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What capital structure theory suggests that firms prioritize funding sources according to cost, starting with internal financing first?

AAgency Theory

BTrade-Off Theory

CMM Hypothesis with Taxes

DPecking Order Theory

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Which financial statement provides a snapshot of a company’s financial position at a specific point in time?

ABalance Sheet (Statement of Financial Position)

BIncome Statement

CStatement of Cash Flows

DStatement of Retained Earnings

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Which dividend policy theory, proposed by Miller and Modigliani, argues that dividend policy has no impact on stock price or cost of capital?

ATax Preference Theory

BBird-in-the-Hand Theory

CPecking Order Theory

DDividend Irrelevance Theory

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What term describes past costs that have already been incurred and cannot be recovered or changed by any future decision?

ADifferential Costs

BOpportunity Costs

CSunk Costs

DIncremental Costs

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In cost accounting, costs that remain constant in total amount over a relevant range of activity are known as:

ASemi-Variable Costs

BFixed Costs

CSunk Costs

DVariable Costs

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Which accounting principle states that revenue should be recognized in the accounting period in which the performance obligation is satisfied?

AHistorical Cost Principle

BRevenue Recognition Principle

CMatching Principle

DFull Disclosure Principle

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What capital budgeting technique calculates the discount rate that sets the Net Present Value (NPV) of a project to zero?

AProfitability Index

BInternal Rate of Return (IRR)

CPayback Period

DAccounting Rate of Return

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Which financial metric measures a company’s ability to cover its short-term obligations using its most liquid current assets?

AQuick Ratio (Acid-Test Ratio)

BReturn on Equity

CDebt-to-Equity Ratio

DCurrent Ratio

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What investment rule states that independent capital projects should be accepted whenever their Net Present Value (NPV) is:

AEqual to Zero (NPV = 0)

BEqual to Cost of Capital

CGreater than Zero (NPV > 0)

DLess than Zero (NPV < 0)

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What is the primary objective of cash budget preparation in managerial finance?

AProjecting short-term cash inflows and outflows to anticipate liquidity surpluses or deficits

BCalculating tax liability owed to tax authorities

CDetermining historical depreciation charges

DAllocating factory overhead across product lines

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