Free Business Finance MCQs with Answers
975 Business Finance MCQs from Management Sciences, each with the correct answer and a written explanation of why it is correct. Free and unlimited, with no account needed.
Business finance explains how organisations plan, obtain and use money while balancing risk, return and liquidity. Topics include financial statements, time value of money, budgeting, working capital, capital structure, sources of finance, investment appraisal and cost of capital. Capital budgeting evaluates long-term projects, whereas working capital manages day-to-day operations.
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975 questions · page 49 of 49
- A. Operating Leverage
- B. Financial Leverage
- C. Manufacturing Leverage
- D. None of the given options
Explanation: Financial leverage refers to using debt or other fixed-financing-cost sources to fund business operations.
Correct answer: Financial Leverage- A. 5 days
- B. 36 days
- C. 48 days
- D. 73 daysBusiness & Industrial
Explanation: Average collection period equals average receivables divided by net sales, multiplied by 365: (150,000 ÷ 750,000) × 365 = 73 days.
Correct answer: 73 daysBusiness & Industrial- A. Product cost
- B. Period cost
- C. Both product cost and period cost
- D. Neither product cost nor period cost
Explanation: Product costs are attached to inventory and become cost of goods sold when the related products are sold.
Correct answer: Product cost- A. Marketing Research
- B. Product Pricing
- C. Design of marketing and distribution channels
- D. All of the given optionsFinance
Explanation: Finance supports marketing research, pricing decisions, and the design of distribution channels by providing cost, investment, revenue…
Correct answer: All of the given optionsFinance- A. Operating Cash Flows
- B. Investing Cash Flows
- C. Financing Cash Flows
- D. All of the given options
Explanation: Operating cash flows arise from routine business activities such as producing, selling, and collecting cash from customers.
Correct answer: Operating Cash Flows- A. Operating cash flow
- B. Capital spending
- C. Change in net working capital
- D. All of the given optionsHire An Accountant
Explanation: Cash flow from assets is calculated from operating cash flow, less capital spending, less the change in net working capital.
Correct answer: All of the given optionsHire An Accountant- A. Profit Margin
- B. Total Assets Turnover
- C. Debt-equity ratio
- D. None of the given options
Explanation: The debt-equity ratio evaluates financial policy by showing the relative use of borrowed funds and owners' funds.
Correct answer: Debt-equity ratio- A. Selling expenses
- B. General expenses
- C. Manufacturing overhead
- D. Administrative expensesGet Study Guides
Explanation: Product costs are incurred to manufacture or acquire goods and include direct materials, direct labour, and manufacturing overhead.
Correct answer: Manufacturing overhead- A. Selling expense
- B. Raw material
- C. Direct labor
- D. Manufacturing overhead
Explanation: Selling expenses are period costs because they are charged against revenue in the period incurred.
Correct answer: Selling expense- A. Return on investment
- B. Return on Insurance
- C. Return on Index
- D. Ratio on invoiceSubmit Mcqs Platform
Explanation: ROI means Return on Investment, a profitability measure comparing the return earned with the investment made.
Correct answer: Return on investment- A. long-term shareholder value
- B. calculating stock value
- C. calculating return on investment
- D. calculating working capital
Explanation: The rate of return on investment is a financial performance measure used to assess the value created for shareholders over time.
Correct answer: long-term shareholder value972. The kind of pension plan which follows a formula to determine retirement benefits is classified as?
- A. defined benefit pension plan
- B. defined contribution pension plan
- C. defined noncontributory pension plan
- D. deferred contribution pension planCompare Pension Plans
Explanation: A defined benefit pension promises a retirement benefit calculated through a formula based on factors such as salary and years of service.
Correct answer: defined benefit pension plan- A. contributory versus noncontributory
- B. defined contribution versus defined benefit
- C. qualified versus non-qualified
- D. all of above
Explanation: Pension plans may be classified by contribution status, benefit formula and tax qualification, giving the pairs…
Correct answer: all of above- A. $14.67
- B. $18.67
- C. $20.67
- D. $25.67
Explanation: Unit fixed cost is $200,000 ÷ 30,000 = $6.67; adding the $8 variable cost gives a total unit cost of about $14.67.
Correct answer: $14.67- A. total costs
- B. overhead costs
- C. markup costs
- D. both a and b
Explanation: Total cost is calculated by adding fixed costs and variable costs. Overhead costs usually refer mainly to indirect operating costs, so…
Correct answer: total costs