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CS Executive Practice Test: Nature & Scope of Financial Management
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CS Executive Practice Test: Nature & Scope of Financial Management
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25 Questions

1. Profit maximization –
2. Investment decisions are concerned with –
3. _____consistent with the object of maximizing the owner’s economic welfare.
4. “Shareholder wealth” in a firm is represented by___
5. Under inflationary conditions, the value of money expressed in terms of its purchasing power over goods and services
6. Financial management is broadly concerned with___
7. Which of the following is not a function of a finance manager?
8. ______means the organization can no longer meet its financial obligations with its lender or lenders as debts become due.
9. FinancialManagementis concerned with –
10. For which of the following reason(s) profit maximization concept is criticized –
1. It is vague conceptually.
2. It ignores the timing of returns.
3. It ignores the risk factor
4. Its emphasis is generally on short-run projects.
Select the correct answer from the options given below.
11. The focal point of financial management in a firm is____
12. Statement (I):
Since funds can be obtained from different sources, therefore, their procurement is always considered a complex problem by business concerns.
Statement (II):
Funds produced from different sources have different characteristics in terms of risk, cost, and control.
Select the correct answer from the options given below.
13. Money market mutual funds –
14. Financial management is –
15. The market price of a share of common stock is determined by:
16. ₹ 200 is invested at the end of each month in an account paying interest of 6% per year compounded monthly. What is the amount of this annuity after the 10th payment? Given that (1.005)10= 1.0511
17. A permanent_____may lead an organization to the chaotic state
18. Financial Management can be judged by the study of the nature of___
19. Financial Management is study –
(I) Of the process of procuring and judicious use of financial resources
(II) Undertaken to maximize the value of the firm/owners.
Select the correct answer from the options given below.
20. Assuming that the discount rate is 7% per annum, how much would you pay to receive ₹ 50, growing at 5%, annually, forever?
21. Using _in the capital structure of a company is called financial gearing.
22. Procurement of funds inter alia includes___
(a) Identification of sources of finance
(b) Determination of finance mix
(c) Raising of funds
(d) Division of profits between dividends and retention of profits of internal funds generation
Select the correct answer from the options given below.
23. High financial gearing will___
24. Assertion (A):
Profit maximization as an objective does not take into account the time pattern of returns.
Reason (R):
The finance managers will accept highly risky proposals if they give high profits by applying the profit maximization concept.
Select the correct answer from the options given below.
25. If 18% is the best risk-free return available, then you would be indifferent to receiving ₹ 100 now or ₹ 118 in one year’s time

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