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 8 of 12

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Q71.
What does dividend payment attract?

a.

Short-term goals

b.

Shareholders

c.

Growth and expansion process

d.

External finance

Discuss
Answer: (b).Shareholders Explanation:Dividend payment attracts shareholders.
Q72.
Why does dividend payment hamper the growth or expansion process?

a.

It attracts external finance

b.

It involves more costs and is time-consuming

c.

It is not attractive to shareholders

d.

It is focused on short-term goals

Discuss
Answer: (b).It involves more costs and is time-consuming Explanation:Dividend payment hampers the growth or expansion process because it involves more costs and is time-consuming.
Q73.
What does the company depend on for expansion when profits are distributed as dividends?

a.

Internal finance

b.

External finance

c.

Only Retained Earnings

d.

Only Regulatory aspects of different sources of finances

Discuss
Answer: (b).External finance Explanation:When profits are distributed as dividends, for expansion, the company depends on external finance.
Q74.
What do most investors want in financial products?

a.

Perfect jobs

b.

Risk-free financial products

c.

Perfect investments

d.

External factors beyond their control

Discuss
Answer: (b).Risk-free financial products Explanation:Most investors want risk-free financial products, demanding assurance and guarantees for good returns.
Q75.
How does the entity entrusted with savings and investments use them?

a.

To create assets and property for business purposes

b.

To ensure perfect investments

c.

To avoid financial risks

d.

To eliminate external factors beyond control

Discuss
Answer: (a).To create assets and property for business purposes Explanation:The entity entrusted with savings and investments uses them to create assets and property for business purposes.
Q76.
What does the performance of assets created by a business enterprise depend on?

a.

Perfect investments

b.

Multiple unknown and external factors beyond control

c.

Risk-free financial products

d.

Avoiding financial risks

Discuss
Answer: (b).Multiple unknown and external factors beyond control Explanation:The performance of assets created by a business enterprise depends on multiple unknown and external factors beyond the control of the corporate management of the entity.
Q77.
What is one of the major functions of financial management?

a.

External factors

b.

Perfect investments

c.

Financial decisions

d.

Risk-free financial products

Discuss
Answer: (c).Financial decisions Explanation:Financial Decision is one of the major functions of financial management.
Q78.
What is time value of money?

a.

The worth of a rupee received today is the same as the worth of a rupee to be received in the future.

b.

The worth of a rupee received today is greater than the worth of a rupee to be received in the future.

c.

The worth of a rupee received today is less than the worth of a rupee to be received in the future.

d.

The worth of a rupee received today is equal to the worth of a rupee to be received in the future.

Discuss
Answer: (c).The worth of a rupee received today is less than the worth of a rupee to be received in the future. Explanation:Time value of money means that the worth or value of a rupee received today is less than the worth of a rupee to be received in the future.
Q79.
What is the preference of money at present compared to future money called?

a.

Financial risk management

b.

Risk-free financial products

c.

Time preference for money

d.

Perfect investments

Discuss
Answer: (c).Time preference for money Explanation:The preference of money at present compared to future money is called time preference for money.
Q80.
Why is time value of money a primary consideration of financial decisions?

a.

To ensure perfect investments

b.

To eliminate external factors beyond control

c.

To make risk-free financial products

d.

Because the worth of money is different over time

Discuss
Answer: (d).Because the worth of money is different over time Explanation:Time value of money is a primary consideration of financial decisions because the worth of money is different over time.
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