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Business & Finance MCQs

Prepare for competitive exams with our comprehensive Business & Finance MCQs, designed for students of commerce and candidates appearing in recruitment tests. These multiple-choice questions cover financial management, accounting, auditing, business law, corporate governance, investment analysis, banking, cost of capital, stock markets, marketing, human resource management, and business communication. Highly beneficial for aspirants of PPSC, FPSC, CSS, NTS, SPSC, BPSC, KPSC, ETEA, AJKPSC, as well as banking sector exams, commerce lecturer tests, and business-related university assessments (B.Com, M.Com, MBA, ACCA, CA).

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1 Finance MCQs

In project analysis, cash outflows, which represent the costs of a project, are typically shown as what type of numbers?

  • Negative numbers
  • Positive numbers
  • Hurdle number
  • Relative number
0 Comments
Correct Answer: A. Negative numbers

Explanation:

The correct option is Negative numbers.


In finance MCQs and corporate financial analysis, cash ... Read More Details

2 Finance MCQs

If a project has a positive Net Present Value (NPV), what will be the corresponding value of the Profitability Index (PI)?

  • Greater than two
  • Equal to one
  • Less than one
  • Greater than one
0 Comments
Correct Answer: D. Greater than one

Explanation:

The correct option is Greater than one.


In corporate finance and capital budgeting, the ... Read More Details

3 Finance MCQs

A situation in which a firm restricts its capital expenditures is classified as which of the following?

  • Optimal rationing
  • Capital rationing
  • Marginal rationing
  • Transaction rationing
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Correct Answer: B. Capital rationing

Explanation:

The correct option is Capital Rationing.


In corporate finance, capital rationing is a fundamental ... Read More Details

4 Finance MCQs

In capital budgeting, the Internal Rate of Return (IRR) can be adjusted to represent which of the following?

  • Relative outflow
  • Relative inflow
  • Relative cost
  • Relative profitability
0 Comments
Correct Answer: D. Relative profitability

Explanation:

The correct option is Relative Profitability.


In finance, Internal Rate of Return (IRR) is ... Read More Details

5 Finance MCQs

A high price-to-earnings (P/E) ratio indicates that a company has which of the following characteristics?

  • Low dividends paid
  • High-risk prospect
  • High growth prospect
  • High marginal rate
0 Comments
Correct Answer: A. Low dividends paid

Explanation:

The correct answer is high growth prospect


In Finance MCQs, the price-to-earnings (P/E) ratio ... Read More Details

6 Finance MCQs

If a company has a return on assets (ROA) of 5.5%, total assets of $3,000, and common equity of $1,050, what is its return on equity (ROE)?

  • $22,275
  • 15.71%
  • 1.93%
  • 1.925 times
0 Comments
Correct Answer: B. 15.71%

Explanation:

The correct answer is 15.71%.


In Finance MCQs, Return on Equity (ROE) is a ... Read More Details

7 Finance MCQs

If a company has a net income of $150 and total assets of $2,100, what is its return on assets (ROA)?

  • 0.07%
  • 7.14%
  • 0.05 times
  • 7.15 times
0 Comments
Correct Answer: B. 7.14%

Explanation:

The correct option is 7.14%.


In Finance MCQs, Return on Assets (ROA) is a ... Read More Details

8 Finance MCQs

If a company’s price per share is $30 and its earnings per share (EPS) is $3.5, what is the price-to-earnings (P/E) ratio?

  • 8.57 times
  • 8.57%
  • 0.11 times
  • 11
0 Comments
Correct Answer: B. 8.57%

Explanation:

The correct option is 8.57 times.


In Finance MCQs, the price-to-earnings (P/E) ratio is ... Read More Details

9 Finance MCQs

Notes, mortgages, bonds, stocks, treasury bills, and consumer loans are examples of which type of financial instrument?

  • Financial instruments
  • Capital assets
  • Primary assets
  • Competitive instruments
0 Comments
Correct Answer: A. Financial instruments

Explanation:

The correct option is this Financial instruments.


In Finance MCQs, financial instruments are defined ... Read More Details

10 Finance MCQs

What is the term used for the cost a firm pays to borrow debt?

  • Debt rate
  • Investment return
  • Discount rate
  • Interest rate
0 Comments
Correct Answer: D. Interest rate

Explanation:

The correct option is this Interest rate.


In Finance MCQs, the interest rate is ... Read More Details