10/16/2020 304- FIN- ADVANCE FINANCIAL MANAGEMENT MCQ TEST -1
304- FIN- ADVANCE FINANCIAL
MANAGEMENT MCQ TEST -1
Name of the Students
Shubham Diwakar Argade
Name of the institute
Zeal college of institute
Mail ID
[email protected]
1.Which statement is prepared in the process of funds flow analysis?
Schedule of changes in working capital
Funds Flow Statement
Both a and b
None of the above
Correct answer
Schedule of changes in working capital
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10/16/2020 304- FIN- ADVANCE FINANCIAL MANAGEMENT MCQ TEST -1
2.Funds Flow Statement is prepared on the basis of data of P&L statement and
two consecutive balance sheets.
True
False
Value delivery
None of the above
3.Which of the following rules stands true while preparation of Schedule of
changes in working capital?
An increase in current assets increases working capital.
An increase in current assets decreases working capital.
An increase in current liabilities decreases working capital.
An increase in current liabilities increases working capital
4.Funds Flow Statement is also known as
Statement of Funds Flow
Statement of Sources and Application of Funds
All of the above
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10/16/2020 304- FIN- ADVANCE FINANCIAL MANAGEMENT MCQ TEST -1
5. Given Net profit for the year Rs 2, 50,000 Transferred to general reserves Rs
40,000 and old machinery bought for Rs 50,000 was sold for Rs 20,000.
Calculate funds from operations.
Rs 2, 80,000
Rs 2, 20,000
Rs 2, 40,000
Rs 2, 60,000
6.In the context of Funds Flow Analysis, the word “funds” is used to define
Net Working capital
Total current assets-Total current liabilities
Both a and b
None of the above
7. Provision of taxation is treated as
As a current liability
As an appropriation of profits
Either a or b
None of the above
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10/16/2020 304- FIN- ADVANCE FINANCIAL MANAGEMENT MCQ TEST -1
8.Which of the following are treated as long term investments?
Non-current investments
Trade Investments
Sinking fund investments
All of the above
9. The balance of fixed assets of Y Ltd. at cost at the end of 2013 and 2014 were
Rs 5,70,800 and Rs 6,15,300. During the year 2014 a machinery costing Rs
60,000 was sold. Determine the purchase of fixed assets.
Rs 5000
Rs 1000
Rs 1,100
Rs 15,000
Correct answer
Rs 1000
10.Funds Flow Statement holds significance for
Shareholders
Financiers
Government
All of the above
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11.Statement of cash flows includes
Financing Activities
Option 2
Operating Activities
Investing Activities
All of the Above
12. In cash flows, when a company invests in fixed assets and short-term
financial investments results in
Increased Equity
Increased Liabilities
Decreased Cash
Increased Cash
13.A company that issues stocks and bonds to raise funds results in
Decrease in Cash
Increase in Cash
Increase in Equity
Increase in Liabilities
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10/16/2020 304- FIN- ADVANCE FINANCIAL MANAGEMENT MCQ TEST -1
14. The purchase value of assets over its serviceable life is categorized as
Appreciated Liabilities
Appreciated Assets
Depreciation
Appreciation
15.The basic financial statements include
Statement of Cash Flows
Statement of Retained Earnings
Balance Sheet and Income Statement
None of the Above
Correct answer
None of the Above
16.What is the formula to calculate economic value added?
Net profit - WACC
Revenue - (capital invested * WACC)
Net profit, after tax - WACC
Net profit, after tax - (capital invested * WACC)
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10/16/2020 304- FIN- ADVANCE FINANCIAL MANAGEMENT MCQ TEST -1
17. If you have net profit of 100,000, invested capital of 50,000 and WACC of
10%, what is your economic value added?
50,000
40,000
10,000
95,000
18.Economic value added is based on the -------?
Profit
Residual wealth
Gross wealth
None of these
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10/16/2020 304- FIN- ADVANCE FINANCIAL MANAGEMENT MCQ TEST -1
19.How is economic value added (EVA) calculated?
It is the difference between the market value of the firm and the book value of equity
It is the firm's net operating profit after tax (NOPAT) less a dollar cost of capital
charge
It is the net income of the firm less a dollar cost that equals the weighted average
cost of capital multiplied by the book value of liabilities and equities.
None of the above are
Correct answer
It is the firm's net operating profit after tax (NOPAT) less a dollar cost of capital
charge
20. The key function of the financial manager is to
make investment decisions
perform financial analysis and planning
make financing decisions
all of the above
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