Prepare Strategic Financial Management mcq set 4 for your bba mba courses. Then you can give exam quiz of Strategic Financial Management for assess your knowledge.
MCQ of Strategic Financial Management set 4
121. IGR stands for ___
A. Interest growth rate
B. Internal gearing rate
C. Internal growth rate
D. None of the above
Answer
C. Internal growth rate
122. SGR stands for
A. Sustainable growth rate
B. Statutory growth rate
C. Stable growth rate
D. Suitable growth rate
Answer
A. Sustainable growth rate
123. Financial leverage indicates disproportionate change in taxable income as a result of change in ___
A. Operating income
B. Operating leverage
C. Interest
D. Tax
Answer
A. Operating income
124. The term trading on equity is generally used for ___ . ___ financial leverage
A. Unfavourable
B. Moderate
C. Less than 1
D. Favourable
Answer
D. Favourable
125. MOS stands for ___
A. Marginal own source
B. Money of seller
C. Margin of safety
D. Medium own source
Answer
C. Margin of safety
126. The ideal situation is to have high financial leverage and low operating leverage.
A. False
B. True
C. none
D. all
Answer
B. True
127. Composite leverage explains change in taxable income on account of change in sales
A. True
B. False
C. none
D. all
Answer
A. True
128. Dividend on preference share capital is ignored while calculating operating leverage.
A. True
B. False
C. none
D. all
Answer
B. False
129. Trading on equity implies having a ___ debt-equity ratio.
A. Low
B. Medium
C. High
D. Normal
Answer
C. High
130. ___ on capital is called cost of capital.
A. Minimum expected return
B. Normally expected return
C. Higher expected return
D. None of these
Answer
A. Minimum expected return
131. Which among the following method is based on time value of money?
A. Pay-back period
B. Post pay-back profitability
C. Discounted cash flow method
D. ARR method
Answer
C. Discounted cash flow method
132. Under net present value criteria, a project is approved if ___
A. NPV is positive
B. The funds are unlimited
C. Both A & B
D. None of these
Answer
A. NPV is positive
133. The return available from the project after the pay-back period is not considered in the case of ___
A. Net present value
B. Profitability index
C. Internal rate of return
D. Pay-back period method
Answer
D. Pay-back period method
134. Internal rate of return and net present value are synonymous terms.
A. True
B. False
C. none
D. all
Answer
B. False
135. Ind AS deals with Lease finance is ___
A. Ind AS 17
B. Ind AS 117
C. Ind AS 102
D. Ind AS 115
Answer
D. Ind AS 115
136. ___ is a long term lease and the lessee will be paying much more than the cost of the property orequipment to the lessor in the form of lease charges.
A. Operating lease
B. Financial lease
C. Leveraged lease
D. Direct lease
Answer
B. Financial lease
137. ___ is also known as dividend capitalisation model
A. Walter’s model
B. Gordon’s model
C. Modiglani & Millers model
D. None of these
Answer
B. Gordon’s model
138. SVA stands for ___
A. Share value accounted
B. Statutory value addition
C. Shareholder value added
D. None of the above
Answer
C. Shareholder value added
139. Financial risk arises when there is an involvement of ___ in the capital structure
A. Debt
B. Equity
C. Right issue
D. Bonus issue
Answer
A. Debt
140. The concept of EVA has been developed by ___
A. Alfred marshal
B. Benjamin Fleming
C. Stern Steward
D. Charles H Dow
Answer
C. Stern Steward
141. Use of more debt capital rather than equity capital is called ___
A. Risk taking
B. Operating leverage
C. Combined leverage
D. Financial leverage
Answer
D. Financial leverage
142. The policy on quantum of dividend to be distributed as dividend is termed as ___
A. Profit sharing policy
B. Appropriation
C. Dividend policy
D. Distribution policy
Answer
C. Dividend policy
143. Operating leverage is not favourable when ___
A. Fixed costs are more than contribution
B. Fixed cost is less than variable cost
C. Fixed cost and variable cost are equal
D. None of the above cases
Answer
A. Fixed costs are more than contribution
144. Stock dividend and bonus shares are synonymous terms.
A. True
B. False
C. none
D. all
Answer
A. True
