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 7 of 12

Discover more Topics under IC 89 Management Accounting

Q61.
What does financial management provide techniques, methods, and modules for in the assessment of various projects or investments?

a.

Only Profit maximization

b.

Only Liquidity analysis

c.

Only Strategic planning

d.

Assessment of various projects or investments in terms of NPV, IRR, etc.

Discuss
Answer: (d).Assessment of various projects or investments in terms of NPV, IRR, etc. Explanation:Financial management provides techniques, methods, and modules for the assessment of various projects or investments in terms of NPV (Net Present Value), IRR (Internal Rate of Return), etc.
Q62.
What is NPV?

a.

Net Product Value

b.

Net Present Value

c.

Non-Profit Venture

d.

New Project Valuation

Discuss
Answer: (b).Net Present Value Explanation:NPV stands for Net Present Value.
Q63.
What does IRR stand for in the context of financial management?

a.

Internal Revenue Rate

b.

Investment Return Ratio

c.

Interest Rate of Return

d.

Internal Rate of Return

Discuss
Answer: (d).Internal Rate of Return Explanation:IRR stands for Internal Rate of Return in the context of financial management.
Q64.
What do financing decisions relate to?

a.

Only determining needs and sources of finance

b.

Acquiring optimum funds to finance various fixed assets and working capital

c.

Estimation of cost of capital

d.

Preparation of fund flow statement

Discuss
Answer: (b).Acquiring optimum funds to finance various fixed assets and working capital Explanation:Financing decisions relate to acquiring optimum funds to finance various fixed assets and working capital.
Q65.
What is used for the assessment of new projects, investments, and treatment of investments in financing decisions?

a.

Only Financial risk analysis

b.

Only Cash flow statement

c.

Financial risk management techniques and modules

d.

Only Determination of time value of money

Discuss
Answer: (c).Financial risk management techniques and modules Explanation:Financial risk management techniques and modules are used for the assessment of new projects, investments, and treatment of investments in financing decisions.
Q66.
What does financial management take care of in the context of financing decisions?

a.

Only Determination of time value of money

b.

Only Estimation of cost of capital

c.

Preparation of fund flow and Cash flow statement, evaluation of long term investments or projects, Cash management

d.

Only Assessment of merits and demerits of various sources of finance

Discuss
Answer: (c).Preparation of fund flow and Cash flow statement, evaluation of long term investments or projects, Cash management Explanation:Financial management takes care of the preparation of fund flow and Cash flow statement, evaluation of long-term investments or projects, and Cash management in the context of financing decisions.
Q67.
What do financing decisions call for in terms of knowledge, skill, experience, and exposure?

a.

Only Knowledge of industry trends

b.

Only Exposure to financial risk analysis

c.

Sound knowledge, skill, experience, and exposure on financial risk analysis and management

d.

Only Skill in cash management

Discuss
Answer: (c).Sound knowledge, skill, experience, and exposure on financial risk analysis and management Explanation:Financing decisions call for sound knowledge, skill, experience, and exposure on financial risk analysis and management.
Q68.
What important issues are examined in financing decisions regarding the needs and sources of finance?

a.

Only Merits and demerits of various sources of finance

b.

Only Determination of time value of money

c.

Only Consideration of both regulatory aspects and technical aspects of different sources of finances

d.

Determination of needs and sources of finance, assessment of merits and demerits of various sources of finance, consideration of both regulatory aspects and technical aspects of different sources of finances especially long-term finance

Discuss
Answer: (d).Determination of needs and sources of finance, assessment of merits and demerits of various sources of finance, consideration of both regulatory aspects and technical aspects of different sources of finances especially long-term finance Explanation:In financing decisions, important issues examined include determination of needs and sources of finance, assessment of merits and demerits of various sources of finance, and consideration of both regulatory aspects and technical aspects of different sources of finances, especially long-term finance.
Q69.
What aspects does management consider in dividend decisions?

a.

Only Industry trend for dividend per share (DPS)

b.

Only Retention of profit for internal financing

c.

Both the portion of profits to be distributed to shareholders and retention of profit for internal financing

d.

Only Industry trend for dividend per share (DPS) and profit maximization

Discuss
Answer: (c).Both the portion of profits to be distributed to shareholders and retention of profit for internal financing Explanation:In dividend decisions, management considers both the portion of profits to be distributed to shareholders and retention of profit for internal financing.
Q70.
What conflict arises in dividend decisions?

a.

Industry trend for dividend per share (DPS) versus Retention of profit for internal financing

b.

Profit Maximisation versus Wealth maximisation

c.

Short-term goal versus Long-term goal

d.

External finance versus Internal finance

Discuss
Answer: (b).Profit Maximisation versus Wealth maximisation Explanation:In dividend decisions, conflicts arise in respect of management decisions for Profit Maximisation versus Wealth maximisation.
Page 7 of 12