the corporate world means not
B. it’s an asset account on the balance
breaking any laws.
sheet that represents money due to a com-
D. is essential in business because uneth- pany in the short-term
ical behavior destroys trust and business
relationships. C. it’s the amount of net income left over
for the business after it has paid out divi-
853. Which of the following financial decisions dends to its shareholders
involves determining the mix of debt and
D. none of above
equity financing for a company?
A. Investment decision 858. A company is evaluating an investment
B. Financing decision project with the following forecast cash
flows:Time 0 1 2 3 4Cash flow ($m) (6.5)
C. Dividend decision 2.4 3.1 2.1 1.8Using discount rates of
D. Working capital decision 15% and 20%, what is the internal rate
of return of the investment project? (to
854. Q2) All constituencies with a stake in the
one decimal place)
fortunes of the company are known as
A. Shareholders A. 17.7%
B. Stakeholders B. 17.8%
C. Creditors C. 17.6%
D. Customers D. None

859. Capital that comes from the creditor, a C. refraining from improer use of inside
debt for the company concerned is called information
D. maintenance of an appropriate level of
A. Own capital professional competence
B. Venture capital 864. What is not included in operating ex-
C. Foreign capital penses is
D. Company capital A. Interest costs
NARAYAN CHANGDER
860. Profitability and liquidity are two main B. Marketing Costs
objectives of ? C. General & admin costs.
A. Cash management D. Sales Costs
B. Inventory management 865. Which of the following statements about
C. Receivable management the corporate form of business organiza-
D. All of these tion is true?
A. The corporate form has the disadvan-
861. Open-end credit is tage of double taxation relative to a sole
A. revolving credit. proprietorship.
B. one time only credit. B. The corporate form is preferred over
the sole proprietorship because a corpo-
862. There are two main techniques when ration is easier to form and faces less reg-
choosing between two investment ulation.
projects-the payback methods and
C. Sole proprietorships are the most com-
mon form of business organization be-
cause liability is limited to the amount in-
vested in the business by the sole propri-
etor.
D. The corporate form has the advantage
of unlimited liability.
866. If ICR is high, firm prefers

A. Debt
A. Accounting Rate of Return B. Equity
B. Investment Rate of Return C. Both A and B
C. Profitability Comparison D. None
D. Return on Equity
867. What are the types of credit?
863. Integrity is an ethical requirement for A. Cash Credit, Sales Credit, Secured
all financial managers. One aspect of in- Credit, Revolving Credit, Single payment
tegrity requires Credit, Installment Credit, I.O.U
A. performance of professional duties in B. Cash Credit, Savings account, Secured
accordance with applicable laws Credit, Revolving Credit, Single payment
B. Avoiding of conflict of interest Credit, Installment Credit, I.O.U

C. Cash Credit, Checking Account, Se- for her son. Therefore, she plans to save
cured Credit, Revolving Credit, Single pay- RM300 a month for ten months
ment Credit, Installment Credit, I.O.U

B. Mr Hazry is a teacher with an income
D. Cash Credit, Your parents, Secured of RM3, 000 and plans to get married in
Credit, Revolving Credit, Single payment two years’ time. The wedding expenses
Credit, Installment Credit, I.O.U are estimated to be RM30, 000. There-
fore, he wants to save RM1, 000 a month
868. If the Demand for money increases, what for a period of two years. Besides that,
will happen to the Interest Rate? she also plans to get a loan for the wed-
A. Decrease ding expenses.
B. Increase C. Miss Hazwanyza wants to buy a house

worth RM200, 000 if she has sufficient
C. No Change amount of money
D. none of above D. none of above
869. ITC breaks down its decision-making 872. Followings are the example of fixed as-
function of financial management into sets, except
A. machinery
B. building
C. inventories
D. land
A. Investment, financing and asset man-
agement 873. Steve works the same amount of hours
each month. Steve worked 100 hours in
B. Cash management, capital budgeting,
the last pay period. He earns $22 per hour.
and credit management
What is Steve’s gross pay?
C. Financing and investing
A. $1200
D. Financing and dividend B. $1250
870. Cost of capital is the maximum rate of C. $2100
return expected by the investors D. $2200
A. True 874. What type of training do most business
B. False owners need to participate in?
A. Financial literacy training
871. Among the following individuals, who
sets the SMART goals? B. Investment training
A. Puan Hadirah intends to buy a laptop C. Personnel management training
which costs RM3, 000 as a birthday gift D. Financial forecasting training

875. Exchange rates in the foreign exchange 880. Advantages of the Payback Period
market represent the value of a currency A. Provides an indication of a project’s
relative to another currency. risk and liquidity
A. TRUE B. Ignores CFs occurring after the pay-
B. FALSE back period
C. Easy to calculate and understand
876. Two projects intersect, in terms of NPV, D. Easy to use and understand
at a discount rate labeled the
NARAYAN CHANGDER
881. What financial ratio measures a com-
A. crossover rate
pany’s ability to meet its short-term obli-
B. internal rate of return gations using its most liquid assets?
C. discount rate A. Debt-to-Equity ratio
D. yield to maturity B. Return on Investment (ROI)
C. Current ratio
877. The formula of EBIT = D. Price-Earnings (P/E) ratio
A. Sales-Variable cost
882. Market value of shares is influenced by
B. Contribution-Fixed cost A. financing decision
C. Sales-Fixed cost B. investment decision
D. All the above C. dividend decision
D. financial decision
878. Which of the following identities is
FALSE? 883. The capital budget associated with
A. Change in Equity = Paid-in-Surplus- A. Long term and short term assets
Net New Borrowing from Creditors B. Long term assets
B. Net New Borrowing = Ending Long- C. Short term assets
term Liabilities-Beginning Long-Term Lia- D. Fixed assets
bilities
884. Solvency:
C. Cash Flow to Owners = Dividends-Net
New Borrowing from Owners A. “The ability of a business to meet its
short-term obligations.”
D. Net New Borrowing from Owners =
B. “The ability of a business to repay its
Change in Equity
debt.”
879. The primary goal of financial manage- 885. What is a common focus of financial man-
ment is to: agement training?
A. Maximize shareholder wealth A. Marketing and sales
B. Minimize costs B. Money management and budgeting
C. Increase sales C. Customer service and relationship

building
D. Improve efficiency
D. Risk management and financial analy-
E. All of the above sis

886. What are some basic objectives of finan- 891. Which of the following colors coresponds
cial management training? with the correct ticker information?

A. To improve credit management skills A. red is for higher
B. To develop financial planning skills B. green is for lower
C. To increase profit margins C. yellow is for no change
D. To reduce operational costs D. orange is for lower
E. blue is for higher
887. The principle of investment is?
A. Hoarding wealth so we can be arro- 892. It is the amount which is earned without
gant investing time, money
B. Postpone Consumption Today for Con- A. Dividend

sumption Later B. Amount
C. Make a profit in any way C. Leverage
D. none of above D. Return earnings
888. IF THE SALES OF A FIRM IS RS 10, 00, 893. What is not an expense category that we
000 AND CONTRIBUTION IS RS 2, 00, are required to allocate from our income?
000 THEN VARIABLE COSTS ARE A. Zakat and Taxes
A. RS 5, 00, 000 B. Investments (children’s education, re-
B. RS 8, 00, 000 tirement, Hajj, etc.)
C. RS 12, 00, 000 C. Walking/Travelling
D. RS 20, 00, 000 D. none of above
894. Which financial ratio measures a com-

889. Select the reasons for short term financ-
pany’s ability to meet its short-term obli-
ing.
gations?
A. Cash flow problems
A. Current ratio
B. Speculative productions B. Return on equity (ROE)
C. Increase inventory C. Debt-to-equity ratio
D. All of the above D. Gross profit margin
890. What does “liquidity” in financial terms 895. If Lanten’s gross pay is $1, 800 this pay
indicate about a company? period and the Medicare tax is 1.45%,
A. Its ability to meet short-term obliga- how much Medicare tax will be deducted
tions from Lanten’s paycheck?
B. The value of its long-term investments A. $35.18
C. The efficiency of its production pro- B. $26.10

cesses C. $19.15
D. The total value of its assets D. none of above

896. What is NOT a human habit 901. The financial goal of a corporation is to
A. Smart purchasing maximize:
A. sales
B. Impulsive shopping
B. profits
C. Addictive
C. market value of the firm
D. Emotional
D. managers’ benefits
E. Easily spiral out of control
902. What annual rate of return must you earn
NARAYAN CHANGDER
897. A mortgage payment is an example of a to double your money in about 9 years?
A. Periodic Expense Use the Rule of 72 to determine your an-
swer.
B. Fixed Expense
A. You would need to earn an annual rate
C. Variable Expense of return of about 12%.
D. none of above B. You would need to earn an annual rate
of return of about 10%.
898. Corporate bonds
C. You would need to earn an annual rate
A. Short term debt
of return of about 8%.
B. Long term debt D. There is not enough information to an-
899. These are all functions of financial man- swer this question.
ager in an organization: 903. In a futures contract, the buyer has the
obligation to buy the underlying asset,
while the seller has the obligation to sell.
A. TRUE
B. FALSE
Explanation:False (In a futures contract,
both parties have the right, but not the
obligation, to buy or sell.)
A. Involve the analysis of cause and re-
sponsible to control cash flow 904. Cash & Cash Equivalent-24, 890Held
B. Determine how much money to be allo- for Trading-10, 000Trade and Other
cated for assets Receivables-16, 000Inventory-8, 960If
total current liabilities amounted to 19,
C. Involve in manufacturing process and
900, Net Sales for the present year
strategies
amounted to 480, 000 and the ending re-
D. Determine the sources of fund for firm ceivables totaled to 16, 500. However, it
to maintain operation was found out that the ending inventory
amounted to 9, 500 and the Cost of Goods
900. The money invested in short term assets Sold totaled to 364, 000. What is the av-
of a firm is called erage sale period?
A. Fixed capital A. 9 days
B. dividend B. 10 days
C. working capital C. 11 days
D. both a and c D. 12 days

905. Dividend policy of a firm is governed by 911. Retained earnings items can be seen
in what components of financial manage-
A. Long term financing Decision
ment. Choose the letter below.

B. Profit maximization decision A. Balance Sheet Statement
C. Wealth maximization decision B. Income Statement
D. (a) and (c ) 912. Which of the following is not the factor
affecting Investment decision.
906. Financial instruments are:
A. Rate of return of project
A. Debt securities
B. cash flows of project
B. Equity securities
C. Investment criteria
C. Derivatives D. Flotation cost
D. All of the above
913. Q1) Basic objective of Financial Manage-
907. Car insurance usually costs less or female ment is
teens than male teens A. Maximization of profit.
A. Fact B. Maximization of share holder’s wealth
C. Ensuring Financial discipline in the
B. Fiction
firm.
908. Which is the main motive is to select ac- D. All of these.
tivities having positive impact on society
914. The market value of a share is responsi-
in:
ble for.
A. Profit maximization objective
A. The investment market
B. Welfare maximization objective B. The government
C. Wealth maximization objective C. Shareholders
D. None of these D. The respective companies
909. Decrease in accounts receivable 915. what do you NOT need to order a credit
report
A. Operating Activities
A. SSN
B. Investing Activities B. Your Legal Name
C. Financing Activities C. Permanent address
D. none of above D. Previous Address (from 3 years ago)
E. Tin number
910. Which one of these is a liability?
A. bonds 916. Mm model irrelevance of capital structure
is based on
B. stocks
A. Cost of Dept
C. cash B. Cost of equity
D. shoes C. Arbitrage process
E. loans D. All of the above

917. The date on which ownership officially 922. The following are the results of business
changes hands, is the meaning of activities. Everything is important, but the
MOST IMPORTANT is:
A. Settlement
A. Profit/Profit
B. Maturity
B. Revenue / turnover
C. Redemption
C. cash
D. Rate
D. Investment
NARAYAN CHANGDER
918. The after-tax cost of debt the before-
923. Calculate the cash flow for Mr Razak.
tax cost of debt for a firm that has a pos-
Then, determine whether it is Deficit
itive marginal tax rate.
or Surplus.Active Income:RM3 000Pas-
A. is always greater than sive Income:RM350Fixed Expenses:RM2
B. is always equal to 300Variable Expenses:RM250
C. is always less than A. -800 (Deficit)

B. 800 (Surplus)
D. may be greater than or less than
C. 1000 (Surplus)
919. This type of loan allows customers to bor-
D. -1000 (Deficit)
row money up to a certain limit against the
security of the commodity. 924. How much more are short term stocks
A. Overdraft taxed compared to long term stocks
B. Trade Credit A. 0-5%

B. 5-10%
C. Cash Credit
C. 15-20%
D. none of above
D. 15-25%
920. The amount of money left after all deduc- E. 0.4
tions have been taken from the gross pay
earned in pay period. 925. which of the following is not used to cal-
A. Gross Pay culate insurance needed?
A. short-term needs
B. Pay Period
B. Long-Term Needs
C. Net Pay
C. Long-term wants
D. Retirement Pay
D. Maintenance expenses
921. An increase in the firm’s receivable E. Resources
turnover ratio means that:
926. Who is a TA?
A. it is collecting credit sales more
quickly than before. A. Franklin
B. cash sales have decreased. B. George
C. it has initiated more liberal credit C. Fredrick
terms. D. Thomas
D. inventories have increased. E. Churchil

927. You’ll get Rs. 110 after one year if you 932. Financing Decision comes under
invest Rs. 100 at 10% interest rate. A. Financial decision

A. True B. Investment Decision
B. False C. Dividend decision
928. Short term investment decisions affect D. Working capital decision
the
933. How much is Puan Soffia’s monthly sav-
A. Purchase of fixed assets
ing if she wanted to pay the down pay-
B. Long term profitabiliy ment (10%) for a RM650, 000 house in
C. Day to day working of business five years? How much monthly savings
should Puan Soffia save if she wants to
D. Large amount of funds for future pay a down payment (10%) for a house
worth RM 650, 000 within 5 years?
929. What is the first step in the budgeting
process? A. RM1111.78
A. prepare a list of each type of income B. RM1083.33
and expense that will part of the budget C. RM900.00
B. calculate each type of income, ex- D. RM902.78
pense, and the amount of net income or
loss 934. Cash flows are discounted for various
C. explain the budget to people who need reasons, but NOT because of
to make financial decisions A. Time
D. gather accurate financial information B. Inflation
930. One of the reasons why companies are C. Interest rate
required to maximize value compared to D. Risk and uncertainty
company profits is?
935. Who is the player in foreign exchange
A. Maximizing long-term oriented profits.
market?
B. Maximizing profits considers risk fac-
A. Commercial banks
tors.
B. Retailers
C. Maximizing value, not paying attention
to social responsibility. C. Wholesalers
D. Maximizing company value considers D. Workers
risk factors.
936. Raymond has a financial goal to purchase
931. . When a company uses increased fixed a video game worth RM1 500 next month.
cost for production, this is an example of Is this a long-term goal or short-term
what type of leverage goal? Is this a need or a want?
A. operating leverage A. short-term goal
B. financial leverage B. long-term goal
C. variable cost leverage C. need
D. combined leverage D. want

937. mainly general type of Direct Foreign In- D. Unlimited liability

vestment (DFI) is
942. anything of value that is owned or con-
A. Franchising trolled
B. Patent
A. property
C. International trade
B. equity
D. Establishment of new subsidiaries
C. owner’s equity
938. It is a kind of bank with the motive of
NARAYAN CHANGDER
D. capital
profit earning, and for this purpose, it per-
forms the functions of accepting the de- 943. Which of the following is an external
posits of the public and lends them the source of finance
loan. A. Retained earnings
A. Thrift Bank B. Equity shares
B. Rural Bank C. Preference shares
C. Commercial Bank D. Debentures
D. Universal Bank
944. The following are investment approaches,
939. The concept that value of a rupee to be except:
received in future is less than the value Of
A. Conservative
a rupee on hand today is known as
B. Proactive
A. A. Recovery factor concept
C. Moderate
B. B time value of money
D. Aggressive
C. C. Compounding fator concept
D. D. None of these 945. Financial analysis is used only by the cred-
itors.
940. An investment is lucrative when:
A. True
A. The equity IRR is higher than NPV to
equity capital providers B. False
B. The NPV is higher than cost of invest- C. don’t know
ment D. none of above
C. The equity IRR is higher than cost of
946. One of the goals of company owners
equity
and managers in studying financial man-
D. The NPV to equity capital providers is agement is?
higher than cost of equity
A. Make decisions that can increase com-
941. Which of the following refers to corpora- pany profits.
tion B. Make decisions that can streamline
A. Tax paid by individual owners the organization.
B. Decision making will be done by the C. Make decisions that can expand the
board of directors company’s market share.
C. More than one person enter the busi- D. Make decisions with the aim of maxi-
ness mizing company value.

947. Records and statements are based on B. Equity

most reliable data available. C. stockholder

A. Objectivity Principle D. stakeholder
B. Matching Principle
952. Cash discount terms offered by trade
C. Revenue Recognition Principle
creditors never be accepted because
D. Historical Cost
A. Benefit in very small
948. What is the time value of money (TVM)? B. Cost is very high
A. The concept that money available to- C. No sense to pay earlier
day is worth more than the same amount
in the future
B. The concept that money available in 953. Dividend decision is concerned with
the future is worth more than the same A. only distribution of dividend to share-
amount today holders
C. The concept that money has a constant B. how much to be retained in business
value over time
C. how much profit earned is distributed
D. The concept that money should be in- to shareholders and how much to be re-
vested in stocks for long-term growth tained in the business
949. Other things remaining the same, an in- D. none of the above
crease in the tax rate on corporate profits
will: 954. A would be an example of a princi-
pal, while a would be an example of
A. Make the debt relatively cheaper. an agent, in agency theory.
B. Make the debt relatively dearer. A. shareholder and manager
C. Have no impact on the cost of debt. B. shareholder and bondholder
D. Can’t say
C. manager and employee
950. All of the following are types of taxes D. None of the above
EXCEPT
955. The question, “By WHEN will the goal be
A. Income Tax
accomplished?” goes with which letter of
B. Sales Tax SMART?
C. Roadside Tax A. Measurable
D. Property Tax B. Specific
E. Payroll Tax C. Timely
951. Sinovac is a Chinese company that de- D. Attainable
veloped a Covid-19 vaccine. Sinovac got
$515 million dollars in exchange for 15% 956. Sales with credit will be entered in the
ownership in Sinovac. What type of finan- P/L as ‘revenue/income’ and entered in
cial instrument was used to raise the $515 the Balance Sheet as what?
million? A. Account receivable profitability
A. Debt B. Long-term assets

C. Short-term liability 961. The Characteristics of an effective con-

D. Operating Cash Flow trolsystem is/are:
A. Integration
957. What does the term “ROI” stand for in
finance? B. Accuracy
A. Return on Investment C. Flexibility
B. Rate of Interest D. All of above
NARAYAN CHANGDER
C. Risk of Inflation
962. A(n) is the purchase of goods that are
D. Revenue on Investment not consumed today but are used in the fu-
ture to create wealth
958. If you borrow $100, 000 at an annual
rate of 8.00% for a 10-year period and A. Credit
repay the total amount of principal and in-
B. Investment
terest due of $215, 892.50 at the end of
10 years, what type of loan did you have? C. Income
A. Discount loan D. Savings
B. Interest-only loan
963. The money you get before deductions is
C. Discount Decline loan called?
D. Discount and Compound loan A. Gross Pay
959. Which of the following is the correct B. Net Pay
statement of the conclusion of Modigliani
C. Take Home Amount
and Miller on the relevance of dividend pol-
icy? D. Year To Date
A. Increase in retentions result in a
higher growth rate 964. is the system of recording busi-
ness transactions, and analyzing, verify-
B. All shareholders are indifferent being, and reporting the results.
tween receiving dividend income and cap-
ital gains A. Accounts receivable
C. The value of the shareholders’ equity B. Accounting

is determined solely by the firm’s invest- C. Generally accepted accounting princi-
ment selection criteria pals (GAAP)
D. Discounting the dividends is not an ap- D. Fixed assets
propriate way to value the firm’s equity
960. Select all of the LONG term goals listed 965. A is an estimate of a business’s finan-
below: cial outlook for the few years.
A. Buying a house A. financial plan
B. Buying a pair of shoes B. financial forecast

C. Buying a car C. budget
D. Paying for college D. income statement

966. Company prefers to go for debt financing C. $115, 740

instead of equity financing because of
D. $74, 403

A. A company does not have to share own-
ership of the company 970. The basic format of an income statement
B. Interest paid is exempted from tax, is
while dividends paid on equity are not A. Sales-Expenses = Profits
C. A company can offer voting right to the B. Income-Expenses = EBIT
investors
C. Sales-Liabilities = Profits
D. Interest paid to the bondholders are
tax deductible and therefore is a cheaper D. Assets-Liabilities = Profits
source of capital
971. Edward wishes to save enough money to
967. The main variables of the TVM equation purchase a retirement lake cabin. He is
are willing to spend $500, 000 for the cabin
and he can save $25, 000 per year and
A. present value, future value, time, inter-
invest the money into an account earning
est rate, and payment.
8.00% per year. If Edward’s investments
B. present value, future value, perpetuity, come in the form of equal annual end-of-
interest rate, and payment. the-year cash flows and the first cash flow
C. present value, future value, time, an- is in exactly one year, how long will it take
nuity, and interest rate. him to save enough money to buy the lake
cabin?
D. present value, future value, perpetuity,
interest rate, and principal. A. Between 8 and 9 years
B. Between 10 and 11 years
968. The cost of equity share capital is greater
than the cost of debt because C. Between 12 and 13 years
A. Equity shares carry a higher risk than D. Exactly 20 years
debts
B. The face value of equity shares is 972. Replacement of machinery is an example
lower than the face values of debentures of
in most cases A. Growth of business
C. Equity shares do not provide a fixed B. Change in technique
dividend rate
C. Technological Upgradation
D. Equity shares are not easily saleable
D. none of above
969. M Co will receive a perpetuity starting in
2 years’ time of $10, 000 per annum, in- 973. Which of the following is not a long term
creasing by the rate of inflation (which is source of finance
2%).What is the present value of this per- A. Debentures
petuity assuming a money cost of capital
of 10.2%? B. Equity capital
A. $90, 910 C. Treasury bills
B. $125, 000 D. Preference shares

974. The extent to which an organisation uses 979. External sources of finance do not in-
fixed cost on its total structure is called clude:
A. Overall leverage A. Retained earnings
B. Financial leverage B. Overdraft
C. Fixed Leverage C. Leasing
D. Operating leverage D. Debentures
975. Which of the following is an example of 980. A weekly newspaper ad and a monthly
NARAYAN CHANGDER
a non-current liability? lease fee for a credit card machine are both
A. Bank overdraft
B. Accounts payable A. variable costs
C. A bank loan of $500, 000 B. variable expenses
D. Interest payable C. fixed costs

D. incidental needs
976. Which is not a qualitative factor affecting
a firm’s investment appraisal decisions? 981. A finance manager has to make estima-
A. Aims and objectives tion with regards to capital requirements
of the company
B. Risk
A. Estimation of Capital Requirements
C. The selected discount factor
B. Determination of Capital Composition
D. Impact on the environment
982. The finance manager is accountable for.
977. What is the difference between capital
A. Earning capital assets of the company
and revenue?
B. Effective management of a fund
A. Capital is money earned, revenue is
money spent C. Arrangement of financial resources
B. Capital is money spent, revenue is D. Proper utilization of funds
money earned
983. is a market where buyers and sellers
C. Capital is money used for investments, trade commodities, foreign exchange and
revenue is used for expenses financial securities.
D. Capital is money used for expenses, A. Financial market
revenue is used for investments
B. market
978. The “time value of money” means that C. finance
A. money paid out today less value than if D. Asset
the money is paid out in the future
984. A method of inventory recording which
B. money received today is worth more produce high inventory in balance sheet is
than the same amount of money received classified as
in the future
A. last out receivable
C. the more time a person has to save,
the lower the return on the money B. first out receivable
D. the longer money is held, the less likely C. first in first out
it will be spent D. last in first out

985. The principal savers in the financial mar- B. wealth

kets are C. valuable

A. businesses.
D. financial
B. businesses.
C. individuals. 991. Diner Ltd. is a restaurant having 15
restaurants in Europe. They decide to take
D. governments. this number to 25 by opening 10 more
986. Failure to read and understand the infor- restaurants in the major cities of Europe.
mation in the Notes to the Financial state- What do you think will be the fixed capi-
ments may be obscure managers in evalu- tal here?
ating the degree of risk. A. High
A. TRUE B. Low
B. FALSE C. Can be high or low
987. The reports the revenue and ex- D. none of above
penses of a business for a specific time pe-
riod and shows a net income or a net loss. 992. To determine the operating cycle for a de-
partment store, which one of these pairs
A. income statement
of items is needed?
B. accounts payable
A. Cash turnover and net sales
C. owner’s equity
B. Days’ sales in accounts receivable and
D. financial statement average merchandise inventory
988. What are the five C’s of credit? C. Accounts receivable turnover and in-
A. Capacity, Coloring, Clearing, Creative- ventory turnover
ness, Coneheads D. Asset turnover and return on sales
B. Capacity, Collection, Collateral, Com-
993. Sum of money that is owned or due
mon Sense, Capital
C. Capacity, Clearance, Collateral, Char- A. RBD
acter, Capital B. debtors
D. Capacity, Conditions, Collateral, Char- C. Creditors
acter, Capital
D. Debt
989. Name of the form you use to file your
federal taxes. 994. The financial intermediary such as bank,
insurance company, or a mutualfund ob-
A. D-400 tains funds from savers in exchange for its
B. 1040EZ securities.
C. W-2 A. Transfer Through a Financial Interme-
D. W-4 diary
B. Direct transfer
990. The sooner cash is received, the more
it is. C. Transfer through Investment Banks
A. money D. none of above

995. Is hence the handling of all financial mat- 1000. Generally, a corporation is owned by
ters, and this includes analyzing financial its:
statements, evaluating investment oppor- A. Managers
tunities which happens before one actu-
ally starts investing, and raising capital or B. Directors
funds from different sources. C. Shareholders
A. Finance D. All of these options
NARAYAN CHANGDER
1001. Payment of monthly interest expense
C. Financial Management A. Operating Activities
D. Financial Institution B. Financing Activities
996. Participants who receive more money C. Investing Activities
than they spend. D. none of above
A. Surplus Units
1002. True or False, The following statement
B. Deficit Unit is a SMART goal:“I want to make all As.”
C. Employees A. True
D. Finance Manager B. False
997. The real interest rate is 3% and the in- 1003. Cash discount term 3 / 15, net 40
flation rate is 5%. What is the nominal means
interest rate?
A. 15% Discount if payment in 3 days, oth-
A. 3% erwise full payment in 40 days
B. 5% B. 40% Discount if payment in 3 days, oth-
C. 8% erwise full payment in 15 days
D. 8.15% C. 3% Discount if payment in 15 days, oth-
erwise full payment in 40 days
998. This refers to the relationship between D. none
equity capital, preference share capital
and debt capital. 1004. The following shows Steven’s
A. capital structure expenses in a month. Food
RM760Utility bills RM130Petrol
B. capital and tolls RM175Insurance premium
C. sources of financing RM70Car Installment RM650House rent
RM500Hobby needs RM50Calculate the
total fixed expenses and total variable
999. Who is a TA? expenses of Steven.
A. Jose A. Fixed expenses RM1220Variable ex-
penses RM1115
B. Think
B. Fixed expenses RM1200Variable ex-
C. Ryan penses RM1135
D. Annabeth C. Fixed expenses RM 1150 Variable ex-
E. Teddy penses RM 1065

D. Fixed expenses RM1270Variable ex- A. Timeliness

penses RM1065 B. Profitability

1005. Jackie is ready to reconcile her bank C. Liquidity
statement with her check register. What
D. Efficiency
should she do?
A. Subtract deposits made since the 1010. Wipro believes that an efficient capital
statement. structure should maximize the value of the
company also
B. Add outstanding checks made since
the statement.
C. Add outstanding deposits and subtract
outstanding checks written since state-
ment.
D. She does not need to reconcile her
bank statements.
A. Reduce financial distress
1006. Capital structure is a part of the liability
side of a balance sheet. B. Reduce cost of capital
A. True C. Reduce the amount of debt
B. False D. Reduce the amount of equity
1007. External sources of funds are 1011. Return on investment is computed as?
A. Funds from long term loans A. Total Investment X EBIT
B. Sale of fixed assets B. EBIT X EBT
C. Both (A) and (B) C. EBIT / Total Investment
D. None of the above D. EBT / Total Investment
1008. What is statement that provide mea- 1012. Joint venture is

surement of performance at some period A. Not jointly owned by
time? Usually, provide amount of firm rev-
enue and firm expense. B. It is licencing
A. Income Statement C. Acquired by firms
B. Cash Flow D. Jointly owned by two or more
C. Balance Sheet 1013. Financial Managers are often task to

D. Risk Management Report trade the equity securities of the firm in
the financial market. What particular ac-
1009. Which one of the following is not a fi- tivity is this?
nancial objective of a firm A. Forecasting & Planning
B. Making Crucial Investment & Financ-
ing Decisions
C. Coordinating & Controlling
D. Trading in Financial Markets

1014. Palo Alto Industries has a debt-to- B. B. A unit of money obtained today is
equity ratio of 1.6 compared with the in- worthless them a unit of money obtained
dustry average of 1.4. This means that in future
the company C. C. There is no difference in the value
A. will not experience any difficulty with of money obtained today and tomorrow
its creditors. D. D. None of these
B. has less liquidity than other firms in
1019. A debt evidenced by a “note, “ which
the industry.
NARAYAN CHANGDER
specifies the principal amount, interest
C. will be viewed as having high credit- rate, and date of repayment
worthiness.
A. Loan
D. has greater than average financial risk
B. Debt
when compared to other firms in its indus-
try. C. Credit Card
D. Credit
1015. What does this statement best align
with?”Business look at its activities 1020. What is the concept of Time Value of
afresh annually. Historical results are not Money primarily concerned with?
taken into account.” A. Measuring inflation
A. Zero-base budgeting. B. Analyzing financial statements
B. Traditional budgeting. C. Determining interest rates
1016. Earning interest on interest is called D. Comparing the value of money at dif-
ferent points in time
A. Extra Interest
B. Simple Interest 1021. Crucial decision made by financial man-
ager it’s concerned in borrowing and funds
C. Inflation Interest
allocation for investment is?
D. Compound Interest A. Marketing Decision
1017. Jasa Dayya Bhd had net credit sales of B. Investment Decision
RM3, 150, 000 in 2019. It began the C. Purchase Decision
year with an accounts receivable balance
of RM78, 200 and ended the year with a D. Financing Decision
balance of RM78, 700. The accounts re- 1022. refers to management of flow of
ceivable turnover is: funds in a firm.
A. 40.15 times A. Cash management
B. 40.28 times B. Bank management
C. 40.03 times C. Financial management
D. 9.09 times D. Money management
1018. Time value of money indicates that 1023. This decision determines the overall cost
A. A unit of money obtained today is of capital and the financial risk of the en-
worth more than a unit of money obtained terprise
in future A. Dividend decision

B. Capital budgeting decision B. A corporation is treated as a separate

C. Investment decision legal entity for tax and legal purposes.

D. Financing decision C. A corporation’s shares can be freely
traded among its shareholders.
1024. The length of time for which an em- D. All of the above are advantages that
ployee’s wages are calculated. a corporation has over other business
A. Year-To-Date forms.
B. Pay Period 1029. This account allows you to deposit
C. Work Period money at a bank for safekeeping.
D. Salary A. Saving Account
B. Checking Account
1025. Financial management is concerned with
managerial activities relating to C. Bill Account
A. Planning D. Casino Account
B. Procurement and administration of 1030. Select the TWO types of expenses
funds
A. Must have’s
C. Optimum utilisation of funds
B. Needs
D. All of the above
C. Wants
1026. If return on investment is less than the D. Income
rate of interest, then company must prefer
1031. What is the formula for Earnings per
A. (a) Equity share (EPS)?
B. (b) Debt A. Net Income/Ordinary Shares
C. c) Both (a) and (b) B. Net Profit/Shares
D. (d) None of the above C. Net Income/Shares
1027. The importance of ‘Trading on Equity’ D. Net Income/Shares Oustanding
lies in the fact that if the company is earn-
ing more profit, it can make use of bor- 1032. What date do you have to file taxes by?
rowed capital and preference share capital A. April 1st
and by doing so it can increase the income B. March 15th
of
C. April 15th
A. Preference Shareholders
D. February 30th
B. Lenders
C. Equity Shareholders 1033. The higher the risk
D. Government A. The higher the potential return

B. The lower the potential return
1028. What is the major advantage corpora-
tions have over other business entities? C. The potential return remains the same
A. It is easier for a corporation to raise D. Potential return is not related to risk

capital than other forms of businesses. E. Potential return isn’t real

1034. Closed credit is A. If sales rise by 5.5%, then EBIT will

A. a one time loan rise by 1%.
B. a plan with a changing credit limit B. If EBIT rises by 5.5%, then EPS will rise
by 1%.
C. a credit card
C. If EBIT rises by 1 %, then EPS will rise
D. doesn’t go on your credit report by 5.5%.
1035. Bill is a construction worker who has to D. If sales rise by 1 %, then EBIT will rise
NARAYAN CHANGDER
have back surgery. He will be out of work by 5.5%.
for 3 months. His disability insurance pol-
icy will pay him 60% of his salary for the 1039. Choose the right statement about in-
entire time he is out of work. If his salary vestment!
is $3000 per month how much money will A. Investments are definitely profitable
he receive from his insurance company for and there is no possibility of loss
the three months he will be out of work?
B. a. Investment is a form of gambling
A. $1, 800
C. Investment Always Has Elements of
B. $5, 400 Profit (return) and Risk (risk)
C. $9, 000 D. none of above
D. none of above
1040. What does APR stand for
1036. Which of the following statements are A. Annual performance report
correct? 1. Maximising market share is an
B. Amazing person reward
example of a financial objective 2. Share-
holder wealth maximisation is the primary C. Adjustment percentage rate
financial objective for a company listed
D. Adjusted price rate
on a stock exchange 3. Financial objec-
tives should be quantitative so that their E. Annual percentage rate
achievement can be measured
1041. Which suppliers of funds bear the great-
A. 1 and 2 only est risk and should therefore earn the
B. 1 and 3 only greatest return?
C. 2 and 3 only A. common stockholders
D. 1, 2 and 3 B. general creditors such as banks
C. preferred shareholders
1037. What is the primary objective of corpo-
rate financing? D. bondholders
A. Increasing the cost of capital 1042. property or items of value owned by a
B. Improving liquidity business
C. Reducing market risk A. assets
D. Generating long-term value B. accounts payable
C. owner’s equity
1038. A firm has a DFL of 5.5. What does this
tell us about the firm? D. liabilities

1043. NCW Co is considering investing $10, C. Maximize earnings per share after
000 immediately in a 1-year project with taxes
the following cash flows.Income-$100,

D. Minimize shareholder risk
000Expenses-$35, 000 The cash flows
will arise at the end of the year. The above 1047. The balance sheet elements include:
are stated in current terms. Income is sub- A. Interest Charge
ject to 10% inflation; expenses will not
vary.The real cost of capital is 8% and B. Income received in advance
general inflation is 2%. Using the money C. Prepaid expenses
cost of capital to the nearest whole per-
D. All the answers above are incorrect
centage, what is the net present value of
the project? 1048. Assume that International Appliances
A. $68, 175 has a current ratio of 1.2. Now, which of
the following actions would improve (in-
B. $60, 190 crease) this ratio?
C. $58, 175 A. Use cash to pay off current liabilities.
D. $78, 175 B. Collect some of the current accounts
receivable.
TRUE if you increase your monthly pay- C. Use cash to pay off some long-term
ment above the required loan payment? debt.
A. The extra portion of the payment does D. Purchase additional inventory on
not go to the principal. credit (accounts payable).
B. You can significantly increase the num- 1049. Leverage means
ber of payments needed to pay off the
A. Gear box of a car
loan.
C. The extra portion of the payment in-
creases the principal. C. Profit and loss
D. You can significantly reduce the num- D. Effectiveness
ber of payments needed to pay off the
1050. How can poor financial management im-
loan.
pact a company’s credit rating?
1045. Which is needed to evaluate financial A. It has no effect on credit rating
status? B. Improves credit rating
A. Financial goal C. Lowers credit rating
B. Assets D. Stays constant
C. Cash flow Explanation:Your business credit score
works a lot like your personal one.And it’s
D. Total income
one thing banks and other lenders (and
1046. The primary goal of a publicly owned investors) use to make decisions about
corporation is to lending or investments.This can be im-
portant when applying for debt finance.If
A. Maximize dividends per share you want to take out a Business LoanLink
B. Maximize shareholder wealth opens in a new window, an OverdraftLink

opens in a new window or another form 1055. CAPM stands for.

of debt, your score will determine factors
such as:how much you can borrowyour in- A. Capital asset pricing model.
terest ratewhether you’ll be approved for B. Capital amount printing model.
a loan at allThere are other implications
too.Unlike a personal credit score, your C. Capital amount pricing model.
business credit score is available for any-
D. Capital asset printing model.
one to view.This means customers, suppli-
NARAYAN CHANGDER
ers and other companies can check it.And
it could come into play in day-to-day busi- 1056. Which among the following figures is
ness dealings-for example, when you’re not relevant while calculating the cost of
negotiating contracts or tenders, or when the redeemable preference shares?
you’re looking for insurance. A. Earnings per share
1051. Which of these is the NOT a SMART B. Flotation cost
goal?
C. Discount
A. Improve your public speaking skills.
B. Improve your time management capa- D. None of the above
bilities.
C. Be the best at craftman ship. 1057. who has more cash flow?
D. Boost Leadership Skills.
E. Take a course to sharpen your skills.
1052. High financial leverage indicates
A. Amount of debt is high as compared to
stock
B. Risky investments
A. Albert
C. Fixed assets are purchased with debts
D. All of the above B. Salman
1053. Reason for time value of money C. Mania

A. inflation D. Rajsingh
B. reinvestment purpose
C. uncertainity 1058. Your is the amount of money in
your account at any time or the amount
D. All the above
of money you still owe on a purchase that
1054. What is financial planning? you make monthly payments on like a
car/house.
A. How you can spend your money the
fastest way possible A. Budget
B. Managing money so that you can meet B. Salary
short and long term financial goals
C. a fancy term for budgeting C. Balance
D. none of above D. Net Income

1059. Which of the following best describes 1062. Which of the following would be consid-
Murabaha as a source of finance within the ered an advantage of the SOLE PROPRI-
Islamic banking model? ETORSHIP form of business organization?

A. A form of trade credit or loan A. unlimited life
B. The equivalent of lease finance B. wide access to capital
C. A special kind of partnership where C. income taxed at only one level
one partner gives money to another for in- D. pooled expertise
vesting it in a commercial enterprise
1063. Ensuring that the fund to be invested
D. A relationship between two or more will create value to a business or an indi-
parties, who contribute capital to a busi- vidual in the form of profit.
ness, and divide the net profit and loss
pro-rata A. Finance
1060. What percentage is attandence?
A. 0.25
B. 0.5
1064. What is the primary purpose of a capital
C. 0.3
budget?
D. 0.8 A. Managing day-to-day expenses
E. 0.15 B. Planning long-term investments
1061. The best sentence to describe activity ra- C. Controlling operational costs
tio. D. Estimating monthly revenue
1065. The definition of financial management
is wrong as follows:
A. all activities and financial activities
within the company to manage the money
obtained from sales
B. all activities / activities related to how
to obtain working capital funding, allocate
funds & manage assets to achieve the
company’s main goals
A. The extend to which a firm is using C. how to manage finances in a company
debt financing and the degree of safety for the company’s benefit
that the firm provides to the creditors.
D. how to manage household finances
B. The firm’s ability to meet its current
obligations as they come due. 1066. Basic objective of Financial Management
is
C. The effectiveness of a firm in manag-
ing its assets that related to the level of A. Maximization of profit.
operations B. Maximization of share holder’s wealth
D. The combined effects of liquidity, as- C. Ensuring Financial discipline in the
set management and debt of the firm. firm.

D. All of these. 1071. A person buys 100 shares @ Rs.100

per share of XYZ company. After some
1067. In relation to the financial management time the market price of shares becomes
of a company, which of the following pro- Rs.120 per share. How much wealth shall
vides the best definition of a firm’s pri- hehave in the company.
mary financial objective?
A. Rs.12, 000
A. To achieve long-term growth in earn- B. Rs.8000
ings
NARAYAN CHANGDER
C. Rs.10000
B. To maximise the level of annual divi-
dends D. Rs.10120
C. To maximise the wealth of its ordinary 1072. Mm approach is known as theory of rel-
shareholder evance when it is assumed that there is
D. To maximise the level of annual profit A. Absence of taxes
B. Presence of taxes
1068. Which of the following best describes
the term asset? C. Investors act rationally
D. All of the above
A. Amounts a business owes
B. Amounts owned to the business by an 1073. Working capital refers to excess of cur-
external party rent assets over current liabilities.
C. Something that a business owns that A. True

lasts more than 1 year B. False
D. An item of value owned by a business 1074. Which of the following is not included in
the capital structure?
1069. John lives in North Carolina, is single,
and earns more than $5, 500 per year. He A. Long term debt
should use the form to file your state B. Preferred stock,
income taxes. C. Current assets
A. D-400 D. Retained earnings
B. 1040EZ
1075. Owner’s equity is the owner’s claim to
C. W-4 the asset of the business. It is NEVER re-
D. none of above ferred to as the owner’s capital in the busi-
ness.
1070. In managing the day-to-day needs of A. True
the business, it is always recommended
B. False
that a financial manager do the following
A. to pay their bills as late as possible 1076. Which Concept explains this statement
and get liquid funds from receivables as the best?”How much money do the own-
quickly as possible ers’ receive based on the net profit of the
company.”
B. to pay their bills as quickly as possible
and get liquid funds from receivables as A. Return on Owners Equity.
late as possible B. Net profit margin.

C. Return on total capital. A. Sales managers

D. none of above B. Marketing managers

1077. Rate of return on capital is exception- C. Treasury managers
ally high in D. Operations managers
A. Under capitalisation
1082. Increase in accounts receivable
B. Over capitalisation
C. Working capital A. Operating Activities
D. Fixed capital B. Investing Activites

1078. What is the only payment method that
does not charge interest or fees? D. none of above
1083. If you miss you a class what happens

A. You fail the year
B. You get a zero
C. You die
D. Professor Dinter will find you
A. Currency E. Your get disowned by your parents
B. Debit Card
1084. Host-the one who pays to uti-
C. Check lize/consume the products/services.
D. none of above A. True
1079. Assets-Liabilities = Owner’s Equity B. False
A. True
1085. finance function comprises
B. False
A. Safe custody of funds only
1080. The followings are the statements that
B. Expenditure of funds only
best described for cash budget, except
A. The cash forecast of the firm by plan- C. Procurement of finance only
ning inflows and outflows. D. Procurement & effective use of funds
B. Depreciation is excluded from the
statement. 1086. What is the main function of the money
market?
C. Used to estimate short term cash re-
quirements. A. Dealing with short-term securities
D. Positive cashflow indicate the firm has B. Dealing with long-term securities
surplus cash. C. Facilitating the flow of funds among in-
vestors
1081. Q8) In the organization structure of the
finance department, who typically reports D. Channeling savings into loans or in-
to the Chief Financial Officer (CFO)? vestments

1087. Individuals or companies that make a 1093. Dividend is distributed through

profit investing in startup companies
A. Profits
A. Entrepreneurs
B. Asset
B. Venture Capitalist
C. Capital
C. Bill Gates
D. Silent Partner D. Debt
1088. What is the primary goal of financial 1094. It is the study of how the players in a
NARAYAN CHANGDER
managers? financial system acquire, spend, manage,
A. Minimizing debt and make other sound financial decisions
concerning money and other financial re-
B. Maximizing profits sources.
C. Maintaining liquidity
A. Finance
D. Increasing cash flow
B. Money
1089. A government has adopted a contrac-
C. Instrument
tionary fiscal policy. How would this typi-
cally affect businesses? D. Business
A. Higher interest rates and higher infla-
tion 1095. If taxes are ignored, MM approach is
identical to
B. Lower taxes and higher government
subsidies A. NI Approach
C. Higher taxes and lower government B. Traditional Approach
subsidies
C. NOI Approach
D. Lower inflation and lower interest
rates D. Non of the above
1090. All of the following are primary sources 1096. A bank account where you can store
of income except? money you don’t need right away but keep
A. Employment paycheck it easily available and safe. You usually
earn interest on this type of account.
B. Tips
A. Checking Account
C. Interest
D. Loans B. FICO score
C. Credit
1091. If existing shareholders want to exer-
cise complete control them they should pre- D. Savings account
fer debt.
A. True 1097. Discounting formula
B. False A. FV = PV (1+i)n
1092. Federal agency debt B. PV = FV / (1+i)n

A. Short term debt C. EAR = (i/m.n)-1
B. Long term debt D. FVa={1-(1/(1+i)n)}/i

1098. If the present value of the cash flow X C. Financial planning is important in their
is $200, and the present value cash flow business because it helps in determining
Y is $150, then the present value of the their short and long-term financial goals

combined cash flow is: and creating a balanced plan to meet
A. $200 those goals.
B. $150 D. Financial planning only helps in con-

trolling the financial resources of their
C. $350 business.
D. $50
1103. Given the following cash flows for
1099. The T in SMART Goal Stands for project A:C0 =-1000, C1 = +600, C2 =
+400, and C3 = +1500, calculate the pay-
A. Timely
back period.
B. Terrific
A. One year
C. Tardy
B. Two years
D. none of above
C. Three years
1100. Are the following statements true or D. “There is no spoon.”
false? True False 1. Accounting profit is
not the same as economic profit. 2. Profit 1104. It is the study of how individuals or busi-
takes account of risk. 3. Accounting profit nesses evaluate investment opportunities,
can be manipulated by managers. business proposals and business projects,
and raise capital to fund them.
A. True, False, False
A. Finance
B. True, False, True
C. False, False, True
D. True, True, False
1101. A firm gains access to contemporary
market through an acquisition 1105. Public finance is the study of money
A. Hostile takeover management of individual.
B. Acquisition premium A. TRUE
C. Market extension merger B. FALSE

Explanation:Public finance is the study of
D. Vertical merger management of money by government.
On the other hand, money management by
1102. Chloe, Angel, and Xavier are planning
individual is called personal finance.
to start a new venture. They are dis-
cussing the importance of financial plan- 1106. money paid by the borrower for the
ning in their business. Can you explain it use of money that was loaned to him/her
to them?
A. Interest
A. Financial planning is not important in
their business. B. Debt
B. Financial planning is only important for C. Loan

their personal finance management. D. Income

1107. Which technique in financial man- C. yearly

agement enable us to take invest- D. quarterly
ment/expansion decisions?
E. daily
A. Capital Structure
1112. Present value (PV) is the current value
B. Ratio Analysis
of a sum of money or stream of cash
C. Working Capital Management flows given a specified rate of return.
D. Capital Budgeting A. present
NARAYAN CHANGDER
1108. What is the difference between load B. future
fund and no-load fund? C. small
A. Load fund is when you pay the fee in- D. large
termittently while the no-load is when you 1113. things you can live without
pay it up-front
A. wants
B. Load fund is when you pay a fee and
no-load is when you don’t pay a fee B. needs
C. plans
C. Load fund is when you pay upfront and
no-load is whne you pay at the end D. goals
D. load fund is when you pay no fee and 1114. In February 2020, Mr Daniel received
no-load is when you pay a fee a total income of RM4 500. His monthly
E. Load fund is when you pay the fee at fixed expenses and variable expenses are
the end while no-laod is when you pay up- RM2 880 and RMx respectively. There is
front a negative cash flow of RM620. Calculate
the value of x?
1109. Under financial management a forecast A. 1 000
of receipts and payments is made andthe
B. 3 500
shortage or sufficiency of is ensured.
C. 2 240
A. Capital
D. 3 880
B. Human resource
C. Material 1115. The amount of time taken to generate
sufficient cash to cover its own investment
D. All the above costs is called
1110. The contract evidencing the existence of
partnership
A. Service Contract
B. Articles of Partnership
C. Articles of Incorporation
D. Contract of Partnership
A. Return period
1111. Dividends are paid on a basis B. Payback period
A. monthy C. Depreciation period
B. semesterly D. Investment period

1116. Finance functions are B. the stock exchange on which the stock
A. Planning for funds is listed.

B. Raising of funds C. the president of the company.
C. Allocation of funds D. individuals buying and selling the

stock.
D. All of the above
1121. What is the main disadvantage of a sole
1117. shows the financial position of a proprietorship compared to a corporation?
company at point of assets and liabilities
is measured A. Unlimted liability of the owner.
B. More costly to set up.
C. More difficult taxation rules.
D. More disclosure requirements to in-
form the public.
1122. A school decides to have larger classes,

and examination results suffer as a result.
In terms of the ‘value for money’ frame-
work, which of the following statements
is true?
A. Income statement A. Economy has increased but efficiency
B. Pro forma statement has decreased.
C. Balance sheet B. Efficiency has increased but effective-
ness has decreased.
D. Cash flow statement
C. Economy has increased but effective-
1118. Charged when a cardholder does not ness has decreased.
make the minimum monthly payment by
D. Economy has increased but efficiency
the due date.
and effectiveness have decreased.
A. Late-payment fee
1123. Which is an example of an Electronic
B. Annual fee
Funds Transfer?
C. Over-the-limit fee
A. Direct Deposit
D. You are so forgetful fee
B. Paper payroll check
1119. allows business founders to harvest C. Dividend payout
some of their wealth. D. Monopoly money payment
A. Internal Public Offering.
1124. Redeemable preference shares can be
B. Initial Private Offering. redeemed out of
C. Initial Public Offering. A. The sale proceeds of investment
D. Internal Private Offering. B. The proceeds of a fresh issue of
1120. The market price of a share of common shares
stock is determined by: C. Securities premium reserve
A. the board of directors of the firm. D. The proceeds of issue of debentures

1125. Having ALOT of money means you are 1130. Which of the following is a method used
important in analyzing financial statements-
A. True A. Variance analysis
B. False B. Trend analysis
1126. In his traditional role the finance man- C. Break-even analysis
ager is responsible for D. Budget analysis
A. proper utilisation of funds
NARAYAN CHANGDER
1131. Why is shareholder’s wealth maximiza-
B. arrangement of financial resources tion more relevant than profit maximiza-
C. acquiring capital assets of the organi- tion?
zation A. It focuses on short-term goals
D. efficient management of capital B. It ignores risk and uncertainty
1127. What will happen to your credit rating C. It considers the timing of returns
if you don’t pay your loan? D. It emphasizes the efficient use of cap-
A. Poor ital resources
B. Good 1132. Offering protection coverages to its ex-
C. outstanding isting clients (life and non-life)
D. needs improvement A. credit card
1128. The main advantage of ARR
C. locker sevices
A. easy comparisons
D. Bancassurance
B. money
C. profit 1133. In assessing the company’s health level,
we classify it into 3 categories, namely
D. ignores timing of cash inflow
Healthy, Unhealthy and Unhealthy. The
1129. Which TWO of the following statements company code in the ‘Very Healthy’ cat-
are correct? 1. Maximising market share egory is:
is an example of a financial objective 2. A. ” BB”
Shareholder wealth maximisation is the
B. ” AA”
primary financial objective for a company
listed on a stock exchange 3. Finan- C. “AAA”
cial objectives should be quantitative so D. “BBB”
that their achievement can be measured 4.
Three E’s are used as a performance mea- 1134. If the NPV of project A is + $120, and
sure to assess value of money in not for that of project B is-$40 and that of project
profit organisations. The three E’s stand C is + $40, what is the NPV of the com-
for economy, efficiency and environment bined project?
A. 2 & 3 A. +$100
B. 1 & 4 B. +$180
C. 2 & 4 C. +$60
D. 1 & 3 D. +$120

1135. Multiple compounding period means 1140. Which of the following statements is
A. Interest compounded more than once correct?
in a year

A. A Higher Receivable Turnover is not de-
B. Interest is calculated for a number of sirable
years
B. Interest Coverage Ratio depends upon
C. Interest compounded anually Tax Rate
D. none of above
C. Increase in Net Profit Ratio means in-
1136. Which is not an example of an unex- crease in Sales
pected event?
D. Lower Debt-Equity Ratio means lower
A. car accident
Financial Risk
B. fire
C. trip to DIsney World 1141. Which is NOT an advantage of using
D. breaking your arm the Payback method to choose between in-
vestment options?
1137. The cost of trade credit has two compo-
nents. The first component involves taking
cash discount with free credit costs. The
second component involves the expensive
cost of credit for not taking the cash dis-
count.
A.
A. Itfocuses onprofitability and ig-

B. norescash flow
B. Reduces the time during which liquid-
ity is risked
1138. To open a federal or a state bank in the
United States, the owners have to meet C. Easy to understand and calculate
special requirements including applying for
D. May encourage growth by favouring
a “charter” from the federal or state gov-
quick return projects
ernment.
A. False
1142. Which of the following is not a function
B. True of a finance manager?
1139. Which does not belong to the group? A. Investor relations
A. Inventories
B. Credit & collections
B. Land held for Speculation
C. Computer Software C. Investments
D. Equipment D. Appointment of financial personnel

1143. what will be the present value of Rs.40, 1148. Process of moving cash flows to a later
00, 000 receivable at the end of 3 years time period, is the meaning of
at an interest rate 7%
A. Compounding
A. 3004000
B. 3040000 B. Discounting
C. 3004100 C. Future Value

D. None D. Present Value
NARAYAN CHANGDER
1144. Prime Minister Shri Narendra Modi
thinks that capital is a pooled or inherited 1149. The R in SMART Goal stands for
wealth secured in the form of securities A. Respectful
and debt
B. Reasonable
C. Relevant
D. none of above

A. FALSE does not charge interest or fees?
B. TRUE A. Currency (cash)
1145. Financial Planning helps in B. Credit Card
A. Managing Business C. Debit Card
B. Managing Human Resources
D. none of above
C. Forecasting Business Situations
D. All of the above 1151. What type of skills is financial manage-
1146. All of these make a good first impres- ment training designed to help cultivate?
sion except A. Financial planning and analysis
A. Showing excitement
B. Cost analysis and budgeting
B. Helping your coworkers
C. Risk management and forecasting
C. Keeping a good personal appearance
D. Seeking advice and improvement D. Marketing and customer service
E. Doing the minimum amount of work
1152. Based on the function of working assets
1147. Which of the following is NOT on a in active capital companies is devided in to
checkbook register?
A. Payment dates
A. Working capital and fixed capital
B. Check numbers
B. Current assets and fixed assets
C. Payment amounts
D. Bank account balance C. Working capital and current assets
E. Payee names D. Fixed capital and fixed assets

1153. PBP is calculated when the incomes or 1158. A project undertaken by Accenture re-
return are equal by the formula quires an upfront investment of Rs 2 lakhs
which aims to yield an annual revenue of

A. Original outlay/ uncovered amount of
project Rs 40, 000 for nine years. Its financial
manager has to find what would be the re-
B. Year before full recovery+(Uncovered imbursement period of the investment as-
amt/ cash flow during the year) suming revenue inflows are uniform. Help
C. Original cost/ annual return of the him/her out
project
D. none of above
1154. The following are parts of the pyramid

for managing finances, except:
A. Debt Management
B. Income A. 4 years
C. Protection B. 4.5 years
D. Emergency Fund C. 5 years
D. 5.5 years
1155. one of the three fundamental financial
statements and is key to both financial 1159. How do you know when abusive lend-
modeling and accounting. ing is taking place?
A. Management A. when the lender is pressuring you to
take a loan.
B. Assets
B. when you have done your “due dili-
C. Balance Sheet
gence” and the loan office does not bad-
D. Equity ger you to sign for the loan.
1156. The primary goal of Financial Manage- 1160. The loans offered by the American pro-
ment is gram we focused on are
A. To maximise the return
B. To minimise the risk
C. Wealth maximisation
D. Profit maximisation
1157. Which of the following is correct?

A. Short term
A. Positive cash flow occurs when the in-
come exceeds the expenses B. Long term
B. The bank loans are not affected by the 1161. and carry a fixed rate of inter-
negative cash flow est and are to be paid off irrespective of
C. Deficit occurs when someone is the firm’s revenues
bankrupt A. Debentures, Dividends
D. Utilities bills are fixed expenses B. Debentures, Bonds

C. Dividends, Bonds 1165. Which technique in financial man-

D. Dividends, Treasury notes agement enable us to take procure-
ment/sourcing decisions?
1162. Should be added with the hiring of your A. Capital Structure
first employee to cover medical expenses
B. Working Capital Management
as well as disability and death benefits.
Even if employees perform low-risk work, C. Ratio Analysis
such as in an office, claims could result D. Capital Budgeting
NARAYAN CHANGDER
from slip-and-fall injuries or repetitive mo-
tion injuries such as carpal tunnel syn- 1166. Sara worked an 8 hour shift and
drome makes.12 per doll, she makes 80 dolls per
hour, what was her gross pay for that
A. Property insurance
day?
B. Workers’ compensation insurance
A. $80.76
C. Professional liability insurance
B. $76.80
D. none of above C. $75.80
1163. The table below shows actual cash flow D. $60.00
of Rakesh and Monash in a certain month.
Whose cash flow is better? Explain your 1167. The investment involve decision making
answer. on daily basis. This sentence refer to
A. capital investment
B. working capital investment
1168. most unsafe mode by which firms per-

form worldwide business is
A. Licencing
B. Franchising
A. Monash’s cash flow is better because
he has a surplus of income C. International trade
B. Monash’s cash flow is better because D. Establishment of new subsidiaries

he has a deficit of income 1169. The following are all methods of invest-
C. Rakesh’s cash flow is better because ment appraisal, EXCEPT
he has a surplus of income A. Payback period
D. Rakesh’s cash flow is better because B. Balance sheet return
he has a deficit of income
C. Net present value using discounted
1164. an estimate of a business’s financial out- cash flows
look for each of the next five years. D. Average rate of return
A. financial plan
1170. You buy detergent for $11.98 for 64
B. financial forecast ounces, what is the unit price?
C. budget A. .20
D. owner’s equity B. .17

C. .19 A. The purpose of their financial manage-

D. .195 ment should be to solely focus on short-
term financial goals.

1171. Which ratio indicates the proportion of B. The purpose of their financial manage-
each sales dollar that represents profit? ment should be to effectively manage the
A. Gross profit margin financial resources of the company.
B. Operating profit margin C. The purpose of their financial manage-
ment should be to minimize the impor-
C. Net profit margin tance of financial resources.
D. Return on investment D. The purpose of their financial manage-
ment should be to maximize profits at all
1172. CAPM Stands for
costs.
A. Capital asset pricing model
1177. is used to estimate future free cash
B. Capital amount pricing model
flows.
C. Capital amount printing model A. Mission statement
D. Capital asset printing model B. Projected financial statement
1173. A business will make a profit IF C. Vision
A. revenue equals expenses D. Objectives
B. revenue is greater than expenses 1178. Choose the correct option
C. expenses decrease and revenue in-
creases
D. expenses are greater than revenue
1174. an owner’s claim to the assets of the

business
A. financial plan
B. financial forecast
A. Project X
C. budget
B. Project Y
D. owner’s equity
1179. Analysis of Financial Statements is sig-
1175. Operating leverage x financial lever- nificant:
age= A. For Creditors
A. Combined Leverage B. For Managers
B. Financial Combined Leverage C. For Employees
C. Operating Combined Leverage D. For all of the above
D. Fixed leverage
1180. If balance of an asset increases, cash
1176. Kayla, Tyler, and Brie have started a flow operations will decrease. The state-
new business. What should be the pur- ment is?
pose of their financial management? A. TRUE

B. FALSE 1185. It means people can store their wealth

C. Neither TRUE nor FALSE in the form of money. Money acts as a
D. I don’t know
A. checks
1181. The value of an asset to a particular
B. medium of exchange
investor as determined by calculating the
present value of the expected future cash C. standard of value
flows at that investor’s required rate of D. store of value
NARAYAN CHANGDER
return, is the meaning of
1186. The followings are the five financial
A. Book Value
management process.I. Evaluating finan-
B. Intrinsic Value cial statusII. Carrying out financial planIII.
C. Market Value Reviewing and revising progressIV. Set-
D. Equity Value ting goals V. Create financial planWhich of
the followings is the correct order of finan-
1182. Companies with a higher growth pat- cial management process?
tern are likely to: A. I, IV, V, III, II
A. pay lower dividends
B. IV, I, V, III, II
B. pay higher dividends
C. IV, I, V, II, III
C. dividends are not affected by growth
D. I. IV, V, II, III
considerations
D. none of the above 1187. In a primary financial market, existing
financial instruments are traded among in-
1183. A government follows an expansionary vestors.
monetary policy. How would this typically
affect businesses? A. TRUE
A. Higher demand from customers, lower B. FALSE

interest rates on loans and increased Explanation:False (In a primary market,
availability of credit new financial instruments are issued.)
B. A contraction in demand from cus- 1188. What form do you need to complete be-
tomers, higher interest rates and less fore you start a new job?
available credit A. W-2
C. Lower taxes, higher demand from
B. W-4
customers but less government subsi-
dies/available contracts C. D-400
D. Lower interest rates, lower exchange D. 1040EZ
rates and higher tax rates
1189. One of the thumb rules for doing an in-
1184. A firm’s unlevered beta must always be vestment is
greater than its levered beta.
A. True
B. False
C. Depends
D. none of above A. High risk, low profit

B. High return, high profit D. None

C. High profit, low risk 1195. What is the average CAGR (com-

D. High risk, high return pounded annual growth rate) of
Vinamilk’s profit after tax from 2012 to
1190. One of the problems associated with 2021?
profit maximization is that it ignores the
timing of a project’s return. A. 2.15%
A. True B. 7.47%
C. 9.79%
B. False
D. none of above
1191. What is the primary goal of financial
management? 1196. Company issues new securities in a pri-
mary market.
A. Increase earnings
A. TRUE
B. Maximizing cash flow
B. FALSE
C. Maximizing shareholder’s wealth
D. Minimizing risk of the firm 1197. Which is NOT a source of internal funds
for SMEs?
1192. John is single, 20 years old, and makes A. Personal savings of the entrepreneur
less than $100, 000 a year. He has no
children. Which federal tax form should B. Sales of fixed assets
he use? C. Banking
A. 1040EZ D. Profits retained in the business
B. W-4 1198. There are main types of banks.
C. W-2 A. 2
D. none of above B. 3
1193. Internal Rate of Return (IRR) is: C. 4
A. The discount rate that makes NPV pos- D. 5
itive
1199. Firms that wish to raise funds for invest-
B. The discount rate that makes NPV neg- ment purposes issue securities in the
ative
A. primary and secondary markets.
C. The discount rate that makes NPV zero
B. primary markets.
D. The discount rate that makes total
C. secondary markets
undiscounted free cash flows zero
D. intermediary markets.
1194. While calculating the WACC, cost of each
component of the capital is weighted- 1200. Company having high fixed operating
cost would opt for
A. In the ratio of 1:2:3:4
A. Debt
B. By the relative proportion of that type
of funds in the capital structure. B. Equity
C. By the relative proportion of that type C. Both Debt & Equity
of funds to total assets in the company D. None of the above

1201. What is the primary responsibility of a 1205. John wants to buy a $5, 000 car. He
financial manager in an organization? plans to buy it in 3 years. How much
A. To organize company parties should he save each month to pay for the
car?
B. To manage the organization’s financial
resources A. $1, 666.67
C. To hire and fire employees B. $138.89

D. To design the company’s logo C. $208.33
NARAYAN CHANGDER
D. none of above
1202. Which of the followings are key finan-
cial statements in an organization
1206. What do you call the max you can bor-
row?
A. Credit limit
B. Lending Limit
C. Service Limit
D. Equity Limit
E. Quality Limit
1207. Features of international business that

A. Statement of cash flows a organization may be exposed to
B. Bank statement A. Exchange rates
C. Balance sheet B. Political risks
D. Income statement C. Foreign economic condition
E. Supplier’s quotation D. All of the above
1203. What does the A in SMART stand for?
1208. These are given to managers based on
A. Attainable their effectiveness in achieving company
B. Accountable goals
C. Action-Packed A. Economic Value Added
D. Articulate B. Performance Shares
1204. When you make a mistake you should C. Preference Shares
A. Attempt to hide the mistake D. Ordinary Shares
B. Blame others 1209. Increase in accounts payable

C. Accept fault and seek to remediate the A. Operating Activities
error
B. investing Activities
D. Ignore it and move on
E. Apologize but continue acting the same
way D. none of above

1210. What is not included in the definition of A. Trading on profit

Income Tax Subject below is: B. Trading on equity

A. Pet C. Trading on asset
B. Private Person D. Trading on liability
C. A lot
1216. Ke stands for
D. BUT (Permanent Establishment)
A. Cost of evaluation
1211. The sale of “new” securities, where the B. Cost of estimation
financial asset is being traded for the very
first time, is said to take place in the C. Cost of equity capital
market. D. Cost of preference capital
A. primary E. Cost of floatation of equity shares
B. money
1217. Financial Management is study-(I)
C. secondary Of the process of procuring and judi-
D. capital cious use of financial resources(II) Un-
dertaken to maximize the value of the
1212. What is a personal line of credit firm/owners.Select the correct answer
A. Money in your bank account from the options given below.
B. Money available on a need basis A. (I) only

B. (II) only
C. Money that you can’t access
C. Both (I) and (II)
D. A blank credit card
D. Neither (I) nor (II)
E. A consumer loan
1218. The cheapest source of finance is
1213. What institution has authority to in-
crease/reduce interest rate? A. debenture
A. Commercial banks B. equity share capital
B. Central bank C. preference share.
C. Savings and loan associations D. Retained earnings
D. Credit unions 1219. When interest rates are high, a com-
Explanation:Central bank is the bank of a pany with a high capital gearing ratio may
country that manages the currency and experience:
monetary policy.
A. Increased profitability
1214. Financial leverage refers to the portion B. Difficulty in meeting interest payments
of debt in the overall capital.
C. Increased risk
A. True
D. Decreased profitability
B. False
1220. When are the student labs held?
1215. Use of fixed interest bearing source
of funds to enhance the return of equity A. Monday
shareholders is called B. Tuesday

C. Wednesday 1225. The main objective of financial manage-

ment is
D. Thursday
A. (a)Profit Maximisation
E. Friday
B. b) Wealth Maximisation
1221. Cash at bank is an example of C. c) Ensuring availability of finance
A. current asset D. (d) None of the above
B. current liability
NARAYAN CHANGDER
1226. The power of time helps people earn
C. more of current asset less of current more money.
liability
A. True
D. less of current asset more of current
B. False
liability
1227. Karen makes $1, 000 a month working
1222. Financial management function that at Bojangles. She pays $450 in rent. How
managing the funds earned from active much money does she have per month af-
spending is called ter paying her rent?
A. Planning function of funds A. $500
B. Obtaining of funds B. $450
C. Allocation of funds C. $550
D. Earned of funds D. none of above
1223. Which business financial planning con- 1228. A firm’s financing costs include
cept is correct? A. depreciation expense.
A. Manage budgeting for the boss’s inter- B. interest expense
ests
C. costs of goods sold.
B. Manage budgeting for each business
D. both A and B.
needs item
C. Manage debt loan budgeting 1229. Internal Rate of Return (IRR) to equity
capital providers is equal:
D. Manage the flow of receivables collec-
tion wisely A. The hurdle rate of return to equity cap-
ital providers
E. Manage bank loans for personal needs
B. The cost of equity
1224. A fee paid by a borrower to the lender C. The actual return on equity capital
for the use of borrowed money; typically
interest is calculated as a percentage of D. The total discounted free cash flows to
the principal (original loan amount) equity capital providers
A. Interest 1230. If managers are making decisions to

maximize shareholder wealth, then they
B. Credit
are primarily concerned with making deci-
C. Debt sions that should
D. Loan A. positively affect profits.

B. increase the market value of the firm’s B. Time, Money, Investments

common stock.
C. Time, Interest, Investments

C. either increase or have no effect on
D. Time, Money, Interest
the value of the firm’s common stock.
D. accomplish all of the above. 1236. Financial Ratios are measure.
1231. also called as “tangible” or “real” as- A. Absolute
setmarkets; these are for products such as B. Relative
wheat, autos, real estate, computers, and
machinery. 1237. I want to make my money grow so I can
A. Physical Asset Market pay for university.
B. Financial Asset Markets A. Spending
C. Spot Markets B. Saving
D. Futures Markets C. Investing
1232. Market value of shares are decided by D. Donating

A. the respective companies 1238. A share having no face value.
B. the investment market
A. Equity Shares
C. the government
B. Preference Shares
D. the shareholders
C. No Par Share
1233. Bob works a long day of 14 hours, he D. Debenture shares
makes $12.50 per hour-what is his gross
pay for that day? (remember 8 hours is a 1239. Assets that are depleted in one run
day) revolve in the production process and
A. $212.50 turnover process in a short time is called
B. $112.50
A. Fixed assets
C. $200.00
D. $185.50 B. Current assets
C. Capital
1234. Which is a source of earned income?
D. Fixed capital
A. Interest on your money market ac-
count. 1240. Cash flow is
B. Volunteering at your school.
A. the increase or decrease in cash for
C. Money earned while working at the the period
mall.
B. the decrease but not increase in cash
D. Collecting gift cards from birthdays. for the period
1235. Factors that make time value of money C. the increase but not decrease in cash
possible are for the period
A. Time, Money, Security D. the net income for the period

1241. is money given for a period of time 1246. A manufacturer of LCD televisions has
but must be paid back with interest seen sales increase from 125, 000 units
A. Debt per year to 500, 000 units per year in 8
years. What has been the firm’s average
B. Loan annual rate of increase in the number of
C. Income television sets sold? Use the Rule of 72
to determine your answer.
D. Taxes
A. The average annual rate of change has
NARAYAN CHANGDER
1242. Which of the following is one of the been between 10% and 11%.
remedies of over capitalization?
B. The average annual rate of change has
A. it can be compensated with the help of been between 18% and 19%.
fresh issue of shares
C. The average annual rate of change has
B. splitting up of shares been between 15% and 16%.
C. issuing of bonus shares to the existing D. There is not enough information to an-
shareholders swer this question.
D. redemption of preference share capi-
1247. Which of the following is not a factor
tal
affecting financing decision?
1243. The process of calculating future value A. Floatation Cost
of cash flows is known as
B. Risk
A. Discounting
C. rate of return
B. Compounding
D. cash flow position
C. Both of these
D. None of these 1248. The process of converting long term illiq-
uid assets into financial instruments for
1244. Who is the teacher for Financial Man- raising money is called
agement A. Securitisation
A. Prof.Dinter B. Bridge Finance
B. Prof.Jason C. Venture Capital
C. Prof.Daniel D. Seed Capital
D. Prof.Nathan
1249. The popular definition of hospitality
E. Prof.Diego is “the friendly and generous reception
and entertainment of guests, visitors or
1245. Makayla bought a new outfit for
strangers.”
$80.00. Calculate the sales tax at
6.75%. A. True
A. $5.40 B. False
B. $6.00 1250. Marginal cost-
C. $4.50 A. is the weighted average cost of new fi-
D. $85.40 nance raised by the company.

B. is the additional cost of capital when

the company goes for further raising of fi-
nance.

C. is the cost of raising an additional ru-
pee of capital.
D. All of the above
A. 1 year 7 months
1251. Suppose a firm has a $100 million in ex- B. 2 years 7 months
cess cash. It could: C. 1 year 5 months
A. Invest the funds in projects with posi- D. 3 years 2 months
tive NPVs
1255. A fixed cash flow in each year for a spec-
B. Pay high dividends to the shareholders ified number of years is called as
C. Buy another firm A. Annuity
D. All of them B. Recovery factor
C. Discounting
1252. What topics are typically covered in fi-
D. Compounding
nancial management training?
1256. What is a savings account?
A. Strategic management methods
A. an account that you can write a draft
B. Personal financial planning against to pay for goods.
C. Data mining techniques B. an account that does not bear interest
D. Market analysis and forecasting at a bank or financial institution.
C. an interest-bearing deposit account
1253. A is a person who relies on another held at a bank or financial institution.
person, usually a family member, for finan- D. an account that purchases stocks and
cial support. bonds.
A. taxpayer 1257. There are two ways to correct for
B. dependent projects with unequal lives when using the
NPV approach. Which of the answers be-
C. community low is one of these ways?
D. none of above A. One way is to find a common life, with-
out the need to extend the projects to the
1254. NW Co is considering investing $46, least common multiple of their lives.
000 in a new delivery lorry that will last
B. One way is to find the present value
for 4 years, after which time it will be
factors and then compare them.
sold for $7, 000. Depreciation is charged
on a straight-line basis. Forecast oper- C. One way is to compare the lengths of
ating profits/(losses) to be generated by the projects and take the project with the
the machine are as follows.Assuming op- shortest life.
erational cash flows arise evenly over the D. One way is to find a common life by ex-
year, what is the payback period for this tending the projects to the least common
investment (to the nearest month)? multiple of their lives.

1258. What does the term ‘liquidity’ refer to? B. bonds and commercial paper.
A. The amount of debt owed C. commercial paper and Treasury bills
B. The ability to pay off debt D. Treasury bills and certificates of de-
posit
C. The ability to access funds quickly
D. The ability to borrow money in the fu- 1264. Leverage is the extend which a firm
ture is using debt financing and the degree of
safety that the firm provides to the credi-
NARAYAN CHANGDER
1259. Mr. Spark spends RM2 500 for house- tors ratio is one of the ratios to eval-
hold expenses every month. How much uate leverage.
is the minimum emergency fund needed
by him based on Bank Negara Malaysia
suggestion? (Hint:Emergency fund is the
amount Mr. Spark should have to spend
on household if he suddenly doesn’t have
any income)
A. RM15 000
B. RM10 000 A. Average collection period
C. RM7 500 B. Net working capital
D. RM12 000 C. Inventory turnover
D. Time interest earned
1260. Provides the foundation for financial se-
curity 1265. Cost of retained earnings is equal to
A. Investment A. Cost of equity
B. Savings B. Cost of debt
C. Cost of bank loan
1261. What is an expense?
D. Cost of term loans
A. a tax
B. a job 1266. What is the type of income before you
account for taxes?
C. a payroll deduction
A. Deductable income
D. something you use or buy
B. Gross Income
1262. The primary goal of financial manage- C. Net income
ment is D. Taxable Income
A. To maximise the return E. Wageable Income
B. To maximise the wealth of owners
1267. To know the Future value of an Annuity,
C. To minimise the risk following table will be used
D. To maximise profit A. CVAF
1263. The major securities traded in the capi- B. PVAF
tal markets are C. PVF
A. stocks and bonds D. CVF

1268. With a financial perspective, one can D. Manage the organization’s investment
say that a firm is a pool of in order portfolio
to

1273. Which of the following is NOT relevant
A. personal wealth safe taxes to the use of the NPV method of invest-
B. resources invest ment appraisal?
C. contracts control employees A. It relies on discounted cash flows
D. people make the world a better B. It’s expressed as a percentage for eas-
place ier comparison
1269. Which of the following source of capital C. Its value will fall if interest rates rise
should not be selected by a business if its D. A financially viable investment has a
fixed cost is high? positive value
A. Equity shares 1274. Choose the CORRECT unit of mea-
B. Preference shares surement of these investment appraisal
method.
C. Debentures
A. PBP = time
D. none of above
B. ARR = monetary value
1270. What elements include the financial def-
C. NPV = percentage
inition according to material?
D. none of above
A. Financial management
B. All answers are correct 1275. Mention 4 correct personal finance
posts?
C. Financial planning
A. 1. Personal Needs 2. Installments3.
D. Risk management
Parents’ Needs 4. Friends’ Needs
1271. Which of the following is LEAST likely to B. 1. Personal needs, 2. Installments3.
fall within financial management? Savings/Investment 4. Traveling
A. The dividend payment to shareholders C. 1. Personal Needs, 2. Sav-
is increased ings/Investment3. Entertainment 4. Hob-
B. Funds are raised to finance an invest- bies
ment project D. 1. Savings/Investment 2. Personal
C. Surplus assets are sold off Needs3. Social 4. Installments
D. Non-executive directors are appointed E. 1. Savings/Investment 2. Hobbies3.
to the remuneration committee Social 4. Installments
1272. What is one of the roles of fm in tax 1276. One of the important decisions under fi-
planning? nancial management relates to proportion
of the use of different sources in raising
A. Develop marketing campaigns to in-
funds. The financial decision highlighted is:
crease sales
A. Investment decision
B. Analyze customer behavior and prefer-
ences B. Dividend decision
C. Maximize deductions and credits to C. Financing decision
minimize tax liability D. Capital budgeting decision

1277. That part of management which is con- 1282. If the company’s current ratio is 5.
nected with the financial activities iscalled If the company paid $100 of accounts
management. payable using its cash. The new current
ratio will
A. Personnel
A. Be the same
B. Financial
B. Increase
C. Production
C. Decrease
D. All the above
NARAYAN CHANGDER
D. Can not be determined
1278. The size of assets, the profitability and
competitiveness are affected by which de- 1283. How much is Puan Soffia’s monthly sav-
cision in financial management ing if she wanted to pay the down pay-
ment for a RM650, 000 house in six
A. Financing Decision
years?
B. Dividend Decision
A. RM1111.78
C. Investment Decision
B. RM1000.78
D. Working Capital Decision
C. RM900.00
1279. Which does not belong to the group? D. RM902.78
A. Property, Plant and Equipment
1284. Financial institutions and markets
B. Accounts Receivable A. are the organized financial intermedi-
C. Inventory aries and the forums that promote the cy-
cle of money.
D. Prepaid Expenses
B. compose the set of financial activities
1280. An increase in firm’s collection period that support the operations of a business.
means
C. are the activities centered on the pur-
A. the firm’s current ratio is increasing chase and sale of financial assets.
B. the firm’s receivables turnover ratio is D. are concerned only with the addition of
increasing a multinational element to all finance ac-
C. the firm’s collection expenses have tivities.
fallen
1285. A Current asset is cash or any asset that
D. the firm has become less efficient in will be exchanged for cash or used within
the collection of its receivables one year.
1281. What agency is responsible for collect- A. True

ing federal income taxes for the US gov- B. False
ernment?
1286. Short term funds include:
A. Internal Revenue Service (IRS)
A. Hybrid financing, debt financing, long
B. NC Department of Revenue
term finance
C. NC Department of Agriculture
B. Trade credit, debt financing, equity fi-
D. none of above nancing

C. Debt financing, equity financing, hy- 1292. Derivatives markets involve financial in-
brid financing struments with values derived from under-
lying assets or indices.

D. Trade credit, secured term loan and un-
secured term loan A. TRUE
B. FALSE
1287. Which of the following is not one of the
three decisions to be taken by a finance 1293. The process of planning, evaluating, se-
manager? lecting, and managing the financing of
A. Investment Decision long-term operating projects of the com-
pany is termed
B. Dividend Decision
A. working capital management
C. Financing Decision
B. capital structure
D. Pricing decision
C. accounts receivable management
1288. The time value of money concept means D. capital budgeting
money paid out or received in the future is
not equivalent to money paid or received 1294. In what area of a typical family budget
today. do people spend most of their money?
A. True A. food
B. transportation
B. False
C. utilities
1289. What is the purpose of a “master bud- D. housing
get” in financial management?
A. Monitoring day-to-day expenses 1295. Investment decision is also known as
capital structure decision.
B. Estimating overall company profitabil-
ity A. TRUE
B. FALSE
C. Controlling long-term investments
Explanation:False. Investment decision is
D. Analyzing short-term market trends the decision related with the purchase of
fixed asset. On the other hand, capital
1290. Taxes are fees that the government structure decision is the selection of opti-
people to pay in order to live and work in mal mix of long term sources of financing.
their state and the USA.
1296. What does CEO mean?
A. requires
A. Central Executive Office
B. does not require
B. Committee of Essential Operations
1291. Which of the following is/ are exam- C. Chief Executive Officer
ple(s) of financial goal(s)?
D. Chief Education Officer
A. Start an emergency fund
1297. The net present value of a project de-
B. Pay off credit card
pends upon:
C. Save for children’s education
A. project’s cash flows and opportunity
D. All of the above cost of capital

B. Batmobile’s gas condition 1302. Debt causes a dilution of control

C. Thor’s tastes and preferences A. True
D. Alien attacks B. False
1298. Which of the following statements 1303. is an organization which underwrites se-
about Generally Accepted Accounting Prin- curities for companies advises in various
ciples (GAAP) is NOT true? activities
A. GAAP is a set of rule-based accounting A. merchant
NARAYAN CHANGDER
standards established by the Financial Ac- B. leasing
counting Standards Board (FASB). C. mutual funds
B. GAAP sets out the standards, conven- D. none of above
tions, and rules that accountants must
follow when preparing audited financial 1304. If Maddy’s gross pay is $500 this pay
statements. period and the Social Security tax is 6.2%,
how much Social Security tax will be de-
C. GAAP is complex, providing more than
ducted from Maddy’s paycheck?
150 “pronouncements” as to how to ac-
count for different types of transactions. A. $31.00
D. All of the statements above are true. B. $52.15
C. $6.50
1299. The bank issued card that deducts
D. none of above
money directly from the checking account
is 1305. One of the scopes of financial manage-
A. debit card ment, namely:
B. credit card A. Investation decision
C. savings account B. decision to save at the bank

C. production decisions
D. money market
D. income decision
1300. Earning Per Share equals to:
1306. Who might provide expert advice on tax
A. Earning after tax / no. of debentures planning and financial strategies to a busi-
B. Earning after tax / no. of Preference ness?
shares A. Human Resources Manager
C. Earning after tax / no. of Equity shares B. Financial Analyst
D. None of the above C. Operations Manager
1301. What does VAT (Value Added Tax) rep- D. Management Consultant
resent in business transactions? 1307. a detailed plan for a business’ financial
A. A tax on employee salaries needs
B. A tax on imported goods A. expenses
C. A tax on the value added at each stage B. budget
of production C. inventory
D. A tax on company profits D. accounts

1308. What is the important of have the C. to maximize wealth of owners

knowledge in finance?
D. to maximize profit

A. Helps in planning
1313. Head of finance department
B. Helps in problem solving
C. Help in decision making A. Finance manager
D. Able to communicate well among de- B. Line manager

partments in the firm C. Top level manager
1309. Current Ratio is computed as: D. None of these

A. Total Current Assets 1314. Insurance companies have a great deal
B. Product of Current Assets and Current of money to invest because
Liabilities A. there profit margins are so high.
C. Current Assets/ Current Liabilities B. because they are reluctant to cover in-
D. Quick Assets and Quick Liabilities surable losses.
1310. Four years ago, Robert’s annual salary C. because they must hold large reserves
was $52, 500. Today, he earns $73, 800. to pay potential claims.
What has been the average annual rate of D. insurance do not actually have large
growth of Robert’s salary? sums to invest
A. 8.89%
1315. Which of the following is the second pro-
B. 10.38% cess in financial management
C. 41.52% A. Carrying out financial plan
D. $5, 325 per year B. Setting goals
1311. Which of the following statements con- C. Reviewing and revising the progress
cerning net income is MOST correct?
D. Evaluating financial status
A. Net income represents cash available
to pay dividends. 1316. Your employer has agreed to place year-
end deposits of $1, 000, $2, 000, and $3,
B. Net income represents sales minus op-
000 into your retirement account. The $1,
erating expenses at a specific point in
000 deposit will be one year from today,
time.
the $2, 000 deposit two years from today,
C. Negative net income reduces a com- and the $3, 000 deposit three years from
pany’s cash balance. today. If your account earns 5% per year,
D. Net income represents income that how much money will you have in the ac-
may be reinvested in the firm or discount at the end of year three when the
tributed to its owners. last deposit is made?
A. $5, 357.95
1312. The primary goal of financial manage-
ment is B. $6, 000
A. to maximize the return C. $6, 202.50
B. to minimize the risk D. $6, 727.88

1317. are documents that summarize the B. financial asset market

changes resulting from business transac- C. spot markets
tions that occur during an accounting pe-
riod. D. futures market
A. Income statements 1322. The foreign exchange market is where

B. Financial statements currencies are bought and sold, and ex-
change rates are determined.
C. Accounts payables
A. TRUE
NARAYAN CHANGDER
D. Current assets
B. FALSE
1318. Anything that you spend money on.
1323. What are the two main sources of fi-
A. income nance in financial management?
B. expense A. Short-term and Long-term
C. deposit B. Equity and Debt
D. withdrawal C. Internal and External
1319. Which of the following best describes D. Assets and Liabilities
the goal of the firm? 1324. A is a security that pays for an infi-
A. The maximization of the total market nite amount of time.
value of the firm’s common stock A. perpetuity
B. Profit maximization B. annuity
C. Risk minimization C. capital market instrument
D. None of the above D. money market instrument
1320. the table shows Mr. Alan’s family ex- 1325. In cash flow analysis, the cash flows
penses.calculate Mr. Alan’s variable ex- from operating activities
penses.
A. are the cash effects of transactions
that create revenues and expenses
B. generally relate to changes in non-
current assets
C. generally relate to changes in long-
term liabilities and stockholders’ equity
accounts
A. RM 1 350 D. are irrelevant
B. RM 1 500
1326. is the study of how money is used
C. RM 1 650 by individuals, societies and nations to
D. RM 1 700 meet people’s needs.
A. Debt
1321. markets in which assets are brought or
sold for “on-the-spot” delivery (literally, B. Income
within a few days). C. Economics
A. physical asset market D. Debit

1327. Which of the following is an example of 1332. The fixed capital requirement of a trad-
a need for most people? ing concern in comparison to a manufactur-
ing concern will be

A. An expensive car
A. More
B. A big-screen TV
B. Less
C. Designer jeans
C. Same
D. A place to live
D. Not applicable
1328. What is the primary goal of financial 1333. What is a savings account?
management?
A. A for profit institution that offers per-
A. Profit Maximization sonal loans, mortgages and other ser-
B. Wealth Maximization vices.
B. A business that provides money re-
C. Asset Maximization
lated services.
D. Revenue Maximization C. An interest bearing account where
people put money for future use.
1329. EBIT is an important measure of a com-
pany, because D. None of the above
A. Shows free cash 1334. The decisions of investing in long term
or fixed assets on the basis of cost-benefit
B. Because it shows the final profit of a
analysis or risk-return analysis are known
company
as:
C. Shows the profitability of a company in
A. Working capital decisions
terms of operations
B. Financial Decisions
D. Measuring ‘earnings’ before deduct-
C. Capital budgeting decisions
ing indirect costs and transfers
D. None of these
1330. What is included in financial manage-
ment according to the traditional ap- 1335. Matthew, Abigail, and Mattie are run-
proach? ning a lemonade stand. They are trying
to understand their costs. Can you ex-
A. Arranging finance plain to them the difference between fixed
B. Using finance effectively and variable costs in the context of their
lemonade stand?
C. Both (a) and (b)
A. Fixed costs are expenses like the cost
D. None of these of the lemonade stand and the initial pur-
chase of cups that do not change regard-
1331. Investment decisions made by the com- less of the number of lemonades they sell,
pany’s Financial Manager are reflected in while variable costs are expenses like the
the balance sheet? cost of lemons and sugar that fluctuate
A. Earning Per Share based on the number of lemonades they
sell.
B. Active
B. Fixed costs are expenses like the cost
C. Passive
of the lemonade stand that are incurred
D. Balance Sheet only in the short term, while variable costs

like the cost of lemons and sugar are ex- A. $25, 304.90
penses that are incurred over a longer pe-
B. $1, 255.60
riod of time.
C. $7, 236.86
C. Fixed costs are expenses like the cost
of the lemonade stand that increase with D. none of above
the number of lemonades they sell, while
variable costs like the cost of lemons and 1339. the project with high pay back period
sugar are expenses that remain constant will be
NARAYAN CHANGDER
regardless of the number of lemonades A. selected
they sell.
B. rejected
D. Fixed costs are expenses like the cost
of the lemonade stand that are directly 1340. The variable costs per unit of holding an
related to the number of lemonades they item of inventory for a specific period of
sell, while variable costs like the cost of time includes:
lemons and sugar are expenses that are
A. storage cost
unrelated to the number of lemonades
they sell. B. ordering cost
1336. Inventory turnover C. insurance cost
A. Short-term Solvency and Liquidity D. property taxes
B. Asset Liquidity and Management Effi- E. depreciation

ciency
1341. Turnover of capital of trading concern
C. Long-term Financial Position or Stabil- compare with manufacturing concern is
ity
A. Higher
D. Profitability and Returns to Investors
B. lower
E. NOT IN THE CHOICES
C. Equal
1337. Which of the following is a liability?
D. None of these
A. Unit trust
B. Bank loan 1342. The job of a finance manager is confined
to
C. Investment
D. Fixed deposit
1338. Use the W-2 above to answer question.

How much money did Jackson make last
year?
A. Raising of funds
B. Management of cash
C. Utilisation of fund
D. Both raising and utilisation of fund

1343. The three broad approaches to company 1349. What does the M in SMART stand for?
valuation do not include A. Marvelous

A. Inventory valuation B. Memorable
B. Stock market valuation C. Meaningless
C. Asset valuation D. Measurable
D. Future earnings valuation 1350. What happens to your “total left over
savings” in the budgeting homework if
1344. Working Capital is
your savings is negative?
A. Revenue dikurangi COGS
A. A negative sign appears beside bal-
B. Initial paid up capital ance
C. Current Asset dikurangi Current Liabil- B. Balance turns red
ity C. You did the assignment wrong
D. Profits received by the owner D. Your monthly income goes up
1345. Individuals are often savers because E. Your credit score lowers
they wish to save for such things as re-
1351. How many months are in 4 years?
tirement, a down payment on a home or
graduate school. A. 36
A. True B. 60
B. False C. 24
D. 48
1346. Trading on equity is possible on
1352. If you are buying groceries at the store
A. Debentures
and want to use the money in your bank
B. Preference shares account, you should pay with
C. Equity shares
D. Debentures and preference shares
1347. The Chief Executive Officer approves

the company’s strategies, goals, and bud-
gets.
A. Cash
A. True
B. Gift card
B. False
C. Debit card
1348. “I want to practice every night so I can D. Credit card
do well in my game, “ is not
1353. An individual stock required return is
A. Specific
equal to risk-free rate plus bearing risk
B. Timely premium is an explanation of
C. Attainable A. security market line
D. Relevant B. capital market line

C. aggregate market line B. Ordering costs

D. beta market line C. Credit standards
1354. Which of these is not a part of Capital D. Stockout costs

Structure?
1358. Choose 3 correct tips about financial
A. Equity Shares management?
B. Debentures A. Separate personal money and busi-
ness money
NARAYAN CHANGDER
C. Short term Borrowings
D. Bonds B. Save Money in the closet with facial
recognition access lock
1355. JCW Co is appraising an opportunity to
C. Create a Financial Record Book
invest in some new machinery that has
the following cash flows.Initial investment D. Set aside profits for business develop-
$40, 000Net cash inflows for 5 years in ment
advance $12, 000 per annumDecommis- E. Don’t focus too much on profits and
sioning costs after 5 years $15, 000At losses
a cost of capital of 10% what is the net
present value of this project (to the near- 1359. A two-year investment of $200 is made
est $100)? today at an annual interest rate of 6%.
A. $720 Which of the following statements is true?
B. $725 A. The interest earned in year two is
$12.00 and year one is $12.72.
C. $700
B. The interest earned in year one is
D. Nil
$12.00 and year two half is $12.72.
1356. Calculate the cash flow for Mr. C. The interest earned in year one is
RabbaniHitung aliran tunai Encik Rab- $12.00 and year two is $12.72.
bani. Active Income /Pendapatan Ak-
D. The future value would be greater if
tif:RM2, 000Passive Income / Pendap-
the interest rate were lower.
atan Pasif:RM350Fixed Expenses / Be-
lanja tetap:RM 2, 300Variable Expenses / 1360. NI and n o i approach has been sug-
Belanja Berubah:RM 250 Then, determine gested by
whether it is Deficit or Surplus.Pastikan
ialah lebihan atau kurangan. A. F w Taylor
A. -200 (Deficit) B. David Durand
B. 500 (Surplus / Excess) C. Marshall edgeworth
C. 200 (Surplus / Excess) D. Fissure
D. -800 (Deficit) 1361. Financial Management refers to the
planning, monitoring, organising & control-
1357. are criteria a company uses to
ling of the monetary resources of a busi-
screen credit applicants in order to deter-
ness.
mine which of its customers should be of-
fered credit and how much. A. True
A. Carrying costs B. False

1362. What is the definition of Financial Man- B. Get as many credit cards as you can
agement? and max them out.

A. Managing personal savings C. Check your credit report regularly.
B. Managing a company’s financial re- D. Don’t get any credit cards.
sources and decisions
1368. Short term sources of funds are those
C. Managing stock market investments that will mature in at most 12 months
D. Managing real estate assets and the interest is generally lower as com-
E. Public financial management pared to that of long term sources. Hence,
this would lead to a lower financing cost.
1363. The following are types of financial in- A. True
stitutions in Malaysia, except
B. False
A. Commercial banks
B. Investment banks 1369. It consists of recognized gains and
losses that are not included in the income
C. Capital Market
statement but are found in the equity sec-
D. Shadow banking systems tion
1364. fee paid for borrowing money A. Income Statement
A. interest B. Statement of Changes in Equity
B. credit C. Comprehensive Income
C. debit D. Statement of Financial Position
D. tax 1370. What is the cost of raising funds called?
1365. The summary of the operating, invest- A. Flotation Cost
ing and financing activities of the firm is B. Marginal Cost
presented in the?
C. Fixed Cost
A. Statement of Financial Position
D. Variable Cost
B. Statement of Retained Earnings
1371. ‘Fundamental concept in investing, it
C. Statement of Comprehensive Income
combines variety of assets to reduce risk’
D. Statement of Cash Flows pernyataan tersebut merupakan prinsip
keuangan ‘diversifikasi’.
1366. “Decide the appropriate mix of debt and
equity”. This statement is true for A. TRUE
A. Investment decision B. FALSE
B. Financing decision 1372. What is the purpose of financial plan-
C. Dividend decision ning?
D. Liquidity decision A. Developing strategies to increase
wealth
1367. How do you maintain good credit?
B. Managing budgets over time
A. Manage your debt, pay your bills on
time, establish a good credit history, have C. Tracking spending habits
a low debt to income ratio. D. Calculating taxes owed

1373. The relative proportion of debt, equity, A. True

and other securities that a firm has out-
B. False
standing constitute its
C. Maybe
A. asset ratio
B. current ratio D. none of above
C. capital structure 1377. When you pay off the principal and all
D. retained earnings of the interest at one time at the maturity
NARAYAN CHANGDER
date of the loan, we call this type of loan
1374. Under which of the following circum- a/an
stances a company is NOT likely to declare
a higher dividend? A. amortized loan
A. When the earnings of the company are B. interest-only loan

high C. discount loan
B. When a company has a lucrative forth- D. compound loan
coming business opportunity(Growth op-
portunity ) 1378. There is no operating leverage if there
C. When the cash flow position of the is no
company is strong A. Profit
B. Sales
1375. How much in the net cash flow from in- C. Fixed Cost
vesting activities?
D. Variable Cost
1379. Information from PT Maju is known as

follows:Cost of Goods Sold:$500Sales:$3,
000Depreciation:$700Interest:$200How
much is PT Maju’s Earning Before Taxes?
A. -200, 000 A. $200
B. 200, 000 B. $3.000
C. 100, 000 C. $1.500
D. -100, 000 D. $1.600
1376. Banks operate on state, national, and 1380. In terms of business accounts and fi-
international levels. (True or False) nance, an investment is
A. Having retained earnings receiving in-
terest in the bank
B. Purchasing new capital equipment
C. Returning dividends to shareholders
D. Financing a long-term bank loan pay-
ing interest

1381. What is a common financial ratio used 1385. The objective of wealth maximization
to assess liquidity? takes into account

A. Return on Investment (ROI) A. Amount of returns expected
B. Current Ratio B. Timing of anticipated returns
C. Debt-to-Equity Ratio C. Risk associated with uncertainty of re-
D. Price-Earnings Ratio turns
Explanation:Current ratio is the relation- D. All of the above
ship between current assets and current
liabilities, indicating the liquidity of a busi- 1386. What financial reports are commonly
ness i.e. its ability to meet its short term prepared by financial managers?
obligations. Also referred to as the liquid- A. Sales reports and customer satisfac-
ity ration tion surveys
1382. Working capital management consist B. Income statement and cash flow state-
of cash management, receivable management
ment, short term financing decision and C. Marketing plan and advertising budget
A. Fixed asset management D. Report production planning and inven-
B. Total asset management tory
C. Inventory management 1387. Financial management is essential for
D. Equity management businesses because it:
A. Enables efficient allocation of re-
1383. If there is a negative cash flow, we sources and strategic decision-making
should reduce
B. Enhances financial performance and
A. Variable expenses profitability
B. Active income C. Helps attract investors and secure ex-
C. Passive income ternal funding
D. Fixed expenses D. Assists in managing financial risks and
uncertainties
1384. What is the difference between a share-
holder and a debtholder? E. All of the above
A. Shareholders are the owners of a com- 1388. Debt and equity differ in cost and risk.
pany whereas debtholders own debt is-
A. True
sued by a company.
B. False
B. Shareholders are not different from
debtholders as both hold stakes in a com- 1389. Items that remain constant or un-
pany. changed when the firm operating at full
C. Shareholders provide money when capacity are:
starting a company whereas debtholders A. Retained earnings
supply funds during its course of busi- B. Long term debt
ness.
C. Cash
D. Shareholders have less rights than
debtholders who have the actual control D. Preferred stock
over a company. E. Common stock

1390. Financial planning means of financial A. RM 3 000

activities. B. RM 3 250
A. Determining C. RM 3 590
B. Pre-determining D. RM 3 850
C. Later-determining
1396. What are the advantages of investing
D. Not determining in gold?
1391. The long-run objective of financial man- A. The value of gold tends to be stable
NARAYAN CHANGDER
agement is to B. Gold does not require special care
A. Maximize earnings per share. C. Gold is easy to resell
B. Maximize the value of the firm’s com- D. Gold does not require financial plan-
mon stock. ning
C. Maximize return on investment.
1397. Which of the above factors helps to de-
D. Maximize market share. termine the capital structure of a firm
1392. The financial activities which are per- A. Government policies
formed regularly are known as: B. Degree of control
A. Non-recurring finance functions C. Cost of capital
B. Recurring finance functions D. All of the above
C. Both of these
1398. Main objective is to keep down in
D. None of these inventories
1393. The charge for borrowing money. A. Capital investment
A. Introductory rate B. Excessive carrying cost
B. Annual Fee C. Risk of liquidity
C. Interest D. None of above
D. Variable-rate APR 1399. What does the Current Ratio measure?
1394. The main services banks provide is A. The company’s ability to pay its short-
money in bank accounts. term obligations
A. storing B. The company’s total debt
B. spending C. The company’s profitability
C. sorting D. The company’s market capitalization
D. shaving 1400. Based on the tips presented, what is not
1395. The table above is Encik’s Zarul income. included in how to manage debt?
Calculate active income of Encik Zarul A. Set payment priorities
B. Create a budget for each need
C. Using credit cards excessively
D. Looking for cheaper financing alterna-
tives

1401. Through them we can extract an anal- 1406. Which of the following is not types of
ysis and in line with others, analyze the finance?
economic evolution.

A. Personal
A. Monetary Politics B. Government
B. Profit maximization C. Public
C. Financial Planning D. Corporate
D. Economic indicators 1407. The essentials you can’t live without
are called:
1402. Items you buy:tangible object that sat-
isfies wants
A. service
B. needs
C. goods
D. wants
A. Wants
1403. The last step in financial planning pro-
cess is: B. Needs
A. Set SMART goals C. Income
B. Implementation of plan D. Expenses
C. Monitoring of plan 1408. Below are examples of non-profit orga-

nization, except
D. Gather data
A. Malaysian Nature Society
1404. “Shareholder wealth” in a firm is repre- B. MEANING
sented by:
C. Permodalan Nasional Berhad
A. the number of people employed in the
D. Mercy Malaysia
firm.
B. the book value of the firm’s assets less 1409. Builds wealth
the book value of its liabilities. A. Investments
C. the amount of salary paid to its employ- B. Savings
ees.
1410. Nominal interest rates are the sum of
D. the market price per share of the two major components. These components
firm’s common stock. are
1405. Nancy made 600 widgets in 8 hours, A. the real interest rate and expected in-
what is her production rate? flation
A. 60 B. the risk-free rate and expected infla-

tion
B. 80
C. the real interest rate and default pre-
C. 75 mium
D. 70 D. the real interest rate and the T-bill rate

1411. Intermediaries that channel the savings 1415. When a company is unable to meet its
of individuals, businesses, and govern- fixed financial charges it is called
ment into loans of investment. A. financial risk
A. Private Placements
B. business risk
B. Financial Institutions
1416. How do we call the money brought by
C. Public Offering
shareholders?
D. Financial Market
NARAYAN CHANGDER
A. Available funds
1412. An example of open credit is B. Equity
A. a student loan C. Cash
B. an auto loan D. Shareholder Liability
C. a credit card
1417. Which financial statement provides an
D. a debit card
overview of a company’s financial position
1413. Owner’s Equity determines at a specific point in time?
A. how many suppliers are owed money A. Income statement

B. the outstanding debt a business has B. Cash flow statement
C. the total value (worth) of the business C. Balance sheet
D. how much money the business has in D. Statement of retained earnings
the bank
1418. A share which gives you no right to
1414. Which is NOT a disadvantage of using claim dividends from years with no profit
the ARR method to compare investment A. Irredeemable preference Share
opportunities?
B. Cumulative preference share
C. Non-cumulative preference share
D. Redeemable Preference Share
1419. Which of the statements below is

FALSE?
A. The cash that the firm generates from
its operating decisions (use of its assets)
is used to either pay creditors or the own-
A. It does not take into account the time ers of the company.
value of money B. Cash flow from assets shows the suc-
B. It is unreliable if timescales between cess or failure of the operating decisions.
projects are different C. Cash flow to owners shows cash paid
C. There is no target rate of return to to owners plus any new borrowing from
compare with owners
D. It is difficult to calculate and hard to D. Cash flow to creditors shows a portion
understand of how the firm is financing the operations

1420. Taxpayers may prepare and file their 1425. The primary objective of financial man-
tax returns electronically from all of the agement is
following except

A. minimizing risk.
A. home B. maximizing profit.
B. post-office C. maximizing wealth.
C. Authorized e-file provider D. minimizing return.
D. none of above
1426. It measures how often is the turn over
1421. Firms always are short of funds. There- of accounts receivable, inventory and long-
fore, raising funds is the most important term assets.
function of the financial manager. A. Liquidity
A. TRUE B. Asset Utilization
B. FALSE C. Debt Utilization
Explanation:False. Firms may have short D. Profitability
of funds, in this case firm must raise the
funds. On the other hand, if firm have sur- 1427. What is related to debt
plus funds, then firm should invest these A. High Cost Higher Risk
surplus funds. Therefore, the raising of
B. High cost low risk
funds is not only the functions of the fi-
nancial manager i.e. utilization of funds is C. Low cost high risk
also another main function of the financial D. Low cost Low risk
manager.
1428. Which statement is not accurate in de-
1422. The minimum acceptable rate of return termining the emergency fund
on an investment is called the: A. Find out the monthly cost of production
A. Opportunity cost of capital B. Know the amount owed
B. Capital structure decision C. 50% in bank savings
C. Risk D. 50% in low risk investment products
D. Interest payment
1429. This card is used to buy the item or ser-
1423. what is research vice now and pay for it later.
A. search A. Debit card
B. again and again B. Prepaid card
C. finding hidden facts C. Credit Card
D. all of the above D. Payroll card
1424. In the Cash Flow Report there are 3 cash 1430. Higher dividend per share is associated
flow categories, namely EXCEPT: with
A. Cash Flow from Funding A. high earnings, high cash flows, unus-
able earnings and higher growth opportu-
B. Cash Flow from Promotions nities.
C. Cash Flow from Operations B. high earnings, high cash flows, stable
D. Cash Flow from Investments earnings and high growth opportunities.

C. high earnings, high cash flows, stable 1435. A loan that is repaid on monthly, quar-
earnings and lower growth opportunities. terly and annual basis in equal payments
D. high earnings, low cash flows, stable is classified as
earnings and lower growth opportunities. A. amortized loan
1431. All of these are warning signs of debt B. depreciated loan
crisis EXCEPT C. appreciated loan
A. Checks bouncing D. repaid payments
NARAYAN CHANGDER
B. Debt collectors calling 1436. Equity financing designed specially for
C. Friends and family distancing them- funding start ups and high technology
selves projects
D. Denied credit A. Seed capital
E. Overspending B. Bridge finance
1432. The restructuring of a farmer should be C. Venture capital

undertaken if D. Forfaiting
A. The restructuring is expected to create 1437. Mario also has a financial plan. He
value for shareholders wants to save RM10 000 for wedding ex-
B. The restructuring is expected to in- penses after five years. Is this financial
crease earning per share next year goal a long-term or short-term goal? Is
C. The restructuring is expected to in- this considered a want or need?
crease the forms market share power A. short-term goal
with in the industry B. long-term goal
D. The current employees will receive ad- C. need
ditional stock options to align employees
D. want
interest
1438. Based on the SMART concept, what is
1433. Gross working capital refers to firms in-
the meaning of Specific?
vestment in ?
A. Have a specific goal
A. Current liability
B. Goal is attainable
B. Working capital
C. Have a fixed time-bound
C. Current assets
D. Measurable
D. None of these
1439. market is where institutions can buy
1434. Wealth in the form of money or other and sell instruments to raise the fund with
assets owned by a person or organization maturity more than a year.
or available or contributed for a particular
purpose such as starting a company or in-
vesting.
A. Consumer
B. Seller
C. Capital
D. Demand

A. Capital 1445. What is NOT a Financial Report is:

B. Financial A. Laporan Neraca (Balance Sheet)

C. Investment B. Profit and Loss Report (Income State-
D. Money ment)
C. Laporan Arus Kas (Cash Flow State-
1440. Liquidity decision often relates to
ment)
A. Current liabilities and non-current as-
sets D. Working Capital Report (Net working
Capital Statement).
B. Current assets and non-current liabili-
ties 1446. All financial decisions are taken consid-
C. Non-current assets and non-current li- ering
abilities A. Positive cashflows
D. Current assets and current liabilities B. current year’s profit
1441. Firm having higher degree of operating C. NPV
efficiency require higher amount of work-
D. current year’s revenue
ing capital
A. True 1447. Choose the correct way to evaluate fi-
B. False nancial position.
A. Credit statement
1442. Necessary if using company-owned ve-
hicles. If you or employees use personal B. Balance sheet
vehicles for business, personal insurance C. Credit flow
provides coverage in case of an accident.
D. Budget
A. Business interruption insurance
B. Vehicle insurance 1448. A decision to acquire a new and modern
plant to upgrade an old one is a:
C. Product liability insurance
D. Home-based businesses A. Financing decision
B. Working capital decision
1443. Which is an example of a short term
goal? C. Investment decision
A. Saving for 2 months for a $80 dollar D. NONE
outfit?
1449. When the Credit period is increased
B. Saving 5 years fir a $3000 dollar trip. from 30 days to 60 days in response
C. Saving 3 years for a down payment on to market expectations, its implications
a car. would be decrease in debtors.
D. none of above A. True
1444. All financial intermediaries are banks B. False
A. True C. May be
B. False D. none

1450. Measuring data counts and are ex- D. none of above

pressed by numbers
1455. Cash turnover is an average time re-
A. Qualitative quired to acquire inventory, sell it and col-
B. Quantitative lect money from it.
C. Value A. True
D. None of these B. False
1451. Commercial bank customers are also 1456. Q9) What is the role of a financial man-
NARAYAN CHANGDER
called “members”. ager in managing risk?
A. True A. Avoiding all risks
B. False B. Accepting all risks
C. Identifying and mitigating risks
1452. In discounting, the table value goes on
D. Transferring all risks to shareholders
increasing with the increase in the rate of
Interest and number of year. 1457. What is an example of a ownership in-
A. True vestment?
B. False A. savings account
B. stocks
1453. The payment terms 2/10, n/30 tell us
that: C. bonds
A. A 10% discount will be awarded if D. money market account

the payment is made within 2 days of in- E. none of the above
voice date; otherwise, the full amount is
1458. Which of the following is least likely to
payable within 30 days of invoice date.
be considered a role of financial statement
B. A 2% discount will be awarded if the analysis?
payment is made within 10 months of in-
A. Determining whether to invest in the
voice date; otherwise, the full amount is
company’s securities.
payable within 30 months of invoice date.
B. Assessing the management skill of the
C. A 0.5% discount will be awarded if the company’s executives.
payment is made within 10 days of in-
voice date; otherwise, the full amount is C. To make economic decisions.
payable within 30 days of invoice date. D. none of above
D. A 2% discount will be awarded if the 1459. Sara wants to save up to buy a kindle
payment is made within 10 days of infor reading. A kindle costs about $104.00
voice date; otherwise, the full amount is If Sara earns $10 a week for watering
payable within 30 days of invoice date. her neighbors trees how many weeks does
Sara have to work to earn enough money?
1454. Which of the following is an objective of
financial planning? A. 10 weeks
A. Ensuring enough funds are available at B. 11 weeks
the right time C. 5 weeks
B. NOT TO RAISE UNNECESSARY FUNDS D. 20 weeks
C. BOTH E. 15 weeks

1460. Money paid to the state and federal A. Universal Bank

government so that the government can B. Commercial Bank
function is

C. Rural Bank
A. Taxes
D. Thrift Bank
B. Salary
C. Debt 1466. capital should be preferred while ar-
ranging for a long-term finance?
D. Income
A. Preference share capital
1461. The total amount taken from the em- B. Equity share capital
ployee’s paycheck for medical benefits.
C. Debt or borrowed capital
A. FICA
D. Retained earning
B. Medicare
1467. The most liquid of all assets, cash, ap-
C. Medicaid
pears on the first line of the balance sheet.
D. Medical
A. Cash and Equivalents
1462. The Appropriate objectives of enter- B. Accounts Receivable
prises is
C. Inventory
A. Maximization of sales
D. Intangible Assets
B. Maximization of owner’s wealth
1468. SDL is a tax imposed on companies resi-
C. Maximization of profits
dent in the Republic of South Africa i.e. in-
D. none of above corporated under the laws of, or which are
effectively managed in, the Republic, and
1463. Disadvantages of the NPV method in-
which derive income from within or out-
clude:
side the Republic.
A. Tells whether firm value is increased.
A. True
B. Considers all cash flows
B. false
C. Requires estimate of cost of capital
1469. Kumar company has sales of Rs. 25, 00,
D. Considers the time value of money
000. Variable cost of Rs. 12, 50, 000 and
1464. Which one of the following is NOT a re- fixed cost of Rs. 50, 000 and debt of Rs.
tirement plan? 12, 50, 000 at 8% rate of interest. Cal-
culate combined leverage.
A. 401k
A. 1.31
B. IRA
B. 1.13
C. Roth IRA
C. 1.40
D. I-9
D. 1.50
E. 403B
1470. What do you mean by Financial Stabil-
1465. It is a type of financial institution that ity?
specializes in offering savings accounts
and originating home mortgages for con- A. It means time freedom.
sumers. B. It means financial security.

C. It means financial independence. A. $68, 019.13

D. All of the above. B. $60, 000.00
1471. is the long term strategy for financ- C. $68, 119.13

ing proposed capital expenditure D. $68, 219.13
A. Capital budgeting 1476. Twin objectives of financial planning are
B. Budget A. availability of funds and not to raise
NARAYAN CHANGDER
C. Cash budget funds unnecessarily.
D. None of the above B. To ensure availability of funds when-
ever required and to see that the firm
1472. the capital raised by a business or corpo- does not raise resources unnecessarily.
ration through the issueand subscription of
shares and is being paid through dividends C. estimating the fund required and spec-
tostockholders. ifying the sources
A. capital D. estimating the time when funds are re-

quired
B. capital allocation
C. stock 1477. It pertains to the firm’s ability to pay
any immediate and incoming cash disburse-
D. bonds ments
1473. is anything that increases your ability to A. Liquidity
generate value. B. Asset Utilization
A. Capital C. Debt-Utilization
B. Allocation D. Profitability
C. bonds
1478. What is influenced by the financing de-
D. stocks cision?
1474. An empty jar can help me with this situ- A. Market price of shares
ation. B. Cost of capital
A. spending C. Both (a) and (b)
B. saving D. None of these
C. donating
1479. When risk increase, the return will
D. investing
A. Increase
1475. Your department at work places $10, B. Decrease
000 every year-end into an account earn-
C. No change
ing 5%. The money is used when the
corporate office fails to fully finance your D. None
profitable projects. The money has not
been touched since the first deposit was 1480. What does a declining net profit margin
made exactly five years ago. If the most over consecutive periods suggest about an
recent deposit was made today, how much SME’s financial performance?
money is currently in the account? A. Improved efficiency

B. Increasing profitability 1486. What document gives the right to make

C. Declining profitability healthcare decisions, on someone else’s be-
half

D. Lower financial risk
A. Medical Directive
1481. What has the same meaning as positive
cash flow? B. Power of Attorney
A. Surplus C. Will
B. Deficit D. Living Trust
1482. There are 7 principles of financial man- E. Probate

agement, some of which are as follows:
1487. Comparative analysis is also known as
A. accountability, consistency, viability, Analysis.
transparency, accounting standards
A. Horizontal
B. consitency, productivity, integrity,
open minded B. Vertical
C. stewardship, viability, continous learn- C. Parallel
ing, consistency
D. None
D. productivity, integrity, collectivity, ac-
tivity 1488. Which of the following is/ are fixed ex-
penses?
1483. EBIT refers to
A. Insurance payments
A. Equity before interest and tax
B. Earning before investment and taxa- B. Rent
tion C. House installments
C. Earning before interest and tax D. Petrol expenses
D. None of the above E. Electricity bill
1484. What type of assets include cash and
those items that can be readily converted 1489. This decision is about the quantum of fi-
into cash? nance to be raised from various long-term
sources.
A. long-term
B. current
C. expensed B. Financing decision
D. depreciated C. Dividend decision

D. Capital budgeting decision
1485. Which of the following is not an advan-
tage of issuing bonds?
1490. Ke = D/MP x 100, is used for
A. management retains control
A. Reserve
B. interest paid is tax deductable
B. Calculating capital structure
C. Bonds are only a temporay source of
finance C. Depreciation
D. none of the above D. calculating Cost of Equity Share Capital

1491. Five years ago, sona Limited issued 12 1496. Capital budgeting decision has a direct
% irredeemable debentures at Rs. 103, impact on liquidity as well as profitability
at Rs. 3 premium to their par value of of a business
Rs. 100. The current market price of these A. True
debentures is Rs. 94. If the company pays
B. False
corporate tax at a rate of 35 %, calculate
its current cost of debenture capital? 1497. Buying luxurious item such as gold is
A. 7.57 %
NARAYAN CHANGDER
B. 8.30 %
C. 12 %
D. None of these
1492. Under Private Placement, shares are

never offered to ( A. Savings
A. (a) Institutes B. Income
B. (b) Brokers C. Expenditure
C. c) General Public D. Investment
D. (d) None of the above 1498. In case of recurring deposit the fixed
amount is deposited in a bank every month
1493. The Payback Period (PBP) will always
for a fixed period of time.
select the investment that
A. fixed deposit
A. Gives the highest rate of return
B. current a/c deposit
B. Returns the cost of investment first
C. savings bank a/c
C. Has the highest total net cash flow
D. recurring deposit a/c
D. none of above
1499. How would you define financial manage-
1494. In a way that doesn’t change ment?
A. Consistency A. The process of acquiring needed funds
B. Proper way B. The management of money
C. Changes C. The balancing of risks and profitability
D. The planning and controlling of finan-
D. None of these
cial resources
1495. I InsuranceII Emergency FundIII Sav- 1500. Cash & Cash Equivalent-24, 890Held
ings and InvestmentsIV Debt Manage- for Trading-10, 000Trade and Other
mentBased on the above, which should be Receivables-16, 000Inventory-8, 960
included into financial plan? How much is the total current assets?
A. II, III and IV A. 49, 850
B. I, II and III B. 50, 890
C. II and III C. 59, 850
D. I, II, III and IV D. Cannot be determined

1501. .... permanent capital and cannot be that the value of money remains constant
withdrawn during the lifetime of the com- over time. Evelyn thinks that money avail-
pany? able at the present time is worth more

A. Equity financing than the same amount in the future due to
its potential earning capacity. Marryssa,
B. Debt financing on the other hand, believes that the con-
C. Debt equity mix cept of time value of money is not appli-
D. None of above cable in financial management. According
to the principles of financial management,
1502. Why are Capital Budgeting Decisions who is correct?
critical? A. Camden:The value of money remains
A. Risk involved constant over time.
B. Decisions are irreversible B. Evelyn:Money available at the present
C. Large Amounts of funds involved time is worth more than the same amount
in the future due to its potential earning
D. All of the above capacity.
1503. A secure box in a bank’s vault used C. Marryssa:The concept of time value of
for the safe storage of a customer’s valu- money is not applicable in financial man-
ables such as jewelry, birth certificates agement.
and other important documents.
D. None of them are correct.
A. Risk box
1507. The type of financing where the firm
B. Secret box
that specializes in buying other firm’s ac-
C. Trust box count receivable refers to?
D. Safe-deposit box A. Promissory note
1504. A common financial service used by B. Commercial paper
many consumers. They can help to manage C. Factoring
money and make paying bills more conve-
niently. D. Mortgage
A. Debit Card 1508. Only revenue nature cash flow is shown
B. Savings Account in cash budget
C. Checking Account A. True
D. PIN B. False
1505. At the end of the period covered by a C. Other

budget, the business will prepare new fi- D. none of above
nancial statements.
1509. Analysis simply means data.
A. True
A. Complexing data
B. False
B. Simplification
1506. Evelyn, Marryssa, and Camden are dis-
cussing the concept of time value of money C. Hiding data
in financial management. Camden believes D. None

1510. What is the difference between current 1514. Which of the following is true about
and non current assets? the ‘inflation’ figure that is included in the
money cost of capital?
A. There is no difference
A. It is historic and specific to the busi-
B. Current assets are the same as cur-
ness.
rent liabilities and non current are not
B. It is historic general inflation suffered
C. Current assets tend to be easily con- by the investors.
verted to cash whereas non current are
NARAYAN CHANGDER
not C. It is expected and specific to the busi-
ness.
D. A company will gain more profit if they
use non current only D. It is expected general inflation suf-
fered by the investors
1511. Horizontal analysis is a technique for
1515. Present value of Rs. 1 received after 2
evaluating a series of financial statement
years with 10% discounting rate.
data over a period of time
A. 0.268
A. to determine the amount and/or per-
centage increase or decrease that has B. 0.628
taken place C. 0.826
B. that has been arranged from the high- D. 0.286
est number to the lowest number
1516. Working Capital Management refers to
C. that has been arranged from the low- Receivables Management
est number to the highest number
A. True
D. to determine which items are in error
B. False
1512. Short term financial goals can be C. May be
achieved in less than a year and does not D. none
involve in a large amount of money.
A. False 1517. Identify two liquidity ratios.
A. Current Ratio
B. True
B. Fixed Asset Turnover
1513. Which of the following statements is C. Quick Ratio
CORRECT?
D. Debt to Equity
A. One of the disadvantages of a sole pro-
prietorship is that the proprietor is ex- 1518. The examples of liabilities are
posed to unlimited liability.
B. It is generally easier to transfer one’s
ownership interest in a partnership than
in a corporation.
C. One of the advantages of the corpo-
rate form of organization is that it avoids
double taxation.
D. All statements are incorrect.

A. bank loans, credit card bills, unsettled 1524. The process of planning, evaluating, se-
rent, utilities bills lecting, and managing the financing of
long-term operating projects of the com-

B. fixed deposits, unit trust, company
shares pany is termed
C. cash, savings, real estate investments A. capital budgeting

B. capital structure
D. none of above C. accounts receivable management
1519. The agency problem arises due to the D. working capital management
separation of ownership and control in a
corporation. 1525. Which type of bank is NON PROFIT and
run by its members?
A. True
A. Commercial banks
B. False
B. Credit Unions
1520. What Site Can you Get a Free Credit Re-
port 1526. Agency costs are costs incurred when:
A. CreditKarma.com A. Managers do not attempt to maximize
B. CreditReportAnnual.com firm value
C. CreditReport.gov B. Shareholders incur costs to monitor

the managers and influence their actions
D. Annualreport.com
C. Both of these options
E. annualcreditreport.com
D. None of these options
1521. Financing decisions involve
A. Fixed assets decisions 1527. There are checks in the checkbook, so
there must be money in the checking ac-
B. Capital Budgeting decisions count
C. Shareholders fund decisions A. Fact
D. Debt Equity decisions B. Fiction
1522. Investment can be defined.
1528. All income that a business receives over
A. Person’s dedication to purchasing a a period of time is called profit.
house or flat
A. True
B. Use of capital on assets to receive re-
turns B. False
C. Usage of money on a production pro- 1529. The knowledge and skillset necessary to
cess of products and services be an informed consumer and manage fi-
D. Net additions made to the nation’s cap- nances effectively
ital stocks A. Financial Literacy
1523. Treasury Notes B. Loan
A. Short term debt C. Interest
B. Long term debt D. Credit

1530. In the wider sense Capital structure A. Increases the risk of default
mens-
B. Reduces the risk of default
A. Owned Capital + Loan
C. Indicates lower profitability
B. Owned Capital + Long-term loan
D. Implies higher financial leverage
C. Owned Capital + Short-term Loan
D. Owned Capital 1536. Free cash flow is the
A. cash flow from assets
NARAYAN CHANGDER
1531. Funding for international activities can
come from three main sources, except B. remaining cash free to distribute to
creditors and owners of the firm
A. multiple funding
C. cash that a company generates to op-
B. equity financing
erate the company
C. debt financing
D. All of the above
D. intra-company financing
1537. what a company owns
1532. What does the “A” mean in SMART
goals? A. assets
A. Attraction B. owner’s equity
B. Attention C. profits
C. Active D. revenue
D. Attainable
1538. The company uses this account when it
E. Active-Management reports sales of goods, generally under
cost of goods sold in the income statement.
1533. Issuance of bonds to obtain cash
A. Balance sheet
A. Financing Activities
B. Assets
C. Investing Activities C. Current Liabilities
D. none of above D. Inventory
1534. What is the purpose of your net worth? 1539. Which of the following are correct ad-
vantages of the IRR approach to invest-
A. To flash off your money
ment appraisal, and which are not?1.
B. To learn how rich your favorite Clear decision rule2. Takes into account
celebrity is. the time value of money3. Assumes funds
C. To show how financially healthy you are reinvested at the IRR4. Considers the
are. whole project
D. To learn about how money works A. Correct, Correct, Incorrect, Incorrect
E. To learn how much in debt you are B. Incorrect, Correct, Correct, Correct
C. Incorrect, , Correct, Incorrect, Cor-
1535. How does a higher times interest
rect,
earned ratio impact a company’s risk of de-
fault on its debt obligations? D. Correct, Incorrect, Correct, Correct

1540. Which of the following is NOT a bond B. increasing in liabilities.

rating agency? C. decreasing in assets.

A. Equifax D. selling the stocks.
B. Moody’s
1546. The table below shows Steven’s ex-
C. S&P penses in a month. Calculate the total
D. Fitch expenses and total variable expenses of
Steven.
1541. Cash & Cash Equivalent-24, 890Held
900. What is the quick ratio?
A. 3.00
B. 2.55
A. Fixed expenses:RM 1220 Variable ex-
C. 3.01 penses:RM1115
D. 2.56 B. Fixed expenses:RM 1200 Variable ex-
penses:RM1135
1542. Leverage refers to the effects that vari-
able costs have on the returns that share- C. Fixed expenses:RM 1150 Variable ex-
holders earn penses:RM1065
A. True D. Fixed expenses:RM 1270 Variable ex-
penses:RM1065
B. False
1547. The following are some of the Flows of
1543. Shares issued to the promoters of a com-
Business Transactions, EXCEPT:
pany
A. Preparing budget
A. Sweat equity share
B. Transaction Occurrence
B. No Par Share
C. Document Prepared
C. Deferred share
D. Posting in Ledger
D. Right share
1548. In order to find out cost of equity capital
1544. A farmer wants to build a permanent
under CAPM, which of the following is not
building as a storage shed for its half an
required:
acre farm. What type of loan should the
farmer apply for? A. Beta Factor
A. Short-term loan B. Market Rate of Return
B. Medium-term loan C. Market Price of Equity Share
C. Long-term loan D. Risk-free Rate of Interest
D. none of above 1549. Costs that changedisproportionately-
1545. To identify the uses of funds in a firm with changes inoutput levels.
over a time is by A. Fixed Costs
A. increasing in assets. B. Variable Costs

C. Semi Variable Costs 1555. Positive leverage effect brings

D. none of above A. (a) Gain for equity shareholders
B. (b) Loss for equity shareholders
1550. I like to help others, so I am happy to
do this. C. c) Both (a) and (b)
A. spending D. (d) None of the above
B. earning 1556. A wealthy woman just died and left her
NARAYAN CHANGDER
C. saving pet cats the following estate:$50, 000 per
year for the next 15 years with the first
D. donating
cash flow today. At a discount rate of
3.2%, what is the feline estate worth in
1551. Capital budgeting related to
today’s dollars?
A. long term assets
A. $607, 180.14
B. short term assets
B. $601, 180.14
C. long term assets and short term as-
C. $608, 180.14
sets
D. $774, 000.00
D. fixed assets
1557. which is not in assets
1552. What is the purpose behind taxes?
A. Money
A. Pay for services in your community,
state, and country B. Printer
B. To help others when they are in need, C. Note payable

due to circumstances. D. Note receivable
C. To provide safety (police, firefighters,
military) 1558. Which of the following factors affecting
the cost of capital can be controlled by the
D. All of the above firm
1553. Optimal capital structure consists of A. Tax rates

both the mix of debt and equity B. Dividend Policy
A. True C. Level of Interest Rates
B. False D. All of the Above
1554. Although it ignores the time value of 1559. Which of the following tasks would typ-
money, what is the most common method ically be carried out by a member of the
used in practice for capital budgeting? financial management team?
A. internal rate of return A. Evaluating proposed expansion plans
B. net present value B. Review of overtime spending
C. payback C. Depreciation of non-current assets
D. accounting rate of return D. Apportioning overheads to cost units

1560. The following are all features of equity C. Liquidity decision

shares except one: D. None of these options

A. voting rights
1566. The capital redemption reserve is cre-
B. residual claims on assets ated for the following reasons
C. right to control A. To maintain the capital intact
D. leads to speculations B. To safeguard the interest company’s
creditors
1561. The value of the business on a specific
date is referred to as C. Both of the above
A. asset D. None of the above
B. liability 1567. Finance can be defined as managing fund
C. owner’s equity for future benefits of the business.
D. debt A. True
B. False
1562. Real or a virtual document representing
a legal agreement involving some sort-of 1568. The cost of credit expressed as a yearly
monetary value interest rate.
A. Financial Debt A. Variable APR
B. Financial Asset B. Penalty APR
C. Financial Institution C. Fixed APR
D. Financial Instruments D. Annual Percentage Rate (APR)
1563. Which term refers to the total amount 1569. Assest we can see and touch
of money earned by a business before de- A. Intangible Assest
ducting expenses?
B. Tangible Assets
A. Expenditure
C. Liquid Assets
B. Revenue
D. Fixed Assest
C. Profit (net)
1570. Jeremiah wants to save for a $750.00
D. Turnover
stereo over 6 months, what will he need
1564. preference shareholders to save each month to make his goal?
A. preferential right to receive dividend A. $125.00
B. the rate of dividend is fixed B. $105.00
C. have voting rights C. $120.00
D. rate of dividend is variable D. $130.00
1565. A firm’s investment decision is also 1571. On a INCOME STATEMENT, if the “Gross
called the: Profit for the year is $58, 200; and the
“Total Operating Expenses is $13, 780,
A. Financing decision and taxes is “$3, 356.25” what is the
B. Capital budgeting decision “NET INCOME after taxes” amount:

A. $68, 623.75 C. Gross domestic price

B. $41, 063.75 D. None of these
C. $4, 106.375
1577. EBIT stands for
D. $47, 776.25
A. Earnings before Interest and Tax
1572. Capital budgeting is associated with
B. Earnings before Indirect tax
A. Long term and short term assets
C. Earnings before Investment and tax
NARAYAN CHANGDER
B. Fixed assets
D. None of these
C. Long term assets
D. Short term assets 1578. What is the term for the potential cost
of not taking a particular investment op-
1573. How much is the net cash flow from fi- portunity?
nancing activities?
A. Opportunity cost
B. Sunk cost
C. Marginal cost
D. Fixed cost
1579. These are sanctioned for the period

A. 1, 000, 000
varying between 1 and 5 years.
B. 2, 000, 000
A. short term loans
C. -1, 000, 000
B. medium term loans
D. -2, 000, 000
C. long term loans
1574. Secured and unsecured loan are loan:
D. none of above
A. with guarantor:without guarantor
B. without collateral:with collateral 1580. ‘if you want higher return there should
be higher risk on your hand and vice versa’
C. with collateral:without collateral
merupakan prinsip keuangan?
D. without guarantor:with guarantor
A. Risk Aversion
1575. In his traditional role, the finance man- B. Incremental Benefit
ager is responsible for
C. Risk Return Trade Off
A. Proper utilisation of funds
D. Signaling
B. Arrangement of financial resources
C. Acquiring capital assets of the organi- 1581. The followings are elements of the fi-
sation nancial management except
D. Efficinet management of capital A. debts and savings
1576. GDP B. purification of property
A. Gross democracy price C. savings, investmensts and protections
B. Gross domestic product D. budget

1582. What are the benefits of financial man- 1587. What document gives the right to make
agement training for individuals? financial decisions, on someone else’s be-
half

A. It helps to increase self-confidence
B. It provides people with a better under-
standing of investment concepts B. Power of Attorney
C. It helps to understand how to make C. Will
wise decisions with money D. Living Trust
D. It enhances digital literacy E. Probate
1583. What is an example of non-depository 1588. What is the purpose of financial fore-
Institution? casting for a company?
A. Commercial Banks A. Setting employee salaries
B. Saving Bank B. Predicting customer demand
C. Credit Unions C. Planning for capital expenditures
D. Pawn shops D. Analyzing competitor strategies
1584. Banks that are financial intermediaries 1589. While designing a capital structure a fi-
generate earnings when they facilitate the nance manager should choose a pattern of
transfer of money from savers to borrow- capital which-
ers by paying savers a smaller return than A. Minimizes cost of capital
they demand from borrowers.
B. Maximizes the owner’s return.
A. True C. Maximizes the cost of capital and min-
B. False imizes the owner’s return.
D. Both (A) and (B)
1585. Financial decisions involves
A. Investment, financing and dividend de- 1590. Your company just sold a product with
cisions the following payment plan:$50, 000 to-
day, $25, 000 next year, and $10, 000
B. Investment, financing, and sales de-
the following year. If your firm places the
cisons
payments into an account earning 10% per
C. Financing, dividend and cash deci- year, how much money will be in the ac-
sions. count after collecting the last payment?
D. none of above A. $99, 000
B. $98, 500
1586. Which TERM refers to the numerical
value needed to calculate the NPV of an C. $98, 000
investment? D. $85, 000
A. Ratio
1591. A company’s Total Debt-to-Total Assets
B. Net cash flow ratio is an indicator of:
C. Discounted cash flows A. The company’s profitability
D. Discount factor B. The company’s liquidity

C. The company’s solvency 1596. The treasurer oversees the accounting

activities of the firm.
D. The company’s market share
A. TRUE
1592. Which is/are passive income? Which is
B. FALSE
passive income?
Explanation:False. Treasurer oversees
A. dividend / dividend the financing activities and controller
B. commissions oversees the accounting activities.
NARAYAN CHANGDER
C. investment / investment 1597. Which of the following is the wrong
key component in SMART financial goals?
D. salary / salaries
Which component of the SMART financial
1593. The concept which makes sure the avail- goal is wrong?
ability of right amount of finance at the A. T-Time-bound
right time is called
B. S-Specific / Spesifik
A. (a) Financial Planning C. A-Attainable
B. (b) Capital Structure. D. R-Review
C. c) Working Capital E. M-Measureable / Can be measured
D. (d) Fixed Capital
1598. Which statement is not basic financial
1594. Use the W-2 above to answer question. report?
How much did Jackson pay in federal in- A. Outcome statement
come taxes last year?
B. Income statement
C. Balance Sheet
D. Cash flow statement
1599. Is a sequence of price plotted over a

specified time frame
A. Price structure
A. $25, 304.90 B. Price area
B. $7, 234.86 C. Price chart
C. $1, 255.60 D. None of these
D. none of above 1600. Leaving money in your savings ac-

count without withdrawing any for sev-
1595. The primary goal of financial manage- eral years to make more money describes
ment is which factor.
A. Profit Maximisation A. Time
B. Ensuring Safety of finance B. Money
C. Wealth maximisation C. Interest Rate
D. all above D. none of above

1601. Which analysis is considered as dy- 1606. The Federal Reserve is run by the Board
namic: of

A. Horizontal Analysis A. Teachers
B. Vertical Analysis B. Presidents
C. Internal Analysis C. Principals
D. External Analysis D. Governors
1602. What do you call someone who lends 1607. Identify the formula of dividend policy
money?
A. Debenture
B. Creditor
C. Borrower
D. none of above
1603. Retained earnings are effected by

A. Investment Decision A. Walter Model
B. Dividend Decision B. MM model
C. Capital structure C. NI Approach
D. Financing Decision D. Gordon model
1604. Extended payment granted by the seller 1608. Your university is running a special offer
refers to? on tuition. This year’s tuition cost is $18,
000. Next year’s tuition cost is scheduled
A. Trade credit
to be $19, 080. The university offers to
B. Promissory notes discount next year’s tuition at a rate of
C. Unsecured bank loan 6% if you agree to pay both years’ tuition
in full today. How much is the total tuition
D. Commercial paper bill today if you take the offer?
1605. Which of the following statements A. $36, 000

about NPV and IRR is accurate? B. $36, 981
A. Two NPV calculations are needed to es- C. $36, 080
timate the IRR using linear interpolation.
D. $28, 000
B. The graphical approach to IRR is only
an estimate; linear interpolation using the 1609. CAPM stands for.
formula is required for a precise answer.
A. Capital asset pricing model.
C. The IRR is unique.
B. Capital amount printing model.
D. An IRR graph with NPV on the ‘Y’ axis
C. Capital amount pricing model.
and discount rate on the ‘X’ axis will have
a negative slope. D. Capital asset printing model.

1610. When the stock market index is rising, 1615. An example of a financial institution is:
a company may issue in order to meet A. a department store
its financial requirements.
B. a bank
A. Debentures
C. a credit union
B. Bonds
D. a bank and a credit union
C. Equity shares
D. None of the above 1616. Which does not belong to the group?
NARAYAN CHANGDER
A. Notes Receivable
1611. Which of the following is not a financial
goal? B. Accrued Interest Income
A. Chlid’s education fund C. Trading Securities
B. Genting promotion D. Sinking Fund
C. Paying down payment for house 1617. What are the 2 corporations that the re-
D. Buying a vacumm cleaner porters mentioned as an example in the
Hamada Equation?
1612. The activity yield Profit or Financial A. Converge and Jollibee
Gain
B. Orange Brutus and Converge
A. Loss
C. Jollibee and Orange Brutus
B. Profitability
D. McDonald’s and Jollibee
C. Re-investment
D. Benefit 1618. NI and NOI approach of capital structure
is suggested by
1613. represent the cost that sharehold- A. F. W. Taylor
ers bear due to managers’ pursuit of their
own interests B. Marshall Edgeworth
C. David Durand
A. Shareholder
D. Fisher
B. Stakeholder
C. Expenses 1619. Used to borrow money to gain some-
thing you cannot afford at one time
D. Agency problem
A. debit card
1614. Under the factoring arrangement, the
B. credit card
factor
C. check
A. Produces and distributes the goods or
services D. cash
B. Makes the payment on behalf of the 1620. Uncertainty
client
A. Risk
C. collects the client’s debt or account re-
ceivables B. Problem
D. Transfer the goods from one place to C. Return

another D. Investment

1621. Companies with ample growth opportu- B. .29

nities are likely to
C. .28

A. Pay lower dividends
D. .31
B. Pay higher dividends
C. Dividends are not affected by growth 1627. Cash & Cash Equivalent-24, 890Held
consideration for Trading-10, 000Trade and Other
Receivables-16, 000Inventory-8, 960If
D. none of above
total liabilities amounted to 598, 030 and
1622. are intermediaries that channel the total assets amounted to 1, 014, 082.
saving of individuals, businesses, and gov- What is the debt ratio?
ernments into loans or investments. A. 59%
A. Financial institutions
B. 59.06%
B. Kuala Lumpur Stock Exchange
C. 58%
C. Money markets
D. 58.06%
D. Financial markets
1623. Which of the following is usually NOT a 1628. What is the main advantage of a corpo-
long-term asset? ration?
A. land A. Limited liability
B. inventory B. Ease of raising capital
C. buildings C. Unlimited life
D. equipment D. Low cost and ease of formation
1624. Financial Management is concerned with
1629. The cost of a resource that may be rele-
vant to an investment decision even when
A. Investment Decisions no cash changes hand is called a (an):
B. Finance Decisions A. Sunk cost
C. Dividend Decisions
B. opportunity cost
D. All of the above
C. working capital
1625. A reports the assets, liability, and
D. historical cost
owner’s equity at the end of an account-
ing period.
1630. The agency problem is a driving force be-
A. statement of cash flows hind the growing importance attached to
B. balance sheet sound corporate governance. In this con-
text, who are the agents?
C. income statement
A. Shareholders
B. Managers
1626. Jenna buys a keychain for $4.50. Sales
tax is 6.5%. What is the TOTAL PRICE? C. Auditors
A. .30 D. none of above

1631. A company is likely to declare higher div-

idends if
A. Tax rates are high
B. Tax rates are relatively lower
C. Tax rate has no effect on dividend dec-
laration
A. TRUE
NARAYAN CHANGDER
B. FALSE
1632. Money earned through work.
1637. Medicaid is a health insurance pro-
A. withdrawal
gram to help people who cannot afford
B. expense health care costs.
C. deposit A. Private
D. income B. government
1633. The A in SMART Goal Stands for C. Military
A. Acceptable D. none of above
B. Achievable
1638. Interpretation means data.
C. Attainable
A. Explaining
D. none of above
B. Entering data
1634. Who should attend financial manage-
C. sharing of data
ment training?
D. None
A. Only those with skills in business ana-
lyst E. Threat
B. Only those with accounting experience 1639. Tisha was planning her budget, what
C. Both accounting and non-accounting percentage should all her expenses add up
personnel to be to her net pay?
D. Only those with finance experience A. 50%
1635. A is a set of documents that outline B. 75%
the essential financial facts about the new C. 100%
venture.
D. 105%
A. financial forecast
B. budget 1640. Suppose you invest $1, 000 today, com-
pounded quarterly, with the annual inter-
C. income statement
est rate of 5.00%. What is your invest-
D. financial plan ment worth in one year?
1636. Smt. Nirmala Sitharaman thinks that A. $1, 025.00
cushion margin is the surplus over the B. $1, 050.95
usual need of the day-to-day working cap-
ital needs used for providing emergency C. $$1, 051.95
contingencies D. $1, 150.95

1641. Which of the following ratios would be 1647. Discounting is the process of calculating
the best measure of solvency? the:

A. Return on assets ratio A. Future value of present cash flows
B. Price earnings ratio B. Present value of preset cash flows
C. Current ratio C. Present value of future cash flows
D. Times-interest earnede ratio D. Future value of future cash flows
1642. Current assets are those assets which 1648. The funds raised by the issue of are
get converted into cash the best from the risk point of view for the
A. within 6 months company.
B. within one year A. equity shares
C. between one and three years B. debentures
D. between three and five years C. both (A) & (B)
1643. You can usually cash your check at your
own bank without paying an extra fee 1649. The total amount of money owed to a
A. True business is known as, accounts receivable.
B. False A. True
1644. Nessi earns $10.15 per hour. During B. False

this pay period the monster worked 36
1650. Who is the richest person in the world
hours. How much was her gross pay?
A. Y ilong MA
A. $365.40
B. Elon Musk
B. $46.15
C. $540 C. Brandon Sanchez
D. none of above D. Professor Dinter

E. Kim Jong Un
1645. If a company follows labour intensive
technique in production, they will go for 1651. Firm with high cash flow volatility
less requirement of fixed capital. should have less debt.
A. True A. Yes
B. False B. No
1646. When you remove funds from your ac- 1652. The theory regarding problems that
count that is known as a arise due to differences in interests be-
A. Deposit tween owners and managers is?
B. Tax A. Behavioral Finance Theory
C. Withdrawal B. Agency Theory
D. Pension C. Control Hypothesis
E. Interest D. Signaling Theory

1653. What financial statement summarizes 1658. Which of the following is not a rea-
changes to the balance sheets? son why charitable giving is good for busi-
A. Income Statement ( Profit / Lost) nesses?
B. Cash Flow Statement A. Helps create a better community

B. Increases your marketing reach
C. All answers are incorrect
C. Boosts employee morale
D. Income Statement & Cash flow state-
ment D. Qualifies you for reduced corporate
NARAYAN CHANGDER
tax
1654. Which source of finance is typically asso-
E. Provides financial incentives to the
ciated with the issuance of company stock
community
or ownership shares?
A. Debt Financing 1659. This plastic card allows you to buy a
good or service and pay for it now from
B. Equity Financing
a bank account that it is linked to.
C. Short-term Loans
A. Credit card
D. Trade Credit B. Prepaid card
1655. markets in which existing, already out- C. Gift card
standing securitiesare traded among in- D. Debit card
vestors.
A. secondary markets 1660. Of the following, which is NOT an activ-
ity engaged in by a financial intermediary?
B. primary markets
A. Matching borrowers and lenders
C. money markets
B. Bearing risk
D. capital markets
C. Managing retirement portfolios for
1656. Forecast by analysts retention growth large classes of employees
model and historical growth rates are D. All of the above are activities of finan-
methods used for an cial intermediaries.
A. estimate future growth
1661. You invest Rs 800 in an account that
B. estimate option future rate pays 6% interest, compounded annually.
C. estimate option present rate How much money do you have after five
years?
D. estimate growth ratio
A. 898.09
1657. What is the main purpose of the cash B. 1070.58
flow statement?
C. 1710.58
A. To show a company’s profitability
D. 975.68
B. To report a company’s cash inflows
and outflows during a period 1662. Which of the following is not a discount-
C. To provide a summary of a company’s ing technique of capital budgeting
long-term investments A. Profitability index
D. none of above B. Net present value

C. Internal rate of return 1668. Which of the following statements is

correct?
D. Accounting rate of return

A. One of the problems with maximising
1663. If you invest $100, 000 today at 12% accounting profit as a financial objective is
interest rate for one year, what is the that accounting profit can be manipulated
amount you will have at the end of the B. A target for a minimum level of divi-
year? dend cover is a target for a minimum divi-
A. $90, 909 dend payout ratio
B. $112, 000 C. The welfare of employees is a financial

objective
C. $100, 000
D. One reason shareholders are inter-
D. None of the above ested in earnings per share is that ac-
counting profit takes account of risk
1664. .... model of cash management at-
tempts to minimization of total cost? 1669. Permanent working capital
A. S.F Bradley A. varies with seasonal needs.
B. Baumal’s B. includes fixed assets.

C. is the amount of current assets re-
C. Miller-orr
quired to meet a firm’s long-term mini-
D. none of above mum needs.
D. includes accounts payable.
1665. The concept that increases the return on
equity shares with the change in capital 1670. What qualifications are necessary for fi-
structure of a company nancial management training?
A. Trading on debentures A. A finance degree
B. Trading on equity B. A degree in accounting
C. capital budgeting C. At least 5 years of finance experience
D. financial planning D. At least 3 years of accounting experi-

ence
1666. You must file your federal and state in- 1671. Mr Liew and his wife have a total in-
come taxes by April come of RM12 600 a month. They have
A. Taking three children and they would like to save
an amount of RM250 000 for their chil-
B. 1st
dren’s education in 15 years from now.
C. 15th What is the minimum amount they need
to save every month for their education
D. none of above
fund?
1667. True or False:Expenses are things you A. RM 1 360
spend money on B. RM 1 380
A. True C. RM 1400
B. False D. none of above

1672. Which of the following is a financial as- 1677. Current assets are the assets that are
set? either used up or converted to cash during
the normal cycle of business.
A. Gold
A. True
B. Share
B. False
C. Silver
D. Land 1678. A is a financial plan that reflects an-
ticipated revenue and shows how it will be
NARAYAN CHANGDER
1673. Commercial paper is the instrument of allocated in the operation of the business.
A. Secondary market B. financial plan
B. Primary market C. accounting equation
C. Capital market D. budget
D. Money market 1679. If the “original price” a item is $18.00
and has a 15% discount, what is the new
1674. The federal program that assists older discounted sale price:
Americans with insurance and income is
called A. $2.70
B. $18.50
A. FICA (Federal Insurance Contribution
Act) C. $15.30
B. Federal Income Tax D. $15.00
C. State Income Tax 1680. Calculate the cash flow for Mr. Rab-
D. Physician’s Mutual Insurance bani Active Income:RM3, 000Passive
Income:RM350Fixed Expenses:RM 2,
1675. Amount by which total revenues ex- 300Variable Expenses:RM 250 Then, de-
ceeds total revenues. termine whether it is Deficit or Surplus.
A. Revenues A. -800 (Deficit)

B. 1000 (Surplus)
B. Net Income
C. 800 (Surplus)
C. Net Loss
D. -1000 (Deficit)
D. Expenses
1681. Decrease in accounts payable
1676. A business organization can obtain
funds from- A. Investing Activities
B. Operating ACtivities
A. Issue of preference or equity share
capital C. Financing Activities
B. Issue of debentures D. none of above
C. Loan from banks and financial institu- 1682. Main objective of analysis of financial
tion statements is
D. All of the above A. To know the financial strength

B. To make a comparative study with C. both

other firms D. none

C. To know the efficiency of management
1687. ASSETS = LIABILITIES + OWNER’S EQ-
D. All of the Above
UITY is known as the,
1683. Which of the following is not an advan- A. accounts payable
tage of separation of ownership and man-
B. accounting equation
agement of corporations?
C. financial statements
A. Corporations can exist forever
D. income statement
B. Professional managers can be hired
C. Agency costs are incurred 1688. Marginal cost of capital is the cost of
D. Transfer of ownership can be facili- A. Additional Sales
tated without affecting the operations of B. Additional Funds
the firm.
C. Additional Interests
1684. how long has it has to been if you have D. None of the above
moved for you not to report it on your
credit report? 1689. Paulo plans to buy a holiday villa in five
A. 4 years years’ time for cash. He estimates the
cost will be $1.5m. He plans to set aside
B. 3 years
the same amount of funds each year for
C. 2 years five years, starting immediately and earn-
D. 1 year ing a rate of 10% interest per annum com-
pound. To the nearest $100, how much
E. Pluto
does he need to set aside each year?
1685. What is debt? A. $223, 200
B. $223, 300
C. $223, 400
D. $223, 100
1690. ABC Corporation issued and sold 10

shares of stock to Irene Investor, a private
individual. This represents a secondary
market transaction.
A. Money you owe
A. True
B. money you earn
B. False
C. Taxed money Explanation:this is an example of primary
D. money you invest market
1686. Stock market is bullish, company must 1691. Types of Investment decisions
raise funds through A. Long-term, Medium-term and short
A. debt term
B. equity B. LOng-term and Medium-term

C. Long-term and short term D. output rate

D. No classification E. Input rate
1692. When you withdraw money from your 1698. You recently sold 2000 shares of
checking account, this is called a/n Petronas Bhd to your friend. This is an
A. Debit example of a primary market transaction.
B. Credit A. TRUE
B. FALSE
NARAYAN CHANGDER
C. Bad Idea
D. Subtraction 1699. preparation of a detailed, comprehen-
sive and personalized plan for each com-
1693. This tax includes two separate pany in which the objectives to be achieved
taxes:Social Security and Medicare and the costs that this will entail are de-
A. State Withholding Tax termined, the resources that will be neces-
B. FICA sary are identified and a deadline is set to
make them a reality.
C. Federeal Withholding Tax
A. Value added
D. Medical
B. Economic indicators
1694. Merger of two or more companies or C. Financial planning
business undertaking to form new com-
D. Efficiency
pany means
A. Reconstruction 1700. What document gives rights to hold as-
sets on someone else’s behalf
B. Amalgamation
C. Absorption
B. Power of Attorney
C. Will
1695. A CFO is responsible for all financial ac-
D. Living Trust
tivities of the company
E. Probate
A. True
B. False 1701. A business outlook that acknowledges
a firm’s responsibilities to its stakeholders
1696. Which of the following is component in and the natural environment
cash receipt.
A. purchasing materials
B. Wages
C. dividend received
D. acquire fixed asset
1697. Cost of capital is also called A. Corporate Governance

A. Cut of rate B. Corporate Social Responsibility
B. hurdle rate C. Corporate Vision
C. target rate D. Corporate Mission

1702. The cost that is incurred as a result of D. Jesus

past, irrevocable decisions and is irrele- E. Percy
vant to future decisions is called:

1707. and utilization of funds are the fi-
A. Sunk cost
nance function
B. Opportunity cost
A. Acquisition
C. Incremental cost
B. Merger
D. Reliable cost
C. None
1703. Several key factors that influence the D. Both
level of investment in account receivables
are the percentage of credit sales to total 1708. The decision related to distribution of
sales, the level of sales, and credit collec- residual profit is called
tion policy. A. (a) Investment decision
B. (b) Financing decision
A. C. c) Dividend decision
1709. An interest rate that may change de-
pending on other factors, such as the prime
B. rate.
A. Fixed-rate APR
B. Introductory APR
1704. Which method of bill payment is pro- C. Interest
grammed to pay the same amount to your
D. Variable-rate APR
lender each month on the same date?
A. Cash (in person) 1710. corporations that accept money from
savers andthen use these funds to buy
B. Automatic Draft
stocks, long-term bonds, or short-term
C. Debit Card debt instruments issued by businesses or
D. none of above government units
A. mutual funds
1705. is the example of a financial deci-
sion. B. life insurance company
A. Investment decision C. pension funds
B. Financing decision D. credit union
C. Dividend decision 1711. Which of the following figure is irrele-

vant while calculating cost of redeemable
D. All of these
preference shares?
1706. Who is a TA? A. Floatation cost
A. Ronald B. Discount
B. Daniel C. EPS
C. Stalin D. Net proceeds

1712. Out of which affects Financial manage- B. Investment

ment: C. Financial Decision
A. The quantum of current assets and its D. Financial management
break-up into cash, inventory and receiv-
ables 1717. The following are all characteristeristics
B. The amount of long-term and short- of a security finance except:
term funds to be used A. repayment is very limited
NARAYAN CHANGDER
C. All Incomes in the Profit and Loss Ac- B. also called debt capital
count
C. major part of company’s total capital-
D. A and B ization
1713. means the organization should op- D. long-term source of finance
erate efficiently in order to maximize the
value of the stock price hence increase the 1718. Commercial Banks normally provide
shareholders confidence level. short-term finance which is payable within
a week.
A. Wealth maximization
A. False
B. Profit maximization
B. True
C. Funding operational expenses
D. Tax considerations 1719. What does the term “capital gearing”
refer to in finance?
1714. Financial statements that have not un- A. The process of raising equity capital
dergone external auditing procedures may
prove to be inaccurate or worse, fraudu- B. The ratio of fixed interest bearing debt
lent hence, do not fairly present the com- to equity capital
pany’s financial condition. C. The issuance of bonds and debentures
A. TRUE D. The allocation of capital budget to var-
B. FALSE ious projects
1715. Acquire assets should be recorded at 1720. Which is the most important decision?
their actual hitorical cost. A. Finance decision
A. Matching Principle B. Investment decision
B. Objectivity Principle C. Dividend decision
C. Historical Cost D. All of these
D. Revenue Recognition Principle
1721. Caleb is buying a new surfboard for
1716. This means planning, organizing, direct- $670.00, he has only 5 months to save,
ing and controlling the financial activities what does he need to save each month?
such as procurement and utilization of A. $143.00
funds of the enterprise. It means applying
general management principles to financial B. $128.00
resources of the enterprise. C. $134.00
A. Capital structure D. $138.00

1722. Which of the following are financial as- A. Easy form

sets? B. Convenient and rational groups

A. Bonds C. Comparable form
B. Machines D. All of the Above
C. Stock
1728. Offering cash discounts to customer re-
D. Bonds and machines sults in ?
1723. Focal point in Financial Management is A. Reducing the average collection period
A. Increasing sales of the firm B. increasing sales
B. Creating shareholder’s value C. Increasing the average collection pe-
C. Increasing Profit riod
D. Increasing Market Share D. none of above
1724. Which of the following should be consid- 1729. The statement of cash flows
ered when developing a long-term finan- A. Reports the periodic cash inflows and
cial plan? outflows in operating, investing and fi-
A. Inflation Rate nancing activities
B. Interest Rate B. Reports the revenues earned and ex-
penses incurred by the firm during the pe-
C. Personal Health riod
D. none of above C. Shows the company’s total assets, bro-
1725. What is the meaning of wants? ken down into current and non-current as-
sets
A. Something that you do not necessarily
need it, but you still want it for luxurious D. Shows the company’s capital structure
lifestyle. for a period of time
B. Something that is needed to live 1730. Financial ratios that tell how well a com-
C. Something that you cannot live without pany can pay off its short-term debts and
it meet unexpected needs for cash.
D. Something that you like. A. liquidity ratios

B. efficiency ratios
1726. All of the decisions and activities of an
individual or family regarding their money, C. leverage ratios
including spending, saving, budgeting, etc. D. profitability ratios
A. Personal Finance
1731. You place $500 into your checking ac-
B. Consumer count at First Bank and earn 1% APR
C. Loan on your deposit. Your professor borrows
money at a rate of 8% from the same bank
D. Credit for a tuition loan for her son. Which of the
1727. Feature of financial analysis is to following statements is true?
present the data contained in financial A. You benefit from earning interest on
statements your deposit, safety for your funds, and

having a recognizable means for paying 1735. Which is not included in the advantages
for your financial obligations without hav- of deposit investment instruments?
ing to hold cash. A. Safe, because it is guaranteed by LPS
B. You and your professor have an obvi- up to a certain limit
ous conflict of interest because you have B. Low return potential
accounts at the same financial institution.
C. Relatively easy
C. The bank is criminally liable to you for
D. Income stability
paying an interest rate lower than the ex-
NARAYAN CHANGDER
pected rate of inflation. 1736. You are responsible for your financial
D. Your professor is the only party to be well-being
made worse off by this example because A. True
she is the only party paying net interest. B. False
1732. The payback rule ignores all cash flows 1737. A notebook costs $7.50. Tax is 7%.
after the cutoff date. Find the amount of tax for the notebook.
A. False. A. .55
B. What about Superman? B. .50
C. I think thats Batman. C. .53
D. True. D. .35
1738. Portion of Profit distributed to the
1733. Mr Patrick spends RM2 500 for house-
shareholder is
hold expenses every month. How much
is the minimum emergency fund needed A. Interest
by him based on Bank Negara Malaysia B. Dividend
suggestion? (Hint:Emergency fund is the
C. Tax
amount Mr Patrick should have to spend
on household if he suddenly doesn’t have D. Earnings
any income) 1739. Ponnambala Thyaga Rajan Palanivel Ra-
A. RM15 000 jan wants to find out which term is used
to describe the place at which the rate of
B. RM12 000
return of capital employed is equal to the
C. RM10 000 rate of interest on the debt.
D. RM7 500
1734. Financial management is mainly con-

cerned with
A. All aspects of acquiring and utilizing fi-
nancial resources for firms activities
B. Arrangement of funds
C. Efficient Management of every busi-
ness
D. Profit maximisation

A. EBIT breakeven point

B. Financial breakeven point

C. Cost indifference point
D. Investment breakeven point
1740. The fixed capital requirement of a busi- A. low net present value
ness involving labour intensive production B. low payback period
will be C. high payback period
A. Less D. low profitability index
B. More
1744. Which of these is the largest planet in
C. Same the Solar System?
D. None of the above A. Earth
B. Mars
1741. The discount factor used to appraise cap-
ital investment decisions is a measure of: C. Mercury
D. Jupiter
A. The current high street interest rate
E. Pluto
B. The opportunity cost of capital of the
business 1745. Which market directly contributes for
C. The current inflation rate capital formation and increase in capital of
firms?
D. The opportunity cost of capital of all
A. (a) Primary market
businesses in the same industry
B. (b) Secondary market
1742. Which of the following investments has C. c) Both (a) and (b)
a larger future value:Investment A, a $1,
000 investment earning 5% per year for D. (d) None of the above
6 years, or Investment B, a $500 invest- 1746. Which of the following is NOT an exam-
ment earning 10% per year for 6 years, ple of an equity market transaction?
with a bonus of an extra $500 added at
the end of the sixth year? A. Mary sells her shares of Apple stock.
A. Investment B, with a future value of $1, B. Mark contacts his broker and requests
886. a purchase of IBM bonds.
C. Sahid buys shares of a small company
B. Investment A, with a future value of $1,
stock traded on the NASDAQ.
386.
D. All of the above are equity market
C. Investment A, with a future value of $1, transactions.
340.
1747. Suppose you want to set up recurring
D. Investment B, with a future value of $1,
payments for your mortgage that is due
386.
on the 15th of each month, which is the
1743. The best decision for the firm in capital best method of payment?
budgeting is A. Cash (in person)

B. Automatic Draft 1752. The additional risk placed on the com-

mon stockholders as a result of the deci-
C. Check
sion to finance with debt
D. none of above
A. financial risk
1748. Which of the following statements B. systemic risk
is/are correct?(1) Factoring with recourse
C. business risk
provides insurance against bad debts(2)
The expertise of a factor can increase D. asterisk
NARAYAN CHANGDER
the efficiency of trade receivables manage-
ment for a company 1753. Assest easily converted into cash
A. 2 only A. Cash
B. 1 only B. Liquid Assets
C. Neither 1 nor 2 C. Fixed Asset
D. 1 and 2 D. Current Asset
1749. What are some of the advantages of us- 1754. The main types of banks include
ing the IRR method? A. Commodity banks, Silver and Gold As-
A. The main advantage of IRR is that it is sociations, and Credit Onions
easy to communicate. B. Cooperative banks, Salt and Pepper
B. Basically there is no benefit for me. Associations, and Cranberry Onions
C. Don’t know, you tell me? C. Commercial banks, Saving and Loan
Associations and Credit Unions
D. Advantages?
D. Credit Unions, Community banks, and
1750. What type of class is financial manage- Mortgage Companies
ment?
1755. Shareholders current wealth in a com-
A. A hard class pany is equal to X
B. A pass/fail class A. Face value of shares x Market price
C. An easy A per share
D. A Q1 course B. No of shares x Market price per share
E. An AP class C. No of shares x Profit per share

D. No of shares x face value of shares
1751. What type of budget plans income and
expenses from the beginning of a new 1756. The long-run objective of financial man-
business or a major business expansion un- agement is to
til it becomes profitable?
A. Maximize earnings per share.
A. direct
B. Maximize the value of the firm’s com-
B. balance mon stock.
C. start-up C. Maximize return on investment
D. operating D. Maximize market share.

1757. Merger and acquisition in unrelated in- 1762. The acronym COGS stands for:
dustries are called A. cost of goods sold

A. Horizontal merger B. creditors of Goods Tax
B. Vertical mergers C. capital outstanding GST
C. Conglomerate merger D. None of the above
D. Privatisation 1763. When was Byju’s founded?
1758. The insurance premium against fire and A. 2010
theft of inventories is regarded of follow- B. 2011
ing cost?
C. 2012
A. Carrying cost
D. 2013
B. Ordering cost
1764. Suppose you postpone consumption and
C. Storage cost
invest at 9% when inflation is 3%. What
D. All the above is the approximate real rate of your re-
ward for saving?
1759. Which of the following statement is cor-
rect? A. 3%
A. A desire to maintain an established B. 5%
dividend policy may affect the volume of C. 6%
working capital. D. 7%
B. Changes in working capital may bring
1765. AW Co needs to have $100, 000 work-
about an adjustment of dividend policy.
ing capital in place immediately for the
C. Payment of dividend may reduce cash start of a 2-year project. The amount will
in current assets consider-ably which in stay constant in real terms. Inflation is
turn may reduce the available working running at 10% per annum, and AW Co’s
capital for the company. money cost of capital is 12%. What is the
D. All of the above present value of the cash flows relating to
working capital?
1760. This type of share allows shareholders A. $(21, 260)
to convert current shares to equity shares.
B. $(20, 300)
A. Cumulative preference share
C. $(108, 730)
B. Irredeemable preference Share
D. $(4, 090)
C. Non-cumulative preference share
1766. Which of the following statements best
D. Convertible preference share
represents the “Agency Problem”?
1761. What is the main disadvantage of a cor- A. Managers might attempt to bene-
poration? fit themselves in terms of salary and
A. Limited liability perquisites at the expense of sharehold-
ers.
B. Difficulty of transferring ownership
B. The agency problem results from the
C. Unlimited life separation of management and the own-
D. Double taxation ership of the firm.

C. The agency problem may interfere B. Fixed Capital

with the implementation of maximizing C. Investment Decision
shareholder wealth.
D. Financing Decision
D. all of the above
1772. Liquidity in financial markets refers to
1767. PETROL EXPENSES, GROCERIES, AL-
the stability of long-term financial instru-
LOWANCE FOR PARENTS ARE:
ments.
NARAYAN CHANGDER
A. TRUE
B. FALSE
Explanation:False (Liquidity refers to the
ability to meet short-term obligations.)
1773. It also refers to the firm’s speed or pace

A. FIXED EXPENSES
in turning over accounts receivable, inven-
B. VARIABLE EXPENSES tory and long-term assets.
1768. Bonds are bought and sold in mar- A. ASSET UTILIZATION OR ACTIVITY
kets. B. DEBT-UTILIZATION OR LEVERAGE
A. equity
1774. The principle of risk-return trade-off
B. debt means that
C. derivatives A. higher risk investments must earn
D. foreign exchange higher returns.
1769. Financial Management is concerned B. an investor who takes more risk will
with- earn a higher return.
A. Profit Maximization C. a rational investor will only take on
higher risk if he expects a higher return.
B. Both (A) & (C)
D. an investor who bought stock in a
C. Wealth Maximization
small corporation five years ago has more
D. Both (A) & (C) plus Relation Maximiza- money than an investor who bought U.S.
tion Treasury bonds five years ago.
1770. Which situation shows a financially re- 1775. Your credit score is a number that banks
sponsible citizen? and credit card companies use to find out
A. Purchasing an expensive automobile how likely you are to pay back money on
you CANNOT afford. time.
B. Only buying items that you CAN afford A. True
C. Throwing money out the window. B. False
D. Hiding your money under your mat- 1776. It is considered as separate and distinct
tress. from its owners and executives.
1771. Amount of Fixed Assets is decided by A. PARTNERSHIP
A. Working Capital Concept B. CORPORATION

1777. Market Value of share is decided by C. 52.00

A. Investment Decision D. 52.04

B. Investment Market
1783. In the present days, corporation finance
C. Govt is also referred to as business finance and
D. Directors financial management
1778. Long-term debt instruments used by A. True

both government and business are known B. False
as
A. bonds 1784. The same cash flow repeated in multi-
ple time periods in a row, is the meaning
B. equities
of
C. stocks
A. Annuities
D. bills
B. Lump Sums
1779. Its failure to consider changes in the pur-
chasing power of currencies. C. Deferred Annuities
A. TRUE D. Uneven Cash Flows

B. FALSE 1785. Ratios are used as tools in financial anal-
1780. Cost is a feature of a financial plan? ysis
A. True A. instead of horizontal and vertical anal-

ysis
B. False
B. because they can provide information
1781. An accounts receivable record identifies that may not be apparent from inspection
the companies from which credit purchases of the individual components of a particu-
were made and the status of each account. lar ratio
A. True C. because even single ratio by itself is
B. False quite meaningful
1782. Cash & Cash Equivalent-24, 890Held D. because they are prescribed by PFRS
Receivables-16, 000Inventory-8, 960If 1786. If operating leverage is 4, this means
total current liabilities amounted to 19, that-
900, Net Sales for the present year A. 4% change in sales will cause 1%
amounted to 480, 000 and the ending re- change in EBIT.
ceivables totaled to 16, 500. However, it
was found out that the ending inventory B. 1% change in sales will cause 4%
amounted to 9, 500 and the Cost of Goods change in EBIT.
Sold totaled to 364, 000. What is the in- C. 1% change in sales will cause 4%
ventory turnover ratio? change in EPS.
A. 76.63 D. 4% change in sales will cause 1%
B. 39.44 change in EPS

1787. Mention 3 tips for increasing positive 1792. If the discounting factor of year 5 and
balance in Personal Cash Flow correctly? assuming cost of capital of 5% is $0.8, it
A. Adding CASH Loans means that:
B. Lowering QUALITY A. $0.8 is the present value of $1 in 5

years with annual compounding of 3%
C. Prioritize NEEDS over WANTS
B. $0.8 is the present value of $1 in 5
D. Increase Shopping FREQUENCY years with annual compounding of 5%
E. Adding Other Sources of Income
NARAYAN CHANGDER
C. $0.8 is the present value of $1 in 3
1788. The concept which provides a link be- years with annual compounding of 3%
tween investment and financing decision D. $0.8 is the present value of $1 in 3
A. Trading on equity years with annual compounding of 5%
B. Financial leverage 1793. Who is the most common creditor

C. Capital structure A. A bank
D. Financial Planning B. A person
1789. Financial reporting: C. A school

A. Provides information about a com- D. The government
pany’s financial performance to investors, E. Your parents
creditors, and other stakeholders
1794. ROI stands for
B. Helps investors make informed invest-
ment decisions A. Rate of interest
C. Both of the above B. Return on investment
D. Neither of the above C. Risk of investment
1790. A $100 deposit today that earns an an- D. None of these

nual interest rate of 10% is worth how 1795. There are 12 months in a year. How
much at the end of two years? Assume many years is 48 months?
all interest received at the end of the first
year is reinvested the second year. A. 3
A. $121 B. 4
B. $120 C. 5
C. $141 D. none of above
D. $122 1796. Which of the following is not a benefit
of budgeting?
1791. Which of the following would NOT be
considered an expense? A. Save Money
A. wages paid to employees B. Create a retirement plan
B. interest earned on investments C. Avoid overspending
C. taxes D. Avoid late fees
D. purchases of supplies E. Increase debt

1797. What is the chief financial question be- B. Ease of raising capital
fore an organisation? C. Unlimited life

A. How much finance will be required for D. Low cost and ease of formation
various business activities.
B. How much amount can be acquired 1803. You should log off when you’re finished
from various resources. accessing your bank online.
C. How the profit of the business will be A. True

divided. B. False
D. All of these 1804. Investment in Fixed Assets is-of
1798. Which of the following is NOT a compo- decision-
nent of financial strategy formulation? A. Investment
A. Budgeting and forecasting B. Financing
B. Marketing strategy C. Dividend
C. Capital structure decisions D. None of these
D. Investment analysis 1805. Variance and standard deviation mea-
1799. What is the term for the process of sure the volatility of returns
converting future cash flows into today’s A. True
equivalent value to make meaningful com- B. False
parisons?
A. Capital Budgeting 1806. Which one of these is an investment?
B. Liquidity Management A. a mutual fund
C. Present Value (PV) B. real estate
D. Investment Appraisal C. bank investments accounts

D. loans
1800. Nature of business is an important fac-
tor to decide requirement of fixed capital. E. cash
A. True 1807. Convert 7% to a decimal

B. False A. .07
1801. Finance managers need to interact con- B. .007

stantly with C. 7.0
A. marketing managers. D. none of above
B. accounting staff. 1808. cooperative associations whose mem-
C. management information systems bers aresupposed to have a common bond,
staff. such as being employees of thesame firm.
D. all of the above. Members’ savings are loaned only to other
members, generally for auto purchases,
1802. What is the main advantage of a corpo- home improvement loans, and homemort-
ration? gages.
A. Limited liability A. credit union

B. pension funds 1814. What is another word for currency?

C. life insurance company A. money
D. mutual funds B. paper
1809. The first step in monitoring of plan is: C. candy
A. Suggesting corrective action D. bank
B. Review the plan
1815. Your grandmother places $13, 000 into
NARAYAN CHANGDER
C. Identify Variances an account earning an interest rate of 7%
D. None per year. After 5 years the account will
be valued at $18, 233.17. Which of the
1810. A form W-4 allows tax payers to claim following statements is correct?
certain allowances to determine what?
A. The principal is $13, 000, the time pe-
A. The amount of children you have riod is 5 years, the future value is $18,
B. The status of your citizenship 233.17, and the interest rate is 7%.
C. The amount of federal taxes with held B. The future value is $13, 000, the time
from your paycheck. period is 5 years, the principal is $18,
D. The eligibility of an employee 233.17, and the interest rate is 7%.
C. The principal is $13, 000, the time pe-
1811. If the current assets of a firm is Rs riod is 5 years, the future value is $18,
120000, long term debt-Rs 80000, cur- 333.17, and the interest rate is 7%.
rent liability Rs 40000 then Net working
capital is- D. The principal is $13, 000, the time pe-
riod is 7 years, the future value is $18,
A. 120000
233.17, and the interest rate is 5%.
B. 80000
1816. What is done to identify problems and
C. 40000
overcome risks?
D. Zero
A. Having a plan in place just in case you
1812. The lifeblood of all Business concern. lose your job
A. Tip B. Identify all financial problems and
B. Finance risks that may arise
C. Credit C. Just identify investment losses
D. Loan D. Avoid risks completely
1813. All of these are ways to better control 1817. When interest rates are stated or given
your debt EXCEPT for loan repayments, it is assumed that
A. Get advice from professionals or orga- they are unless specifically stated oth-
nizations erwise.
B. Make a list of everything you owe A. annual percentage rates
C. Prioritize your most important debts B. compound percentage rates
D. Use credit card to spend lots of money C. effective annual rates
E. Make a personal budget D. APYs

1818. You invest $800 in an account that pays B. Savings and Loan Associations
6% interest, compounded annually. How C. Credit Unions
much money do you have after five years?

Round your answers to the nearest cent. D. All of the above
A. $898.09 1823. Advertising campaign is an example of

B. $1070.58 A. short term investment decision
C. $1710.58 B. financial decision
D. $975.68 C. long term investment decision
D. dividend decision
1819. Choose the correct way to review and
revise progress of a financial plan. 1824. Which item listed below is not funded
A. Financial management does not need by taxes in your community?
regular review. A. public library
B. Review effects financial management B. community center
on regular basis C. fast food restaurant
C. Ask older people D. none of above
D. Budget made must be followed despite
1825. What practices can be done to reduce
the changing in income and needs
agency cost?
1820. From a financial point of view, a com- A. Giving investment
pany that decides to develop new product B. Paying salary
is making
C. Corporate governance
A. a financing decision.
D. Dividend
B. an investment decision.
1826. Comment on the validity of the follow-
C. a capital structure decision.
ing statements, in relation to the Efficient
D. a cash flow decision. Market Hypothesis. Statement 1:An inef-
ficient market is one in which the value of
1821. If current liabilities are RM100, 000 securities is not always an accurate reflec-
and current assets are RM200, 000, what tion of the available information. State-
is the current ratio? ment 2:In a semi-strong form market the
A. 0.50 share price incorporates all past informa-
B. 1.20 tion and all publicly-available information.
C. 1.50 A. False, False

B. True, False
D. 2.00
C. False, True
E. NOT IN THE CHOICES
D. True, True
1822. Which type of bank offers the entire
range of banking services, such as check- 1827. Easy access to capital market allows
ing and savings accounts, loans, and finan- firm to give more dividend
cial advice? A. true
A. Commercial Banks B. false

1828. Panasonic company wants to know B. 224, 000

which is the universal lubricant that keep C. 200, 000
the Indian stock markets and its business
dynamic? D. 216, 000
1831. Who is someone who acquires goods

and services for his or her own personal
use?
A. producer
NARAYAN CHANGDER
B. consumer
C. market economy
A. Cash
D. seller
B. Securities
E. superman
C. Finance
1832. Accounts receivable management based
D. Debt
on the principle, as liquidity increases the
return decreases?
A. True
B. False
Explanation:
C. All of them
D. none of above
1833. The amount money a person expects to

have in the future is called
Finance is the lubricant that keeps all busi-
ness and stock market activities dynamic A. Principal
B. Future Value
1829. What is the present value of perpetual
annuity of Rs. 1, 00, 000 p.a. at the dis- C. Simple Interest
counting rate of 10%? D. Present Value
A. Rs. 10, 000 1834. The compound average annual rate of
B. Rs. 10, 00, 000 return assuming that the bond will be
C. Rs. 1, 00, 00, 000 called by the issuer at some point prior to
the maturity date, is the meaning of
D. Rs. 1, 000
A. Current Yield
1830. Loaf Company uses the direct method in B. Yield to Maturity
determining the net cash provided by op-
erating activities. During the year, oper- C. Yield to Call
ating expenses was P208, 000, prepaid D. Average Return
expenses increased by P16, 000, and ac-
crued expenses payable increased by P24, 1835. Which of the following is a long-term
000. Cash payments for operating activi- source of finance for a company?
ties amounted to: A. Bank overdraft
A. 208, 000 B. Trade credit

C. Equity shares 1841. The statement of cash flows segregates

D. Short-term loans cash inflows and outflows by:

A. Operating, Financing and Investing Ac-
1836. Alexis bought a new skirt and blouse tivities
with a purchase price of $100.00. Calcu- B. Operating and Investing Activities
late 6.75% sales tax for her purchase.
C. Financing and Investing Activities
A. $6.75
D. Operating and Financing Activities
B. $10
1842. The managerial process which is con-
C. $13 cerned with the planning and control of fi-
D. none of above nancial resources is called as:
A. Control function
1837. Is a company issue bonus shares the
debt equity ratio B. Finance function
C. Management function
A. A. Remain unaffected
D. None of these
B. B will be affected
C. C. Will improve 1843. Exchange rates in the foreign exchange
market represent the value of a currency
D. D. None of the above relative to another currency.
1838. This is the money that is spend on goods, A. TRUE
services, and bills. B. FALSE
A. Expenditures Explanation:True. Stock price is the prod-
uct of price earnings ratio and earnings
B. Impulse buying per share. Stock price depends on the
C. Long term goals earning per share, thus higher the earn-
ings per share higher will be the stock
D. Needs price and viceversa.
1839. Its main role is to act as financial inter- 1844. .Long term finance is required for
mediary.
A. Current assets.
A. Finance B. Fixed assets.
B. Evaluating Investments C. Intangible assets.
C. Financial Management D. None of these.
D. Financial Institution 1845. The expected return on a riskless asset
is greater than zero due to
1840. is simply the interest earned in sub-
sequent periods on the interest earned in A. an expected return for delaying con-
prior periods. sumption.
A. Quoted interest B. an expected return for opportunity

costs.
B. Anticipated interest
C. an expected return for taxes.
C. Simple interest D. irrational investors who believe risk is
D. Compound interest always present.

1846. One of the goals of financial manage- 1851. Retirement of entity-issued bonds
ment is to maximize profits. What does A. Operating Activities
it mean?
A. maximizing existing value so that the
greater the profits obtained by a company C. Investing Activities
D. none of above
B. improving the function of the assets
owned so that maximum added value is ob- 1852. Through investment the business will
tained by the company earn interest.
NARAYAN CHANGDER
C. increase the company’s profit value A. Money Has Time Value
from all assets owned
B. Risk Return Trade Off
D. maximizing profits, which through the
C. Cash Flows Are Source of Values
right policies can maximize company prof-
its in the long term. D. Individuals Respond to Incentives
1847. Dividend paid in the form of shares is 1853. Financial Management aims at
called A. Maximum fund at minimum cost
A. Right shares B. Optimum utilisation of fund with mini-
B. Bonus shares mum cost and keeping the risk under con-
trol
C. Property dividend
C. Getting fund for the business
D. None of these
1848. How many percentage should a person
1854. individuals giving out small amounts of
save from their monthly income?
money to a project in return for something
A. 5% A. Peer-to-peer lending
B. 8% B. Reward-based crowdfunding
C. 10% C. Donation-based crowdfunding
D. 20% D. none of above
1849. The matiurity period of ICDs range from 1855. The portion of a company’s net profit
A. 1 year to 2 year that is distributed to shareholders is
known as?
B. one day to 6 months
A. Retained earning
C. up to 1 year
B. Net profit
D. 1 year to 5 year
C. Dividends
1850. What is not included in the Liquidity ra- D. Paid-up capital
tio is
1856. A schedule of how much producers are
A. Current Ratio
willing and able to produce and sell at a
B. Quick Ratio price
C. Average Collection Period A. Profit
D. Cash Ratio B. Services

C. Supply B. Bankruptcy
D. Demand C. Total assets

D. Debt consolidation
1857. High interest rates occur if you dont pay
off ? E. Unsecured debt
A. Your gym membership 1862. minimum rate of return that a project
B. Miss credit card loans must earn to increase firm value
A. cost of capital
C. The IRS
B. cost of opportunity
D. Prof. Dinter
C. implicit cost
E. The CIA
D. quality cost
1858. CW Co is appraising an opportunity to
invest in some new machinery that has 1863. are documents that are used to re-
the following cash flows.Initial investment port information about the business at the
$40, 000Net cash inflows for 5 years in end of the accounting cycle.
advance $12, 000 per annumDecommis- A. Income statements
sioning costs after 5 years $15, 000What B. Financial statements
is the internal rate of return of the project,
C. Accounts payables
calculated using discount factors for 10%
and 15% (to the nearest whole %)? D. Current assets
A. 10% 1864. Funds raised from this source dilutes
B. 15% management’s holding
C. 11.5% A. debentures
B. preference shares
D. 12%
C. equity shares
1859. The primary goal of financial manager is D. none
A. to maximise return
1865. type of financing is usually done for
B. to minimize risk financing high risky businesses
C. to maximize the shareholder’s wealth A. leasing
D. to maximize the stakeholder’s wealth B. venture capital
1860. Which factor does not effect the divi- C. hire purchase
dend decision D. factoring
A. Rate of dividend 1866. Which TWO of the following are exam-
B. History of dividend ples of financial objectives that a company
might choose to pursue? A. Dealing hon-
C. Rate of dividend of the competitor firm
estly and fairly with customers on all oc-
D. Risk casions B. Provision of good working con-
ditions and industrial relations C. Earning
1861. What is it called when a person or busi- above a particular level of return on cap-
ness is unable to pay their debts? ital employed D. Producing environmen-
A. Secured debt tally friendly products E. Restricting the

level of gearing to below a specified tar- A. Overdraft

get level
B. Debentures
A. B & D
C. Retained profit
B. A & C
D. Share capital
C. C & E
D. A & E 1872. While designing capital structure a fi-
nance manager should choose a pattern of
NARAYAN CHANGDER
1867. Housing is an example of which of the capital which-
following:
A. Minimizes cost of capital
A. Need
B. Maximizes the owners return
B. Want
C. Maximizes cost of capital and mini-
C. Income mizes owners return
D. Desire D. Both (a) and (b)
1868. What does the concept of ‘present
1873. Also known as errors and omissions
value’ in time value of money calculations
(E&O) insurance. It protects you against
refer to?
negligence claims arising from harm that
A. The future worth of money results from mistakes or failure to perform
B. The value of money in the present A. Property insurance
C. The value of money in the future B. workers’ compensation insurance
D. The total monetary assets of a com- C. Professional liability insurance
pany
D. none of above
1869. is the present value of an asset less
all claims against it. 1874. The sources of finance from which the
A. Capital quantum of required funds can be raised
is/are:
B. Property
A. Share capital
C. Equity
B. Trade credit
D. Asset
C. Debt capital
1870. The amount of money left after all de-
D. All of these
ductions have been taken from the gross
pay earned in a pay period is called? 1875. The management of money and financial
A. Gross pay decisions for a person or family including
B. Overtime pay budgeting, investments, retirement plan-
ning and investments is
C. Pay period
A. Investment
D. Net pay
B. Personal Finance
1871. Which of the following is not a source
C. Economics
of external financing for a public limited
company? D. Savings

1876. It also deals with financial decisions 1880. One way to prepare and file your fed-
such as when to introduce a new product, eral income tax return is online. Filing your
when to invest in new assets, when to taxes online is called

replace existing assets, when to borrow
A. government file
from banks, when to issue stocks or bonds,
when to extend credit to a customer, and B. e-File
how much cash to maintain. C. manual file
A. FINANCIAL MANAGEMENT D. none of above
B. FINANCIAL STATEMENT
1881. Which is / are Fixed Expenses?
1877. Using the NPV approach, an investment
A. petrol / petrol oil
is lucrative when the:
A. Aggregate free cash flows to all capital B. rental
providers discounted by the cost of equity C. loan installment / loan installment
is higher than total invested capital
D. insurance / insurance
B. Aggregate free cash flows to eq-
uity capital providers discounted by the 1882. It means planning, organizing, directing
weighted average cost of capital is higher and controlling the financial activities such
than total invested capital as procurement and utilization of funds of
C. Aggregate free cash flows to equity the enterprise.
capital providers discounted by the cost of A. Financial Statement
equity is higher than total invested capital
B. Financial Markets
D. Aggregate free cash flows to equity
capital providers discounted by the cost of
equity is higher than invested equity capi- D. Financial Institutions
tal
1883. What is the term for the cost of capi-
1878. The IRR is the discount rate that pro- tal in financial management that is the re-
duces a zero NPV or the specific discount quired rate of return demanded by an in-
rate at which the present value of the cost vestor for investing in a project?
equals
A. Discount rate
A. the future value of the present cash
outflows B. Inflation rate
B. the present value of the future benefits C. Interest rate

or cash inflows D. Market rate
C. the present value of the cash outflow
1884. It is kind of demand deposits which is
D. the investment generally kept by the people for the sake
1879. Deals with Opportunity Cost of safety
A. Money Has Time Value A. fixed deposits

B. Risk Return Trade Off B. current a/c deposit
C. Cash Flows Are Source of Values C. savings bank a/c
D. Market Prices Reflect Information D. recurring deposit a/c

1885. Wealth maximization as the goal of the 1890. All of the following operate as financial
firm implies enhancing the wealth of intermediaries EXCEPT
A. the Board of Directors. A. commercial banks
B. the firm’s employees. B. mutual funds.
C. the government.
C. insurance companies.
D. the firm’s shareholders.
D. the U. S. Treasury
1886. The financial manager is accountable for
NARAYAN CHANGDER
A. Earnings capital asset of the company 1891. The portion of a corporation’s profits
that is not distributed to stockholders is
B. Effective management of the fund
called?
C. Arrangements of financial resources
A. Retained earning
D. Proper utilization of fund
B. Private placement
1887. An underwriter facilitates the issuance
of securities. The company sells itsstocks C. Venture capital
or bonds to the investment bank, which D. Preferred stock
then sells these samesecurities to savers.
A. Direct transfer 1892. In calculating COGS for manufacturing
companies, these are:
B. Transfer through Investment Banks
C. Transfer Through a Financial Interme- A. Beginning inventory balance + cost of
diary goods purchased-ending inventory.
D. none of above B. Saldo awal persediaan barang jadi
+ harga pokok barang yang diproduksi-
1888. The following are the responsibilities of saldo akhir
a President EXCEPT ONE:
C. Sales-expenses
A. Overseeing the operations of a com-
pany. D. EBIT-Interest expenses
B. Performing all areas of manage-
1893. Which of the following is not an inflow?
ment:planning, organizing, staffing, di-
recting, and controlling. A. Passive Income
C. Approving company’s strategies, B. Savings
goals, and budgets.
C. Earned Income
D. Ensuring that the company’s strate-
gies are implemented as planned. D. Portfolio Income
1889. The capital market is primarily asso- 1894. affects bond prices
ciated with the issuance and trading of
short-term debt instruments. A. Time to maturity
A. TRUE B. Expiration date
B. FALSE C. Real estate prices
Explanation:False (The capital market is
D. Loan rates
associated with long-term debt and equity
instruments.) E. Tax deductions

1895. If you take out a loan from a bank, you 1900. All of the following are skills that man-
will be charged agers acquire through corporate finance
except

A. for principal but not interest
A. evaluate potential projects.
B. for interest but not principal
B. select corporate strategies that add
C. for both principal and interest
value to the firm.
D. for interest only C. raise money to fund the firm’s opera-
tions.
1896. Financial analysis becomes significant
because it: D. reduce operating costs.
A. Ignores price level changes 1901. Which among the statement is not true
B. Measures the efficiency of business for a debenture
C. Lacks qualitative analysis A. Long term loan finance
D. Is effected by personal bias B. Interest on debenture is a tax de-

ductible expense for the company
1897. How is financial viability of an organi- C. Fixed and regular source of income to
zation typically assessed? the investor
A. Employee satisfaction D. None of these
B. Customer feedback 1902. Long term investment decisions are also
C. Financial Statements called
D. Market Share A. capital investment decision
B. capital budgeting decision
1898. Debts to be paid more than one year
from now are claims against the firm’s as- C. capital management decision
sets:in other words, they are long-term D. capital decision borrowing
liabilities. These claims are from
who have provided capital to the firm but 1903. The process of budgeting, saving, in-
whose entire repayment is not due during vesting, spending or otherwise supervis-
the coming year or operating cycle. ing the use of money by an individual or
group is
A. banks and bondholders
A. Money Management
B. banks and stockholders
B. Savings Account
C. stockholders and bondholders
C. Checking Account
D. all long-term lenders
D. Investment
1899. deals with stocks, bonds, notes, and 1904. An Annual Report is issued by a com-
mortgages and derivative securities pany to its:
A. Financial Asset Markets A. Directors
B. physical asset markets B. Shareholders
C. money market C. Auditors
D. capital markets D. Management

1905. A company with high growth plans must C. To narrowed their markets
A. Distribute liberal dividend D. To avoid political hurdles
B. Distribute less dividend Explanation:The choice must be To ex-
pand their markets.
C. distribute no dividend
D. none of above 1911. Which type of bank is FOR PROFIT and
run by its shareholders?
1906. Credit used to buy a house or car is
A. Credit unions
known as
NARAYAN CHANGDER
A. open credit B. Commercial Banks
B. quick credit 1912. The liabilities included in the balance

C. closed credit sheet elements are:
D. bad credit A. Interest Charge
B. Income received in advance
1907. The job of a finance manager is confined
to C. Prepaid expenses
A. Raising of funds D. All the answers above are incorrect
B. Management of Cash
1913. Executive finance functions are handled
C. Raising of Funds and their effective uti- by the persons with the basic knowledge
lization of accounting.
D. none of above A. TRUE
1908. Financial management came into exis- B. FALSE
tence as a separate field of study from Explanation:False. Executive finance func-
? tions are carried out by Financial manager
(chief financial officer, treasurer, con-
A. 19th century
troller, and respective department heads).
B. 21st century On the other hand, accounting activities
C. 20th century are carried out by controller and day to
day functions of accounting are carried
D. None of these
out by lower level staff of respective de-
1909. A net working capital will arise partment.
when current assets exceed current liabili-
ties. 1914. Choose the correct 3 Benefits of Finan-
cial Reports?
A. Summative
A. Submit investment proposals and cap-
B. Negative
ital loans
C. Excessive
B. To prove to other people that we are
D. Positive rich
1910. What is not the main reason that com- C. We can analyze our business
panies go “global”? D. Controlling future business profits
A. To seek raw materials E. Create a business strategy for the fu-
B. To diversify ture

1915. If the discounting factor of year 3 is 1919. Activity Ratio mencakup

$0.8, it means that: A. Average Collection Period

A. $0.8 is the future value of $1 now B. Total Asset Turn Over
B. $1 is the present value of $0.8 in 3 C. Liquidity Ratio
years
D. Inventory Turn over
C. $0.8 is the present value of $1 in 5
years 1920. CAPITAL STRUCTURE DENOTES THE
COMPOSITION OF
D. $0.8 is the present value of $1 in 3
years A. SHARE CAPITAL
B. LONG TERM AND SHORT TERM DEBTS
1916. In accounts receivable management,
credit analysis is the process of determin- C. DEBT AND EQUITY
ing the probability that customers will not D. RESERVES AND SURPLUS
pay.
1921. What is financial management?
A.
B.
A. Management of finance
1917. Which of the statements below is B. Managaging procurement and utilisa-
FALSE? tion of fund
A. Reducing principal at a faster pace in- C. Accounting for managerial decision
creases the overall interest paid on a loan. making
B. The more frequent the payment, the D. All of the above
lower the total interest expense over the
1922. Examples of assets are (you can choose
life of the loan, even though the effective
more than one answer)
rate of the loan is higher.
A. investments
C. Reducing principal at a faster pace re-
duces the overall interest paid on a loan. B. credit card debts
D. Monthly interest on a loan is equal to C. cash
the beginning balance times the periodic D. real estate
interest rate.
1923. What steps are not included in financial
1918. What is a bond? management according to the material?
A. A long-term debt A. Identifying income and outcomes
B. A short-term investment B. Make a budget
C. A long-term assets C. Monitor production
D. A short-term assets D. Set medium-term goals

1924. Business finance deals with which of the 1930. I am walking 3 hours today to raise
following? money for Juvenile Diabetes. How much
A. Utilize funds efficiently can you pledge?
B. Procuring funds from different A. spending

sources on fair terms B. saving
C. Both of these C. investing
D. None of these D. donating
NARAYAN CHANGDER
1925. Expense 1931. Receivables management involves a
between costs and benefits of receivable
A. tax
A. Discount
B. cost
B. Trade-off
C. highly expensive
C. recommendation
D. something you use or buy
D. none
1926. Which of the following transactions will
improve the Current Ratio? 1932. Which of the following is a SUPPORT ac-
tivity?
A. Purchase of Goods for Cash.
B. Payment to Trade Payables.
C. Credit purchase of Goods.
D. Cash collected from Trade Receiv-
ables.
1927. The primary goal of corporate manage-

ment is profit maximization.
A. True
B. False
A. Sales
1928. The ‘M’ in SMART goals stands for: B. Firm infrastructure
A. Maintainable C. Logistics
B. Measurable D. Margin
C. Matching
1933. Long term financial plan usually exceed
D. Motive
A. 10 years
1929. Which of the following is not a short- B. 20 years
term financial goal?
C. 5 years
A. Buy a PS5
D. 15 years
B. Buy a house
1934. A local business has made a Gross Profit
C. Buy a nintendo switch of $150, 000 in 2019. They had $50 000
D. Go for vacation in wages to pay, and $40 000 in Rent and

$5000 in electricity. The net profit was 1939. Bad debts refers to default cost.
therefore:
A. True

A. $245 000 B. False
B. $145 000 C. may be
C. $ 25 000 D. none
D. $55 000
1940. All of the decisions and activities of
1935. Market value of shares is influenced by an individual or a family regarding their
money, including spending, saving, saving,
A. Liquidity decision and budgeting.
B. Investment Decision A. personal finance
C. Financing Decision B. financial management
D. Dividend Decision C. cash flow analysis
1936. Who is the parties involved in financial D. none of above

environment?
1941. What is a credit score?
A. Finance Manager
A. a small plastic card that lets you make
B. Investors a purchase without cash.
C. Financial markets B. how much money you make compared
D. Financial institutions to how much money you owe?
C. a number that helps a lender predict
1937. A capital budget is how likely an individual is to repay a loan.
A. a plan for company expenditure for the
purchase of large assets such as property D. none of above
or manufacturing equipment
1942. The feasibility of an investment project
B. an estimate of cash inflows and out-
can be assessed using
flows over a certain period
A. Time Value of Money Approach
C. the total of the company budget that
summarizes the proposed financial activi- B. Capital Budgeting Approach
ties C. Amount of Depreciation
D. none of above D. Answers a and b are correct
1938. When a company uses debt fund in its 1943. Criteria that measures how quickly
financial structure, it will lead to a change project will return its original investment
in is?
A. Financial leverage A. Accounting rate of return
B. Operating leverage B. Payback period
C. Money market leverage C. Internal rate of return
D. Stock market leverage D. Benefit cost ratio

1944. Holly Corporations’ net income was B. Cash Flow Forecast

P400, 000 in 2015 and P1, 600, 000 in
C. Payback period
20216. What percentage increase in net
income must Holly achieve in 2017 to off- D. Investment
set the decline in profits in 2016?
1949. cannot be controlled and that must be
A. 60%
paid to operate a business. They include
B. 150% depreciation on buildings and equipment
and salaries paid to managers
NARAYAN CHANGDER
C. 600%
D. 67% A. COMMITTED
1945. What is the primary goal of financial B. DISCRETIONARY

strategy formulation? C. Controllable
A. Maximizing shareholder wealth D. none of above
B. Maximizing revenue
1950. Which of the following would NOT im-
C. Minimizing expenses
prove the current ratio?
D. Achieving operational efficiency
A. Borrow short term to finance addi-
1946. Which is the correct financial statement tional fixed assets.
flow? B. Issue long-term debt to buy inventory.
A. Financial Reports > General Journal
C. Sell common stock to reduce current
> General Ledger
liabilities.
B. General Journal > General Ledger >
Financial Reports D. Sell fixed assets to reduce accounts
payable.
C. General Ledger > General Journal >
Financial reports 1951. Average U.S. wages in 1990 were $28,
D. Small Book > Big Book > Marriage 960, far larger than the average wage in
Book 1930 of $1, 970. What was the aver-
age annual increase in wages over this 60-
E. Single Entry > Double Entry > Lapo-
year period?
ran Keuangan
A. 4.58%
1947. What is a depreciation?
B. 2.45%
A. A cash outflow.
C. 24.50%
B. Accounting expression for the act of
selling an asset. D. 3.31%
C. An income-decreasing expense that
1952. Which of the following is NOT an exam-
does not affect cash-flows.
ple of an business expense
D. A side calculation done by auditors.
A. Car loan
1948. The quantitative techniques used to cal-
B. Staff Wages
culate the financial costs and benefits in
investments? C. Electricity Bill
A. Investment Appraisal D. Rent paid

1953. Pedro is saving for a car and needs $8, C. Financing

000, he will save for 3 years. How much
D. Financial management
does he need to save each month to make

his goal? 1958. What percentage of Vinamilk’s revenue
A. $225.00 in 2021 came from domestic sales?
B. $230.00 A. 0.7%
C. $222.22 B. 10.5%
D. $250.00 C. 84.05%
1954. The following accounts are part of the D. The information is not provided
Balance Sheet, EXCEPT:
1959. In case of net income approach the cost
A. Account Receivable
of equity is
B. Inventories
A. Constant
C. Depreciation and Amortization ex-
penses B. Fixed
D. Patent & Goodwill. C. Increasing
D. Decreasing
1955. What is the first financial model?
A. savings 1960. Financial intermediaries, such as banks
B. investment and mutual funds, play a role in facilitat-
ing the exchange of financial assets in fi-
C. profits nancial markets.
D. financial freedom
A. TRUE
1956. A merger in which an entirely new form B. FALSE
is created and both the acquired or acquir-
ing form cease to exist is called a a 1961. Indicate, by clicking in the relevant
A. Divestiture boxes, whether the following statements
are true or false. 1. Financial management
B. Consolidation is concerned with the long-term raising of
C. Tendor offer finance and the allocation and control of
D. None of the above resources 2. Management accounting is
concerned with providing information for
1957. Is an ongoing process that will reduce the more day-to-day functions of control
your stress about money, support your and decision-making 3. Financial account-
current needs and help you build a nest egg ing is concerned with providing informa-
for your long-term goals, like retirement. tion about the historical results of past
Financial planning is important because it plans and decisions
allows you to make the most of your as- A. True, False, True
sets, and helps ensure you meet your fu-
ture goals. B. True, False, False
A. Budgeting C. False, True, True
B. Financial Planning D. True, True, True

1962. The knowledge and skill-set necessary A. TRUE

to be an informed consumer and manage B. FALSE
finances effectively.
A. personal finance 1967. What does the “T” mean in SMART
goals?
B. financial literacy
A. Time
C. economical analysis
D. none of above B. Time-Bound
NARAYAN CHANGDER
C. Task
personal finance? D. Team
A. A company issuing common stocks E. Teammates

B. A government obtaining funds through 1968. It refers to the net inflows and outflows
bonds of money that a company or project has in
C. An individual managing their own sav- a given period.
ings A. Cash flow
D. A financial institution giving loans to B. Utility
businesses
C. Bills
1964. A tool that helps managersto deter- D. Costs
mine thebest way of structuringoperating
costs(fixed versus variable). 1969. Among the follpowing individuals, who
A. Break Even Point sets the SMART goals
B. Breakeven wedge A. Mrs. Lee intends to buy a laptop which
cost RM 3500 as a birthday gift for her son.
C. Cash break even
Therefore, she plans to RM 350 a month
D. none of above for 10 months.
1965. A, a finance manager of a company B. Mr. Anson is a civil engineer with an
thinks its better to declare smaller div- income RM 3000 and plans to get married
idend in spite the company earned high in two years’ time. The wedding expenses
profits as he was not sure about the earn- are estimated to be 30 000. He plans to
ing potential of a company in coming years. get a loan for the wedding expenses.
A is considering which factor C. Mr. Hazeeq wants to buy a bouse
A. Stability of dividend worth RM 500 000 if he has sufficient
amount of money
B. stability of earning
C. growth opportunities D. none of above
D. stock marker reaction 1970. During the summer, I work at the pool.
1966. Choose whether the following state- A. Spending
ment is true/false.Levies are actions that B. Earning
make the IRS is empowered to use in tak-
ing your stuff when you owe them unpaid C. Investing
taxes. D. Donating

1971. The is the time period that elapses C. Real Discount Rate
from the point when the firm makes the D. Risk free rate of interest
outlay to purchase raw materials on ac-

count to the point when payment is made 1976. How old can you be to open a savings
to the supplier of the goods. or checking account?
A. cash conversion cycle A. 13 with a guardian
B. average payment period B. 20
C. average age of inventory C. 5 with a guardian
D. average collection period D. 18 with a guardian
1977. A financial statement that shows the
1972. A high operating leverage indicates-
“Gross Profit, Operating Expenses, and
A. Highly favourable situation as it con- Net Income over a year’s time is a:
sists of low fixed costs.
A. Balance Sheet
B. Highly risky situation as it consists of
B. Income Statement
large interest costs.
C. Payroll Sheet
C. Highly favourable situation as it con-
sists of higher EPS. D. none of the above
D. Highly risky situation as it consists of 1978. Kumar company has sales of Rs. 25, 00,
large fixed costs. 000. Variable cost of Rs. 12, 50, 000 and
fixed cost of Rs. 50, 000 and debt of Rs.
1973. Totals all of the deductions that have 12, 50, 000 at 8% rate of interest. Cal-
been withheld from an individual’s pay- culate combined leverage.
check from January 1 to the last day of
A. 1.31
the pay period indicated on the paycheck
stub. B. 1.13
A. Retirement Plan C. 1.04
B. Year-To-Date D. 1.40
C. Paycheck-To-Paycheck 1979. What is the primary concern of the
D. Month-To-Date investment function in financial manage-
ment?
1974. Which one of the following gives a A. Determining which investments to
brand new form by merging existing en- make
tities
B. Raising capital
A. Acquisition of stock
C. Managing short-term liquidity
B. Merger
D. Distributing profits to shareholders
C. Shared Assignment
1980. PD Co is deciding whether to replace its
D. Consolidation delivery vans every year or every other
1975. The Real Cashflows must be discounted year. The initial cost of a van is $20, 000.
to get the present value at a rate equal to: Maintenance costs would be nil in the first
year, and $5, 000 at the end of the second
A. Money Discount Rate year. Secondhand value would fall from
B. Inflation Rate $10, 000 to $8, 000 if it held onto the

van for 2 years instead of just 1. PD Co’s 1985. One benefit of using e-file to prepare
cost of capital is 10%. How often should and file federal and state income taxes is
PD Co replace its vans, and what is the
equivalent annual cost (EAC) of that op- A. takes longer to complete
tion?Replace every EACYear $
B. increased accuracy in calculations
A. 1, 10, 910
C. increased math errors
B. 1, 12, 002
C. 2, 10, 093 D. none of above
NARAYAN CHANGDER
D. 2, 8, 761 1986. Which of the following is not concerned
with long term investment decision?
1981. Compounding is the process in which an
asset’s , from either capital gains or A. Purchase of Fixed Asset
interest, are reinvested to generate addi- B. Advertisement Campaign
tional earnings over time.
C. Launching a product line
A. price
D. Payment of salaries to employees
B. value
C. earnings 1987. Banks require collateral as security for
their loans.
D. expenses
A. True
1982. Jose wants to buy a new pair of Air Jor-
dan 11’s. They cost $300. He wants to B. False
buy them in 4 months. How much money 1988. Which of the following is not a key com-
should he save each month in order to buy ponent in the SMART concept for goal set-
the shoes? ting?
A. $100
A. Measurable
B. $50
B. Time-bound
C. $75
C. Specific
D. none of above
D. Goal
1983. Which of the following is not a limita-
tion of financial statement analysis? 1989. How do you say ‘libro paga’ in English?
A. The cost basis
B. The use of estimates
C. The diversification of firms
D. The availability of information
1984. Facilitates the sale of short-term debt
securities by deficit units to surplus units.
A. Money Market A. Paybook
B. Valuation of Securities B. Payroll
C. Capital Market C. Payroll
D. Derivation Securities D. Paylist

1990. It estimates the overall debt status of 1995. Operating leverage measures
the firm in light of its asset base and earn-
A. Financial Risk
ing power.

B. Business Risk
A. Liquidity
C. Production Risk
B. Asset utilization
D. Market Risk
C. Debt-Utilization
D. Profitability 1996. Managers’ Decisions are essential fac-
tors.
1991. Short-term financial goals are less than A. Money Has Time Value
a year and donot involve a large amount
of money to be achieved.True or false? B. Risk Return Trade Off
A. True C. Cash Flows Are Source Of Values
B. False D. Market Prices Reflect Information
1992. Margin trading means borrowing debt 1997. What does a cash budget help financial
and trading in shares with the borrowed managers to anticipate?
fund A. loan needs, debt repayments, operat-
A. True ing costs, and short-term investments
B. False B. report a company’s assets, liabilities

and shareholders’ equity at a specific
1993. What do you need to do within the pro- point in time
cess of evaluating financial statues? C. profit margin or a company in a spe-
A. Evaluate assets owned cific point in time
B. Evaluate assets owned and liabilities D. none of above

borne
1998. Other things remaining the same, an in-
C. Check savings and investments owned crease in the tax rate on corporate profit
D. Check credit cards debts will
A. Make debt relatively cheaper
1994. Asus has the opinion that the financial
break-even point of its company is when B. Make debt relatively costlier
C. No impact on cost of debt
D. We can’t say
1999. What is the main responsibility of finan-

cial managers?
A. Deciding how to invest the firm’s funds
A. Return per share is 1
B. Determining the best method of financ-
B. Return per share is infinite ing assets
C. Return per share is 0 C. Forecasting sales growth rates
D. Return per share is negative D. Obtaining funds for investment

2000. What type of financial instrument is an 2006. The present value of $115, 000 ex-
equity? pected to be received one year from today
A. Loan at an interest rate (discount rate) of 10%
per year is:
B. Deposit
A. $121, 000
C. Bond
D. Stock B. $100, 500
C. $110, 000
2001. The two key financial markets are the
NARAYAN CHANGDER
secondary market and primary market. D. $104, 545
A. TRUE
B. FALSE
short-term finance source?
Explanation:False, the 2 key financial mar-
kets are money market and capital mar- A. preference share
ket. B. fixed deposit
2002. allow a person to buy goods and ser- C. trade credit
vices up to a certain limit without imme-
diate payment. The amount is paid to D. debenture
the shops, hotel, etc. by the commercial
banks. 2008. What is not part of the Financial Report
is
A. venture capital
A. Laporan Neraca (Balance Sheet)
C. credit cards B. Profit and Loss Report (Income State-
ment)
D. telebanking
C. Laporan Arus Kas (Cash Flow State-
2003. Who does the attendance? ment)
A. Professor Dinter
D. Working Capital Report (Net working
B. You do! Capital Statement).
C. Your TA
2009. Makenzy, Tiernan, and Kylonie are run-
D. Your Mom
ning a small business. They are trying
E. Nobody does. to understand the concept of break-even
point. Can you explain it to them?
2004. What type of records identify the type
and number of products on hand for sale? A. Break-even point is the point at which
A. payroll total cost and total revenue are equal, i.e.,
there is no net loss or gain.
B. asset
C. current B. Break-even point is the total amount of
variable costs that a company has.
D. inventory
C. Break-even point is the total amount of
2005. Treasury bills fixed costs that a company has.
A. Short term debt D. Break-even point and financial lever-
B. Long term debt age are the same thing in a business.

2010. Financial ratios are used to:

A. Provide insights into a company’s liq-

uidity, profitability, efficiency, and sol-
vency A. Current
B. Aid in decision-making and perfor- B. Cash
mance evaluation C. Quick
C. Track a company’s financial perfor- D. None of the above
mance over time 2015. It corresponds to an indicator that de-
D. All of the above fines how many products or services have
been produced for each of the resources
2011. A fixed assets of business firm should used in their production (labor, time and
be financed through: capital, among others) within a deter-
A. Long term liability mined period.
A. Optimize
B. Short term Liability
B. productivity
C. A Mix of long term and short term lia-
bility C. Costs
D. Utility
2016. Based on the example below, which
2012. Which of the following is NOT a tax items need to be included in a finan-
form cial plan?I. InsuranceII. Emergency fundIII.
A. Form 1040-EZ Savings and investmentsIV. Debts man-
agement
B. Form W2
A. II and III
C. Form 1099-DIV B. I, II and III
D. Form W4 C. II, III and IV
E. Form 1099-TIN D. I, II, III and IV
2013. Which of the following statements are 2017. Which of the following is an active in-
correct? (1) Capital market securities are come?
assets for the seller but liabilities for the A. Dividend
buyer (2) Financial markets can be clas- B. Interest
sified into exchange and over-the-counter
markets (3) A secondary market is where C. House rental
securities are bought and sold by investors D. Commission
A. 1 and 2 only 2018. A is a plan specifying how money
B. 1 and 3 only will be used or spent during a particular
period.
C. 2 and 3 only
D. 1, 2 and 3 B. financial plan
2014. which ratio the above formula repre- C. accounting equation
sents? D. budget

2019. what is factoring? 2023. ‘A fast-moving market and the right

price’ is the financial principle of ‘capital
A. Production Plan
market efficiency’.
B. New Financial Service
A. FALSE
C. Cost of Sales B. TRUE
D. all of the above
2024. They are the monetary relations that
2020. Which of the following constitutes arise between the economic actors in the
NARAYAN CHANGDER
owner’s fund? formation, distribution and use of money
funds; In this post we explain the three
A. Retained earnings main functions that finance has:distribute,
B. Debentures control and accumulate.
C. Bank loan A. finance

B. Production
D. none of above
C. Efficiency
2021. What are the common parts of a credit D. Costs
application?
2025. Below are the responsibilities of finan-
A. Name, date, reason for the loan, what
cial managers, except
school you go to
A. Controlling credit operations
B. Reason for loan, School attended(ing),
where you live, documentation, current B. Acquiring needed inventory
debts, credit references, your grand- C. Making capital expenditures
parents names, bank references, signa-
D. decide equity share percentage to
ture/date
founders and investors
C. The names of your siblings, how much
E. Managing day-by-day needs of the
money you make, your favorite hobbies,
business
your favorite music, references
D. Reason for the loan, your grades dur- 2026. Which of the following would be consid-
ing high school, employment history. ered a short-term goal for a 4th grader?
E. Reason for loan, personal identi- A. Going to college on a football scholar-

fication info, employment info, mort- ship
gage/rental info, documentation, current B. Submitting the work on time for the 1st
debts, credit references, collateral, bank term
references, signature/date C. Having perfect attendance from 9-
12th grades
2022. Compounding technique is used to:
D. Having a career in physical training af-
A. Find out the future value of money ter college
B. Find out both present and future value
2027. The original purchase price of an asset
of money
less its accumulated depreciation, is the
C. Find out the present value of money meaning of
D. None of the above A. Book Value

B. Intrinsic Value 2033. is the requirement amount from the

C. Market Value bank to the borrower with specific percent-
age of the outstanding loan balance on de-

D. Equity Value posit in the borrower’s account.
2028. On the asset side, we have as our
current asset and as the long-term as-
set.
A. equipment, inventory
B. inventory, equipment
C. equipment, investments
D. inventory, investments
2029. What is a purpose of financial analysis?

A. Identifying areas of cost reduction
B. Determining the value of a business A. floatation cost
C. Developing long-term growth strate- B. commitment fees
gies C. compensating balance
D. Calculating the return on investment D. unused portion
2030. Makayla bought a new outfit for 2034. As the economy booms and approaches
$80.00. If sales tax was 6.75% what the limits of productivity at a point in time,
was the total price of the outfit? a manufacturing business would typically
A. $85.40 feel which one of the following effects?
B. $86.40 A. Increased inflation (higher sales
prices and higher costs), difficulty in find-
C. $85.04
ing suitable candidates to fill roles and
D. $87.50 higher interest rates
2031. can help to deal with agency prob- B. High export demand, increasing
lem. growth rates, high inflation and high in-
terest rates
A. Corporate policies
C. Reducing inflation, falling demand, re-
B. Corporate responsibility
ducing investment, increasing unemploy-
C. Corporate ethics ment
D. Corporate governance D. Higher government spending, lower
tax rates, high inflation and low unemploy-
2032. an organization that underwrites and-
ment
distributes new investment securities and
helps businesses obtainfinancing. 2035. Income from investment
A. investment banks A. Property
B. commercial banks B. Risk
C. financial services corporations C. Investment
D. none of above D. Return

2036. Granting a loan and the creation of debt; concepts, we inherently assume that the
any form of deferred payment entire cash flow was received at the end
A. debit of the year.
B. credit D. The Discounted Payback Period

method is the time it takes to recover the
C. credit card initial investment in current dollars.
D. debt
2040. What Telkom will aim for in 2019 is
NARAYAN CHANGDER
2037. Money that you make is called
A. Embracing best in class digital cus-
A. income tomer experience
B. variable expense B. triple double digit growth
C. propery taxes
C. intensifying digital business
D. fixed expense
D. Driving smart initiatives on cost effec-
2038. Infosys ponders over the thought to find tiveness
out which covers activity is covered by Fi-
nancial Management at all levels of the 2041. Are the following statements true or
company. If you know, help them out. false? True False 1. Cash flow forecast-
ing is primarily the responsibility of finan-
cial reporting. 2. Whether to undertake
a particular new project is a financial man-
agement decision.
A. True & False
B. True & True
C. False and False
A. Decision making D. False & True
B. Investment 2042. Mr. Singh’s company uses labour inten-

C. Channelising sive technique, he requires fixed capi-
tal
D. Corporate Responsibility
A. more
2039. Which of the statements below is
FALSE? B. less
A. In order to account for the time value C. no

of money with the Payback Period Model, D. none of above
the future cash flow needs to be restated
in current dollars. 2043. Chris gets a monthly statement each
B. The Payback Period method (with no month to pay his
discounting) is the dollar amount that it A. Barber
takes to recover the initial investment in
B. Credit Card
current dollars.
C. Debit card
C. When we discount a future cash flow
with our standard time-value-of-money D. Saving account

2044. Financial leverage is also known as A. RM2115

A. Composite leverage B. RM5380

B. Break even point
C. RM5430
C. Trading on equity
D. RM7495
D. Capital structure leverage
2045. Firms having longer processing cycle re- 2050. In designing a Management Control Sys-
quire tem, we must be sensitive to changes in
the characteristics of our business environ-
A. more fixed capital
ment, which are triggered by drivers of
B. no fixed capital change. Therefore, the mindset of man-
C. more working capital agers must change to view business now.
There are several mindsets that managers
D. less working capital
must have, including, EXCEPT:
2046. Average cost of capital in case of opti-
A. Customer Value Mindset
mum capital structure is-
A. Highest B. Opportunity Mindset
B. Lowest C. Continuous Improvement Mindset
C. Zero D. Boss Mindset
D. None of these
2051. The most popular alternative to NPV
2047. What is the main function of the money for capital budgeting decisions is the
market? method.
A. Dealing with short-term securities
A. internal rate of return (IRR)
B. Dealing with long-term securities
B. payback period
C. Facilitating the flow of funds among in-
vestors C. discounted payback period
D. Channeling savings into loans or in- D. profitability index
vestments
2052. All of the following are important as-
2048. A cash budget is a plan for the amount
pects of effect investment except
expected to be spent and earned over a
given period of time. A. Timing of the cash flow stream
A. True B. Amount of expected cash flows
B. False C. Risk of the cash flows.
2049. The information at the side shows D. None of the above.
Kathy’s incomes in October. Determine
the active income of Kathy in that month. 2053. Increase in current assets or decrease in
current liabilities increases the current ra-
tio
A. True
B. False

2054. The bank grants overdraft facility to its C. Earnings from stocks
reliable and respectable depositors. D. none of above
A. overdraft
2059. It’s important to spend money on things
B. cash credit you need before spending money on things
C. bills of exchange you want:
D. none of above
2055. What does equity financing require the
NARAYAN CHANGDER
entrepreneur to give up?
A. Cash
B. Control and ownership
C. Pro forma statements
D. Internal funds A. True
B. False
2056. Governments have a number of eco-
nomic targets as part of their fiscal policy. 2060. Profit maximization does not ade-
Which of the following government actions quately describe the goal of the firm be-
relate predominantly to fiscal policy? 1. cause
Decreasing interest rates in order to stim-
A. profit maximization does not require
ulate consumer spending 2. Reducing tax-
the consideration of risk.
ation while maintaining public spending 3.
Using official foreign currency reserves to B. profit maximization ignores the timing
buy the domestic currency 4. Borrowing of a project’s return.
money from the capital markets and spend- C. maximization of dividend payout ratio
ing it on public works is a better description of the goal of the
A. 1 only firm.
B. 1 and 3 D. A and B.
C. 2 and 4 only 2061. Equity financing involves the activities
D. 2, 3 and 4 of
A. issuing share and payment of divi-
2057. Current assets of a business firm should
dends to shareholder
be financed through:
B. purchasing of fixed assets
A. current liability only
C. purchasing of current assets
B. long-term liability only
D. borrowing money from any banks
C. both types (i.e. long and short term li-
abilities) 2062. Choose the examples of long-term finan-
D. shareholders’ funds cial goals.
2058. Which of the following is considered as A. savings for retirement

portfolio income? B. medicalexpenses
A. Money earned from working C. Save for children’s education
B. A tip given to a waiter D. All of the above

2063. Which of the following financial state- 2068. Maximization of shareholder wealth as
ments provides information about a com- a goal is superior to accounting profit max-
pany’s financial position at a specific point imization because

in time? A. it considers the time value of the
A. Income statement money.
B. Balance sheet B. following the shareholder wealth maxi-
mization goal will ensure high stock prices
C. Statement of cash flows
C. accounting profits are not the same as
D. Statement of retained earnings cash flows.
2064. Intrinsic value D. A and C
A. Available value 2069. Which of the following is not an impor-

tant financial management decision
B. Correctness
A. Liquidity decision
C. Essential value
B. Investing Decision
D. All the above
C. Assets Management Decision
2065. What does the top row in the following D. Dividend Decision
picture represent?
2070. Which of the following organisations is
A. HOPE most likely to benefit from a period of high
B. CNBC price inflation?
C. NYSE A. An organisation which has a large num-

ber of long term payables
D. volume in thousands
B. An exporter of goods to a country with
E. volume in millions relatively low inflation
C. A supplier of goods in a market where
2066. What is the main role of financial man-
consumers are highly price sensitive and
agers?
substitute imported goods are available
A. Deciding how to invest the firm’s funds D. A large retailer with a high level of in-
B. Determining the best method of financ- ventory on display and low rate of inven-
ing assets tory turnover
C. Forecasting sales growth rates 2071. Which of the following assets is not con-
D. Obtaining funds for investment sidered as current asset:
A. Stock
2067. There are several types of budgets in a
B. Furniture
company’s financial plan, except
C. Cash
A. Capital Budget
D. Goodwill
B. Tax Budget
2072. Barack Obama thinks that the scope
C. Cash Budget
of modern financial management has ex-
D. Operating Budget panded with the introduction of

A. Procurement of optimal capital 2077. Which one of the following statements

is correct
B. Efficient allocation of capital
A. Interest coverage ratio depends upon
C. Capital budgeting technique
the tax rate
D. Financial planning B. A higher receivable turnover is not de-
Explanation:The scope has increased due sirable
to capital budgeting techniques which in
turn has led to the framework of efficient C. Increase in net profit ratio means an
increase in sales
NARAYAN CHANGDER
planning and allocation of resources
D. Lower debt-equity ratio means lower
2073. Following are some guidelines for in- financial risk
ternational financial managers to minimize
currency risk, except 2078. A firm needs to find the sources of fund
and then plan to utilize or use the fund for
A. reducing the use of foreign currency in firm’s benefits.
transactions
A. True
B. Seek expert advice from banks or con-
B. False
sultants to organize programs and strate-
gies 2079. Encik Roslan works as a music teacher
C. Determine the level of risk the com- at a private school. He earns RM5 000
pany can tolerate a month. The table beside shows the
monthly expenditure of Encik Roslan. Cal-
D. Monitoring changes in major curren- culate the monthly cash flow of Encik
cies can help reduce costly mistakes Roslan.
2074. E-file offers direct deposit for re-
funds.
A. faster
B. smaller
C. increased
D. none of above
2075. What is included in financial planning?

A. Determining financial objectives
B. Determining financial policies A. RM1 450
C. Determining financial procedures B. RM1 350
D. All of these C. RM1 150
D. RM1 050
2076. The “new issues market” where
first-time security issues are offered for 2080. Almost everyone can find at least one
sale is called the secondary market. way to save money.
A. TRUE A. Fact
B. FALSE B. Fiction

2081. Other things remaining the same, an in- A. $228, 611.56

crease in the tax rate on corporate profits B. $127, 550.00
will

C. $3, 391, 475.16
A. make the debt relatively cheaper
D. $127, 500.00
B. make the debt relatively the dearer
C. have no impact on the cost of debt 2086. a difference between actual and bud-
geted performance
D. we can’t say
A. ratio
2082. The employees full name, address, and B. discrepancy
Social Security number.
C. budget
A. I-9
D. expense
B. W-4
C. Personal Information 2087. A sum of money in the hand has
value than the same sum to be paid in the
D. Paystub Record future.
2083. What is one reason you should keep A. no
bank account records up to date that can B. equal
impact you annually?
C. greater
A. Tax purposes
D. lesser
B. Credit score
C. Inflation 2088. Financial analysis and reporting:
D. Net worth A. Provides insights into a company’s fi-

nancial health, performance, and prof-
E. Assets itability
2084. Time value of money indicates that B. Helps investors make informed invest-
A. A unit of money obtained today is ment decisions
worth more than a unit of money obtained C. Both of the above
in future D. Neither of the above
B. A unit of money obtained today is
worth less than a unit of money obtained 2089. security is known as variable in-
in future come security.
C. A unit of money obtained today is A. Debentures.

worth less than a unit of money obtained B. Preference shares.
in future C. Equity shares.
D. None of the above D. None of these.
2085. Your firm intends to finance the pur- 2090. What is it called when there is debt cre-
chase of a new construction crane. The ated without any collateral promised to
cost is $1, 500, 000. What is the size of the creditor?
the first payment if the crane is financed
with an interest-only loan at an annual A. Secured debt
rate of 8.50%? B. Unsecured debt

C. Bankruptcy 2095. Assume that you are willing to postpone

consumption today and buy a certificate of
D. Insolvent
deposit (CD) at your local bank. Your re-
E. Total assets ward for postponing consumption implies
that at the end of the year
2091. One drawback of switching from a part-
nership to the corporate form of organiza- A. you will be able to consume fewer
tion is the following: goods
B. you will be able to buy the same
NARAYAN CHANGDER
A. It subjects the firm to additional regu-
amount of goods or services
lations.
C. you will be able to buy more goods or
B. It makes it more difficult for the firm
services
to raise additional capital.
D. you will be able to buy fewer goods or
C. It makes the firm’s investors subject
services
to greater potential personal liabilities.
D. It makes it more difficult for the firm’s 2096. Which of the following does NOT form
investors to transfer their ownership in- part of the objectives of a corporate gov-
terests. ernance best practice framework?
A. Separation of chairperson and CEO
2092. A ratio that shows the company’s abil- roles
ity to settle its short-term obligations
B. Establishment of audit, nomination
A. Current Ratio and remuneration committees
B. Quick Ratio C. Minimisation of risk
C. Acid Test Ratio D. Employment of non-executive direc-
D. All answers are correct tors
2093. Portion of profit after tax, which is dis- 2097. Example of non-diversifiable risk or sys-
tributed to shareholders is a tematic risk:
A. Financing decision A. GDP

B. Inflation
B. Dividend decision
C. Interest rates
C. Investment decision
D. All above
D. none of above
2098. varies inversely with profitability.
2094. If net credit sales for a given year are
RM400, 000 and the average accounts re- A. Risk
ceivable are RM20, 000, What is the ac- B. Assets
counts receivable turnover?
C. Liquidity
A. 20
D. Revenue
B. 80
2099. EBIT of NS Ltd. is |4, 50, 000.Debt
C. 200
in capital structure = |6, 00, 000Cost
D. 50 of debt (Kd) =10%Cost of equity (Ke) =

12.5%Ignore taxation.Total market value 2103. Which of the following statements is

of X Ltd. =? CORRECT?

A. |37, 20, 000 A. It is generally more expensive to form
a proprietorship than a corporation be-
B. |34, 72, 222
cause, with a proprietorship, extensive le-
C. |32, 70, 000 gal documents are required.
D. |34, 70, 000 B. Corporations face fewer regulations
than sole proprietorships.
2100. What does it mean when financial man-
agers doing financial control? C. One disadvantage of operating a busi-
ness as a sole proprietorship is that the
A. comparing actual revenues, costs & ex- firm is subject to double taxation, at both
penses with its budget planning the firm level and the owner level.
B. estimating the company’s short and D. One advantage of forming a corpora-
long term financial needs tion is that equity investors are usually
C. setting income forecast and allocat- exposed to less liability than in a regular
ing the use of the company’s financial re- partnership.
sources
2104. EBIT stands for
D. none of above
A. Earnings before Interest and Tax
2101. Financial instruments can be supported B. Earnings before Interest and Tariff
by debt (promise of future cash) or equity
(ownership in something of value). C. Earn before Interest and Tax
A. True D. Earnings before Investment and Tax
B. False 2105. Corporation finance is a part of public

C. Maybe finance
D. It depends on the situation. A. True

B. False
2102. Sony company wants to know which fi-
nancial statement identifies the origin of 2106. RENT, HOUSE INSTALMENT, INSUR-
cash generation and its landing place. ANCE, AND CREDIT CARD PAYMENT ARE:
A. FIXED EXPENSES
B. VARIABLE EXPENSES
2107. Finance is a broad term that describes

activities associated with , leverage or
debt, credit, capital markets, , and
A. Income statements A. banking, money, investments
B. Fund flow statements B. banking, insurance, fintech
C. Statements of shareholders’ equity C. banking, money, fintech
D. Liquidity statements D. banking, investments, fintech

2108. Which of the following is/are usually C. Deployment of funds

seen as forms of market failure where reg-
D. All of the above
ulation may be a solution?1. Imperfect
competition2. Social costs or externali-
2114. The time lag between placing an order
ties3. Imperfect information.
and actual receipt of materials is known
A. 1 only as
B. 1 and 2 only A. make time
NARAYAN CHANGDER
C. 2 and 3 only
B. lead time
D. 1, 2 and 3
C. order placement time
2109. Which of the following is true for “Sav-
D. material receipt time
ings”?
A. The income remaining from the house- 2115. Cash & Cash Equivalent-24, 890Held
hold sector after all consumption has for Trading-10, 000Trade and Other
taken place. Receivables-16, 000Inventory-8, 960If
B. The functional relationship between total liabilities amounted to 598, 030 and
savings and the level of income is the sav- total assets amounted to 1, 014, 082.
ings function. How much is the Shareholder’s Equity?
C. Both A&B A. 356, 202
D. None B. 400, 052
2110. Gross working capital refers to the in- C. 416, 052
vestment in all the current liabilities.
D. 390052
A. True
B. False 2116. A firm borrows @12% and the tax rate
is 25%. The after-tax cost of debt is
2111. What are the components of capital
A. 15%
structure
A. Debts and equity B. 9%
B. Debts, preference shares and equity C. 12%
C. Debts, revenue and equity D. 25%
2117. Which of the following statements con-
2112. Corporate Finance is wider than busi- cerning profit are correct?1. Accounting
ness finance profit is not the same as economic profit2.
A. True Profit takes account of risk3. Accounting
profit can be manipulated by managers
B. False
A. 1 and 3 only
2113. Which of the following is a function of
the finance manager B. 1 and 2 only C
A. Mobilizing funds C. 2 and 3 only

B. Risk return trade off D. 1, 2 and 3

2118. A project has an initial outflow followed A. EBIT

by years of inflows. What would be the B. EBT
effect on NPV and the IRR of an increase

in the cost of capital? Described to the C. EPS
expected impact from this increase.Item-1. D. EAT
NPV 2. IRR
2123. In NC the insurances required by all peo-
A. Increase, No Change ple are
B. Decrease, No Change A. car insurance
C. No Change, No Change B. life insurance
D. Decrease, Decrease C. home insurance
2119. Which things are not included in work- D. all of the answers are correct
ing capital?
2124. Which one is classified as ‘capital’ in fi-
A. Account Receivable nancial term? (You can choose more than
B. Property, Building and equipment one choice)
C. Inventory A. Equity
D. All answers are correct B. Trading
C. Working capital
2120. The decisions relating to the use of prof-
its or income of an entity or organization D. Human Resources
are known Explanation:There are only four (4) types
of financial capital:debt, equity, trading,
A. Finance decisions
and working capital.
B. Dividend decisions
2125. Unfavourable financial leverage leads
C. Investment Decision
to
D. Any of these
A. Increase in EPS
2121. Which budget focuses on a company’s B. Decrease in EPS
long-term capital investments? C. EPS is not affected
A. Operational budget D. lncrease in tax
B. Capital budget
2126. Which ratio measures the efficiency of a
C. Cash budget company’s utilization of its assets to gen-
D. Flexible budget erate profits?
Explanation:Capital budgeting is used to A. Current Ratio
decide whether or not an investment is
worthwhile. Organisations may have sev- B. Quick Ratio
eral opportunities to use available capital C. Return on Assets
and must measure the potential of each D. Debt Ratio
opportunity.
2127. How company raises money is:
2122. Maximum returns to shareholder is en-
sured by maximizing and the market A. Operational role
price of shares. B. Investment Role

C. Financing Role D. Asset:Saving Liability:Property

D. None
2133. Arius, Erynn, and Brayden are planning
2128. The decision function of financial man- to start a bakery business. They are dis-
agement can be broken down into the de- cussing various sources of financing for
cisions. their business. Can you identify the most
A. financing and investment viable options they could consider?
B. investment, financing, and asset man- A. Using their credit cards, borrowing
NARAYAN CHANGDER
agement from family and friends, and applying for
C. financing and dividend government subsidies
D. capital budgeting, cash management, B. Seeking donations, investing in the

and credit management stock market, and using lottery winnings
2129. What is SMART goal? C. Engaging in bartering, using inheri-

tance money, and taking personal loans
A. Systematic, Manageable, Attainable,
Relevant, Time-bound D. Using personal savings, taking loans
from banks or financial institutions,
B. Specific, Measurable, Attainable, Rele-
seeking venture capital, finding angel
vant, Time-bound
investors, crowdfunding, applying for
2130. Which of the following is an example of grants, and forming partnerships
agency problem?
A. costs incurred for setting up a busi- 2134. The set of ratios that are most useful in
ness evaluating profitability is
B. failure of making the best investment A. ROA, ROE, and cash flow to debt
decision B. ROA, ROE, and debt to equity ratio
C. payment of income tax
C. ROA, ROE, and acid-test ratio
D. payment of interest
D. ROA, ROE, and dividend yield
2131. Which of the following is a result of fail-
ing to pay of your credit card on time? 2135. Indicate, by clicking in the relevant
A. Late fees boxes, whether the following objectives
are financial or non-financial objectives of
B. Added benefits
a company. Objective 1. Maximisation of
C. Free upgrades market share 2. Earnings growth 3. Sales
D. increase your credit score revenue growth 4. Achieving a target
level of customer satisfaction 5. Achiev-
E. Higher taxes
ing a target level of return on capital em-
2132. Which of the following is the correct ex- ployed
ample of asset and liability? A. Financial-1, 3 Non-financial-2, 4 & 5
A. Asset:Loan Liability:Credit card debts
B. Financial-2, 3 & 5 Non-financial-1 & 4
B. Asset:Tax Liability:Real estate
C. Financial-2, 4 & 5 Non-financial-1 & 3
C. Asset:Unit trust Liability:Instalment
balance D. Financial-4 & 5 Non-financial-1, 2 & 3

2136. Which of the following is true for NI ap-

proach of capital structure A.

A. Higher debts increases value of the
firm
B. Lower debt increases WACC
C. Higher equity increases value of the B.
firm
D. All of the above
2141. Working capital is an investment in
2137. Bonds are considered what type of
short-term assets or investment in current
strategy
assets, namely:
A. Aggressive
A. Cash, Receivables, Inventory and
B. Low risk Long-term debt
C. Moderate B. Cash, Receivables, Inventory and
D. High risk Short-term debt
E. Fund generating C. Gross working capital
D. Answers a, b and c are all correct
2138. In financial management, what does the
term ‘liquidity’ refer to? 2142. The objective of financial management
is to
A. The ability to meet short-term obliga-
tions A. generate the maximum net profit
B. The profitability of a company B. generate the maximum retained earn-
ings
C. The return on investment
C. generate the maximum wealth for its
D. The value of assets in the long term shareholders
2139. Which one of the following statements D. generate maximum funds for the firm
is INCORRECT? at the least cost
A. Money markets are markets for long- 2143. Which one of these is non-liquid?
term capital
A. Cash
B. Money markets are operated by banks B. real estate
and other financial institutions
C. loans
C. Money market instruments include
interest-bearing instruments, discount in- D. stocks
struments and derivatives E. bank accounts
D. Money market instruments are traded 2144. What is a creditor’s objective in per-
over the counter between institutional in- forming an analysis of financial state-
vestors ments?
2140. A lenient credit policy has negative im- A. To determine the firm’s capital struc-
pact of an increase in bad debt and addi- ture.
tional cost of funding tied to account re- B. To decide whether or not the firm has
ceivables and inventory. operated profitably in the past.

C. To determine the company’s future 2149. Which of the following statements de-
earnings stream. scribes the main objective of financial man-
D. To decide whether or not the borrower agement?
has the ability to repay interest and prin- A. Efficient acquisition and deployment
cipal on borrowed funds. of financial resources to ensure achieve-
ment of objectives
2145. The objective of a credit policy is to cur-
tail the credit period allowed to debtors B. Providing information to management
for day to day functions of control and de-
NARAYAN CHANGDER
A. True cision making
B. May be C. Providing information to external
C. False users about the historical results of the
organisation
D. none
D. Maximisation of shareholder wealth
2146. CALCULATE THE FIXED EXPENSES IF
CONTRIBUTION IS RS 15, 00, 000 AND 2150. The traditional approach is also known
EBIT IS RS 10, 00, 000 as
A. RS 5, 00, 000 A. 2 Ap lower ch
B. RS 25, 00, 000 B. N o the appr
C. RS-(5, 00, 000) C. Mm approach
D. NONE OF THE ABOVE D. Intermediate approach
2147. There are two primary ways of calculat- 2151. The mission of the State Reserve is to
ing the cost of common equity: provide the United States with a safe,
A. Using a dividend discount model flexible, and stable monetary and financial
system.
B. Use the capital asset pricing mod el
A. True
C. Use the weighted average cost of cap-
ital B. False
D. Using a free cash flow model 2152. What is a credit card?
2148. Logan has recently started a small busi-
ness and Sam, a business analyst, is help-
ing him understand his financial perfor-
mance. Sam wants to calculate the return
on investment (ROI) for Logan’s business.
Which formula should he use?
A. ROI = (Net Profit / Initial Investment)
B. ROI = (Net Profit / Initial Investment) A. a small plastic card issued by a bank,
* 100 business, etc., allowing the holder to pur-
C. ROI = (Net Profit / Total Revenue) * chase goods or services on credit.
100 B. A card that has a set balance that you
D. ROI = (Net Profit / Total Assets) * 100 can only use at one place.

C. A card with the money from your check- 2158. Cash dividends payments
ing account. A. Operating Activities

D. none of above B. Financing Activities
2153. Who Is not a TA C. Investing Activities
A. Clever D. none of above
B. Simon 2159. Standard deviation measures risk
C. Monteverde while beta measures risk.
D. Dinter A. systematic; unsystematic
E. Collins B. unsystematic; systematic

C. total; unsystematic
2154. Treasurer should report to
D. total; systematic
A. A. Chief financial officer
2160. ) “Living within your means” is a princi-
B. B. Vice president of operations ple that promotes and avoiding exces-
C. C chief executive officer sive debt.
D. D. Board of directors A. Overspending
B. Impulsive spending
2155. These are the factors that influence mar-
ket price of the corporation’s stocks which C. Financial stability
are controllable by management, EXCEPT: D. Ignoring budgeting
A. dividends
2161. All are reasons why it is important to
B. competent management set goals EXCEPT
C. profitability A. they keep you from being unfocused
D. macroeconomic conditions B. they help you see progress
C. they motivate you
2156. Which includes the Academy at TCU,
among others D. they give your life direction
A. Consumer Academy 2162. Which of the following is true for net
B. Fantasy Academy income approach
C. Akademi Business Enabler A. Hi adept increase value of the firm
D. Akademi NITS B. Higher Dept is better
C. Low adept increases weighted aver-
2157. What is the definition of a market cap? age cost of capital
A. the 5 year market cap D. All of the above
B. the highest price of a stock for the day
2163. If the depreciation amount is $100, 000
C. the total price of all the shares in a and the marginal tax rate is 35%, then the
company tax shield due to depreciation is:
D. percentage of growth A. $35, 000
E. maximum amount of volume B. $100, 000

C. $65, 000 2168. Business Activities will produce a

D. None of the above Profit/Loss Report. To run a business
you need assets. And to obtain assets, a
2164. Pick the 2 types of short term financing source of funds is needed. The following
available to organisations. are sources of funds, EXCEPT:
A. Bank overdraft. A. Capital (Shareholder Funds)
B. Accruals. B. 3rd party loan debt (ex. Bank, MTN,
Bonds, etc.)
NARAYAN CHANGDER
C. Loans.
D. Financial Leasing. C. Answers a and b are both correct
2165. Which of the following is NOT typically D. Customer Receivables

thought of as an investment activity?
2169. Which of the following is NOT provided
A. Accurately pricing financial assets in a ticker?
B. The process of buying and selling finan- A. ticker symbol
cial assets
B. volume of shares
C. Repaying borrowed funds
C. which stock to buy
D. Negotiating the rules and regulations
of financial transactions D. price change
2166. It is the after-tax profit a company- E. percentage change from previous ses-
would have if it had no debt and no invest- sion close
ments in nonoperating assets.Because it
2170. Your employer has agreed to place year-
excludes the effects of financial decisions,
end deposits of $1, 000, $2, 000 and $3,
it is a better measure ofoperating perfor-
000 into your retirement account. The $1,
mance than is net income.
000 deposit will be one year from today,
the $2, 000 deposit two years from today,
and the $3, 000 deposit three years from
today. If your account earns 5% per year,
how much money will you have in the ac-
count at the end of year three when the
last deposit is made?
A. market value added A. $6, 202.50
B. economic value added B. $6, 000
C. FCF C. $6, 212.50
D. NOPAT
D. $6, 727.88
2167. For knowing the Present Value of a per-
petuity, we use 2171. Present value takes
A. PVF A. Compounding rate

B. PVAF B. Deflation rate
C. Annuity÷ C. Inflation rate
D. None of the above D. Discounting rate

2172. Which budget is designed to estimate a 2176. are the debts owed to others.
company’s cash inflows and outflows? A. Liabilities

A. Master budget B. Owner’s equity
B. Capital budget C. Equity
C. Cash budget D. Assets
D. Operational budget
2177. In a financial market, the price to bor-
Explanation:A cash budget is an estima-
row money is called the?
tion of the cash flows of a business over
a specific period of time. This could be A. Deposit
for a weekly, monthly, quarterly, or an- B. Interest Rate
nual budget. This budget is used to assess
whether the entity has sufficient cash to C. Credit
continue operating over the given time D. Cost
frame
2178. Purchase of land and building
2173. A stronger cash flow position prefers
A. Investing Activities
A. debt
B. equity
D. none of above
C. both debt and equity
D. none 2179. What does affect the value of company?
A. Capital cost
2174. Which of the following argues that the
B. Market price of shares
value of levered firm is higher than that of
the early word firm C. Both (a) and (b)
A. Net income approach D. None of these
B. Net operating income approach 2180. Which of these are mutual funds?
C. Mm model with taxes A. Money market funds
D. Both a and C B. Bonds funds
2175. A high capital gearing ratio indicates C. stock funds

that: D. Target date fund
A. A company has a high proportion of eq- E. all of the above
uity capital compared to debt capital
2181. The true owners of the corporation are
B. A company has a high proportion of the
debt capital compared to equity capital
A. holders of debt issues of the firm.
C. A company has a low proportion of eq-
uity capital compared to debt capital B. preferred stockholders.
D. A company has a low proportion of C. board of directors of the firm.

debt capital compared to equity capital D. common stockholders.

2182. Necessary whether you rent or own cash outflow but INCREASE your effective
the property. Property insurance typically borrowing rate.
covers equipment, signage, inventory and B. By INCREASING the number of pay-
furniture in the event of storm, theft or ments per year, you REDUCE your total
fire. Mass destruction events, such as cash outflow but INCREASE your effective
tornadoes, floods and earthquakes, are borrowing rate.
not usually covered under a general policy.
You may need to get a separate policy if C. By INCREASING the number of pay-
these are likely in your area. ments per year, you BOOST your total
NARAYAN CHANGDER
cash outflow but INCREASE your effective
A. Property insurance borrowing rate.
B. Workers’ compensation insurance D. By INCREASING the number of pay-
C. Professional liability insurance ments per year, you REDUCE your total
cash outflow but DECREASE your effective
D. none of above
borrowing rate.
2183. It also acts as an intermediary that take
2187. Also known as balance sheet, balance
funds from the people who save and lend
sheet or statement of equity, it is a fi-
it to people who have productive invest-
nancial statement that reflects at a given
ment opportunities.
time the economic and financial informa-
A. financial institution tion of a company, separated into three
B. finance markets assets:assets, liabilities and net worth.
C. money markets A. Balance sheet

B. Statement of income
D. capital markets
C. cash flow
2184. Bond that can be converted to common
D. cost effectiveness
share is?
A. Debenture 2188. Used to withdraw cash or make de-
posits.
B. Mortgage
A. ATM
C. Convertible
B. Debit Card
D. Registered
C. Credit Card
2185. Correct cost of capital helps in the fol- D. Deposit Slip
lowing decision making:
2189. which representation is not true for
A. Evaluation of Investment options
SMART concept?
B. Financing Decision
C. Designing of optimum credit policy
D. All the three

TRUE?
A. By DECREASING the number of pay- A. Sustainability
ments per year, you REDUCE your total B. Can be measured

C. Able to achieve 2194. Which type of budget is an estimate of

the actual money received and paid out for
D. have time constraints
a specific period?

2190. A result in the reduction in value or loss A. accounting budget
of any of the organization’s financial as- B. final budget
sets.
C. cash budget
A. Risk
D. balanced budget
B. Investment Proposal
2195. Which of the following is NOT one of
C. Returns
the four categories of key resources men-
D. none of above tioned by the Crash Course video?
2191. An invoice dated 1 June 2020, with

credit term 3/10 net 30 is RM10, 000.
It means, customers enjoy free credit of
RM9, 700 within the first 10 days and
pay full RM10, 000 if fail to pay within
that time.
A.
A. Human resources
B. Software resources
C. Financial resources
B. D. Physical resources
2196. The following reasons are good motives

for merger except
2192. How the organizations find/obtain the A. Economics of scale
funds needed for running the organiza- B. Contemporary resources
tions’ activities?
C. Diversification
A. Loans
D. Eliminating inefficiencies
B. Shares or bonds
2197. Financial Management is one Function of
C. Sales of products an Organisation.
D. All answers are correct A. True.
2193. Inventories can be classified into B. False.
A. Product, material, item 2198. can also be created to turn a sub-

stantial lump sum into steady cash flow,
B. Raw material, work in progress, and
such as for winners of large cash settle-
finished good
ments from a lawsuit or from winning the
C. Stationaries, and other goods lottery.
D. None A. Capital Market

B. Money Market B. 1.18 times

C. Perpetuity C. 2.18 times
D. Annuity D. 2.88 times
2199. Jackson spends in gas changes every 2204. It is the increase in shareholders’ equity
month, based upon the price of gas, this in harmony with the objectives associated
is an example of which of the following: with clients, workers and other interest
groups.
A. Fixed Expense
NARAYAN CHANGDER
A. Monetary Politics
B. Variable Expense
B. Basic financial objective
C. Periodic Expense
C. Value added
D. none of above
D. Production
2200. Which is an example of an internal
source of finance? 2205. Bank statements are compared to the
check register when this account.
A. Trade credit
A. depositing slip
B. Public Deposit
B. reconciling
C. Depreciation Funds
C. check registering
D. Share capital
D. checking
2201. Liquidity:
2206. There are three possible sources of
A. “The ability of a business to meet its weights for the WACC, except
ST obligations.”
A. Book value weights
B. “The relationship between 2 items (or
B. Market value weights
groups of items) in the financial state-
ments.” C. Target capital structure weights
D. Intrinsic value weights
2202. There are six technique in capital buget-
ing to measures profitability, which one is 2207. Financial leverage is also known as
correct?
A. Trading on equity
A. PP, NPV, IRR, CAPM, PI, MIRR
B. Trading on debt
B. Disc PP, PP, NPV, IRR, MIRR, PI
C. Interest on equity
C. CAPM, MIRR, PP, NPV, IRR, PI D. Interest on debt
D. PP, Disc PP, NPV, PI, MIRR, CAPM
2208. When the value of the firm is derived by
2203. Calculate the value of Degree in Operat- capitalizing the earnings by its cost of cap-
ing Leverage (DOL) ital the formula for the value of the firms
is
A. Debt+ Equity
B. Debt+ Equity+ Retained Earnings
C. WACC/Earnings
A. 0.18 times D. Earnings/WACC

2209. Which form verifies the eligibility of an 2214. What is done in the financial planning
individual for employment. stage?

A. W-2 A. Determine investment goals
B. 401(k) 401(k) B. Identify ways to achieve financial
C. I-9 goals, both long and short term
C. Seek as much income as possible
D. W-4
D. Keep expenses to a minimum
2210. Terms of sale will determine the percent-
age of cash discount, the credit period and 2215. Businesses can practice social responsi-
the discount period. bility by donating money, products or ser-
vices to social causes and nonprofits.
A. ENVIRONMENTAL EFFORTS
A.
B. PHILANTHROPY
2216. Occur when a form acquires former sup-

pliers for customers
B. A. Horizontal merger
B. Vertical merger
C. Product extension merger
2211. The value of a bond is dependent upon
D. Market extension merger
the:
A. coupon rate and the current yield. 2217. A system by which goods and services
are produced and distributed
B. current yield and the yield to maturity.
A. Economy
C. coupon rate but neither the current
yield nor the yield to maturity. B. Loan
D. coupon rate and the current yield. C. Credit
D. Consumer
2212. Under conventional method enters
into a calculation of working capital?. 2218. Which of the following statements
A. Cash is/are correct?(1) Monetary policy seeks
to influence aggregate demand by in-
B. Current assets creasing or decreasing the money raised
C. Inventories through taxation(2) When governments
adopt a floating exchange rate system,
D. Current liabilities
the exchange rate is an equilibrium be-
2213. What is the value of the firm usually tween demand and supply in the foreign
based on? exchange market(3) Fiscal policy seeks
to influence the economy and economic
A. The value of debt and equity. growth by increasing or decreasing inter-
B. The value of equity. est rates
C. The value of debt. A. 2 only
D. The value of assets plus liabilities B. 1 and 2 only

C. 1 and 3 only 2224. A fixed asset should be financed

D. 1, 2 and 3 through:
A. a long-term liability
2219. Which answer below is an example of
earned income? B. a short-term liability
C. a mix of long and short-term liabilities
A. Interest earned on a savings account.
D. current liability
B. Money earned from working at the
mall. 2225. The income statement reports:
NARAYAN CHANGDER
C. Money received from Social Security. A. A company’s financial position at a spe-
D. none of above cific point in time
B. A company’s cash flows over a period
2220. Financial risk is analysed with the help of time
of
C. A company’s revenues and expenses
A. Operating leverage over a period of time
B. Financial leverage D. A company’s assets, liabilities, and eq-
C. Combined leverage uity
D. All of above 2226. Which of the following is/are the finan-
cial management process? Yang manakah
2221. Which is the better buy? Shampoo A is
ialah proses pengurusan kewangan?
$4.59 for 32 ozs. and shampoo B is $8.86
for 46 ozs.? A. Setting goals
A. Shampoo A B. Evaluating financial status
B. Shampoo B C. Creating financial plan / Creating a fi-
nancial plan
C. Both are equally good
D. Measurement of financial flow / Mea-
D. Neither A or B
surement of financial collection
2222. Which technique of financial manage- E. Implementing financial plan / Imple-
ment enables to manage day to day activ- menting a financial plan
ities?
2227. means current value of a future
A. Capital Structure amount of money evaluated at a given in-
B. Capital Budgeting terest rate?
C. Working Capital Management A. compounding
D. Ratio Analysis B. discounting
C. continuous rate
2223. What percentage is evalua-
tions/assesment? D. Nominal rate
A. 0.25 2228. Debenture indicate the
B. 0.5 A. Short term borrowings of the company
C. 0.3 B. Directors shares
D. 0.8 C. The investment of equity shareholders
E. 0.15 D. Long term borrowings of a company

2229. Also known as liquid assests C. No place for a signature on the card
A. Investment D. Under the card number

B. Savings
2234. For whom the analysis of financial state-
2230. Rs 40, 000 is the earnings of Prestige ments is not significant?
company after paying all its fixed liability A. Investor
from its capital of 4000 equity shares at
B. Government
Rs 100 each. What is it net income per
share C. Ambassador of India
D. Company’s Employee
2235. involves increasing the proportion

of debt and preference shares in total cap-
ital.
A. Trading on equity
B. Capital Budgeting
C. Financing decision
D. Financial Analysis
A. Rs 4
2236. Shadowline Co has a money cost of cap-
B. Rs 20
ital of 10%. If inflation is 4%, what is
C. Rs 11 Shadowline Co’s real cost of capital? (to
D. Rs 10 one decimal place)?
A. 5.5%
2231. Cash flow management:
B. 5.9%
A. Ensures adequate liquidity to meet
short-term obligations C. 5.7%
B. Manages working capital D. 5.8%
C. Invests surplus funds effectively 2237. Where a function reaches a highest
D. All of the above point
2232. How many TA’s are there? A. Maximum cost

A. 8 B. Minimum
B. 6 C. Maximum value
C. 7 D. Maximum
D. 9 2238. What is the EAR if the APR is 10.52%
E. 5 and compounding is daily?
A. Slightly above 10.09%
2233. Where is the signature on a credit or
debit card? B. Slightly below 11.09%
A. Front of card C. Slightly above 11.09%
B. Back of card D. Over 11.25%

2239. Financial systems and policies must be B. Cash flow from administrative activi-
consistent but that does not mean they ties
cannot be adjusted if there are changes in
C. Cash flow from operating activities
an organization. This is one of the princi-
ples of financial management, namely: D. Cash flow from investing activities
A. transparency E. Cash flow from capital activities
B. consistency 2244. The process in which a company buys
NARAYAN CHANGDER
C. accounting standards securities in one market and sells securi-
D. accountability ties in another market at the same time is
called
2240. A person or organization that uses a A. Homemade leverage
product or service.
B. Arbitrage
A. consumer
C. Corporate debt raising process
B. customer
C. creditor
D. none of above 2245. These are cash flows that have occurred
in the past and cannot be recovered regard-
2241. Which formula is used to measure the less of the investment decision, so they
degree of operating leverage cannot affect our decision, is the meaning
A. EBT/EBIT of
B. Contribution/EBIT A. Flotation Cost
C. EBIT/EBT B. Sunk Cost
D. EBIT/CONTRIBUTION C. Variable Cost
2242. To prepare a budget, a business must be D. Fixed Cost

able to identify and predict the amount of
2246. The main objective of Financial Manage-
each source of income and each type of ex-
ment on the basis of old concept-
pense.
A. Maximisation of profit
A. True
B. False B. Maximization of wealth
C. both(a) and (b)
2243. Three components of the statement of
cash flows are: D. None of these
2247. It is anything generally accepted as a

means of paying for goods and services
and for paying off debts or liabilities.
A. Finance
B. Money
C. Bills
A. Cash flow from financing activities D. Coins

2248. Check all the boxes that includes every 2253. Financial Management is mainly con-
option for the company to get equity fund- cerned with
ing from external sources!

A. All aspects of acquiring and utilizing fi-
A. venture capitalist investments nancial resources for firms activities
B. IPO B. Arrangement of funds
C. retained earnings C. Efficient Management of every busi-
D. owner contributions ness
2249. Below is information from PT Lulus Long D. Profit maximization
term debt:$1, 500 Short term debt:$300
Equity:$250 How many total assets does 2254. A system by which goods and services
PT Lulus have? are produced and distributed.
A. $3.000 A. system
B. $2.500 B. economy
C. $2.050 2255. These deposits mature after a consider-
D. $1.250 able long period like 1 year or more than
that the rate of interest is fixed.
2250. This account allows you to withdraw
money, pay a bill, or make purchases eas- A. fixed deposits
ily. B. Current A/C deposits
A. Checking Account C. savings bank A/C
B. Savings Account D. Recurring deposit A/C
C. Market Money Account
D. CD Account 2256. This shows how the business is struc-
tured and who oversees whom.
2251. Which of the following financial goals A. management plan
does not meet the SMART concept?
B. mission statement
A. Save RM5 000 as registration fees of
college after 2 years C. procedures
B. Buy a new watch worth RM500 by next D. organizational chart
year
2257. What is mobile banking?
C. Save RM2 000 to buy video games by
next year A. An electronic way to view account ac-
D. Save RM5 000 to bring parents on va- tivity and pay bills via the internet and an
cation to Japan. institution’s website.
B. A written order for a bank to pay
2252. My mom makes me cut the grass but she
money out of the account holders account.
pays me when I do.
C. A record of income and spending and
A. spending
a plan for managing money.
B. saving
D. A wireless service that allows finan-
C. earning cial transactions by using an app or web
D. investing browser from a mobile device.

2258. A business will sometimes factor its re- B. Consolidation

ceivable assets to meet its present and im- C. Goodwill
mediate cash needs. What does factoring
mean? D. Synergy
A. it’s when a business sells its accounts 2263. The term used to describe the process
receivable (i.e., invoices) to a third party of determining how a firm should allo-
at a discount cate scarce capital resources to available
B. it’s a debt document bond with a long-term investment opportunities, is the
NARAYAN CHANGDER
promise to pay back the amount borrowed, meaning of
with interest, on a certain date A. Capital Budgeting
2259. The overall financial risk depends upon B. Capital Structure

the C. Working Capital
A. Proportion of debt in the total capital D. Cost of Capital
B. Proportion of equity in the total capital 2264. What method of payment would you
C. Both of the above choose to use if your telephone bill is due
D. None of the above today?
A. Automatic Draft
2260. What do credit cards NOT offer?
B. Check
A. Miles
C. Cash (in person)
B. Airplane tickets
D. none of above
C. Free bags
D. Airplane lounge 2265. Advantages of the Discounted Payback
Period
E. Hotel Stays
A. Considers the time value of money
2261. A company issued 10, 000, 10% Deben- B. Requires estimate of cost of capital
tures of Rs. 100 each on 1.4.2020 to
C. Ignores cash flows beyond the pay-
be matured on 1.4.2025. The company
back
wants to know the current cost of its exist-
ing debt and the market price of the deben- D. Considers the riskiness of the cash
ture is Rs. 80. Compute the cost of ex- flows involved in the payback
isting debenture assuming 35 % tax rate
using NPV Method or IRR Method 2266. Seema and her daughter went for shop-
ping is
A. Around 12.21 %
B. Around 14.21 %
C. Around 9.21 %
D. None of these
2262. After a merger the difference between

the value of the combined entities and the
sum of the values of the separate entity is
A. A pooling of interest

A. Saving C. A stated rate of 10% compounded

B. Investment semi-annually

C. Expenditure D. A rate of 10% simple interest
D. Income 2271. a plan specifying how money will be

used or spent during a particular period.
2267. If notes payable increases, the cash
flow will be ? A. financial plan
A. INCREASES B. financial forecast
B. DECREASES C. budget
D. owner’s equity
2268. The capital structure of DELL is said to
be optimal only when the 2272. Why is estate planning so important?
A. Because you plan out what you want
B. Protects minor beneficiaries from mak-
ing poor decisions with new assets
C. Because it allows you to appoint a ben-
eficiary
D. Because it allows you to appoint an ex-
A. Debt-Equity ratio results in highest ecutor
possible WACC
E. allows a trustee to hold the settlor’s
B. Debt-Equity ratio results in WACC is property for the person
equal to 1
C. Debt-Equity ratio results in the lowest 2273. The following are the types of mutual
possible WACC funds, except:
D. Weight of equity is equal to weight of A. Money market mutual funds
debt B. Fixed income mutual funds
2269. Which of the following would not be fi- C. Sharia mutual funds
nanced from working capital? D. Index Mutual Funds
A. Accounts receivable.
2274. Dividends are paid by corporations
B. Cash float. to existing shareholders based on their
C. Credit sales. shareholdings in the company as a return
on their investment.
D. A new personal computer for the of-
fice. A. True
B. False
2270. A bank offers the following invest-
ments. Which do you prefer? 2275. Amalgamation is said to be in the nature
A. A stated rate of 10% continuously com- of merger
pounded A. All assets and liabilities of transferor
B. stated rate of 10% compounded annu- company are taken over by the transferee
ally company

B. Business of transferor company is in- A. Money valuing time

tended to be carried on by the transferee B. Money value of period
company
C. Time Value of money
C. But she is consideration must be paid
in equity shears by the transferring com- D. Intrinsic Value
pany accept for fractions shares
2280. Assets are referred to anything you
D. All of the above have or own that has
NARAYAN CHANGDER
2276. Also known as dynamic measure or A. cash value
trend ratios. This involves the comparison B. education
and measurement of financial statements
C. origin
of two or more periods.
D. popularity
A. HORIZONTAL ANALYSIS
B. VERTICAL ANALYSIS 2281. This pertains to the overall debt status
of the company. It measures the degree of
2277. Is a tool to help you record the flow of how the firm is financed
your company’s money and examine your
financial condition. A. DEBT-UTILIZATION OR LEVERAGE
A. Management System B. ASSET UTILIZATION OR ACTIVITY
B. Financial System 2282. Without no business planning can be

C. Accounting System successfully implemented.
D. Financial Management System A. Dividend decision

B. Investment decision
2278. Which of the following is not true of
cash budget? C. Both of above
A. Cash budgets indicates timing of short D. Financial planning
term borrowing
2283. The present and prospective stockhold-
B. Cash budget is based on accrual con- ers are primarily concerned with a firm’s
cept
A. risk and return
C. Cash budget is based on cash flow con-
B. profitability
cept.
C. liquidity
D. All of these
D. leverage
2279. Socrates wants to know which con-
cept in financial management refers to the 2284. The social cost benefits analysis is pri-
proverb, “A deer in hand is worth ten in marily used to determine the economic ben-
the forest.” efits of the activities in forms of which of
the following:
A. Market prices
B. Discounted prices
C. Shadow prices
D. Augmented prices

2285. Which type of bank is “not-for-profit”? 2290. Debit cards require using this to access
the account to perform transactions.
A. Commercial bank

A. Check
B. Savings and Loan Associations
B. Credit Card
C. Credit Union
C. ATM
D. All of the above
D. PIN
2286. Of the following, which is NOT an ex- 2291. Which one of the following represents
ample of a financial intermediary? the rate of return a firm must earn on its
A. Commercial bank assets if it is to maintain the current value
of its securities?
B. Insurance company
A. Cost of equity
C. Investment bank
B. Internal rate of return
D. All of the above are financial interme- C. Aftertax cost of debt
diaries
D. Weighted average cost of capital
2287. There are several discounted cash flow
2292. Fixed capital is less required in which
models, except
concern?
A. Capital Asset Pricing Model A. Service provider
B. The Constant-Growth Dividend Dis- B. Manufacturer
count Model
C. Capital intensive
C. The Two-Stage Growth Model D. None of these
D. The Free Cash Flow Model
2293. Q4) In financial planning, what is the
2288. A company receives a perpetuity of $20, first step to undertake?
000 per annum in arrears, and pays 30% A. Investing all available funds
corporation tax 12 months after the end B. Setting a single long-term goal
of the year to which the cash flows relate.
At a cost of capital of 10%, what is the C. Determining one’s risk tolerance
after-tax present value of the perpetuity? D. Establishing clear financial goals
A. $140, 000 2294. The financial objectives in terms of deci-
B. $145, 454 sion criteria may be:
A. Welfare maximization
C. $144, 000
B. Wealth maximization
D. $127, 274
C. Profit maximization
2289. Select TWO types of NEEDS D. Any of these
A. Housing 2295. Which of the following statements are
B. Xbox correct?(1) A certificate of deposit is
an example of a money market instru-
C. Clothes
ment(2) Money market deposits are short-
D. Unlimited data term loans between organisations such as

banks(3) Treasury bills are bought and C. Risk management

sold on a discount basis D. Financial analysis and reporting
A. 1 and 2 only E. Marketing
B. 1 and 3 only
2301. Factoring involves
C. 2 and 3 only
A. Purchase and collection of debts
D. 1, 2 and 3 B. Sales ledger management
NARAYAN CHANGDER
2296. TVM stands for C. Provision of specialised services re-
lated to credit investigation
A. Time value of money
D. All of the above
B. Trend value of money
C. Top value of money 2302. What does the “S” mean in SMART
goals?
D. All of these
A. Super
2297. The finance manager’s role is to: B. Smart
A. ensures that the funds are properly uti- C. Specific
lized
D. Simple
B. maintains the financial health
E. Strong
C. effective supervision of capital
2303. A branch of economics relating to the be-
D. obtains capital assets of the organiza- havior of principals (such as owners) and
tion their agents (such as managers).
2298. Victor wants to save $100 dollars over
the next 4 months. How much money does
he need to save per month in order to have
$100?
A. $20
B. $50
C. $100
D. $25
A. Agency Theory
2299. The cost of raising finance is B. Agency
A. promotion cost C. Agency contract
B. venture cost D. Agency problems
C. sinking cost
D. floatation cost FALSE?
2300. Which of the following is not a key as- A. The income statement is put together
pect of financial management? at a specific point in time (end of a busi-
ness quarter, or business year) and so the
A. Financial planning and budgeting sale could be in one period and the cash
B. Capital budgeting received in another period.

B. The income statement contains the set C. Decrease the amount of time.
of expenses associated with the products
D. All of the above will decrease the
or services sold during the current oper-

present value.
ating period, with those expenses not as-
sociated with current cash flow labeled as 2308. Worldwide trade is
non-cash expense items.
A. Buying goods from abroad
C. Companies depreciate fixed assets
(such as office furniture, equipment, ma- B. Selling goods to abroad
chinery, and buildings) over an assigned
C. Paying foreign currency
time period, but the initial cash outlay for
the fixed asset typically occurs at the time D. All of above
the asset is acquired by the firm.
2309. What is emergency savings?
D. In almost all circumstances deprecia-
tion is a current expense of a cash outflow A. Transferring money into your savings
in the current period. before you pay your bills
2305. Which of the following is the process of B. Original amount of money saved or in-
deciding where to put your money to work vested
in the market? For example, the 2065 C. Cash set aside to cover the cost of un-
fund expected events
A. Retirement strategies D. Maximizing your return by selling
B. Asset Allocation stocks at a higher price than what you paid
for
C. Benefit retirement plan
D. tax implications 2310. If for the next 40 years you place $3,
000 in equal year-end-deposits into an ac-
E. stock investing
count earning 8% per year, how much
2306. What is the Use of Financial Reports? money will be in the account at the end
of that time period?
A. As a form of responsibility to cus-
tomers A. $777, 189.56
B. As controlling marketing division ex- B. $777, 159.56
penses
C. $777, 179.56
C. As a hobby in my spare time
D. $777, 169.56
D. As a parameter of the good and bad
conditions of our business 2311. What can be done to manage savings ef-
E. As job description for finance and pro- fectively, according to the tips listed?
duction A. Ignoring long-term savings
2307. Which of the following actions will DE- B. Withdraw all savings for investment
CREASE the present value of an invest- C. Manage savings allocation for immedi-
ment? ate and future needs
A. Decrease the interest rate. D. Not monitoring savings balances regu-
B. Decrease the future value. larly

2312. IF RETURN ON INVESTMENT IS 3.2%, what is the feline estate worth in

MORE THAN RATE OF INTEREST IS today’s dollars?
FAVOURABLE
A. $588, 352.84
A. DEBT
B. $607, 180.14
B. EQUITY
C. $750, 000.00
C. BOTH
D. $774, 000.00
D. NONE
NARAYAN CHANGDER
2318. Bond by the name of the owner of the
2313. The percentage deducted from an indi-
issuing company is?
vidual’s paycheck to assist in funding gov-
ernment agencies within the state. A. Debenture
A. Federal Withholding Tax B. Mortgage
B. Debits C. Convertible
C. State Withholding Tax D. Registered
D. Interest
2319. Financing decisions is related to
2314. Short term or current assets Decisions
A. Capital structure
are known as:
A. Short term investment decisions B. Purchasing of fixed assets
B. Working capital decisions C. Dividend distribution
C. Both D. Maintenance of accounts

D. None 2320. Deficit is
2315. The users that look for signals from A. Positive cash flow
management are:
B. Negative cash flow
A. Signalling theory
B. Traditonal Approach 2321. Functions of managerial finance are
C. Agency theory A. Planning for investments

D. none B. Raising of funds
C. Working capital decisions
2316. MM approach adds behavioral justifica-
tion to NOI approach through D. All the above
A. Personal Leverage
2322. Which type of income is the income after
B. Corporate Leverage taxes are taken out?
C. Financial Leverage A. Gross income
D. Operation Leverage B. Net income
2317. A wealthy woman just died and left her C. Accounted income
pet cats the following estate:$50, 000 per
D. Taxable Income
year for the next 15 years with the first
cash flow today. At a discount rate of E. Generated Income

2323. EBIT is usually the same thing as B. market value of the firm’s buildings
A. funds provided by operations has increased.

C. market value of the firm’s long-term
B. earnings before taxes
debt has decreased.
C. net income
D. none of above
D. operating profit
2328. Financial management process deals
2324. The offers free file software for in- with
dividuals who have an income below $62, A. Investments
000.
B. Financing decisions
A. schools C. Both a and b
B. IRS D. none of the above
C. employer
2329. A “deduction” is
D. none of above
A. money added
2325. Which of the following actions is LEAST B. money taken out of a paycheck
likely to increase shareholder wealth? C. gross pay
A. The weighted average cost of capital is D. net pay
decreased by a recent financing decision
2330. What Is Finance?
B. The financial rewards of directors are
linked to increasing earnings per share A. Finance can be defined as the science
and art of managing money
C. The board of directors decides to in-
vest in a project with a positive NPV B. Finance can be defined as the science
and art of managing people
D. The annual report declares full compli-
C. Finance can be defined as the science
ance with the corporate governance code
and art of managing customers
2326. Refers to the traditional and narrow ap- D. Finance can be defined as the science
proach, which aims to maximize the profit and art of managing firm
of the concern.
2331. Which of the following is NOT a function
A. Profit Minimization of a financial manager?
B. Wealth Maximization A. Financial report
C. Profit Maximization B. Cash flow management
D. Wealth Minimization C. Product development
D. Financial risk management
2327. Assume a profitable firm has neither is-
sued nor repurchased any shares of its 2332. The abbreviation for WTP in the world
common stock, nor has it ever paid div- of Financial Reports is
idends. If the book value of the firm’s
A. Reasonable Without Inspection
stockholders’ equity has increased, it fol-
lows that the: B. Reasonable but just barely
A. firm’s earnings per share has in- C. Reasonable Without Exceptions
creased. D. Reasonable without coercion

2333. Not typically covered by homeowners B. a person who initially founded a firm
insurance policies and currently has management control
A. home-based business over that firm.
B. product liability insurance C. a creditor to whom a firm currently

owes money.
C. vehicle insurance
D. none of the above.
D. Business interruption insurance
2339. The amount required by law for employ-
NARAYAN CHANGDER
2334. Which of the following is an example of ers to withhold from earned wages to play
an operating expense for a business? taxes.
A. Purchase of a new building A. State Withholding Tax
B. Salary payments to employees B. Federal Withholding Tax
C. Loan interest payments C. FICA
D. Dividend payments to shareholders D. OSHA
2335. When considering each financial decision 2340. This is the total amount of net income
alternative or possible action in terms of the company decides to keep.
its impact on the share price of the firm’s
stock, financial managers should accept A. Retained Income
only those actions that are expected to in- B. Financial Income
crease the firms profitability.
C. Management Income
A. True
D. Shareholder equity
B. False
2341. Based on financial management, firm
2336. Money that is subtracted from one’s usually tend to attain specific goal which
bank account during a purchase is consid- is
ered
A. Loan
B. Income
C. Taxes
D. Debit
A. investment maximization
2337. High receivable turnover rate does not
B. operation maximization
automatically mean good or efficient col-
lection of the company. C. wealth maximization
A. True D. capital maximization
B. False 2342. What is a creditor?
2338. A stakeholder is: A. The person that collects your posses-
A. any person who has voting rights and sions if you don’t pay your debt.
receive dividends based on stock owner- B. Someone who the loan or debt is owed
ship of a corporation. to.

2343. According to the traditional approach 2348. All of the following are variables that
cost of capital affected by can be manipulated to affect monetary pol-
icy except-

A. debt-equity mix
A. credit restrictions achieved via the
B. debt-capital mix
banking system
C. equity expenses mix
B. government expenditure on goods and
D. debt-interest mix services
2344. If customers pay their bills on time they C. the volume of money in circulation
will have D. the rate of interest
A. a higher credit score
2349. The more principle (money) you invest
B. a lower credit score the more you will make over the long-
C. the same credit score term, this is describing the following in-
vestment factor:
D. none of above
A. Money
2345. Why do the firm need to do the basic B. Time
cash management?
C. Interest Rate
D. none of above
2350. What do you call the cost of issuing eq-

uity shares?
A. Preliminary cost
B. Floatation Cost
A. The firm want to has low average pay- 2351. Modern approach focus on
ment period
A. Wise use of funds
B. The firm want to has low average col-
lection period B. Outsiders looking
C. The firm want to has many customer C. Merger
D. The firm want to connect with many D. None of these

suppliers 2352. What does the R in SMART stand for?
2346. Investment Decisions involve A. Readily Available
A. Capital Budgeting Decisions B. Relevant
B. Working Capital Decisions C. Redundant
C. Both of the above D. Readily Available
D. None of the above 2353. Which from the below are the avenues
of Savings and Investment?i. Pension
2347. Which is the cheapest Source of Finance
schemesii. Unit Trust of Indiaiii. Premium-
A. Debt siv. Funds
B. Equity A. Option i, ii

B. Option ii, iii 2359. is wealth in the form of money or

C. Option iii, iv other assets owned by a person or organi-
zation, available for a particular purpose
D. Option iv, i such as starting a company or investing.
2354. The type of preference share which is A. Consumer
eligible for arrears of dividend
A. Participating B. Seller
B. Cumulative C. Capital
NARAYAN CHANGDER
C. Redeemable D. Demand
D. Convertible
2360. What is the definition of financial man-
2355. Net pay is the pay you receive each pay
agement?
period
A. before any deductions A. The recording of all the costs incurred
in a business
B. after all taxes and deductions
C. after retirement only is deducted B. The process of recording financial
transactions pertaining to a business
D. none of above
C. The stages measuring, processing,
2356. Which of the following is/are the finan-
and sharing financial and other informa-
cial management process?
tion about businesses
A. Setting goals
B. Evaluating financial status
cial resources
C. Creating financial plan
D. Reviewing and revising the progress 2361. Managerial finance
E. All of the above A. involves tasks such as budgeting, fi-
2357. Insolvency happens when nancial forecasting, cash management,
and funds procurement.
A. The firm cannot meet its current obli-
gations fast enough B. involves the design and delivery of ad-
B. The firm cannot meet its non-current vice and financial products.
obligations fast enough C. recognizes funds on an accrual basis.
C. The firm can meet its current obliga-
tions fast enough D. All of the above
D. The firm can meet its non-current obli-

2362. The model is usually considered
gations fast enough
the best of the capital budgeting decision-
2358. Which government agency is responsi- making models.
ble for collecting federal income taxes?
A. internal rate of return (IRR)
A. NC Department of Revenue
B. net past value (NPV)
B. Internal Revenue (IRS)
C. NC Department of Finance C. profitability index (PI)
D. Federal Bureau of Investigation D. net present value (NPV)

2363. Books are on sale for $30 for 3 books. 2369. What are 3 warning signs of debt prob-
Calculate the unit price (per book) lems?

A. $10 A. delinquent payments
B. $30
B. default notices
C. $90
C. collection agencies.
D. none of above
D. paying your bills on time.
2364. What is NOT another name for a service
fee with credit
2370. What is the present value of Rs. 5, 00,
A. Administrative fee 000 to be received after 5 years assuming
B. Management fee 10 % interest rate?( DF-.621)
C. Handling fee A. 2, 35, 500
D. Annual fee B. 3, 10, 500
E. Adjustment fee
C. 3, 15, 000
2365. The interaction process between a guest
D. 3, 50, 500
and a host happens at the guest’s home.
A. True 2371. Key principles that financial managers
B. False use when making business decisions in-
clude
2366. What field of study is financial manage-
ment associated with? A. time value of money
A. Accounting B. tradeoff between return and risk
B. Economics
C. cash
C. Engineering
D. all of the above
D. Mathematics
2367. Advances received is an example of 2372. Calculate the ROCE.Initial investment is
£12m.
A. current asset
B. current liability
C. more of current asset less of current
liability
D. less of current asset more of current
liability
2368. Non cash expenses are taken into con-
sideration in
A. 37.5
A. accounting profit
B. 12.5
B. sunk cost
C. working capital C. 15.5
D. cash flows D. 33.5

2373. Decision criterion with respect to prof- 2379. Serenity, Elleanna, and Devon are dis-
itability index to accept project is? cussing the concept of compound interest
A. Profitability index is equal to or less in financial management. Emma believes
than 1 that compound interest is calculated on the
initial principal, which also includes all of
B. Profitability index is greater than 1 the accumulated interest from previous pe-
C. Profitability index is greater than or riods. Noah, on the other hand, thinks that
equal to 1 compound interest is calculated only on the
initial principal. According to the principles
NARAYAN CHANGDER
D. Profitability index is less than 1
of financial management, who is correct?
2374. A decision to acquire a new and modern
A. Serenity:Compound interest is not a
plant to upgrade an old one is
concept in financial management.
A. Investments decision
B. Elleanna:Compound interest is calcu-
B. Financing decision lated on the initial principal, which also
C. Dividend Decision includes all of the accumulated interest
from previous periods.
D. Working Capital decision
C. Devon:Compound interest is calcu-
2375. Which financial goal in financial manage- lated only on the initial principal.
ment is associated with increasing the net
D. None of them are correct.
worth of the shareholders?
A. Profit Maximization 2380. Cash & Cash Equivalent-24, 890Held
B. Revenue Maximization
C. Wealth Maximization total current liabilities amounted to 19,
D. Market Share Maximization 900, Net Sales for the present year
amounted to 480, 000 and the ending re-
2376. The non discounting method that ignores ceivables totaled to 16, 500. What is the
the fact that profit can be reinvested average collection period?
A. Urgency A. 12 days
B. pay back period B. 13 days
C. Average rate of return C. 14 days
D. none of above D. 15 days
2377. Cash Flow Statement is based upon 2381. A is a type of credit score created
A. Accrual basis of accounting by the Fair Isaac Corporation. Lenders
B. Cash basis of accounting use borrowers’ these scores along with
other details on borrowers’ credit reports
C. Credit basis of accounting to judge how much the borrower can be
D. None of the above trusted to pay back money owed based on
their payment history
2378. The finance manager has to take deci-
sion with regards to the net profit distri- A. Debt
bution. B. Loan
A. Dividend Decision C. FICO score
B. Financial Decision D. Net Income

2382. The difference between present value of (using the average investment method, to
cash inflows and present value of cash out- the nearest %)?
flows

A. Gross present value
B. Capital
C. Net present value
D. None of these
2383. We multiply foreign revenue with rate

A. 47%
with respect to that country is
B. 48%
A. Spot rate
C. 50%
B. Forward rate
D. 49%
C. Cash flows
D. Portfolio investments 2387. Dividend decisions involve
A. Retained earnings
2384. Which of the following is NOT an exam-
B. Dividends
ple of a financial transaction?
C. Distributable profit
A. Your parents use their credit card to
pay for your current term’s college tuition. D. All of the above
B. You use the ATM at Heathrow airport 2388. Papasarami Co. currently has a capital
in London to withdraw British pounds. structure that consists of 40% debt and
C. Your roommate lends you $20 and you 60% common equity. The company has a
repay it in one week. 40% tax rate. Currently the levered beta
on the company’s stock is 1.4. What is its
D. All of the above are financial transac- unlevered beta?
tions.
A. 1.15
2385. Stocks are bought and sold in mar- B. 1.10
kets. C. 1.0
A. equity D. .98
B. debt
2389. Type of finance which concerns with rev-
C. derivatives enue and disbursement of Government.
D. foreign exchange A. Private Finance
2386. NW Co is considering investing $46, B. Public Finance

000 in a new delivery lorry that will last C. Personal Finance
for 4 years, after which time it will be D. Corporate Finance
sold for $7, 000. Depreciation is charged
on a straight-line basis. Forecast operat- 2390. Indian Logistics’ has its own warehous-
ing profits/(losses) to be generated by the ing arrangements at key locations across
machine are as follows.What is the return the country. Its warehousing services help
on capital employed (ROCE) for the lorry business firms to reduce their overheads,

increase efficiency and cut down distribu- B. Loan

tion time. State whether the working cap- C. Economy
ital requirements of ‘Indian Logistics’ will
be high or low. D. Debt
A. High 2394. The money market deals with long-term

debt instruments and provides a platform
B. Low
for companies to issue new stocks.
C. Doesn’t effect
A. TRUE
NARAYAN CHANGDER
D. none of above
B. FALSE
2391. A financial report that provides informa- Explanation:False (The money market
tion about a company’s assets, capital and deals with short-term debt instruments.)
equity on a certain date is? 2395. Working capital management is con-
A. Consolidate Statement of Changes in cerned with
Equity A. how a firm can best manage its cash
B. Cash Flow flows as they arise in its day-to-day oper-
C. Income Statement ations.
B. how a firm should raise money to fund
D. Balance Sheet
its investments.
2392. The picture below is a condition of the C. what long-term investments a firm
balance between foreign capital and the should undertake.
amount of its own capital is
D. managing a firm’s capital stock.
2396. When making a choice you should al-

ways first check
A. Costs (What you give up)
B. Benefits (What you gain)
C. Consequence’s (What happens as a re-
sult)
D. What your sister thinks (Opinions)
2397. Debt includes

A. Normal state
A. Equity shares
B. Own capital is insufficient to spend
B. Debentures
fixed assets
C. Retained earnings
C. Own capital is more than enough to fi-
nance fixed assets D. Reserves
D. A balance between the amount of fixed 2398. The concept of Financial management is.
assets with own capital
A. Profit maximization
2393. The granting of a loan and the creation B. All features of obtaining and using fi-
of debt; any form of deferred payment. nancial resources for company operations
A. Credit C. Organization of funds

D. Effective Management of every com- 2403. Financial Planning link

pany
A. (a) Investment and dividend decision

2399. Buy stocks issued by a firm that repre- B. (b) Investment and financing decision
sents certain degree of power to make de- C. c) Dividend and financing decision
cisions for the firm
A. Corporation
B. Owner 2404. The total returns from the investment in
share is classified as
C. Shareholders
A. Dividend and Capital appreciation
D. Directors
B. Dividend and Market price of share
2400. Which one is classified as ‘Assets’? C. Dividend and Book Value of the shares
A. Accounts payable D. None of the above
B. Common stock
2405. The money market refers to trading in
C. Bonds very debt investments.
D. Inventories A. small
Explanation:Accounts payable and bonds
B. short-term
are liabilities.Common stock is owner’s
equity. C. large
D. long-term
2401. Name the activity that is not among the
daily activities of financial management 2406. is specific risk factor
A. Credit management A. Market risk
B. The receipt and disbursement of funds B. Inflation risk
C. Inventory control C. Interate rate risk
D. Sale of shares and bonds D. Financial risk
Explanation: 2407. A financial goal must be specific, mea-
surable, attainable, realistic and long time
The sale of shares and bonds is a long frame.
term activity and cannot b classified into
daily activities A. TRUE
B. FALSE
2402. Which choice is classified as political risk
factors? (You can choose more than one 2408. is concerned with the maximization
choice) of a firm’s earnings after taxes
A. Currency Inconvertibility A. Shareholder wealth maximization.
B. Recession B. Profit maximization.
C. Corruption C. Stakeholder maximization.
D. War D. EPS maximization.

2409. Financial management is strategic plan- A. Excessive spending

ning, organizing, directing, and controlling
B. Inadequate expenditure
financial undertakings in an organisation
or an institute. True or False? C. Passive expenditure
A. True D. Active spending
B. False
2415. g is a throwback to the days when peo-
2410. When you deposit money into your ple would call into a central number at
NARAYAN CHANGDER
checking account, this is called a/an their bank/financial institution in order to
get balance.
A. Debit
A. venture capital
B. Credit
C. Good Idea
C. telebanking
D. Addition
D. credit cards
2411. Financial planning is a not a product.
A. Activity 2416. The gross profit margin is unchanged,
but the net profit margin declined over the
B. Process same period. This could have happened if
C. Assignment
A. cost of goods sold increased relative
D. none of above to sales.
2412. Sales and profits will decrease when B. sales increased relative to expenses.
credit policy is lenient. C. the Federal Government increased the
tax rate.
A. D. dividends were decreased.
2417. The main aim of the Finance manager is

to
A. Maximize the profit
B.
B. Maximize the EPS
C. Maximize the wealth of the Sharehold-
ers
2413. Which is a credit card bureau
A. experience D. Maximize the Salaries of the Managers
B. Authority 2418. is to mobilize the savings of the general

C. Carfax public and invest them in stock market and
money market.
D. Experion
A. merchant
E. Riviera Prepatory School
B. leasing
2414. A condition when the available capital
C. mutual funds
is not enough to spend the business called
D. none of above

2419. Which analysis is based only on one 2424. Retained earnings are affected by
year’s data: A. (a) Financing decision

A. Cash Flow Statement B. (b) Investment decision
B. Dividend Analysis C. c) Dividend decision
C. Vertical Analysis D. (d) Capital structure
D. Horizontal Analysis
2425. What is the main responsibility of finan-
2420. The profits or income of an entity or or- cial managers?
ganisation can be used: A. Determining the best method of financ-
A. To distribute it as dividend to the share- ing assets
holders B. Obtaining funds for investment
B. To retain it in business in the form of 2426. The table shows part of Encik Halim’s
accumulated profits monthly financial plan. Express p as a
C. Either a or b percentage of the net income. This pic-
D. None of these ture shows Encik Halim’s monthly financial
plan. Please find the “p” in the percentage
2421. Online Banking can NOT be used to: value in his net income.
A. Transfer money between accounts
B. Order Bank statements
C. Set up direct bill payments or debits
D. Withdraw Cash
2422. Chris gets a monthly statement each A. 25%

month to pay his B. 20%
C. 15%
D. 10%
2427. What happens when bank statements
are not reconciled?
A. fraud
B. short of funds
A. Barber
C. bank errors
B. Credit Card
D. unauthorized withdrawls
C. Debit card
E. All of the above
D. Saving account
2428. Pay for working more than 40 hours in
2423. Limitation of financial analysis is one week is called?
A. Dressing A. Net pay
B. window B. Gross Pay
C. Window Dressing C. Pay period
D. None D. Overtime pay

2429. Tips presented to avoid financial prob- 2435. You have purchased a Treasury bond
lems include that will pay $10, 000 to your newborn
A. Just focus on investing child in 15 years. If this bond is discounted
at a rate of 3.875% per year, what is to-
B. Keeping money under the pillow day’s price (present value) for this bond?
C. Manage debt carelessly A. $5, 654
D. Monitor and manage expenses wisely
B. $5, 500
NARAYAN CHANGDER
2430. Capital Budgeting decision is a- C. $5, 644
A. Short term D. $10, 000
B. Long term
2436. is concerned with maximisation of a
C. Convertash
firm’s stock price
D. daily routine work
A. Shareholder wealth maximisation
2431. Which out of the following happens to B. Profit maximisation
be a financial decision?
C. Stakeholder welfare maximisation
D. EPS maximisation
B. Financing decision
C. Dividend decision 2437. An effective financial plan should priori-
D. All of these tise
A. Fixed expenses payments
2432. Cost of the company fund is the cost of
capital B. Variable expenses payments
A. True C. Utility bills payments
B. False D. Liabilities payment
2433. Which of the following is not a limita- 2438. The document that lenders ask for as a
tion of analysis of financial statements? guarantee that a loan will be paid.
A. Affected by personal bias
A. Interest
B. To know the financial strength
B. References
C. Lack of Qualitative Analysis
C. Collateral
D. Based on accounting concepts
D. Advanced Payment
2434. What are some additional warning signs
of debt problems? 2439. Capital budgeting technique is a funda-
mental requirement of ?
A. Garnishments
B. Judgment lien A. Cost of debt
C. Avoiding late fees B. Cost of capital

D. Collection agencies C. Capital structure
E. Repossessions D. All the above

2440. what did you call this? 2444. Adam, Robbie, and Sean are planning
their financial future. What are the key
components they should consider in their

financial plan?
A. Setting financial goals, creating a bud-
get, managing debt, saving and investing,
and planning for college
B. Setting financial goals, creating a bud-
and planning for a vacation
C. Setting financial goals, creating a bud-
and planning for a new car
D. Setting financial goals, creating a bud-
A. Marketing sheet and planning for retirement
B. Financial sheet
2445. Which one is not the international trade
C. Financial marketing sheet
flows?
D. balance Sheet
A. Regional trade bloc
2441. Financial markets are: B. Trade agreements
A. Places where financial instruments C. Tariffs
are bought and sold
D. Exports and imports
B. Institutions that facilitate the buying
and selling of financial instruments 2446. Blue print of Financial management is
C. Both of the above drawn by
D. Neither of the above A. Treasurer
2442. Securities whose values are determined B. Finance manager

by the market price or interest rate of C. Auditor
some other asset is called ? D. Accountant
A. Hedging
2447. What is the other name of long term de-
B. Equities
cision?
C. Derivatives
A. Capital Budgeting
D. Liabilities
B. Gross working capital
2443. The model that describes the relation be- C. Financial management
tween risk and expected return is
D. Working Capital
A. APT model
B. CAPM model 2448. Profitability Ratio
C. Dividend growth model A. Return on asset
D. None B. Return on equity

C. Debt to Equity 2452. Which of the following can’t be a Capi-

D. Profit Margin tal Structure?
A. Equity + Debentures
2449. The capital structure of a company con-
B. Equity only
sists of the following securities:Equity
share capital of Rs. 10 each Rs. 1, 00, C. Preference Shares only
0008% Debentures RS. 1, 00, 00010% D. Equity + Preference
Preference shares Rs. 1, 00, 000The
NARAYAN CHANGDER
amount of operating profit is Rs. 60, 000. 2453. What is a good reason to save money?
The tax rate applicable to the company is
50%.You are required to calculate the fi-
nancial leverage of the company
A. 1.234
B. 1.524
C. 1.352
A. To have money to buy things
D. 1.154
B. To have money put aside for emergen-
2450. Which financial statement is crucial for cies
evaluating a company’s profitability over C. For a future purchase
a specific period?
D. All of the above
A. Balance Sheet
2454. Capital Structure (Capital Structure) is
B. Income Statement
A. a combination of long-term equity fi-
C. Cash Flow Statement nancing and debt financing
D. Statement of Retained Earnings B. a combination of large long-term fi-
Explanation:An income statement is one nancing and debt financing
of the three important financial state-
ments used for reporting a company’s fi- C. a combination of long-term equity fi-
nancial performance over a specific ac- nancing and short-term financing
counting period. The other two key state- D. a combination of long-term financing
ments are the balance sheet and the cash
flow statement. 2455. How does financial management train-
ing help improve profitability?
2451. What are the three financial state- A. It reduces overhead costs
ments?
B. It improves marketing strategies
A. Balance sheet, equity statement, and
C. It creates more efficient accounting
revenue statement
processes
B. Balance sheet, income statement, and D. It optimizes cash flow management
cash-flow statement
C. Asset statement, liability statement, 2456. This is the last component of Share-
and income statement holder’s Equity
D. Cash-flow statement, accrual state- A. Share Capital

ment, and depreciation statement B. Reserves

C. Retained Earnings 2462. What is an example of a fixed expense?

D. Additional Paid-In Capital A. Fixed mortgage

B. Price of a coffee
2457. If an employee works 56 hours in one
week, and earns $14.00 an hour, what C. Gym membership
would be his gross pay for the week? D. Your credit score
A. $784.00 E. Groceries
B. $560.00
2463. The Primary goal of financial manage-
C. $1, 230 ment is
D. $896.00 A. to maximise return
2458. The process of calculating present value B. to minimize risk

of future cash flows C. to maximize the wealth of owners
A. compounding D. to maximize profit
B. discounting 2464. These are activities related in the gener-
C. both compounding and discounting ation of the principal revenue of the firm
D. none of the above A. Investing Activities
2459. A B C analysis is useful for analyzing the
inventories? C. Operating Activities
A. Based on their quality D. All of the above
B. Based on physical volume 2465. Rate of Returns is less than Rate of In-
terest, company should prefer
C. Based on their usage and value
A. Equity
D. All the above
B. Debt
2460. Internal Rate of Return (IRR) is equal
C. both
to:
D. none
A. The hurdle rate of return
B. The cost of equity 2466. Systematic Risk is classified as
C. The cost of debt A. Investment Risk, Market Risk and Busi-

ness Risk
D. The actual return of the investment
B. Interest Rate Risk, Market Risk and In-
2461. Cost of advertising, printing prospectus, flation Risk
etc incurred at the time of raising funds is C. Financial Risk and Business Risk
called
D. Investment Risk, Financial Risk and
A. Marginal Cost Purchase power Risk
B. Opportunity Cost
2467. Which of the below is NOT a major com-
C. Floatation Cost ponent of interest rates?
D. Variable Cost A. Real rate

B. Inflation premium C. Profitability index will be greater than

C. Historical interest rates unity
D. Default premium D. Any of the above
2468. Working capital is of- 2473. A reputation for unethical behavior can
negatively affect the value of a company’s
A. High risk
stock.
B. Flexible
A. True
NARAYAN CHANGDER
C. Depreciable
B. False
D. Long-term
2474. Juicy Co is considering investing in a
2469. When the net income of the combined new industrial juicer for use on a new con-
companies after merger exceeds the sum tract. It will cost $150, 000 and will last
of the net income prior to the merger 2 years. Juicy Co pays corporation tax at
Is said to 30% (as the cash flows occur) and, due
A. Goodwill to the health benefits of juicing, the ma-
chine attracts 100% tax-allowable depre-
B. Synergy
ciation immediately.Given a cost of capital
C. Leverage of 10%, what is the minimum value of the
D. None of above pre-tax contract revenue receivable in two
years which would be required to recover
2470. On June 1, RM800 of goods are sold the net cost of the juicer?
with credit terms of 1/10, net 30. On
A. $150, 000
June 3 the customer returned RM100 of
the goods. How much should the seller ex- B. $105, 000
pect to receive if the buyer pays on June C. $127, 050
8?
D. $181, 500
A. RM692
B. RM693 2475. A bull market is and a bear market
is
C. RM700
A. optimistic, pessimistic
D. RM792
B. neutral, neutral
2471. Stockholders are most interested in
evaluating C. pessimistic, optimistic
A. profitability D. good, optimistic
B. solvency E. bad, pessimistic

C. marketability 2476. Weaknesses of the IRR approach,
D. liquidity among others
A. Considers the time value of money
2472. Project is accepted when:
B. Considers all cash flows
A. Net present value is greater than zero
B. Internal Rate of Return will be greater C. Tells whether firm value is increased
than cost of capital D. May produce multiple IRRs

2477. The formula to calculate Gross Profit is: 2482. Federal government tax revenues if it
exceeds government spending then it is
A. COGS + Expenses
classified as

B. Sales-COGS
A. budget deficit
C. Net profit + Operating expenses B. budget surplus
D. Revenue-Owner’s equity C. federal reserve
D. federal budget
2478. Which taxes must employers make
matching contributions to? 2483. “Financial management is concerned
A. income taxes with the acquisition, financing and man-
agement of assets with some overall goal
B. unemployment taxes in mind”. Whose definition is this?
C. FICA (Social Security and Medicare) A. Khan & Jane
taxes
B. Solomon
D. all of the above C. J.F. Bradley
2479. It refers to the renting out of immovable D. James C. Van Horne
property by the bank to the businessmen.
2484. E-filers are issued a Personal Identifica-
A. merchant tion Number or allows the taxpayer to
“sign” the return electronically.
B. leasing
A. 1040EZ
C. mutual funds
B. PIN
D. none of above
C. D-400
2480. Cash & Cash Equivalent-24, 890Held D. none of above
Receivables-16, 000Inventory-8, 960 If 2485. Fixed assets are items of value that will
total current liabilities amounted to 19, be held for more than one year.
900. How much is the current ratio? A. True
A. 3.00 B. False
B. 3.01 2486. The market for supplier and demanders
C. 2.55 for long term securities is
A. capital market
D. 2.56
B. money market
2487. Which type of financial records identify
lets you buy now and pay later in install-
the amount assets have decreased in value
ments
due to their age and use?
A. Debit card A. asset records
B. Credit card B. depreciation records
C. Currency C. cash records
D. none of above D. accounts payable records

2488. Which of the following is not a variable B. Financial Banking

expenses C. Finance
A. Groceries D. Financial
B. Home utilities
2494. How is financial management training
C. Insurance payment beneficial for businesses?
D. Allowance for parents A. It improves customer satisfaction
B. It increases the availability of capital
NARAYAN CHANGDER
2489. safe mode by which firms perform
worldwide business is C. It allows for more informed decision
making
A. Licencing
D. It provides tax benefits
B. Franchising
C. International trade 2495. Which of the following assets is not con-
sidered as Tangible asset:
D. Establishment of new subsidiary
A. Stock
2490. Which is NOT a necessary financial as- B. Furniture
pect to know?
C. Cash
A. Pre-payment penalty
D. Goodwill
B. Escrow amount
2496. What is the primary concern of the fi-
C. Start & End APR nancing function in financial management?
D. Painting art A. Determining which investments to
E. What your loan consists of (T’s & C’s) make
B. Managing a company’s cash flow
2491. According to financial experts, what
portion of your income should be devoted C. Raising capital and managing debt
to wants? D. Managing short-term investments
A. 50 2497. Which of the following is not the cause
B. 20 of under capitalization?
C. 30 A. maintaining high standards of effi-
ciency
D. none of above
B. conservative dividend policy
2492. The primary goal of financial manage-
C. provides not enough depreciation to
ment is
the fixed assets
A. to maximize wealth of owners D. desire of control and trading of equity
B. to maximize profits
2498. Which of the following is also known as
C. to minimize risk intermediate approach
D. to minimize return A. NI Approach
2493. It is a financial institution licensed to re- B. NOI Approach
ceive deposits and make loans. C. MM Approach
A. Bank D. Traditional Approach

2499. The nonoperating cash flows associated C. Both (a) and (b)
with the end of the life of the project, is
D. Market price of shares minimum
the meaning of

A. Annual After-Tax Cash Flow 2505. If net sales are RM1, 500, 000 and ac-
B. Terminal Cash Flow counts receivable amount to RM300, 000,
how long is the average collection period?
C. Initial Outlay
A. 36.00 days
D. Terminal Value
B. 45.00 days
2500. Money invested in a business in return
C. 64.00 days
for a share in the profits from the busi-
ness. D. 72.00 days
A. Collateral E. NOT IN THE CHOICES
B. Interest
2506. What caused Byju’s financial state-
C. Equity Capital ments to change and increase their losses?
D. all of these A. Lack of senior financial manager
2501. The basic formula for bookkeeping is B. Brand value declines
A. Asset = Liability C. Investor lawsuits
B. Liabilities = Assets + Capital D. Difficulty in paying interest
C. Assets = Liabilities + Capital
2507. Operating leverage =
D. Capital = Liability
A. (A) Contribution x Earnings before in-
2502. It is a type of firm individual own a busi- terest and tax
ness
B. B) Contribution / Earnings before in-
A. Business terest and tax
B. Management C. (C) Earnings before interest and tax /
C. Enterprise Contribution
D. All the above D. (D) Earnings before interest and tax +
Contribution
2503. A sum of money paid regularly by a com-
pany to it’s shareholders out of its Profit 2508. Jamie wrote a check to Food Lion for
A. Debenture her groceries in the amount of $46.29
and wants to know her current balance.
B. Divided Based on the check register below she has
C. Division $437.41, What is Jamie’s current balance
D. Dividend after the check clears?
A. $437.41
2504. What out of the following is the effect
of optimum capital structure? B. $500.00
A. Capital cost-minimum C. $391.12
B. Total value of company-maximum D. none of above

2509. Which does not belong to the group? 2513. What is the compound value of Rs. 10,
000 at the end of 3rd year at 12% in-
A. Accounts payable
terest when interest is calculated on quar-
B. Dividends Payable terly basis?
C. Withholding Tax Payable A. 14050
D. Premium on bonds payable B. 13500
2510. Company Financial Management regu- C. 14260
NARAYAN CHANGDER
lates
D. 15430
A. Funding Activities
B. Investment Activities 2514. According to financial experts, what
portion of your income should be devoted
C. Dividend Policy
to needs?
D. All the answers above are correct
A. 50
2511. You dream of endowing a chair in fi- B. 20
nance at the local university that will pro-
vide a salary of $150, 000 per year C. 30
forever, with the first cash flow to be
D. none of above
one year from today. If the university
promises to invest the money at a rate of
5% per year, how much money must you 2515. It means planning, organizing, directing,
give the university today to make your and controlling the financial activities such
dream a reality? as procurement and utilization of funds of
the enterprise.
A. $3, 000, 000
A. FINANCIAL MANAGEMENT
B. $15, 000, 000
B. MANAGEMENT
C. $2, 857, 143
D. This question cannot be answered. 2516. Samsung Co. considers the Modern Ap-
proach to financial management as the
2512. How are “creditors” different from ‘Floaters Approach.’
“debtors” in a company’s financial state-
ments?
A. Creditors represent money owed to
the company; debtors represent money
the company owes.
B. Creditors represent money the com-
pany owes; debtors represent money
owed to the company.
C. Creditors and debtors are terms used
interchangeably in accounting.
A.
D. Creditors represent long-term debts;
debtors represent short-term debts.

2521. Which one is disadvantages of SML

A. Have to estimate the expected market
B. risk premium, which does vary over time

B. Have to estimate beta, which also
varies over time
C. We are using the past to predict the
future, which is not always reliable
D. All above
Explanation:
2522. If you work more than 40 hours per
week, what is the extra time called?
A. overtime pay
The traditional approach is a floaters ap- B. net pay
proach as it is concerned only with the C. gross pay
procurement of funds D. salary
2517. An accounting period is NOT the period 2523. A sheet of information in the form of a
of time reflected by a accounting report. Table, Graph or Diagram
A. True A. Form
B. Information
B. False
C. Chart
2518. The company’s liabilities divided by the D. Data
owner’s equity is the current ratio.
2524. Increase in finished goods inventory
A. True
A. Financing Activity
B. False B. Investing Activity
2519. What is the definition of financial man- C. Operating Activity
agement? D. none of above
A. The process of acquiring needed funds 2525. Someone who relies on another for fi-
B. The management of money nancial support is called?
A. Taxpayer
C. The balancing of risks and profitability
B. Coach
C. Dependent
cial resources
D. Couch potato
2520. When do you accept a project based on
2526. What is one characteristic of Goals?
the Net Present Value calculation.
A. Dynamic
A. Positive NPV.
B. Bad
B. Negative NPV. C. Weird
C. NPV = 0. D. Money
D. none of above E. family

2527. Certificate of deposit is issued by 2532. Which one of these is an available tool
A. (a) Mutual fund companies to help calculute your net worth?
B. (b) Reserve Bank of India A. Experian
C. c) Large Corporate House B. Credit Karma
D. d) Commercial bank and development C. Your net worth homework.
financial institution
D. A calculator
2528. What is the definition of financial man-
NARAYAN CHANGDER
E. Your cash
agement?
A. The process of acquiring needed funds 2533. The job of a finance manager is confined
B. The management of money to
C. The balancing of risks and profitability A. Raising funds
D. The planning and controlling of finan- B. Management of cash
cial resources
C. Raising of funds and their effective uti-
2529. The financial activities which are per- lization
formed only on special events like promo-
D. None of these
tion. Amalgamation and solvency crisis
are called as:
2534. A financial plan is failed to be carried
A. Non-recurring finance functions out if
B. Recurring finance functions A. be patience
C. Both of these
B. be flexible
D. Both of these
C. be discipline
2530. Which of the following is NOT the key
D. spend more than the planned ex-
components of SMART financial goals?
penses
A. Salary
B. Measurable 2535. What does the “M” mean in SMART
goals?
C. Attainable
D. Realistic A. Measureable
E. Time-bounded B. Management
2531. What is the net cash provided by oper- C. Money

ating activities? D. Money-management
E. Marketing
2536. Which analysis is considered as static:

A. Horizontal Analysis
A. 8, 000, 000
B. 7, 300, 000 B. Vertical Analysis
C. 6, 600, 000 C. Internal Analysis
D. 7, 400, 000 D. External Analysis

2537. For example, the totality value form 2542. The set of ratios that is most useful in
evaluating solvency is
A. implement plans, carry out evaluations

and continuous improvements A. debt ratio, current ratio, and times in-
B. committed, dedicated and continues to terest earned
develop oneself to provide more value to B. debt ratio, times interest earned, and
work return on assets
C. trust each other and work together to C. debt ratio, times interest earned, and
realize a shared vision quick ratio
D. agile and proactive to provide the best D. debt ratio, times interest earned, and
cash flow to debt
2538. What is a common strategy to improve
cash flow? 2543. Financil management process deals with
A. Delaying invoice payments A. investments
B. Increasing inventory levels
B. financing decisions
C. Offering longer credit terms
C. both A & B
D. Implementing efficient billing prac-
tices
2539. These are mainly maintained by busi- 2544. A majority of employees in most busi-
ness community to facilitate frequent nesses receive a weekly or monthly
transaction with big amounts. salary.
A. fixed deposits A. True
B. current a/c deposits B. False
C. savings bank a/c 2545. The period between initial outlay and
D. recurring deposits a/c anticipated return is called
A. gestation period
2540. What role does a financial advisor play
in business decision-making? B. opportunity cost
A. Provides legal advice C. degree of risk
B. Offers marketing strategies D. long term investment
C. Gives financial guidance
2546. A legal document that sets forth your
D. Manages human resources wishes regarding the distribution of your
property
2541. is the process of setting financial
goals and developing plans to reach them. A. Executor
A. Financial forecasting B. benficiary
B. Budgeting C. living trust
C. Creating an income statement D. will
D. Financial planning E. probate

2547. A is a report of the balances in all as- B. Mortgage

sets, liability, and owner’s equity accounts C. Convertible
at the end of a accounting period
D. Registered
A. statement of cash flows
B. balance sheet 2552. Money Markets are “funds required for
long-term investment”.
C. income statement
A. True.
B. False.
NARAYAN CHANGDER
2548. Your employer needs to have this form
2553. Mr Bean’s has a financial goal. He
given to you by January 31st so you can
wants to install an air purifier worth RM2
file your taxes.
000 in his mother’s room next year. Is
A. W-4 this a short-term goal or long-term goal?
B. D-400 Is this financial goal a need or a want?
C. 1040EZ A. short-term goal
D. W-2 B. long-term goal
C. need
2549. Choose the correct option
D. want
2554. The interest rate charged on new trans-
actions if the penalty terms in the credit
card contract are triggered.
A. A A. Over-the-limit fee
B. B B. Penalty APR
C. C C. APR
D. D D. Introductory rate
2550. Cash & Cash Equivalent-24, 890Held 2555. The five basic principles of finance in-
for Trading-10, 000Trade and Other clude all of the following EXCEPT
A. Cash flow is what matters.
900, Net Sales for the present year B. Money has a time value.
amounted to 480, 000 and the ending re- C. Risk requires a reward.
ceivables totaled to 16, 500. What is the
D. Incremental profits determine value.
accounts receivable turnover ratio?
A. 29.10 2556. Cost of equity of a company is 20 %.
Rate of floatation cost is 5 %. Rate of
B. 29.09 personal income tax is 30 %. Calculate
C. 29.54 cost of retain earning?
D. 30 A. 21 %
2551. Bond backed by the reputation of the is- B. 26 %
suing corporation is? C. 14.7 %
A. Debenture D. 13.3 %

2557. Having lots of credit cards shows that 2562. Elliott works two jobs, the first he
you are an important person. worked 7 hours and makes $24.25 and
hour, the second he worked 5 hours and

A. Fact
makes $18.50, what was his total gross
B. Fiction pay for that day?
A. $169.75
2558. Which branch of management does take
care of the efficient planning and control- B. $265.00
ling of the financial activities of an organi- C. $262.25
sation?
D. $200.50
A. Production management
2563. Financial intermediaries help bring
B. Financial management
savers and borrowers together.
C. Marketing management A. True
D. Personnel management B. False
2559. Which THREE of the following methods 2564. Decrease the purchase power
of financing the purchase of a non-current
A. Debenture
asset have an impact on the gearing ratio
of a business?1. Short-term bank loan2. B. Shares
Surplus cash from the business bank ac- C. Inflations
count3. Ten year finance lease4. Introduc-
D. Bonds
tion of new ordinary share capital5. Seven
year Eurobond 2565. Which of the following are the fac-
A. 1, 3, 5 tors that can influence a long-term fi-
nancial plan?I-Inflation ratesII-electricity
B. 2, 3, 4 billIII-HobbyIV-Government policy
C. 1, 2, 3 A. I and II
D. 3, 4, 5 B. I and IV
C. II and III
2560. Leverage Ratio mencakup
D. III and IV
A. Debt to asset ratio
B. Capital Structure 2566. Cash flows are the money that is avail-
able to a business at any given time.
C. Debt to Equty ratio
A. True
D. Time interest earned rat
B. False
2561. The primary aim of financial manage- 2567. Is a Graph which uses lines to connect
ment is Individual data points
A. Wealth maximisation A. Picture
B. Increase the share price B. Line Graph
C. Both A and B C. Chart
D. Distributing maximum dividend D. Diagram

2568. Working capital refers: 2572. An obligation of repayment owed by

A. Excess of Current Assets over Current one party to a second party, which in-
Liabilities cludes the payment of interest.
B. Excess of Current Liabilities over Cur- A. debt

rent Assets B. debit
C. Excess of Fixed Assets over Current Li- C. creditor
abilities Fixed Cost D. none of above
NARAYAN CHANGDER
D. Excess of Current Assets over Fixed
Assets 2573. Which of the following is an example of
variable expenses?
2569. You can invest your money at a rate of A. Housing loan installment
7% per year. At this rate it will take you
just over years to double your money. B. Petrol expenses
Use the Rule of 72 to determine your an- C. Insurance premiums
swer. D. Car installment
A. 4
2574. Used to pay for emergencies
B. 10
A. Investment
C. 5.5
B. Savings
D. There is not enough information to an-
swer this question. 2575. Why are the TA’s selected
2570. optimum capital structure is at which A. They have completed the highest level
is minimum and value of firm is maxi- of business class
mum? B. They all got 1600’s on their SAT
A. A. EBIT C. They have all been accepted by Har-
B. B. Weighted average cost of capital vard Business School
C. Tax rate D. Professor Dinter likes them
D. None of these E. They took financial management last

year
2571. The credit term 3/10 net 40 means
customers will receive 10% cash discount 2576. Which of the following is NOT one of the
from the invoice price if payment is made primary financial statements used in finan-
within the first three days. However, pay- cial reporting?
ment must be made within 30 days. A. Income statement
B. Cash flow statement
A. C. Sales statement
D. Balance sheet
2577. Which investment fund has invested in

Byju’s?
B.
A. Sequoia Capital India and Peak XV
B. Chan Zuckerberg Initiative

C. Deloitte company C. Answers a and b are wrong

D. All of the above D. Answers a and b are correct

2578. Traditional approach focus on 2584. Earning per share is calculated as
A. Short term A. EBIT/No of Equity Shares
B. Long term B. Earning available to the Equity share-
C. Mid term holders/No of Shares
D. None of the above C. Earning available to the Equity share-
holders/No of Shares holders
2579. The major goal of Financial Managment
D. PAT/ Total Shareholders
A. profit maximisation
2585. BANK OVERDRAFT IS A FORM OF
B. sales maximisation
A. SHORT TERM FUNDS
C. wealth maximisation
D. customer maximisation B. LONG TERM FUNDS
C. BOTH
2580. A limitation of online banking is:
D. NONE OF THE ABOVE
A. The data is not safe from hackers
B. You have to log in regularly or your ac- 2586. What is an agreement between a lender
count could be closed and a borrower, who promises to repay
the lender at a later date, with interest?
C. You have to have an internet connec-
tion A. Credit
D. All of the above B. Debt
C. Investment
2581. To prepare a budget, a business must be
able to identify and predict the amount of D. Savings
each source of income and each type of ex-
2587. The higher the interest rate affects the
pense.
time value rate of an investment by in-
A. True creasing the amount you will make. This
B. False describes which factor.
A. Money
2582. What does “ATM” stand for?
B. Time
A. Automated Teller Machine
C. Interest rate
B. Almost Time Machine
D. none of above
C. Active Time Moment
D. A Time Machine 2588. Peyton is running a small business. She
is confused about the difference between
2583. In funding Working Capital for Busi- profit and cash flow. Can you explain it to
ness, we know the term Capital Structure, her?
namely its contents consist of:
A. Profit is the difference between rev-
A. Modal enue and expenses, while cash flow is the
B. Long Term Debt and Obligation/Share amount of cash or cash equivalents that
Debt flow in and out of Peyton’s business.

B. Profit is the amount of cash that flows B. I-9 form

in and out of Peyton’s business, while C. Birth cirtificate
cash flow is the difference between rev-
enue and expenses. D. W-4 form
C. Profit is the amount of money Pey- E. Passport
ton’s business has in the bank, while cash
2593. A trend is then determined by compar-
flow is the amount of money her business
ing percentage relationships. Base on the
makes.
trends, interpretation, conclusions, and im-
NARAYAN CHANGDER
D. Profit and cash flow are the same thing plications are drawn.
in Peyton’s business.
A. TRUE
2589. Why are more young people in Malaysia B. FALSE
being declared bankruptcy nowadays?You
can choose more than one answer. 2594. The table shows Mrs Maryam’s income
and expenses.She kept 10% of the total
A. Well prepared for financial planning
income and a sum of RM300 for the emer-
B. Not spendingwisely gency fund. Calculate the surplus of in-
C. Uncontrolled use of credit cards come of Mrs Maryam.
D. Failure to payoff the loans and car in-
stalments
2590. The purpose of studying financial state-

ments is
A. to mechanically build portfolio analysis
B. to understand those portions of the A. RM 2 900
statements that have relevance for finan- B. RM 3 200
cial decision making
C. RM 3 700
C. to primarily investigate all portions of
D. RM 4 000
the statements that have relevance for
dividend policy 2595. The following items are spontaneous
D. to mechanically learn how to read and when the firm is operating below its ca-
understand footnotes pacity, except
2591. When you get a job you are required to

complete a form.
A. W-4 and I-9
B. W-2 and I-9
C. 1040 and I-9
D. 1040 EZ Form and I-9 A. Account receivable
2592. Which of the following do you NOT need B. Account payable

to bring on your first day of work? C. Fixed assets
A. Drivers license D. Retained earnings

2596. The method of converting the amount of 2601. What is the market?
the future cash into an amount of cash and
cash equivalents value in present is known

as
A. A. Compounding
B. B. Annuity
C. C discounting
D. D. None of these A. That ‘s a super market
B. Where we can buy goods
2597. Which is not the current assets?
C. That ‘s a medium that allows buyers
A. Stock and sellers of a specific good or service to
B. Goodwill interact in order to facilitate an exchange.
D. The activity, set of institutions, and
C. Debtors
processes for creating, communicating,
D. Bills receivable delivering, and exchanging offerings that
have value for customers, clients, part-
2598. Why is budgeting important ners, and society at large
A. Plan for retirement
2602. urgency method is suitable for short
B. Reduce expenses term projects
C. help create emergency fund A. true
D. Budgeting increases your credit score B. false
E. Plan for future expenses 2603. The tool used by companies to as-
sess the company’s financial performance
2599. Which of the following is NOT an exam- based on comparative data for each item
ple of annuity cash flows? in the financial report is called:
A. Regular equal monthly rent payments A. Balance Sheet & Profit and Loss
B. Equal annual deposits into a retire- B. Activity Ratio
ment account
C. Money turnover ratio
C. The $50 of gasoline you put into your
D. Financial Ratio Analysis
car every two weeks on pay day
D. All of the examples above are annuity 2604. A financial manager must choose be-
cash flows. tween four alternative Assets 1, 2, 3, and
4. Each asset costs $35, 000 and is ex-
2600. To manage school finances effectively, pected to provide earnings over a 3-year
the financial managers should anticipate period as described below:Asset 1:Year 1-
capital expenditures and maximize main- $21, 000 ; Year 2-$15, 000 ; Year 3-
tenance costs. $6, 000 Asset 2:Year 1-$9, 000 ; Year 2-
$15, 000 ; Year 3-$21, 000Asset 3:Year
A. True
1-$3, 000 ; Year 2-$20, 000 ; Year 3-$19,
B. False 000Asset 4:Year 1-$6, 000 ; Year 2-$12,

000 ; Year 3-$12, 000Which asset would B. Vehicle purchase

the financial manager choose? C. Payment of taxes
A. Asset 1 D. Dividend payments
B. Asset 2
2609. Occurs when a business sells its stocks
C. Asset 3 or bonds directly to savers, without going
D. Asset 4 through any type of financial institution.
A. Direct transfer
NARAYAN CHANGDER
2605. What is a potential consequence of poor
financial management for a business? B. Transfer through Investment Banks
A. Increased profitability C. Transfer Through a Financial Interme-
diary
B. Enhanced market reputation
D. none of above
C. Insufficient cash flow
2610. Selected information from the account-
D. Higher employee morale
ing records of R Company is as follows:Net
2606. Mind tree is squeezing their heads to sales for 2020-P800, 000Cost of goods
find out which of the following is an as- sold for 2020-500, 000Inventory, De-
sumption under MM approach cember 31, 2019-200, 000Inventory, De-
cember 31, 2020-156, 000P’s inventory
turnover for 2020 is
A. 2.88 times
B. 3.77 times
C. 3.57 times
D. 3.00 times
2611. In the grocery store, the food displays
A. Market capitalizes the value of firm at the end of the aisle are the best buys.
eliminating the equity-dividend split A. Fact
B. The expenditure of debt is costant B. Fiction
C. None of the earnings is ploughed back 2612. Companies (A) and (B) have the same
D. Investors are rational and have ho- tax rate, sales, total assets, and basic
mogenous expectation earning power. Both companies have pos-
itive net incomes. Company (A) has a
2607. A long term investment decision is called higher debt ratio and, therefore, a higher
A. Dividend decision interest expense. Which of the following
statements is CORRECT?
B. Working capital decision
A. Company (A) has a lower equity multi-
C. Financing decision
plier.
D. Capital budgeting decision
B. Company (A) has more net income.
2608. One example of cash disbursement from C. Company (A) pays more in taxes.
financing activities is D. Company (A) has a lower times inter-
A. Paycheck est earned (TIE) ratio.

2613. The objectives or goals of financial man- B. a decrease in bad debt losses.
agement are to maximize ?
C. an increase in sales.

A. Sales
D. higher profits.
B. Profits
C. Owner’s wealth 2619. True/False:Current Ratio = (Current
Assets-Inventory)/Current Liabilities
D. Total assets
A. True.
2614. Q5) Which principle of sound financial
planning relates to spreading investments B. False.
across different asset types?
2620. How many percentages should a person
A. Living beyond means
save from their monthly income?
B. Accumulating excessive debt
A. 5%
C. Diversification
B. 10%
D. Ignoring budgeting
C. 8%
2615. Financial leverage is also called as
D. 20%
A. Financial Risk
B. Financial return 2621. The primary function of financial mar-
C. Trading on equity kets is to provide investment advice to in-
dividual investors.
D. Fixed charges leverage
A. TRUE
2616. Which one of the following items is
not a method/tool of analysis of financial B. FALSE
statements? Explanation:False (The primary function is
to facilitate the exchange of financial as-
A. Accounting Ratio sets.)
B. Break Even Point
2622. These are sanctioned for a period up to
C. Statement of Receipts and Payments
1 year
D. Fund Flow Statement
A. call loans
2617. Refers to the fungible and tradable fi-
B. short term loans
nancial instrument used to raise capital in
public and private markets. C. medium term loans
A. Equity D. long term loans
B. Stocks
2623. An organisation wanting to have more
C. Security
liquid assets would
D. Surplus
A. raise more amount of short term funds
2618. Increasing the credit period from 30 to B. raise more amount of long term funds
60 days, would likely result in:
C. No change in capital
A. an increase in the average collection
period. D. none of above

2624. According to financial experts, what B. the most costly source of financing
portion of your income should be devoted C. the weighted average cost of all financ-
to savings? ing sources
A. 50 D. the current opportunity cost
B. 20
2629. What is the goal of the firm according
C. 30 to shareholder’s wealth maximization?
D. none of above A. Maximizing total earnings
NARAYAN CHANGDER
2625. An asset’s value determined by the B. Emphasizing short-term targets
present values of its future C. Considering risk and uncertainty
A. Cash flows. D. Increasing the market value of com-
B. Competitors. mon stock
C. No thats Batman 2630. Higher working capital usually results in
D. I’m BATMAN. A. higher current ratio, higher risk and
higher profits
2626. Commercial banks in the U.S. often own
the corporations they lend to. B. lower current ratio, higher risk and
higher profits
A. True
C. higher equitability, lower risk and
B. False lower profits
2627. It differs from accounting profit because D. lower equitability, lower risk and
some of the revenuesand expenses re- higher profits
flected in accounting profits may not have
2631. The model answers one basic ques-
been received orpaid out in cash during the
tion:How soon will I recover my initial in-
year
vestment?
A. initial payback period
B. IRR
C. payback period
D. profitability index
2632. What are the six things you should do
to establish and maintain good credit.
A. Never pay on time, get lots of credit
cards, increase your debt to income ra-
A. Net Cash flow tio, get rid of savings accounts, check your
B. Statement of cash flow credit report, pay off debt
C. Balance Sheet B. Pay off debt, check your credit score,
D. Income statement read your credit report, don’t fix mistakes
on it, pay your debts on time, only get a
2628. A firm should use when evaluating few credit cards.
an investment C. Pay on time, check your credit score,
A. the least costly source of financing get lots of credit cards, open a savings

account, check your credit report, pay off A. RM800

debt.
B. RM1000

D. Pay bills on time, Avoid late fees,
Check your credit report, Pay off debt, Cor- C. RM1700
rect mistakes, Get current and stay cur- D. RM1900
rent.
2638. Why do we need to study financial man-
2633. Check the intangible assets agement?
A. Patents
A. To find out Capital Expenditure
B. Geographical Indications
B. To Manage Operational Cash
C. Trademarks
C. To Lower Costs
D. Factories
D. All Answers are Correct
E. Work in Progress
2634. Mutual Funds and ETFs provide the in- 2639. Secondary markets
vestor a chance to diversify without hav- A. function as a place for smaller, less
ing to buy shares in numerous corpora- well-known firms to issue securities.
tions.
B. are an important vehicle for estab-
A. True lished firms to raise additional money for
B. False expansion.
2635. Making an investment in long term as- C. are a means by which funds are cycled
sets is from savers to borrowers.
A. Capital Budgeting D. are concerned with the trading of
B. Capital Structure previously issued securities between in-
vestors
2636. The S in SMART Goals stands for
2640. Compounding can thus be construed as
A. Specific
interest on the effect of which is to
B. Similar magnify returns to interest over time, the
C. Sporty so-called “miracle of compounding.”
D. none of above A. investment
2637. Encik Jebat receives an active income of B. principal

RM2 800 and a passive income of RM900 C. capital
a month. He also has fixed expenses
of RM1 800 and variable expenses of D. interest
RM 900 a month. What is Encik Jebat’s
monthly cash flow? 2641. Accounting profits and cash flows are
generally:
A. unequal because of how income is rec-
ognized according to GAAP.
B. unequal because cash inflows must oc-
cur before revenue recognition.

2642. Sarah earns $600 a month. She spends 2648. Sale of land from book value
15% on rent. She puts 20% into her sav- A. Investing Activities
ings account. How much money does she
have left each month? B. Financing Activities
A. $90 C. Operating Activities
B. $290 D. none of above
C. $390 2649. Municipal bonds
NARAYAN CHANGDER
D. none of above A. Short term debt
2643. If a salaried employee earns “$77, 500 B. Long term debt
a year and is paid “bi-monthly”, how
2650. A new project being considered by BLW
much is their gross pay per pay period.
Co would require 1, 000 hours of skilled
A. $6, 458.33 labour. The current workforce is already
B. $3, 875.00 fully employed but more workers can be
hired in at a cost of $20 per hour. The
C. $3, 229.16
current workers are paid $15 per hour
D. $3, 229.17 on a project that earns a contribution of
$10 per hour. What is the relevant cost
2644. The role of the VP for Finance is to de-
of labour to be included in the project ap-
termine the appropriate capital structure
praisal?
of the company.
A. $10, 000
A. True
B. False B. $15, 000
C. $20, 000
2645. The long term plan when breaked into
smaller plan is: D. $25, 000
A. Tactical Plan 2651. A(n) in working capital represents

B. Strategic Plan a(n)
C. Operational Plan A. increase; cash inflow
D. None B. decrease; cash inflow
C. decrease; cash outflow
2646. Non-Current Assets
D. increase; equivalent annual cost
A. Prepaid Expenses
B. Long Term Investments 2652. What is EOQ?
C. Cash Equivalents A. Cost of an order
D. Equipment B. Cost of stock
C. Optimum order size
2647. The cheapest source of finance is:
D. None of them
A. debenture
B. equity share capital 2653. Capital Structure is called
C. preference share A. Quantitative aspect
D. retained earnings B. Qualitative aspect

C. Both (a) and (b) 2658. The concept which makes sure the avail-
D. None of these ability of right amount of finance at the
right time is called

2654. Risk management: A. Financial Planning
A. Helps identify and mitigate financial B. Capital Structure
risks
C. Working Capital
B. Protects a company’s assets
D. Fixed Capital
C. Reduces the company’s exposure to
risk 2659. The primary role of a financial institu-
tion is to act as the link between the de-
D. All of the above
positors who have the money and the bor-
2655. *focuses on decisions relating to how rowers who need the money.
much and what types of assets to acquire, A. True
how to raise the capital needed to pur-
B. False
chase assets, and how to run the firm so
as to maximize its value 2660. Receivables Management deals with
Collection.
A. Creditors
B. Debtors
C. Working Capital
D. none
A. Finance 2661. is financial capital provided to early-
B. Financial market stage, high-potential, high risk, growth
C. Financial Investment start-up companies.
A. venture capital
D. Financial management
2656. Net working capital refers to
C. telebank
A. total assets minus fixed assets.
D. credit cards
B. current assets minus current liabili-
ties. 2662. the creditor’s claims to the assets of the
business
C. current assetsets minus inventories.
A. assets
D. current assets
B. accounts payable
2657. The method that converts the amount
C. owner’s equity
of present cash into an amount of cash of
equivalent value in future is D. liabilities
A. Budgeting 2663. Calculate Degree of Combined Leverage
B. Discounting method from the following data:-Sales 50, 000
units @ RM 4 Per unitVariable Cost per
C. Both unit 40% from sales priceFixed Costs Rm
D. Compounding method 100, 000Interest charges RM 3668

A. 7.35 2669. What does “IRS” stand for?

B. 6 A. Instant Regulation Service
C. 1.22 B. Increase Rent Status
D. 5.22 C. Internal Revenue Service
D. Invoice Receipt Sale
2664. Which of the following is the wrong key
component in SMART financial goals? 2670. :a bank account that allows you to
NARAYAN CHANGDER
A. T-Time-bound access the money in your bank account by
writing checks. It’s the account that you
B. S-Systematic will use to pay your bills.
C. A-Achievable A. Savings Account
D. R-Realistic B. Loan
E. M-Measureable C. Checking Account
2665. The Bursa Malaysia is an example of a D. Budget
primary market 2671. Sara earns $10.00 an hour. She
A. TRUE worked 40 hours this pay period. Her
B. FALSE gross pay was?
A. $300 after taxes and deductions
2666. is concerned with the maximization
B. $400.00
of a firm’s stock price.
C. $275.00 after standard deductions
A. Shareholder wealth maximization.
D. none of above
B. Profit maximization.
C. Stakeholder welfare maximization. 2672. The amount of money subtracted or de-
ducted from the gross pay earned in a pay
D. EPS maximization. period.
2667. From the investors point of view the A. Credit
cost of capital is B. Debit
A. Yield of capital sacrifice C. Deduction
B. Market value D. Witholding Taxes
C. Interest rates 2673. Used to pay for long-term goals, such
D. None of these as retirement
A. Investment
2668. The cost of capital plays a central role in
FM because it provides link between B. Savings
&financial decision of a firm?.
2674. SW Co has a barrel of chemicals in its
A. Capital structure warehouse that it purchased for a project
B. Investment a while ago at a cost of $1, 000. It would
cost $400 for a professional disposal com-
C. Cash pany to collect the barrel and dispose of
D. None of these it safely. However, the chemicals could

be used in a potential project which is cur- 2679. How much money is pictured above?
rently being assessed. What is the rele-
vant cost of using the chemicals in a new

project proposal?
A. $1, 000 cost
B. $400 benefit
C. $400 cost A. $32.50
D. $Nil B. $33.30
C. $32.30
2675. Is part of this strategy to sale of assets
D. none of above
cut cost and operate the remaining assets
more efficiently is engaging in 2680. The stocks that are owned by investors
A. Strategic acquisition who are not active in management are
called ?
B. Financial Acquisition
A. Common stock
C. 2 tier tender offer
B. Classified stock
D. Shark repellent C. Closely held stock
2676. Which of the following sources of fi- D. Publicly held stock
nance does not have interest added?
2681. The following shows part of Mr Jason’s
A. Overdraft financial management process. To save for
B. Owner’s Capital emergency fundTo buy a laptopTo buy a
terrace house in 10 years by paying RM60
C. Bank Loan 000 as a down payment. What step in
D. Mortgage the financial management process did Mr
Jason take?
2677. Why is debt control considered an impor- A. Evaluating financial status
tant step in financial management?
B. Setting financial goals
A. Because debt is always profitable
C. Carrying out financial plan
B. Because debt can increase wealth
D. Creating a financial plan
C. Because debt can be a financial bur-
den 2682. The followings are the characteristics of
common stock, except
D. Because debt is never a financial prob-
A. voting rights
lem
B. preemptive right
2678. Which goal is Specific? C. limited liability
A. I’m going to be a better friend. D. call feature
B. I’m going to be successful.
2683. The balance sheet statement is correct,
C. I’m going to do better in school. if:
D. I am going to turn in all of my Math A. Assets + Liabilities = Stockholder’s
Homework Equity

B. Assets = Liabilities-Stockholder’s Eq- A. (a) Money market

uity B. (b) Capital market
C. Assets = Liabilities + Stockholder’s C. c) Both (a) and (b)
Equity
D. Liabilities = Assets + Stockholder’s
Equity 2688. A company’s is (are) potentially the
most effective instrument of good corpo-
2684. It is the amount of cash flow available rate governance.
NARAYAN CHANGDER
for distribution to investors, so the value
of a company is directly related to its abil- A. common stock shareholders
ity to generate free cash flow B. board of directors
C. top executive officers
D. none of above
2689. When you get a job, you will be required

to complete a form. This form is usu-
ally completed on your first day of work
or at an employee training prior to start-
ing work.
A. W-4
A. Market Value Added B. W-2
B. Economic Value Added C. 1040EZ
C. Free Cash Flow D. none of above
D. NOPAT 2690. Which of the following is not a key com-

ponent in the SMART concept for goal set-
2685. Financial blueprints are determined by ting?
A. Financial Planning. A. Measurable
B. Financial Leverage. B. Specific
C. Financial Decision C. Time-bound
D. Capital Structure D. Goal
2686. What is required for carrying out busi- 2691. Property is anything of value that is
ness activites? owned or controlled.
A. Cash A. True
B. Debt B. False
C. Equity Shares
2692. Is long-term vision and financial plan-
D. Money ning an important part of a financial man-
2687. If a firm requires to two crores for six ager’s role? Why?
months time to keep the stock of raw ma- A. No, because financial managers only
terial, it should approach focus on short-term financial goals

B. No, because financial planning is the amount of tax relief would be received by
responsibility of the accounting depart- Trecor in time 4 of a net present value
ment (NPV) calculation?

C. Yes, because it helps ensure the finan-
cial stability and growth of the organiza-
tion
D. Yes, because finance managers are
primarily responsible for forecasting
sales and generating revenue
2693. A wise investment strategy helps in

A. Build short-term wealth A. $14, 063
B. Prepare a financial budget B. $10, 547
C. Supports the achievement of financial C. $18, 750
goals D. $10, 457
D. Identify financial problems
2697. firms that offer a wide range of finan-
2694. Why is financial management training cial services, including investment banking,
important? brokerage operations, insurance and com-
A. It can help increase profits mercial banking
B. It is a waste of resources A. commercial banks
C. It can help enhance corporate and per- B. investment banks

sonal wealth C. financial services corporation
D. It can help reduce department costs D. none of above
2695. What is the purpose of a company’s cap- 2698. Two disadvantages of a proprietorship
ital structure decisions in financial strat- are (1) the relative difficulty of raising
egy? new capital and (2) the owner’s unlimited
A. To minimize taxes personal liability for the business’ debts.
B. To maximize short-term profits A. True
C. To determine the allocation of re- B. False
sources
2699. In capital asset pricing model, character-
D. To find the optimal mix of debt and eq- istics line is classified as
uity financing
A. profitability line
2696. Trecor Co plans to buy a machine costing B. regression line
$250, 000 which will last for 4 years and
C. weighted line
then be sold for $5, 000.Depreciation is
charged on a straight-line basis over the D. scattered point
life of an assets.Trecor Co can claim tax-
allowable depreciation on a 25% reducing 2700. Which from the below is not the princi-
balance basis. It pays tax at an annual ples underlying sound investments.
rate of 30% one year in arrears.What A. Reasonable rate of return

B. Recognition of effect of world condi- 2704. Which of the following can lead to in-
tions creased expected cash flow over time to
the firm?
C. Tax efficiency
A. Open and collaborative relations with
D. Collateral of specific units
the community
2701. What is the main disadvantage of a B. Qualified and motivated employees
partnership? C. Greater customer satisfaction
NARAYAN CHANGDER
A. Limited liability D. All of the above
B. Difficulty of transferring ownership
2705. In constant growth model, the value of
C. Unlimited life equity share is sensitive to growth rate.
D. Ease of raising capital A. True
2702. A company has calculated the NPV B. False

of a new project as follows:Present
2706. are property and other items of
value($’000)Sales revenue 4, 000Vari-
value owned by a business.
able costs (2, 000)Fixed costs (500)Cor-
poration tax at 20% (300)Initial outlay A. Current assets
(1, 000)NPV 200What is the sensitivity B. Fixed assets
of the project decision to a change in sales
volume? C. Liabilities
D. Assets
A. 12.5%
B. 6.3% 2707. Flotation cost is the cost involved in the
issue of shares and debentures.
C. 10.0%
A. True
D. 5.0%
B. False
correct? 2708. AM Co will receive a perpetuity starting
in 2 years’ time of $10, 000 per annum,
A. Governments may choose to raise in- increasing by the rate of inflation (which
terest rates so that the level of general is 2%). What is the present value of this
expenditure in the economy will increase perpetuity assuming a money cost of capi-
B. The normal yield curve slopes upward tal of 10.2%?
to reflect increasing compensation to in- A. $90, 910
vestors for being unable to use their cash
B. $125, 000
now
C. $115, 740
C. The yield on long-term loan notes is
lower than the yield on short-term loan D. $74, 403
notes because long-term debt is less risky
for a company than short-term debt 2709. It is also known as static measure or
structural ratios
D. Expectations theory states that future
interest rates reflect expectations of fu- A. HORIZONTAL ANALYSIS
ture inflation rate movements B. VERTICAL ANALYSIS

2710. It has to do with motivating people, D. Business risk is assumed to be con-

paying them well and taking cared of their stant as the capital structure changes
interest.

2715. Main limitation of financial analysis is:
A. Money Has Time Value
A. To know earning capacity
B. Risk Return Trade Off
B. To know financial strength
C. Cash Flows Are Source of Values
C. Do not reflect changes in price level
D. Individuals Respond to Incentives
D. Comparative study with other firms
2711. Which of the following is not an element
of financial management? 2716. is not included in owner’s capital?
A. Allocation of resources A. Equity share capital
B. Financial Planning B. Long-term debt
C. Financial Decision-making C. Preference share capital
D. Financial control D. Retained profit
2712. What is the primary goal of financial 2717. With an increase in the investment in
management? fixed assets, there is a commensurate
A. Maximizing shareholder wealth in the working capital requirement.
B. Maximizing profits A. Decrease
C. Minimizing costs B. Increase

D. Maximizing sales revenue C. May increase or decrease
D. No change
2713. In carrying out Break Even Point analy-
sis, we must know what is called Cost Be- 2718. The objective of wealth maximization
havior. Below are types of cost behavior, takes into consideration:
except:
A. Risk related to uncertainty of returns
A. Advertising Costs
B. Timing of expected returns
B. Variable Costs
C. Amount of returns expected
C. Fixed cost
D. All of the above
D. Semi Variable Costs
2719. Which of the following is used as Work-
2714. Which of the following statements con- ing Capital?
cerning capital structure theory is correct?
A. Stock
A. In the traditional view, there is a lin-
B. Factory
ear relationship between the cost of eq-
uity and financial risk C. Furniture
B. Modigliani and Miller said that, in the D. Machinery
absence of tax, the cost of equity would
remain constant 2720. How much to invest in long term assets?
This decision belongs to
C. Pecking order theory indicates that
preference shares are preferred to con- A. Capital Budgeting
vertible debt as a source of finance B. Working capital management

C. Financing decision 2723. Which is not a quick asset?

D. Dividend decision A. Cash equivalents
2721. what Is NOT a technique for credit wor- B. Notes receivable
thiness C. Inventories
A. Spending only 20% of your credit limit D. Cash substitutes
B. Pay more then the minnium balance E. NOT IN THE CHOICES
C. Limit the number of credit cards you
NARAYAN CHANGDER
have 2724. If the “original price” a item is $49.99
and has a 25% discount, what is the new
D. Avoid cash advances discounted sale price:
E. Pay off your bar tab A. $37.50
2722. Which TWO of the following are exam- B. $37.49
ples of internal stakeholders in a firm? A.
C. $12.4975
Company directors B. Customers C. Suppli-
ers D. Employees E. Finance providers D. $12.50
A. B & C 2725. Flotation cost includes the cost of dis-
B. A & D count of issue of shares.
C. B & D A. True
D. A & E B. False

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DESIGNED FOR SURE SUCCESS

JAI SHREE RAM

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It is my deepest gratitude and warmest

To my mother JOYTSNA CHANGDER

who has been a constant source of Knowledge and in-

The aim of this publication is to sup-

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9. C 10. A 11. D 12. A 13. A 14. B 15. C 16. C 17. D

C. Surplus assets are sold off B. Income Statement

18. C 19. D 20. B 21. A 22. C 23. A 24. C 25. C 26. B

32. TVM stands for what?

B. A. Total Valuable of Money

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37. Which of the following is a long-term fi- C. investment market

42. In the share market, the market value of A. $124, 658

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48. C 49. A 50. A 51. D 52. C 53. B 54. A 55. B 56. C

A. A.payoff 71. Leasing of machinery can be categorized

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B. Loans 85. Name the concept which increases the re-

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D. Perpetuity 94. Which of these would require the highest

A. $30.32 103. The data collected should be:

100. Higher Inventory to be maintained when

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108. Financial management aims at 114. Payment of cash dividends

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122. What does the “R” mean in SMART

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158. This is one of the functions of a Financial

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C. Balance sheet C. Chief Executive Officer

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C. venture capital 181. Which of the following is studied with the

A. Value of firm B. Cash-Liabilities

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189. The revenue of Lenovo for July 2019 is

D. 2.7 lakhs A. direct

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B. mobilizing D. Market Prices Reflect Information

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C. debit C. ‘CREDO’ meaning ‘I trust’

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