If you’re looking for assistance with financial management and preparing for accounting exams, Gurumcqs has over 2000 Finance MCQs with detailed explanations. The Finance MCQs section includes important questions related to financial management, financial accounting for finance and accounting Jobs, and Business Finance. These MCQs cover various topics such as Finance Basics, Time Value of Money, Future Value, Present Value, Future Annuity, Shares, Risk & Return, Capital Budgeting, General Financial Rules, Working Capital Management, financial accounting, and more. Additionally, you can also find software engineering MCQs questions and answers on the platform.

1. Situation in which firm limits expenditures on capital is classified as________?

A. Optimal rationing
B. Capital rationing
C. Marginal rationing
D. Transaction rationing

2. An internal rate of return in capital budgeting can be modified to make it representative of_________?

A. Relative outflow
B. Relative inflow
C. Relative cost
D. Relative profitability

3. Other factors held constant, greater project liquidity is because of___________?

A. Less project returns
B. Greater project return
C. Shorter payback period
D. Greater payback period

4. Project whose cash flows are sufficient to repay capital invested for rate of return then net present value will be_________?

A. Negative
B. Zero
C. Positive
D. Independent

5. Process in which managers of company identify projects to add value is classified as__________?

A. Capital budgeting
B. Cost budgeting
C. Book value budgeting
D. Equity budgeting

6. Number of years forecasted to recover an original investment is classified as________?

A. Payback period
B. Forecasted period
C. Original period
D. Investment period

7. In capital budgeting, a negative net present value result in______________?

A. Zero economic value added
B. Percent economic value added
C. Negative economic value added
D. Positive economic value added

8. Modified rate of return and modified internal rate of return with exceed cost of capital if net present value is____________?

A. Positive
B. Negative
C. Zero
D. One

9. Set of projects or set of investments usually maximize firm value is classified as_________?

A. Optimal capital budget
B. Minimum capital budget
C. Maximum capital budget
D. Greater capital budget

10. In internal rate of returns, discount rate which forces net present values to become zero is classified as__________?

A. Positive rate of return
B. Negative rate of return
C. External rate of return
D. Internal rate of return