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MBA Finance Corporate Finance — practice questions

Explore 30 free Corporate Finance questions in MBA Finance Business Studies. Open each question or exercise to read its content, reference answers and available explanation.

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Corporate Finance questions and exercises with answers

Showing questions 1–30 of 30.

Funds needed to buy land, buildings, plant and machinery are the firm's:Read the answer and worked solution →Funds used to hold stock, bills receivable and to pay wages and rent are the firm's:Read the answer and worked solution →A trading concern usually needs how much fixed capital compared with a manufacturing concern?Read the answer and worked solution →A firm selling on credit with a slow turnover needs more:Read the answer and worked solution →Sources that meet needs for a period exceeding five years are:Read the answer and worked solution →Funds required for more than one year but less than five years come from:Read the answer and worked solution →Trade credit, bank loans and commercial paper mainly provide funds for:Read the answer and worked solution →Short-term financing is most common for financing:Read the answer and worked solution →Seasonal businesses that build stock before the selling season typically need:Read the answer and worked solution →Funds provided by the owners of an enterprise, including reinvested profits, are:Read the answer and worked solution →Which pair are the two important sources of owner's funds?Read the answer and worked solution →Loans from banks, debentures, public deposits and trade credit together form:Read the answer and worked solution →A burden of borrowed funds is that interest must be paid even when:Read the answer and worked solution →Collecting receivables faster, selling surplus stock and ploughing back profit are examples of:Read the answer and worked solution →Suppliers, lenders and investors outside the firm are:Read the answer and worked solution →A limitation of internal sources of funds is that they:Read the answer and worked solution →Profits kept back in the business instead of paid as dividend are:Read the answer and worked solution →Which is a merit of retained earnings?Read the answer and worked solution →Excessive ploughing back of profits may cause dissatisfaction because shareholders get:Read the answer and worked solution →Credit extended by one trader to another for buying goods is:Read the answer and worked solution →In the buyer's records, trade credit appears as sundry creditors or:Read the answer and worked solution →Trade credit is granted to customers who have reasonable financial standing and:Read the answer and worked solution →Catch the owner's fundsRead the answer and worked solution →Pop the short-term sourcesRead the answer and worked solution →Run the finance periodsRead the answer and worked solution →Slice the finance wordsRead the answer and worked solution →Internal or externalRead the answer and worked solution →Sort period, ownership and originRead the answer and worked solution →Type the numberRead the answer and worked solution →Business finance bingoRead the answer and worked solution →

Worked practice questions

Funds needed to buy land, buildings, plant and machinery are the firm's:

  1. Fixed capital requirements
  2. Working capital requirement
  3. Trade credit requirement
  4. Seasonal stock requirement
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Correct answer: A. Fixed capital requirements

1. These assets stay in the business a long time. 2. They are bought when the firm starts. 3. This need is fixed capital. _Source: syllabus Business Studies, Chapter 8, Sources of Business Finance._

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Funds used to hold stock, bills receivable and to pay wages and rent are the firm's:

  1. Loan capital
  2. Working capital
  3. Fixed capital
  4. Share capital
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Correct answer: B. Working capital

1. They cover day-to-day operations. 2. They finance current assets and expenses. 3. That is working capital. _Source: syllabus Business Studies, Chapter 8, Sources of Business Finance._

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A trading concern usually needs how much fixed capital compared with a manufacturing concern?

  1. A smaller amount
  2. A larger amount
  3. The same amount
  4. Twice the amount
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Correct answer: A. A smaller amount

1. Fixed capital depends on the nature of business. 2. Manufacturing needs heavy plant. 3. So trading needs a smaller amount. _Source: syllabus Business Studies, Chapter 8, Sources of Business Finance._

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More Business Studies topics

Business StudiesFinancial ManagementSources of Business Finance