CBSE Class 12 Financial Management Multiple Choice Questions with Answers. MCQ Questions Class 12 Financial Management with Answers Is Prepared Based on Latest Exam Pattern. Students can solve NCERT MCQ questions Class 12 Financial Management with Answers to know their preparation level.
Students who are searching for NCERT MCQ Questions Class 12 Financial Management with Answers are compiled here to get good practice on all fundamentals. Know your preparation level on MCQ Questions for Class 12 Financial Management with Answers. You can also verify your answers from the provided MCQ Class 12 Financial Management with Answers. So, ace up your preparation with MCQ of Class 12 Business Studies Examinations.
MCQ Questions Class 12 Financial Management with Answers - Set - 3
Question 1:Â
A decision to acquire a new and modern plant to upgrade an old one is a
(a) Financing decision
(b) Working capital decision
(c) Investment decision
(d) None of the above
Correct Answer – (C)
Question 2:Â
Financial leverage is called favourable if:
(a) Return on investment is lower than the cost of debt.
(b) ROI is higher than the cost of Debt
(c) Debt is easily available.
(d) If the degree of existing financial leverage is low.
Correct Answer – (B)
Question 3:Â
The Cheapest source of finance is :
(a) Debenture
(b) Equity share capital
(c) Preference share
(d) Retained earningsÂ
Correct Answer – (D)
Question 4:Â
Higher debt – equity ratio results in:
(a) Lower financial risk
(b) Higher degree of operating risk
(c) Higher degree of financial risk
(d) Higher EPS.Â
Correct Answer – (C)
Question 5:Â
Current assets of a business firm should be financed through:
(a) Current liability only
(b) Long term liability only
(c) Fixed liabilities only
(d) Both types (i.e., long- and short-term liabilities)Â
Correct Answer – (A)
MCQ Questions Class 12 Financial Management With Answers
Question 6:Â
A fixed asset should be financed through:
(a) A Long-term liability
(b) A Short-term liability
(c) A Medium-term liability
(d) A Mix of long- and short-term liabilities
Correct Answer – (A)
Question 7:Â
Current assets are those assets which get converted into cash:
(a) Within six months
(b) Within one yearÂ
(c) Between one year and three years
(d) Between three and five years.
Correct Answer – (B)
Question 8:Â
Higher Working capital usually results in:
(a) Higher current ratio, higher risk and higher profits
(b) Lower current ratio, higher risk and profits
(c) Higher equity, lower risk and lower profits
(d) Lower equity, lower risk and higher profits.
Correct Answer – (A)
Question 9:Â
Companies with a higher growth potential are likely to
(a) Pay lower dividends
(b) Pay higher Dividends
(c) Dividends are not affectedÂ
(d) None of the aboveÂ
Correct Answer – (A)
Question 10:Â
Other things remaining the same, an increase in the tax rate on corporate profit will
(a) Make the debt relatively cheaper
(b) Make the debt relatively the dearer
(c) Have no impact on the cost of debt
(d) We can’t sayÂ
