MCQ SFM Question Bank

Strategic Financial Management
1. We may define the term ‘Strategy’ as a blueprint.

A. Long-range
B. Short-range
C. Short and medium-range
D. Unlimited rage
2. The fundamental purpose for the existence of any organization is described by its
A. policies
B. mission
C. procedures
D. strategy
3. Which of the following is not a characteristic of strategic management that makes it
different from other types of management?
A. It is interdisciplinary.
B. It has an external focus.
C. It has an internal focus.
D. It concerns the present direction of the organization.
4. Which of the following is NOT a major element of the strategic management process?
A. Formulating strategy
B. Implementing strategy
C. Evaluating strategy
D. Assigning administrative tasks
5. Which of the following defines what business or businesses the firm is in or should be
in?
A. Business strategy
B. corporate strategy
C. Functional strategy
D. National strategy
6. Which of the following defines how each individual business unit will attempt to achieve
its mission?
A. Business strategy
B. Corporate strategy
C. Functional strategy
D. National strategy
7. Which one of the following is at the core of strategic management?
Nairuti S Chokkas
(D.R Patel & R.B Patel Commerce College & Bhaniben Chhimkabhai Patel BBA College)
A. Choosing which organisational objectives to focus on

B. Being alert for opportunities to change work responsibilities
C. Adapting the organisation to a changing external environment
D. Choosing whether to make decisions autocratically or on the basis of participation
8. The corporate level is where top management directs:
A. all employees for orientation
B. its efforts to stabilize recruitment needs
C. overall strategy for the entire organization
D. overall sales projections
9. ______ takes place when a company enters into upward stream of activity with respect to
the same product line/ flow – for example, a garment manufacturer starts its own retail chain.
A. Backward integration
B. Horizontal integration
C. Acquisition
D. Forward integration
10. ___ takes place when a company acquires a competing business or when two or more
companies in competing businesses merge.
A. Forward integration
B. Joint venture
C. Horizontal integration
D. Vertical integration
11. Sensitivity analysis is useful in decision making because
A. It shows probability associated with each outcome
B. It tells the user how much critical each input is for each output
C. It allows to calculate the probable results under different scenario
D. The result of sensitivity analysis is reliable.
12. Which of the following is not the Techniques of Financial Forecasting?

A. Percentage of sales techniques
B. Delphi techniques
C. Time series techniques
D. Market survey techniques
Nairuti S Chokkas
13. The measurement of resources used in an activity and their comparison with the value of
the benefit to be derived from the activity is known as__________
A. Cost benefit analysis
B. Social cost benefit analysis
C. Forecasting technique
D. Feasibility study
14. Which amongst these is not the techniques of and models in taking decision under risk and
uncertainty?
A. Sensitivity analysis
B. Decision tree approach
C. Simulation analysis
D. Financial statement analysis
15. Which of the following is the techniques of debt financial restructuring?
A. Bonus issue
B. Stock split
C. Unsecured long-term borrowings
D. Buy back
16. which amongst the following is the correct model provided by Altman
A. Z = 1.2X1 + 1.4X2 + 3.3X3 + 0.6X4 + 1.0X5.
B. M= 1.2X1 + 1.4X2 + 3.3X3 + 0.6X4 + 1.0X5
C. A= 1.2X1 + 1.4X2 + 3.3X3 + 0.6X4 + 1.0X5
D. P= 1.2X1 + 1.4X2 + 3.3X3 + 0.6X4 + 1.0X5
17. Who tested groups of ratios covering cashflow, net income, gearing, liquidity and turnover.
His research indicated that 'Cashflow to Total debt' was the best predictor.
A. Fitz Patrik (1974)
B. Smith (1974)
C. Merwin (1974)
D. Beaver (1966)
18. It is an industrial company (being a company registered for not less than 5 years) which has
at the end of any financial year accumulated losses equal to or exceeding its entire net worth.
A. RBI definition of industrial sickness
B. SEBI’s definition of industrial weakness
C. Company’s Act 2013 definition of industrial sickness
D. Industrial Act definition of Weak industries.
Nairuti S Chokkas
19. Conduct environmental scans by internal appraisals and external appraisals can be done
through
A. Industry analysis
B. SWOT analysis
C. Competitive analysis
D. Risk return analysis
20. Which of the following is the broad aspect of Appraisal by Financial Institutions?
A. Financial feasibility
B. Production feasibility
C. Marketing feasibility
D. Personal feasibility
21. __________ is the aggregate of costs estimated to be incurred on various heads for bringing
the project into existence.
A. Cost of project
B. Means of financing
C. Budgeting
D. Forecasting
22. Which is not the assumption under Sensitivity analysis providing different cash flow
estimates
A. Most optimistic
B. Most likely
C. Most pessimistic
D. Most preferred
23. __________ is a pictorial representation in tree form which indicates the probability and
magnitude, probability and inter-relationship of all possible outcomes.
A. Sensitivity analysis
B. Decision tree approach
C. Simulation analysis
D. Scenario analysis
24. "long range business planning is a systematic approach to decision-making about issues,
which are fundamental and of crucial importance to its continuing long-term effectiveness".
A. Strategic planning
B. Financial planning
Nairuti S Chokkas
C. Traditional Management
D. Strategic management
25. Swot analysis stands for
A. Strength weakness opportunity threat

B. Strength weakness opportunity test
C. None of the following
D. Struggle weakness option threat
26. The financial objectives can be classified into

A. Long term objective
B. Short term objective
C. Long term and short-term objective
D. None of the objective
27. __________________shows financial planning activities of a firm for specific period of

time.
A. Forecasting
B. Financial forecasting
C. Budgeting
D. Scanning
28. Which among the following is quality techniques that are employed in financial
forecasting?
A. Delphi method
B. Time series method
C. Financial statement
D. Day sales technique
29. An investment decision to set up an entirely new project which is not connected with
existing line of business is ______________
A. Modernization projects
B. Replacement/renewal projects
C. Expansion projects
D. Diversification projects
Nairuti S Chokkas
30. Which one of the following is not the part of Procedure of Cost Benefit Analysis?
A. Determine Problem to be Considered

B. Ascertain Alternative Solutions to Problem
C. Estimate and Analyse Costs and Benefits:
D. Getting the feedback
31. SCBA stands for
A. Social cost benefit analysis

B. Suggestion creation base analysis
C. None of the options
D. Society cost base analysis
32. The economic rate of return (ERR) is_______
A. a discount rate at which the cash inflows and cash outflows of the project are
equated.
B. the resource cost of a product manufactured indigenously without importing such
product or cost of such product if it can be exported.
C. the degree of protection a project receives from international competition
D. none of the options
33. Financial feasibility analysis can be grouped as_____

A. Cost of project and means of financing
B. All the options
C. Cashflow estimates during the period of loans outstanding
D. Proforma balance sheets as at the end of each financial year during the period of loan.
34. Which one of the following points is not regarding the technical feasibility of the projects
need to be considered?
A. Location
B. Land and building
C. Plant and machinery
D. Promotion
35. Which is the correct sequence of Stages in Setting up of Project:
A. Identification, Formulation &Appraisal, Selection, Implementation & Review
Nairuti S Chokkas
B. Formulation, Identification, Appraisal, Selection, Implementation & Review

C. Review, Formulation, Identification, &Appraisal, Selection & Implementation
D. Identification, Selection, Formulation &Appraisal, Implementation & Review
Nairuti S Chokkas

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Strategic Financial Management

1. We may define the term ‘Strategy’ as a blueprint.

A. Choosing which organisational objectives to focus on

12. Which of the following is not the Techniques of Financial Forecasting?

25. Swot analysis stands for

A. Strength weakness opportunity threat

26. The financial objectives can be classified into

27. __________________shows financial planning activities of a firm for specific period of

A. Determine Problem to be Considered

31. SCBA stands for

A. Social cost benefit analysis

32. The economic rate of return (ERR) is_______

33. Financial feasibility analysis can be grouped as_____

35. Which is the correct sequence of Stages in Setting up of Project:

A. Identification, Formulation &Appraisal, Selection, Implementation & Review

B. Formulation, Identification, Appraisal, Selection, Implementation & Review

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