ANSA India Private Limited

Unit Revision: Lesson 1

1. Which of the following is NOT one of the three main types of decisions facing
the finance manager in a company:
a. Dividend
b. Investing
c. Economic
d. Financing
2. The agency problem is a driving force behind the growing important of
corporate governance. In this context, the agents are:
a. Customers
b. Shareholders
c. Managers
d. Auditors
3. Which of the following is an example of a financial objective that a company
might choose to pursue?
a. Provision of goods wages and salaries
b. Dealing honestly and fairly with customers on all occasions
c. Producing environmentally friendly products
d. Restricting the level of gearing to below a specified target level.
4. In the context of managing performance in an NFP, which of the following
definitions is incorrect:
a. VFM means providing a service in a way which is economical, efficient and effective
b. Economy means doing things cheaply
c. Efficiency means doing things quickly
d. Effectiveness is doing the right things
5. Under an investing decision, which of the following is a finance manager
concerned with:
a. Working capital and bank funding
b. Long term assets and current assets
c. Equity investment and repayment
d. Timely payout to shareholders
6. Which of the following is a financing decision:
a. How much to borrow and from where
b. How much to repay the investors on a period basis
c. How to reduce the costs so that efficiency can be achieved
d. None of the above
7. Under a dividend decision, a finance manager is concerned with:
a. Dividend payout and value of the business
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b. Raising Stock prices
c. Cash flow availability for meeting day-to-day operations
d. None of the above
8. Which of the following does NOT form part of Corporate Governance
objectives
a. Separation of Chairman and CEO roles
b. Appointment of audit committees
c. Employment of Executive Directors
d. Minimization of Risks
9. A school decides to increase the size of the classroom, but examination results
suffer. From the VFM perspective, which of the following is true:
a. Economy has increased but efficiency has decreased
b. Efficiency has increased but effectiveness has decreased
c. Economy has increased but effectiveness has decreased
d. Economy has increased but effectiveness and efficiency have decreased
10. Which of the following is an external stakeholder?
a. Shareholders
b. Customers
c. Bankers
d. Government
11. A Government body uses the 3Es to measure its VFM. It uses the cost per
patient to measure its VFM. Which of the following is it measuring:
a. Economy
b. Effectiveness
c. Efficiency
d. Externality
12. In an NFP, VFM can be used to measure performance. Which of the following
could be used to measure effectiveness in this context?
a. Avoiding wastage of inputs
b. Achieving targets
c. Obtaining suitable quality at the lowest price
d. None of the above