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.
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MCQ Questions Class 12 Financial Management with Answers - Set - 5
Question 1:
If dividend portion of total earnings is high, portion of retained earnings will be
(a) high.
(b) low.
(c) moderate.
(d) equal.
Correct Answer – (B)
Question 2:
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)
Correct Answer – (A)
Question 3:
Current assets are those assets which get converted into cash:
a. Within six months
b. Within one year
c. Between one year and three years
d. Between three and five years.
Correct Answer – (B)
Question 4:
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.
Correct Answer – (C)
Question 5:
Companies with a higher growth potential are likely to
a. Pay lower dividends
b. Pay higher Dividends
c. Dividends are not affected
d. None of the above
Correct Answer – (A)
MCQ Questions Class 12 Financial Management With Answers
Question 6:
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 – (B)
Question 7:
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 8:
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:
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 10:
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 say
