M.COM PART
2
FINANCIAL
MANAGEMENT
SEMESTER 4
Part 4 Link Click Here
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International Marketing
https://www.surajpateleducation.com/2021/02/international-marketing-mcq-with.html
ORGANISATIONAL BEHAVIOUR
1) https://www.surajpateleducation.com/2021/01/mcom-part-2-organisational-behaviour-mcq.html
2) https://www.surajpateleducation.com/2021/01/organisational-behaviour-mcq-pdf-mcom.html
Entrepreneurship
1) https://www.surajpateleducation.com/2021/01/entrepreneurship-mcom-part-2-multiple.html
2) https://www.surajpateleducation.com/2021/01/entrepreneurship-development-importance.html
Direct Tax
1) https://www.surajpateleducation.com/2021/01/direct-tax-mcom-part-2-importance-mcq.html
2) https://www.surajpateleducation.com/2020/12/direct-tax-mcom-part-2-mcq-pdf.html
1. The type of collateral security used of
short term loan is
(a) Real Estate
(b) Plant & Machinery
(c) Stock of Goods
(d) Equity share capital
ANS: C
2. Commercial Paper is a type of
(a) Fixed Coupon Bond
(b) Unsecured short term loan
(c) Equity share capital
(d) Government Bonds
ANS: B
3. Capital Budgeting is a part of
(a) Investment Decision
(c) Marketing Management
(b) Working Capital Management
(d) Capital Structure
ANS: A
4. Capital Budgeting deals with
(a) Long-term Decisions
(b) Short-term Decisions
(c) Both (a) and (b)
(d) Neither (a) nor (b)
ANS: A
5. Which of the following is not used in
Capital Budgeting?
(a) Time Value of Money
(b) Sensitivity Analysis
(c) Net Assets Method
(d) Cash Flows
ANS: C
6. Capital Budgeting Decisions are
a) Reversible
b) Irreversible
c) Unimportant
d) All of the above
ANS: B
7. Which of the following is not incorporated
in Capital Budgeting?
(a) Tax-Effect
(b) Time Value of Money
(c) Required Rate of Return
(d) Rate of Cash Discount
ANS: D
8. Which of the following is not a capital
budgeting decision?
(a) Expansion Programme
(b) Merger
(c) Replacement of an Asset
(d) Inventory Level
ANS: D
9. A sound Capital Budgeting technique is based
on
(a) Cash Flows
(b) Accounting Profit
(c) Interest Rate on Borrowings
(d) Last Dividend Paid
ANS: A
10. Which of the following is not a relevant
cost in Capital Budgeting?
(a) Sunk Cost
(b) Opportunity Cost
(c) Allocated Overheads
(d)Both (a) and (c) above
ANS: D
11. Capital Budgeting Decisions are based on
(a) Incremental Profit
(b)incremental Cash Flows
(c) Incremental Assets
(d) Incremental Capital
ANS: B
12. Which of the following has no effect on
project cash flows?
(a) Salvage Value
(b) Depreciation Amount
(c) Tax rate change
(d) Method of projecting finance
ANS: D
13. Cash Inflows from a project include
(a) Tax Shield of Depreciation
(b) After –tax operating profits
(c) Raising of Funds
(d) Both (a) and (b)
ANS: D
14. Which of the following is not true with
reference to capital budgeting?
(a) Capital budgeting is related to asset replacement
decisions
(b) Cost of capital is equal to minimum required return
(c) Existing investment in a project is not treated as sunk
cost
(d) Timing of cash flows is relevant
ANS: C
15. Which of the following is not followed in
capital budgeting?
(a) Cash flows Principle
(b) Interest Exclusion Principle
(c) Accrual Principle
(d) Post-tax Principle
ANS: C
16. Depreciation is incorporated in cash flows
because it
(a) Is unavoidable cost
(b) Is a cash flow
(c) Reduces Tax liability
(d) Involves an outflow
ANS: C
17. Which of the following is not true for
capital budgeting?
(a) Sunk costs are ignored
(b) Opportunity costs are excluded
(c) Incremental cash flows are considered
(d) Relevant cash flows are considered
ANS: B
18. Which of the following is not applied in
capital budgeting?
(a) Cash flows be calculated in incremental terms
(b) All costs and benefits are measured on cash basis
(c) All accrued costs and revenues be incorporated
(d) All benefits are measured on after-tax basis
ANS: C
19. Evaluation of Capital Budgeting Proposals
is based on Cash Flows because с C
(a) Cash Flows are easy to calculate
(b) Cash Flows are suggested by SEBI
(c) Cash is more important than profit
(d) None of the above
ANS: C
20. Which of the following is not included in
incremental A flows?
(a) Opportunity Costs
(b) Sunk Costs
(c) Change in Working Capital
(d) Inflation effect
ANS: B
21. A proposal is not a Capital Budgeting
proposal if it
(a) is related to Fixed Assets
(b) brings long-term benefits
(c) brings short-term benefits only
(d) has very large investment
ANS: C
22. In capital budgeting, the term Capital
Rationing implies
(a) That no retained earnings available
(b) That limited funds are available for investment
(c) That no external funds can be raised
(d) That no fresh investment is required in current year
ANS: B
23. Profitability Index, when applied to
Divisible Projects, impliedly assumes that
(a) Project cannot be taken in parts
(b) NPV is linearly proportionate to part of the project
taken up
(c) NPV is additive in nature
(d) Both (b) and (c)
ANS: D
24. A weakness of the internal rate of return
(IRR) approach for determining the acceptability of investments is that it
(a) Does not consider the time value of money
(b) is not a straightforward decision criterion
(c) Implicitly assumes that in firm is able to reinvest
project cash flows at the firm's cost of capital
(d) implicitly assumes that the firm is able to reinvest
project cash flows at the project's intimal rate of return
ANS: D
25. The profitability index approach to
investment analysis
(a) Fails to consider the timing of project cash flows
Investment Decisions
(b) considers only the project's contribution to net income
and does not consider cash flow effects
(c) Always yields the same accept reject decisions for
independent projects as the net present value method
(d) Always yields the same accept/reject decisions for
mutually exclusive projects as the net present value method
ANS: C
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