Financial Management MCQs

A) Fixed costs remain constant regardless of production levels, while variable costs change with production levels
B) Fixed costs change with production levels, while variable costs remain constant regardless of production levels
C) Fixed costs are associated with long-term investments, while variable costs are associated with short-term investments
D) Fixed costs are associated with short-term investments, while variable costs are associated with long-term investments
Answer: A) Fixed costs remain constant regardless of production levels

A) The use of debt financing to increase returns
B) The use of equity financing to increase returns
C) The use of debt financing to decrease returns
D) The use of equity financing to decrease returns
Answer: A) The use of debt financing to increase returns

A) Equity financing is a loan, while debt financing involves selling ownership in the company
B) Equity financing involves selling ownership in the company, while debt financing is a loan
C) Equity financing is a short-term financing option, while debt financing is a long-term financing option
D) Equity financing is a long-term financing option, while debt financing is a short-term financing option
Answer: B) Equity financing involves selling ownership in the company, while debt financing is a loan

A) To eliminate all risks
B) To minimize risks
C) To maximize risks
D) To ignore risks
Answer: B) To minimize risks

A) The process of allocating resources for long-term investments
B) The process of allocating resources for short-term investments
C) The process of allocating resources for debt financing
D) The process of allocating resources for equity financing
Answer: A) The process of allocating resources for long-term investments

A) Financial accounting is used for internal decision making, while managerial accounting is used for external decision making
B) Financial accounting is used for external decision making, while managerial accounting is used for internal decision making
C) Financial accounting is used for both internal and external decision making, while managerial accounting is used for budgeting
D) Financial accounting is used for budgeting, while managerial accounting is used for both internal and external decision making
Answer: B) Financial accounting is used for external decision making, while managerial accounting is used for internal decision making

A) The management of long-term assets
B) The management of short-term assets
C) The management of long-term liabilities
D) The management of short-term liabilities
Answer: B) The management of short-term assets

A) PV = FV/(1+r)^n
B) PV = FV(1+r)^n
C) PV = FV/(1-r)^n
D) PV = FV(1-r)^n
Answer: A) PV = FV/(1+r)^n

A) The concept that money has value based on time
B) The concept that money has a fixed value regardless of time
C) The concept that money has no value
D) The concept that money has value based on supply and demand
Answer: A) The concept that money has value based on time