Financial Management part4 - SCDL Assignement

Financial Management part4 - SCDL Assignement
Financial Management Paper of SCDL

Multiple Choice Single Answer
	Question	A private limited company and a public limited company are similar on the basis of
	Correct Answer	Limited liability
	Your Answer	Invitation to public for subscription for any shares
	Select The Blank
	Question	Subscription list of a public issue of shares shall be kept open for minimum ________ working days
	Correct Answer	3
	Your Answer	3
	True/False
	Question	Loans from financial corporations etc. are sources of cash
	Correct Answer	True
	Your Answer	False
	Multiple Choice Single Answer
	Question	According to the Irrelevance approach of dividend policy, the value of the company
	Correct Answer	remains unaffected by the dividend policy of the company
	Your Answer	will increase if dividend payout is on the higher side
	Multiple Choice Multiple Answer
	Question	International financial function of the organisation comprises of :
	Correct Answer	Study of flow of funds beyond national boundaries , Exchange of currencies
	Your Answer	Study of flow of funds beyond national boundaries , Exchange of currencies , Financial matters of Government
	Multiple Choice Single Answer
	Question	The hidden cost of capital which is not incurred directly is referred to as
	Correct Answer	Implicit cost
	Your Answer	Explicit cost
	True/False
	Question	In calculating funds from operations non-business expenses like dividends paid etc. as well as non cash expenses like depreciation etc. are added back in the net profits shown by the Profit & Loss Account
	Correct Answer	True
	Your Answer	True
	True/False
	Question	Accounts Receivable is an example of current assets
	Correct Answer	True
	Your Answer	True
	Multiple Choice Multiple Answer
	Question	The advantages of leasing for the lessee are
	Correct Answer	The payment of lease rents is the tax deductible expenditure , It is the quickest method of financing the requirements of long term capital , Avoids risk of ownership
	Your Answer	The payment of lease rents is the tax deductible expenditure , It is the quickest method of financing the requirements of long term capital , Avoids risk of ownership
	Multiple Choice Multiple Answer
	Question	The book-keeping and accounting activities in relation to the receivables management undertaken by the factor includes
	Correct Answer	Maintenance of debtors ledger , Various periodical reports about outstanding from the customers , Age-wise analysis of the outstanding
	Your Answer	Maintenance of debtors ledger , Preparing financial statements , Age-wise analysis of the outstanding
	Select The Blank
	Question	________ is one of the current assets that takes the longest time to get converted into cash
	Correct Answer	Stock
	Your Answer	Stock
	Select The Blank
	Question	From the following data, the Earning per share is ________ : Net Profit before tax Rs. 2,00,000/-, Taxation at 50% of Net Profit, 10% Preference Share Capital (Rs. 10 each) Rs. 1,00,000/-, Equity Share Capital (Rs. 10 each) Rs. 1,00,000/-
	Correct Answer	9
	Your Answer	4
	Multiple Choice Multiple Answer
	Question	Advantages of Preference shares from shareholders point of view
	Correct Answer	For a corporate investor, preference dividend income , It earns a stable dividend rate
	Your Answer	For a corporate investor, preference dividend income , It earns a stable dividend rate , No collateral is pledged in favour of preference shareholders

	LIST OF ATTEMPTED QUESTIONS AND ANSWERS
	Multiple Choice Single Answer Question The capacity of the existing owners of the company to retain control over operations of the company is termed under Correct Answer Control factor Your Answer Control factor Multiple Choice Single Answer Question The entire requirement of working capital arises due to the Correct Answer time gap involved in various stages of the cycle Your Answer time gap involved in various stages of the cycle True/False Question The term Accrued Income and Outstanding Income have synonymous meaning Correct Answer False Your Answer False Select The Blank Question ________ will be shown as source of funds net of proposed dividend Correct Answer Operating Profit Your Answer Earning after tax Multiple Choice Multiple Answer Question Overall profitability ratio includes Correct Answer Return on Asset , Return on Shareholders Funds Your Answer Return on Asset , Return on Shareholders Funds Multiple Choice Single Answer Question The ratio which indicate the long term financial prospects of the company are Correct Answer Solvency ratios Your Answer Solvency ratios Select The Blank Question The comparison of the ratios of one organisation with that of the other organisation is termed as ________ comparison Correct Answer Inter-firm Your Answer Inter-firm True/False Question Quick Assets are the most liquid of current assets Correct Answer True Your Answer True Select The Blank Question As per the Tandon Committee, the norms suggested for consumption of raw materials should be in ________ Correct Answer months Your Answer months Multiple Choice Single Answer Question The ratio which indicates the credit policy followed by a business firm is known as Correct Answer Debtors turnover ratio Your Answer Debtors turnover ratio Multiple Choice Single Answer Question Gross Profit ratio is calculated as Correct Answer [(Gross Profit / Net Sales)] * 100 Your Answer [(Gross Profit / Net Sales)] * 100 Multiple Choice Multiple Answer Question Advantages of Centralised disbursements Correct Answer It increases the transit time , Minimum cash balance can be maintained only in case of central bank account instead of four different branches , To maintain the bank accounts at different branches may prove to be administratively difficult Your Answer Minimum cash balance can be maintained only in case of central bank account instead of four different branches , To maintain the bank accounts at different branches may prove to be administratively difficult Multiple Choice Multiple Answer Question Advantages of Debentures from company's point of view are Correct Answer The specific cost of debt capital represented by debentures is lower than the cost of preference or equity capital , Debenture financing does not result in dilution of control Your Answer The specific cost of debt capital represented by debentures is lower than the cost of preference or equity capital , Debenture financing does not result in dilution of control Select The Blank Question The ratio of Market Price per share and Earning per share is termed as ________ Correct Answer Price earnings ratio Your Answer Price earnings ratio Select The Blank Question Preparation of Financial plan at the time of company promotion is ________ duty of the finance executive Correct Answer Non-recurring Your Answer Sole True/False Question Under Hire Purchase agreement, depreciation is considered by the hirer as an expenditure, debited the same to Profit and Loss account and hence becomes the tax deductible expenditure Correct Answer True Your Answer True Match The Following Question Correct Answer Your Answer Ratio which measures the profitability of the investments in a firm Return on Asset Return on Asset The relation of Net Sales and Working Capital Working Capital turnover ratio Working Capital turnover ratio The ratio which indicates the speed at which the Sundry debtors are converted in the form of cash Debtors turnover ratio Debtors turnover ratio The ratio which indicates the efficiency of the organisation with which the capital employed is being utilised Capital turnover ratio Capital turnover ratio True/False Question Accounts Receivable is an example of current assets Correct Answer True Your Answer True True/False Question Semi-variable cost is the cost which varies in direct proportion to the sales revenue Correct Answer False Your Answer True True/False Question The redemption of preference shares if they carry too high rate of dividend is the remedy to overcome the situation of overcapitalisation Correct Answer True Your Answer False Multiple Choice Multiple Answer Question The normal process which may be followed under the capital rationing situations may be Correct Answer Rank the projects according to some measure of profitability , Select projects in the descending order of profitability till the available funds are exhausted Your Answer Rank the projects according to some measure of profitability , Select projects in the descending order of profitability till the available funds are exhausted True/False Question If the cash is held to take advantage of profit making opportunities arising out of changes in the value of securities, the cash holding is called Precautionary motive Correct Answer False Your Answer True True/False Question Credit rating is not a recommendation for buying, selling or holding a security Correct Answer True Your Answer True Select The Blank Question ________ in assets involves inflow of funds Correct Answer Decrease Your Answer Decrease Multiple Choice Single Answer Question Unclaimed Dividends is shown in the balance sheet under the head Correct Answer Current liabilities and Provisions Your Answer Current liabilities and Provisions Multiple Choice Single Answer Question The main function of finance under the traditional approach comprises of Correct Answer Procurement of funds Your Answer Procurement of funds True/False Question An ideal investor makes an comparison between the current market price and future Earning per share as the market value of shares depends upon the future Earnings per share Correct Answer True Your Answer True Select The Blank Question The objective of the management in the investment decisions is in the form of ________ Correct Answer maximisation of the wealth of the shareholders Your Answer maximisation of the wealth of the shareholders Multiple Choice Single Answer Question The traditional approach to financial management refers only to the procurement of funds by Correct Answer Corporate entity Your Answer Corporate entity Select The Blank Question Venture Capitalist is not interested in keeping his investment in the project on a ________ basis Correct Answer Permanent Your Answer Permanent Multiple Choice Multiple Answer Question The patterns of Dividend policy are Correct Answer Stable Dividend policy , Irregular Dividend policy , No immediate Dividend policy Your Answer Stable Dividend policy , Increasing Dividend policy Multiple Choice Multiple Answer Question The avenues available to the company to invest the excess cash balance on short term basis may be in the form of Correct Answer inter-corporate bills discounting , Bank deposits , Commercial paper Your Answer Commercial paper , inter-corporate bills discounting , Bank deposits Multiple Choice Multiple Answer Question Packing credit facility can take the following form Correct Answer Pre-shipment Packing credit , Post-shipment Packing credit Your Answer Pre-shipment Packing credit , Post-shipment Packing credit Multiple Choice Multiple Answer Question The recommendations of the Dahejia committee included Correct Answer the banks should not only be security oriented but they should take into consideration total financial position of the client , all cash credit accounts with banks should be bifurcated in two categories Your Answer the banks should not only be security oriented but they should take into consideration total financial position of the client , all cash credit accounts with banks should be bifurcated in two categories Multiple Choice Multiple Answer Question Limitations of capital budgeting is Correct Answer Life of the project cannot be estimated accurately , Cash inflows cannot be eatimated accurately , Difficulties in deciding the cost of capital Your Answer Cash inflows cannot be eatimated accurately , Inaccurate estimation of the fixed assets Multiple Choice Single Answer Question Calculate the Gross Profit Ratio from the following figures : Sales Rs. 1,00,000/-, Purchases Rs. 60,000/-, Sales Return Rs. 10,000/-, Opening stock Rs. 20,000/-, Purchases Return Rs. 15,000/-, Closing Stock Rs. 5,000/- Correct Answer 0.3333 Your Answer 0.3333 Multiple Choice Single Answer Question Mr. A is given the opportunity to receive Rs. 10,000 after two years, when he can earn interest of 10% p.a. on his investment, what should be the amount which he should invest today so that he may be able to receive Rs. 10,000 after two years Correct Answer Rs. 8,264 Your Answer Rs. 8,264 Multiple Choice Single Answer Question The cost of individual items of capital is termed as Correct Answer Component cost Your Answer Composite cost Multiple Choice Single Answer Question Delinquency cost in connection with accounts receivables involves Correct Answer blocking up of funds for an extended period Your Answer blocking up of funds for an extended period Select The Blank Question ________ is clubbed with Current Assets in the Balance Sheet Correct Answer Loans and advances Your Answer Loans and advances Multiple Choice Multiple Answer Question Disadvantages of Internal rate of return is Correct Answer It is difficult to use and understand , It presupposes that the cash inflows can be re Unsecured loans includesinvested immediately to yield the return equivalent to Internal rate of return which is not very realistic Your Answer It is difficult to use and understand , It presupposes that the cash inflows can be reinvested immediately to yield the return equivalent to Internal rate of return which is not very realistic Select The Blank Question The operating profit earned by the company is in the form of contribution duly reduced by the ________ Correct Answer Fixed operating cost Your Answer Sales revenue Match The Following Question Correct Answer Your Answer Safety Stock below which the actual stock should not be allowed to fall below which the actual stock should not be allowed to fall ABC Analysis Vital few Trivial Many which is fixed in such a way that the total variable cost of managing the inventory can be minimised Bill of Materials Details of the necessary materials as well as quantity of each item Details of the necessary materials as well as quantity of each item Perpetual Inventory System Maintenance of Bin Cards and Stores ledger in order to know about the stock in quantity and value at any given point of time Maintenance of Bin Cards and Stores ledger in order to know about the stock in quantity and value at any given point of time Multiple Choice Multiple Answer Question Dividend / Price Approach to compute cost of equity shares is objected on the following grounds Correct Answer This presupposes that an investor looks forward only to receive dividend on equity shares which may not be correct , It assumes that the company will not earn on its retained earnings which is a wrong assumption Your Answer It assumes that the company will not earn on its retained earnings which is a wrong assumption , It wrongly assumes that earnings per share will remain constant in future , All the earnings may not be distributed among the shareholders by way of dividend Multiple Choice Multiple Answer Question The internal factors affecting the dividend policy are Correct Answer Growth rate of the company , Composition of the shareholding Your Answer Growth rate of the company , Composition of the shareholding Select The Blank Question Operating Lease is also referred to as ________ lease Correct Answer Service Your Answer Financial True/False Question Reserve Bank of India appointed the Marathe Committee with the intention to recognize the contribution made by the SSI Sector to the economy Correct Answer False Your Answer False