Scribd
Upload
22 views

MF Assignmentttt

The document contains two multiple choice questions (MCQs) sections about finance topics including financial services, managerial finance, treasury and controller responsibilities, and net profit and cash flow calculations. It also includes true/false statements about capital budgeting concepts such as independent and mutually exclusive projects, capital rationing, net present value (NPV), and internal rate of return (IRR).

Uploaded by

engy amr
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PDF, TXT or read online on Scribd
22 views

MF Assignmentttt

The document contains two multiple choice questions (MCQs) sections about finance topics including financial services, managerial finance, treasury and controller responsibilities, and net profit and cash flow calculations. It also includes true/false statements about capital budgeting concepts such as independent and mutually exclusive projects, capital rationing, net present value (NPV), and internal rate of return (IRR).

Uploaded by

engy amr
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PDF, TXT or read online on Scribd
You are on page 1/ 6

Question #1: MCQs

1- The part of finance concerned with design and delivery of advice and
financial products to individuals, business, and government is called
A) Managerial Finance. B) Financial Manager.
C) Financial Services. D) none of the above.

2- Managerial finance
A) involves tasks such as budgeting, financial forecasting, cash
management, and funds procurement.
B) involves the design and delivery of advice and financial products.
C) recognizes funds on an accrual basis.
D) devotes the majority of its attention to the collection and presentation
of financial data.

3- Finance can be defined as


A) the system of debits and credits.
B) the science of the production, distribution, and consumption of wealth.
C) the art and science of managing money.
D) the art of merchandising products and services.

4- The treasurer is commonly responsible for


A) taxes. B) data processing.
C) making capital expenditures. D) cost accounting.

5- The controller is commonly responsible for


A) managing cash.
B) financial accounting.
C) managing credit activities.
D) financial planning.

6- Johnson, Inc. has just ended the calendar year making a sale in the
amount of $10,000 of merchandise purchased during the year at a total
cost of $7,000. Although the firm paid in full for the merchandise during
the year, it has yet to collect at year end from the customer. The net profit
and cash flow from this sale for the year are

1
A) $3,000 and $10,000, respectively.
B) $3,000 and -$7,000, respectively.
C) $7,000 and -$3,000, respectively.
D) $3,000 and $7,000, respectively.
Answer: B

7- Making financing decisions includes all of the following EXCEPT


A) determining the appropriate mix of short-term and long-term
financing.
B) deciding which individual short-term sources are best at a given point
in time.
C) analyzing quarterly budget and performance reports.
D) deciding which individual long-term sources are best at a given point
in time.
Answer: C

8- The financial managerʹs financing decisions determine


A) both the mix and the type of assets found on the firmʹs balance sheet.
B) the most appropriate mix of short-term and long-term financing.
C) both the mix and the type of assets and liabilities found on the firmʹs
balance sheet.
D) the proportion of the firmʹs earnings to be paid as dividend.

9- The primary goal of the financial manager is


A) minimizing risk.
B) maximizing profit.
C) maximizing wealth.
D) minimizing return.

10- Corporate ownerʹs receive realizable return through


A) earnings per share and cash dividends.
B) increase in share price and cash dividends.
C) increase in share price and earnings per share.
D) profit and earnings per share.

11- The wealth of the owners of a corporation is represented by


A) profits.
B) earnings per share.
C) share value.
D) cash flow.
2
12- Wealth maximization as the goal of the firm implies enhancing the
wealth of
A) the Board of Directors.
B) the firmʹs employees.
C) the federal government.
D) the firmʹs stockholders.

13- Financial managers evaluating decision alternatives or potential


actions must consider
A) only risk.
B) only return.
C) both risk and return.
D) risk, return, and the impact on share price.

14- A financial manager must choose between three alternative


investments. Each asset is expected to provide earnings over a three-year
period as described below. Based on the wealth maximization goal, the
financial manager would

A) choose Asset 1.
B) choose Asset 2.
C) choose Asset 3.
D) be indifferent between Asset 1 and Asset 2.

15- The key participants in financial transactions are individuals,


businesses, and governments. Individuals are net ________ of funds, and
businesses are net ________ of funds.

3
A) demanders; suppliers
B) users; providers
C) suppliers; demanders
D) purchasers; sellers

16- Most businesses raise money by selling their securities in a


A) public offering.
B) private placement.
C) direct placement.
D) stock exchange.

17- The ________ measures the amount of time it takes the firm to
recover its initial investment.
A) average rate of return B) internal rate of return
C) net present value D) payback period

18- A firm is evaluating a proposal which has an initial investment of


$35,000 and has cash flows of $10,000 in year 1, $20,000 in year 2, and
$10,000 in year 3. The payback period of the project is
A) 1 year. B) 2 years.
C) between 1 and 2 years.
D) between 2 and 3 years.

19- A firm is evaluating a proposal which has an initial investment of


$50,000 and has cash flows of $15,000 per year for five years. The
payback period of the project is
A) 1.5 years. B) 2 years.
C) 3.3 years. D) 4 years.

20 - Which of the following statements is false?


A) If the payback period is greater than the maximum acceptable payback
period, accept the project.
B) If the payback period is less than the maximum acceptable payback
period, reject the project.
C) If the payback period is greater than the maximum acceptable payback
period, reject the project.
D) Two of the above.

4
Question #2: State Which of the Following Statements is
True and Which is False, Justify Your Answer Briefly in
Both Cases.
1- A firm with limited funds for investment in capital assets
must ration those funds by allocating them to projects that
will maximize share value.
2- Independent projects are projects that compete with one
another for the firm's resources, so that the acceptance of
one eliminates the others from further consideration.
3- A non-conventional cash flow pattern associated with
capital investment projects consists of an initial outflow
followed by a series of inflows.
4- If a firm has unlimited funds to invest in capital assets, all
independent projects that meet its minimum investment
criteria should be implemented.
5- The following three projects would seem to compete with
one another form the firm's resources and therefore would
be examples of mutually exclusive projects.
(1) Installing air conditioning in the plant.
(2) Acquiring a small supplier.
(3) Purchasing a new computer system.

6- If a firm has unlimited funds to invest, all the mutually


exclusive projects that meet its minimum investment criteria
can be implemented.
7- Mutually exclusive projects are projects whose cash flows
are unrelated to one another; the acceptance of one does not
eliminate the others from further consideration.

5
8- Independent projects are those whose cash flows are
unrelated to one another; the acceptance of one does not
eliminate any others from further consideration.
9- If a firm is subject to capital rationing, it is able to accept
all independent projects that provide an acceptable return.
10- In spite of the theoretical superiority of NPV, financial
managers prefer to use IRR.

You might also like