BBM Financial Management 3

Question 1

What is the break-even point in business?

Accepted Answer

The point where total revenue equals total costs

Answer

The point where revenue exceeds costs by the greatest margin

Answer

The point of maximum profit

Answer

The point where fixed costs are fully recovered

Question 2

Which term describes the minimum return required by investors for an investment?

Accepted Answer

Hurdle Rate

Answer

Net Present Value

Answer

Payback Period

Answer

Gross Margin

Question 3

What is 'accounts receivable' in financial management?

Accepted Answer

Money owed to the company by its customers

Answer

Money owed by the company to suppliers

Answer

Cash held in the company's bank account

Answer

Long-term investments in other companies

Question 4

Which type of analysis compares a company's financial ratios to industry benchmarks?

Accepted Answer

Benchmarking analysis

Answer

Trend analysis

Answer

Vertical analysis

Answer

Horizontal analysis

Question 5

What is the purpose of a dividend policy in a corporation?

Accepted Answer

To determine how profits are split between retained earnings and shareholder distributions

Answer

To set employee bonus structures

Answer

To establish pricing strategies for products

Answer

To allocate the capital expenditure budget

Question 6

What does 'amortization' typically refer to in business finance?

Accepted Answer

The gradual repayment of a loan over time or write-down of intangible assets

Answer

Depreciation of tangible fixed assets

Answer

Increasing the value of an asset

Answer

Setting aside funds for future capital purchases