Financial Management Quiz: Objectives And Functions!

10 Questions | Total Attempts: 3234

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Financial Management Quizzes & Trivia

Questions and Answers
  • 1. 
    • A. 

      Maximization of Corporate Profits.

    • B. 

      Maximizing a company's market share.

    • C. 

      Maximizing shareholder wealth

    • D. 

      Beating the competition.

    • E. 

      Maximizing the company's share market price.

  • 2. 
    Which of the following is NOT a function of financial management:
    • A. 

      Deciding the best sources of finance.

    • B. 

      Spending money on capital expansion

    • C. 

      Preparation of Tax Returns

    • D. 

      Evaluating how much dividends to pay shareholders.

    • E. 

      The management of working capital.

  • 3. 
    Numerous research has consistently shown that there is a strong positive correlation between the size of the executive bonuses paid to a financial manager and that financial manager's performance in maximizing shareholder wealth.
    • A. 

      True

    • B. 

      False

  • 4. 
    What is the main criticism in using shareholder wealth as the best criterion in evaluating the performance of a financial manager:
    • A. 

      It does not take into account the shareholder's exposure to financial risk.

    • B. 

      It is not sustainable.

    • C. 

      It does not take into account the size of the shareholders investment.

    • D. 

      Maximizing profits is a more suitable criterion.

    • E. 

      Share market prices can be manipulated in the short term.

  • 5. 
    When making investment decisions, professional investors mainly consider the size of their expected returns on investment.
    • A. 

      True

    • B. 

      False

  • 6. 
    • A. 

      Minimizing Corporate Tax

    • B. 

      Slashing costs

    • C. 

      Beating the Competition

    • D. 

      Maximizing Profits

    • E. 

      Maximizing market share.

  • 7. 
    A company's market capitalization = Number of issued shares * market price per share.
    • A. 

      True

    • B. 

      False

  • 8. 
    Which of the following would NOT be classified as a finance decision:
    • A. 

      Spending money on Capital Expenditure.

    • B. 

      Raising money using equity finance.

    • C. 

      Spending money on revenue expenditure.

    • D. 

      Borrowing Funds.

    • E. 

      Paying dividends to shareholders

  • 9. 
    Which of the following would be part of a financial manager's dividend (or operating) decisions:
    • A. 

      Spending money on Capital Expenditure.

    • B. 

      Raising money using equity finance.

    • C. 

      Spending money on revenue expenditure.

    • D. 

      Borrowing Funds.

    • E. 

      Paying dividends to shareholders

  • 10. 
    Which of the following would be part of a financial manager's investment decision:
    • A. 

      Spending money on Capital Expenditure.

    • B. 

      Raising money using equity finance.

    • C. 

      Spending money on revenue expenditure.

    • D. 

      Borrowing Funds.

    • E. 

      Paying dividends to shareholders