Introduction to Financial Management MCQs

Welcome to our comprehensive collection of Multiple Choice Questions (MCQs) on Introduction to Financial Management, a fundamental topic in the field of IC 89 Management Accounting. Whether you're preparing for competitive exams, honing your problem-solving skills, or simply looking to enhance your abilities in this field, our Introduction to Financial Management MCQs are designed to help you grasp the core concepts and excel in solving problems.

In this section, you'll find a wide range of Introduction to Financial Management mcq questions that explore various aspects of Introduction to Financial Management problems. Each MCQ is crafted to challenge your understanding of Introduction to Financial Management principles, enabling you to refine your problem-solving techniques. Whether you're a student aiming to ace IC 89 Management Accounting tests, a job seeker preparing for interviews, or someone simply interested in sharpening their skills, our Introduction to Financial Management MCQs are your pathway to success in mastering this essential IC 89 Management Accounting topic.

Note: Each of the following question comes with multiple answer choices. Select the most appropriate option and test your understanding of Introduction to Financial Management. You can click on an option to test your knowledge before viewing the solution for a MCQ. Happy learning!

So, are you ready to put your Introduction to Financial Management knowledge to the test? Let's get started with our carefully curated MCQs!

Introduction to Financial Management MCQs | Page 2 of 12

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Q11.
What can slow down the economy growth rate and pull down corporate profitability in financial management?

a.

Abnormal hike in interest rates

b.

Fixed rate of interest

c.

Tax advantage

d.

Low p/e ratios

Discuss
Answer: (a).Abnormal hike in interest rates Explanation:Abnormal hike in interest rates can slow down the economy growth rate and pull down corporate profitability in financial management.
Q12.
How does the finance manager handle abnormal hike in interest rates in financial management?

a.

By increasing corporate profitability

b.

By decreasing the economy growth rate

c.

By considering possible and potential risk factors

d.

By ignoring the risk factors

Discuss
Answer: (c).By considering possible and potential risk factors Explanation:The finance manager handles abnormal hike in interest rates by considering possible and potential risk factors in fund procurement decisions for projected investment decisions.
Q13.
What is the primary focus of Financial Management?

a.

Asset management

b.

Maximizing returns

c.

Human resource management

d.

Marketing strategy

Discuss
Answer: (b).Maximizing returns Explanation:Financial Management is primarily concerned with planning and controlling financial resources to maximize returns for an enterprise.
Q14.
Which of the following is NOT a function of Financial Management?

a.

Acquisition of funds

b.

Raising of capital

c.

Human resource management

d.

Allocation of funds and capital

Discuss
Answer: (c).Human resource management Explanation:Financial Management functions include acquisition of funds, raising of capital, and allocation of funds and capital among different projects to maximize enterprise value.
Q15.
What does Financial Management encompass in terms of managing?

a.

Managing only financial resources

b.

Managing only human resources

c.

Managing only marketing strategies

d.

Managing all fundamental aspects of a business enterprise

Discuss
Answer: (d).Managing all fundamental aspects of a business enterprise Explanation:Financial Management involves Planning, Organising, Directing, Coordinating, Controlling, and Budgeting (PODSCORB) in respect of financial resources and allocation in a business enterprise.
Q16.
Which decision does Financial Management NOT deal with?

a.

Procurement of fund decisions

b.

Allocation of funds decisions

c.

Human resource decisions

d.

Both a and b

Discuss
Answer: (c).Human resource decisions Explanation:Financial Management deals with procurement of funds and allocation of funds decisions, not human resource decisions.
Q17.
What are the two basic parts of Financial Management?

a.

Asset management and capital allocation

b.

Procurement of fund decisions and marketing strategies

c.

Procurement of fund decisions and allocation of funds decisions

d.

Human resource management and budgeting decisions

Discuss
Answer: (c).Procurement of fund decisions and allocation of funds decisions Explanation:The two basic parts of Financial Management are procurement of fund decisions and allocation of funds decisions.
Q18.
How has the recent surge in globalization affected the significance of financial management?

a.

It has decreased the significance

b.

It has not affected the significance

c.

It has intensified the significance

d.

It has made the significance unpredictable

Discuss
Answer: (c).It has intensified the significance Explanation:The recent surge in globalization with liberalization and cross-border capital flow has intensified the significance of financial management.
Q19.
What is the responsibility of the financial manager in allocation of funds decisions?

a.

Identifying situations that require more funds

b.

Ensuring proper use of funds

c.

Both a and b

d.

None of the above

Discuss
Answer: (c).Both a and b Explanation:The financial manager's responsibility in allocation of funds decisions includes identifying situations that require more funds and ensuring proper use of funds.
Q20.
What is the key objective of the financial manager in using funds effectively?

a.

Generating income equal to cost of capital

b.

Generating income more than cost of capital

c.

Minimizing income

d.

Maximizing income

Discuss
Answer: (b).Generating income more than cost of capital Explanation:The key objective of the financial manager in using funds effectively is to generate income more than the cost of capital at which funds are procured.
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