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Finance Multiple Choice Online Quiz

Description: Business Studies #Finance Multiple Choice quiz
Number of Questions: 13
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Tags: finance
Attempted 0/13 Correct 0 Score 0

What is the benefit to shareholders of debt financing over equity financing?

  1. it minimises risk

  2. return on shareholders equity is likely to be higher

  3. repayments can be postponed in economic recessions

  4. loans are guaranteed by the australian securities exchange


Correct Option: B

Which strategy could an Australian exporter adopt to reduce the risk of non-payment?

  1. factoring

  2. hedging

  3. letter of credit

  4. unsecured note


Correct Option: C

How can a business improve its working capital management?

  1. by increasing cost centres

  2. by reducing variable costs

  3. by leasing rather than buying assets

  4. by extending credit terms to 60 days


Correct Option: C

Which government institution investigates claims that companies falsify accounting records?

  1. australian securities exchange

  2. new department of fair trading

  3. australian securities and investment commission

  4. australian competition and consumer commission


Correct Option: C

If a business budgets for marketing and human resources to ensure profit it is an example of?

  1. global sourcing

  2. interdependence

  3. operations

  4. total quality management


Correct Option: B

Which of the following is an example of an external source of equity finance?

  1. commercial bills

  2. debentures

  3. ordinary shares

  4. overdraft


Correct Option: C

The financial report limitation of estimating the market price of a new company is known as?

  1. normalised earnings

  2. capitalised expenses

  3. valuing assets

  4. notes to the financial statements


Correct Option: C

Which financial statement best provides information on cash receipts and cash payments?

  1. statement of equity

  2. cash flow statement

  3. income statement

  4. balance sheet


Correct Option: B

Which financial strategy would be most appropriate to manage an appreciating Australian dollar?

  1. increase exports

  2. bill of exchange

  3. derivatives

  4. increase imports of raw materials


Correct Option: C

Which source of finance allows a business to offer new shares to already existing shareholders?

  1. new issue

  2. rights issue

  3. placement

  4. share purchase plan


Correct Option: B

Which of the following ratios would help a business to evaluate its liquidity?

  1. current ratio

  2. debt to equity ratio

  3. profitability ratio

  4. net profit ratio


Correct Option: A

Which of the following is a benefit of the just in time method to manage working capital?

  1. it improves the control of cash

  2. it improves the control of inventory

  3. it improves the value of current assets

  4. it improves the control of current liabilities


Correct Option: B

Which financial institution is most suited in providing advice and finance of $1 billion

  1. bank

  2. finance company

  3. investment bank

  4. insurance company


Correct Option: C
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