Financial Management Online Test

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Financial Management

Description: This quiz will test your knowledge on the fundamentals of Financial Management.
Number of Questions: 15
Created by: Aliensbrain Bot
Tags: financial management finance business

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What is the primary goal of Financial Management?

Maximizing shareholder wealth
Minimizing expenses
Increasing revenue
Reducing debt

Which of the following is a key component of Financial Management?

Capital budgeting
Risk management
Cash flow management
All of the above

What is the Time Value of Money (TVM)?

The concept that money today is worth more than the same amount of money in the future
The concept that money in the future is worth more than the same amount of money today
The concept that money has no time value
None of the above

What is the formula for calculating the Future Value (FV) of a single sum?

FV = PV * (1 + r)^n
FV = PV * (1 - r)^n
FV = PV / (1 + r)^n
FV = PV / (1 - r)^n

What is the formula for calculating the Present Value (PV) of a single sum?

PV = FV / (1 + r)^n
PV = FV * (1 + r)^n
PV = FV * (1 - r)^n
PV = FV / (1 - r)^n

What is the formula for calculating the Annuity Due?

Annuity Due = PMT * [(1 + r)^n - 1] / r
Annuity Due = PMT * [(1 - r)^n - 1] / r
Annuity Due = PMT * [(1 + r)^n + 1] / r
Annuity Due = PMT * [(1 - r)^n + 1] / r

What is the formula for calculating the Sinking Fund?

Sinking Fund = PMT * [(1 + r)^n - 1] / r
Sinking Fund = PMT * [(1 - r)^n - 1] / r
Sinking Fund = PMT * [(1 + r)^n + 1] / r
Sinking Fund = PMT * [(1 - r)^n + 1] / r

What is the formula for calculating the Net Present Value (NPV)?

NPV = -Initial Investment + Sum of Present Values of Future Cash Flows
NPV = Initial Investment + Sum of Present Values of Future Cash Flows
NPV = -Initial Investment - Sum of Present Values of Future Cash Flows
NPV = Initial Investment - Sum of Present Values of Future Cash Flows

What is the formula for calculating the Internal Rate of Return (IRR)?

IRR = Discount Rate that makes NPV = 0
IRR = Discount Rate that makes NPV > 0
IRR = Discount Rate that makes NPV < 0
IRR = Discount Rate that makes NPV = 1

What is the formula for calculating the Payback Period?

Payback Period = Initial Investment / Annual Cash Flow
Payback Period = Initial Investment * Annual Cash Flow
Payback Period = Initial Investment + Annual Cash Flow
Payback Period = Initial Investment - Annual Cash Flow

What is the formula for calculating the Profitability Index?

Profitability Index = Present Value of Future Cash Flows / Initial Investment
Profitability Index = Initial Investment / Present Value of Future Cash Flows
Profitability Index = Present Value of Future Cash Flows + Initial Investment
Profitability Index = Initial Investment - Present Value of Future Cash Flows

What is the formula for calculating the Return on Investment (ROI)?

ROI = Net Income / Initial Investment
ROI = Initial Investment / Net Income
ROI = Net Income + Initial Investment
ROI = Initial Investment - Net Income

What is the formula for calculating the Debt-to-Equity Ratio?

Debt-to-Equity Ratio = Total Debt / Total Equity
Debt-to-Equity Ratio = Total Equity / Total Debt
Debt-to-Equity Ratio = Total Debt + Total Equity
Debt-to-Equity Ratio = Total Equity - Total Debt

What is the formula for calculating the Times Interest Earned Ratio?

Times Interest Earned Ratio = Net Income / Interest Expense
Times Interest Earned Ratio = Interest Expense / Net Income
Times Interest Earned Ratio = Net Income + Interest Expense
Times Interest Earned Ratio = Interest Expense - Net Income

What is the formula for calculating the Current Ratio?

Current Ratio = Current Assets / Current Liabilities
Current Ratio = Current Liabilities / Current Assets
Current Ratio = Current Assets + Current Liabilities
Current Ratio = Current Liabilities - Current Assets

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