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Saturday, October 31, 2009

Financial Management SCDL, Financial Management SCDL Solution

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Financial Management SCDL
Financial Management SCDL Solution
Financial Management Sample Papers for any PGDBA Course of SCDL


Multiple Choice Single Answer
Question
For the calculation of Operating Profit / Loss , Depreciation on fixed assets should be
Correct Answer
added to the Net Profit as per Profit and loss account
Your Answer
Deducted from the Net Profit as per Profit and loss account

Multiple Choice Single Answer
Question
The return which the company pays on borrowed funds is termed as
Correct Answer
Interest
Your Answer
Interest

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. 8,156

Select The Blank
Question
A wrong decision in respect of capital expenditure proposals may disturb the entire ________ structure of the organisation
Correct Answer
financial
Your Answer
financial

True/False
Question
Earnings per share is calculated as ( Profit after tax - Preference Dividend ) / Number of Equity shares
Correct Answer
True
Your Answer
True

Multiple Choice Single Answer
Question
Advantage of term loan from the company's point of view is
Correct Answer
In post tax terms, the cost of term loans is lower than the cost of equity capital or preference capital
Your Answer
There is no liability for repayment

True/False
Question
Proprietary ratios is the relationship between owners funds and total assets
Correct Answer
True
Your Answer
True

Multiple Choice Single Answer
Question
Increase in the amount in debtors results in
Correct Answer
Decrease in cash
Your Answer
Decrease in cash

Multiple Choice Single Answer
Question
The products which are ready for sale in the market are termed as
Correct Answer
Finished goods
Your Answer
Finished goods

Multiple Choice Single Answer
Question
The market price per share is equal to the present value of the expected dividends discounted at the rate of return required by equity shareholders is determined under
Correct Answer
Dividend /Price Approach
Your Answer
Dividend /Price Approach

Multiple Choice Multiple Answer
Question
Assuming the current ratio is 2, in which cases would the current ratio decline
Correct Answer
Purchase of fixed Assets , Borrow Money on an Interest bearing promissory note
Your Answer
Issue of new shares , Purchase of fixed Assets , Cash collected from customers , Borrow Money on an Interest bearing promissory note

Multiple Choice Multiple Answer
Question
Advantages of Net Present value is
Correct Answer
It considers time value of money , It considers cash inflows from the project throughout its life
Your Answer
It considers time value of money , It considers cash inflows from the project throughout its life , It is easy to calculate , It is easy to understand

Match The Following
Question
Correct Answer
Your Answer
Credit rating symbol for Commercial Paper of Default by Investment Information and Credit rating agency
A5
B
Credit rating symbol for Debentures of Inadequate safety by CRISIL
BB
FC
Credit rating symbol for Fixed Deposits of High risk by CRISIL
FC
FA
Credit rating symbol for Fixed Deposits of Adequate safety by Investment Information and Credit rating agency
MA
A5

Multiple Choice Multiple Answer
Question
Types of capital budgeting decisions
Correct Answer
Replacements , Expansion , Diversification
Your Answer
Replacements , Expansion , Diversification , Liquidation

Select The Blank
Question
The ________ collections may be useful for reducing the postal float as well as bank float
Correct Answer
Decentralised
Your Answer
Debtors

Select The Blank
Question
As per the Tandon committee, variations between the projected figures and actuals may be permitted to the extent of ________
Correct Answer
0.1
Your Answer
0.05

Select The Blank
Question
Operating Lease is also referred to as ________ lease
Correct Answer
Service
Your Answer
Financial

Multiple Choice Single Answer
Question
The formula for Current ratio is
Correct Answer
Current assets / Current liabilities
Your Answer
Liquid assets / Current liabilities

Multiple Choice Multiple Answer
Question
The assumptions for the theories of capital structure are
Correct Answer
Firm use only long term debt capital or equity share capital to raise funds , Firm follow policy of paying 100% of its earnings by way of dividend , Operating earnings are not expected to grow
Your Answer
Firm use only long term debt capital or equity share capital to raise funds , Corporate Income Tax does exists , Firm follow policy of paying 100% of its earnings by way of dividend , Operating earnings are not expected to grow

Multiple Choice Single Answer
Question
Capital turnover ratio is calculated as
Correct Answer
Sales / Capital employed
Your Answer
Total assets / Owners fund

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
above which the actual stock should not exceed
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
Vital few Trivial Many

True/False
Question
Return on Assets is a ratio of relationship between Assets and Sales
Correct Answer
False
Your Answer
True

Multiple Choice Single Answer
Question
The Pay Bank period is calculated as
Correct Answer
Cash outlay / Annual cash inflow
Your Answer
External liabilities / Shareholders funds

Multiple Choice Multiple Answer
Question
Disadvantages of factoring are
Correct Answer
The financial burden on the company increases , It may be considered to be a symptom of financial weakness on the part of the selling company , In Indian circumstances, factoring is mainly with-recourse factoring. The risk of non-payment on the part of customer is borne by the selling firm. This restricts its popularity
Your Answer
The financial burden on the company increases , It may be considered to be a symptom of financial weakness on the part of the selling company , In Indian circumstances, factoring is mainly with-recourse factoring. The risk of non-payment on the part of customer is borne by the selling firm. This restricts its popularity

Select The Blank
Question
In ABC analysis C class consist of ________.
Correct Answer
a very large number of items which are less important
Your Answer
that quantity which is fixed in such a way that the total variable cost of managing the inventory can be minimised

True/False
Question
In Regular Stock Dividend policy, the company may pay dividend in the form of bonus shares instead of cash
Correct Answer
True
Your Answer
True

Select The Blank
Question
Factoring indicates the relationship between ________ and a business organisation
Correct Answer
Financial institutions
Your Answer
Financial institutions

Multiple Choice Multiple Answer
Question
Importance of capital budgeting decisions
Correct Answer
They represent the true earning assets of the firm , they are irreversible , they require assessment of future events which are uncertain
Your Answer
They represent the true earning assets of the firm , it helps in preparation of financial statements , they require assessment of future events which are uncertain

Multiple Choice Single Answer
Question
Fixed Income bearing securities for the computation of Capital gearing ratio consists of
Correct Answer
Debentures
Your Answer
Debentures

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Wednesday, October 28, 2009

SCDL - Cases in Marketing Management

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SCDL - Cases in Marketing Management
Cases in Marketing Management - SCDL PGDBA


LIST OF ATTEMPTED QUESTIONS AND ANSWERS

True/False
Question
This question is from the case study "Mr. Atul & Mr. Bhaskar" : Atul felt that freedom to workers means calling for indiscipline.
Correct Answer
False
Your Answer
True

True/False
Question
This question is from the case study "Ice-Kool" : Studying consumer behavior is important to any business.
Correct Answer
True
Your Answer
True

Select The Blank
Question
This question is from the case study "Ray Ltd." : The ________ was to be improved to protect chocolate from melting.
Correct Answer
Packaging
Your Answer
Packaging

Multiple Choice Single Answer
Question
This question is from the case study "Chap-pals" : Current competition of Chap-pal is :-
Correct Answer
Leather shoose
Your Answer
Hawaii

Multiple Choice Multiple Answer
Question
This question is from the case study "Tristar" :What factors affected the estimated stock requirement of 800 dealers?
Correct Answer
Political uncertainty , Act of god
Your Answer
Political uncertainty , Competition actions , Dealer demand

Multiple Choice Single Answer
Question
This question is from the case study "Price Plus" : What is the offer under discussion in the case?
Correct Answer
Money back offer by Akai
Your Answer
Money back offer by Akai

Multiple Choice Multiple Answer
Question
This question is from the case study "AR Sons" : AR Sons became a firm of reputation because of :-
Correct Answer
Service , Quality
Your Answer
Service , Quality

Multiple Choice Single Answer
Question
This question is from the case study "Lubri - Smooth Ltd." : As a promotional strategy the owner believes in :-
Correct Answer
Sampling
Your Answer
Direct marketing

Select The Blank
Question
This question is from the case study "Challenger Sports" : The company command ________ % of the market-share.
Correct Answer
60
Your Answer
75

Multiple Choice Single Answer
Question
This question is from the case study "Kleam" :Why did other companies failed to market toothpastes?
Correct Answer
No uniform quality of Kleam
Your Answer
No uniform quality of Kleam

Multiple Choice Multiple Answer
Question
This question is from the case study "Collaborative Product Development in E-Commerce" :What were benefits of Collaborative development?
Correct Answer
Improves operations , Cuts Costs , Saves Time
Your Answer
Cuts Costs , Saves Time , Saves manpower

Select The Blank
Question
This question is from the case study "Anveshi - The Rural Development Organisation" :The strategy to achieve the objective was to create ________.
Correct Answer
Village organisation
Your Answer
Village cooperative

Multiple Choice Multiple Answer
Question
This question is from the case "Ethel Graff" : Why do Europeans come to India to work?
Correct Answer
Indian Experience matter in International market , Challenge of working in Unfamiliar environment
Your Answer
Challenge of working in Unfamiliar environment , Indian Companies now pay higher salaries

True/False
Question
This question is from the case study "Beauty Cosmetics" :Beauty cosmetics want to reach the products at All India level.
Correct Answer
True
Your Answer
True

Multiple Choice Multiple Answer
Question
This question is from the case study "Astroid Computer Corporation" : What is the product range of this company?
Correct Answer
Personal Computer , Monitors , Printers
Your Answer
Personal Computer , Monitors , Printers

Multiple Choice Single Answer
Question
This question is from the case study "Hindustan Lever - Rural Marketing Initiative" :How were towns & villages covered by HLL initially?
Correct Answer
By Van
Your Answer
By Van

Multiple Choice Multiple Answer
Question
This question is from the case study "Reach India Ltd." : What different product segments is Reach India Ltd. Operating in?
Correct Answer
Telecom Service Provider , Handsets
Your Answer
Telecom Service Provider , Handsets

Select The Blank
Question
This question is from the case study "Delana Hosiery Works" :The owner of the company believed in ________ human relations.
Correct Answer
Informal
Your Answer
Informal

Multiple Choice Single Answer
Question
This question is from the case study "Priya Automobiles" : Why did model Priya still continue to sell?
Correct Answer
Was the cheapest model
Your Answer
Was the cheapest model

Multiple Choice Multiple Answer
Question
This question is from the case study "Alcophin" :What Promotional tools are used by Medical companies?
Correct Answer
Visual Aid , Product Literature
Your Answer
Product Literature , Hoardings

True/False
Question
This question is from the case study "Tushar Laboratories" :Mumbai market was the smallest in volumes.
Correct Answer
False
Your Answer
False

Select The Blank
Question
This question is from the case study "ABC A Major Beverages Company" : The arrangement between ABC & CCA is ________.
Correct Answer
CCA will market ABC brands with their own
Your Answer
ABC will market CCA brands with their own

Multiple Choice Single Answer
Question
This question is from the case study "Mr. Nitin Chandra" : Product Benefit of Silver plated Bronze products is :-
Correct Answer
They are within reach of middle class
Your Answer
They are within reach of middle class

Multiple Choice Multiple Answer
Question
This question is from the case study "ABC Company" : Which categories did the company entered lately?
Correct Answer
Refrigerators , Air Conditioners
Your Answer
Air Conditioners

Multiple Choice Single Answer
Question
This question is from the case study "Blue Shield Company" : What type of promotion was planned in high sale period by Benson & Johnson?
Correct Answer
Discount offer
Your Answer
1 + 1 Free
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Sunday, October 4, 2009

Financial Management SCDL Assignments

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Financial Management SCDL Assignments

LIST OF ATTEMPTED QUESTIONS AND ANSWERS

Multiple Choice Multiple Answer
Question
The collection programme of the firm consists of
Correct Answer
Maintaining the state of receivables , Dispatch of letters to customers whose due date is approaching , Telegraphic and Telephonic advice to customers around the due date
Your Answer
Telegraphic and Telephonic advice to customers around the due date , Maintaining the state of receivables , Dispatch of letters to customers whose due date is approaching

Select The Blank
Question
Shareholders of a joint stock company appoint their representative in the form of ________ to carry on the day-to-day affairs of the company
Correct Answer
Directors
Your Answer
Directors

Select The Blank
Question
________ in liabilities involves inflow of funds
Correct Answer
Increase
Your Answer
Increase

Match The Following
Question
Correct Answer
Your Answer
Recurring duties of finance executive
Raising of funds
Cost management
Objective of finance function
Profit maximization
Profit maximization
Treasurer
Cost management
International Finance
Finance Controller
Internal Auditing
Raising of funds

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

Select The Blank
Question
The analytical method of inventory control which aims at concentrating efforts in those areas where attention is required most is termed as ________
Correct Answer
ABC Analysis
Your Answer
ABC Analysis

Select The Blank
Question
Lease agreement is the most important document as it starts the ________ relationship between the lessor and lessee
Correct Answer
Legal
Your Answer
Legal

True/False
Question
Ratio should be computed on the basis of inter-related figures which have a cause and effect relationship
Correct Answer
True
Your Answer
True

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

Multiple Choice Single Answer
Question
The Proprietary concern is owned by
Correct Answer
Only one person
Your Answer
Only one person

Multiple Choice Multiple Answer
Question
The limitations of ratio analysis are
Correct Answer
Ratios are based on historical financial statements rather than future happenings , Ratios are only indicators, they cannot be taken as final regarding good or bad financial position of the business , Ratio analysis takes in to consideration only monetary transactions
Your Answer
Ratios are based on historical financial statements rather than future happenings , Ratios are only indicators, they cannot be taken as final regarding good or bad financial position of the business , Ratio analysis provides data for inter-firm comparison

Multiple Choice Multiple Answer
Question
The disadvantages of a Partnership firm are
Correct Answer
Unlimited liability , Capacity to raise funds to meet complex business operations is limited
Your Answer
Unlimited liability , Capacity to raise funds to meet complex business operations is limited

Multiple Choice Single Answer
Question
Float indicates
Correct Answer
the difference between the bank balance as per the bank book and as per the bank pass book/bank statement
Your Answer
the difference between the bank balance as per the bank book and as per the bank pass book/bank statement

Multiple Choice Single Answer
Question
Financing consists of the raising, providing, managing of all the money, capital or funds of any kind to be used in connection with the business' is defined by
Correct Answer
Bonneville and Dewey
Your Answer
Kenneth Midgley and Ronald Burns

Select The Blank
Question
If the company pays the dividend out of retained profits, then the amount to be drawn from the reserve shall not exceed an amount equal to ________ of its paid up capital and free reserves
Correct Answer
0.1
Your Answer
0.1

True/False
Question
Introduction of a heavy amount of debt capital in the capital structure will not only reduce the valuation of the firm but will also increase the cost of capital
Correct Answer
True
Your Answer
True

Multiple Choice Single Answer
Question
An increase in the share premium account is
Correct Answer
Source of funds
Your Answer
Source of funds

Multiple Choice Single Answer
Question
Current liabilities consist of
Correct Answer
Creditors
Your Answer
Creditors

True/False
Question
Issue of Bonus shares is the remedy used in the situation of overcapitalisation
Correct Answer
False
Your Answer
True

Multiple Choice Single Answer
Question
Current assets are also referred to as
Correct Answer
Working Capital
Your Answer
Working Capital

Select The Blank
Question
The basic objective of ________ management is to reduce the operating cash requirement to the minimum possible extent without affecting the routine transactions.
Correct Answer
Cash
Your Answer
Cash

Match The Following
Question
Correct Answer
Your Answer
Advantage of Net present value
considers cash inflows from the project throughout its life
presupposes that the cash inflows can be reinvested immediately to yield the return equivalent to the Internal rate of return
Disadvantage of Accounting rate of return
uses profits after depreciation and taxes and not the cash inflows for evaluating the projects
considers cash inflows from the project throughout its life
Disadvantage of Pay back period
ignores time value of money
ignores time value of money
Advantage of Discounted Pay back period
considers time value of money
considers time value of money

Multiple Choice Multiple Answer
Question
Limitations of Average collection period
Correct Answer
Average Collection period assumes that the credit sales are evenly spread throughout the year. In practical circumstances, credit sales are not evenly spread throughout the year , The amount of credit sales made by company or the normal credit period offered by the company are not available in the published financial statements
Your Answer
Average Collection period assumes that the credit sales are evenly spread throughout the year. In practical circumstances, credit sales are not evenly spread throughout the year , The amount of credit sales made by company or the normal credit period offered by the company are not available in the published financial statements , Not proper cost benefit analysis made by the company

True/False
Question
Traditional approach believes the existence of Optimal Capital structure
Correct Answer
True
Your Answer
True

Multiple Choice Multiple Answer
Question
Assuming the current ratio is 2, in which cases would the current ratio decline
Correct Answer
Purchase of fixed Assets , Borrow Money on an Interest bearing promissory note
Your Answer
Issue of new shares , Purchase of fixed Assets , Cash collected from customers

Select The Blank
Question
The amount of profit earned after recovering the interest on long term sources of capital is referred to as ________
Correct Answer
Profit before taxes
Your Answer
Profit before Interest and Taxes

Select The Blank
Question
The concept of watered capital is confined to the time of ________ of the company
Correct Answer
Promotion
Your Answer
Promotion

True/False
Question
Capital budgeting process involves the estimation of various future aspects regarding future cash inflows, life of the project etc.
Correct Answer
True
Your Answer
True

True/False
Question
A good Budget manual promotes standardization and simplification of budgetary procedures
Correct Answer
True
Your Answer
True

True/False
Question
Return on Assets is a ratio of relationship between Assets and Sales
Correct Answer
False
Your Answer
True

Multiple Choice Single Answer
Question
Increase in the amount in debtors results in
Correct Answer
Decrease in cash
Your Answer
No change in cash

Multiple Choice Single Answer
Question
The symptom of low capacity utilisation will be shown by
Correct Answer
Fixed Assets Turnover ratio
Your Answer
Fixed Assets Turnover ratio

Multiple Choice Single Answer
Question
From the following data, work out the Economic order quantity : Annual Demand : 5000 units, Ordering cost Rs. 60 per order, Price per unit Rs. 100, Inventory carrying cost is 15% on average inventory
Correct Answer
200 units
Your Answer
200 units

Select The Blank
Question
________ ratio will be useful in indicating the symptom of inability to pay dues to financial institutions
Correct Answer
Debt Service Coverage ratio
Your Answer
Debt Equity

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 , Irregular Dividend policy , No immediate Dividend policy

Multiple Choice Single Answer
Question
The Walter and Gordon's approach of Dividend policy is based on the assumption of
Correct Answer
Retained earnings represent the only source of financing for the firm, EPS, dividend per share, internal rate of return and cost of capital are all constant
Your Answer
Retained earnings represent the only source of financing for the firm, EPS, dividend per share, internal rate of return and cost of capital are all constant

Select The Blank
Question
The payment of Dividend in the form of Bonus shares involves ________
Correct Answer
only transfer of retained earnings to share capital
Your Answer
only transfer of retained earnings to share capital

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

True/False
Question
If the process of capital rationing is strictly followed it may result into the exclusion of various smaller projects by larger projects
Correct Answer
True
Your Answer
True

Multiple Choice Multiple Answer
Question
External sources of cash are as follows :
Correct Answer
Issue of new shares , long term loans , short term borrowings
Your Answer
Issue of new shares , long term loans , short term borrowings

Select The Blank
Question
Profit after taxes can be distributed among the owners of the company by way of ________
Correct Answer
dividend
Your Answer
dividend

Multiple Choice Single Answer
Question
The Policy which attracts the shareholders who are willing to devote short term dividend income for long term capital gains and share in the increased prosperity of the company is termed as
Correct Answer
No immediate Dividend policy
Your Answer
No immediate Dividend policy

Multiple Choice Multiple Answer
Question
The Economic Order Quantity model is based on the assumption of
Correct Answer
Placing and receiving orders is without any delay , Ordering costs and carrying costs associated with the orders are variable in nature and they behave exactly opposite to each other , The demand for the material concerned is uniform throughout the year
Your Answer
The prices of the material remain unstable , Ordering costs and carrying costs associated with the orders are variable in nature and they behave exactly opposite to each other , The demand for the material concerned is uniform throughout the year

Multiple Choice Multiple Answer
Question
Measurement of cost of capital can be done through
Correct Answer
Cost of Debt , Cost of Preference shares , Cost of Equity shares
Your Answer
Cost of Debt , Cost of Preference shares , Cost of Equity shares

True/False
Question
Financial leverage is calculated as ( Sales - Variable cost ) / ( Earnings before Interest and tax - Interest )
Correct Answer
False
Your Answer
True

Multiple Choice Single Answer
Question
Capital cost is
Correct Answer
cost on the use of additional capital to support credit sales
Your Answer
additional expenses on the creation and maintenance of a credit department

Multiple Choice Single Answer
Question
The rate at which an organisation must pay to the suppliers of capital for the use of their funds is termed as
Correct Answer
cost of capital
Your Answer
cost of investment

at 6:15 AM 0 comments Links to this post

Labels: Financial Management (Set IV)

Financial Management - 13

LIST OF ATTEMPTED QUESTIONS AND ANSWERS FM



Select The Blank

Question
Shareholders of a joint stock company appoint their representative in the form of ________ to carry on the day-to-day affairs of the company

Correct Answer Directors
Your Answer Directors

Select The Blank

Question
In case of Bills Purchased, the company gets only the present worth of the amount of the bill, the difference between the face value of the bill and the amount of assistance being in the form of ________

Correct Answer discount charges

Your Answer commission charges
True/False
Question Profitability Statement is a period statement
Correct Answer True
Match The Following

Question
Correct Answer
Your Answer

Profitability ratio
Ratios which reflect the final results of business operations
Ratios which reflect the final results of business operations

Turnover ratios
Ratios measuring the efficiency with which the assets are employed by a firm
Ratios measuring the efficiency with which the assets are employed by a firm

Overall profitability ratio
Ratios which indicates the percentage of return on the total capital employed in the business
Ratios which indicates the percentage of return on the total capital employed in the business

Financial ratios
Ratios disclosing the financial position or solvency of the firm
Ratios disclosing the financial position or solvency of the firm


Select The Blank

Question
The debt equity ratio of the company after such buy back of shares should not be more than ________ except where the Central Government allows a higher ratio in case of certain companies

Correct Answer 2:1
Your Answer 2:1
Multiple Choice Single Answer

Question
An organized collection of data according to logical and consistent accounting procedure is known as
Correct Answer Financial Statement
Select The Blank
Question
If the amount of interest is considered as a part of expenses, the ________ liability of the company reduces proportionately

Correct Answer tax
Your Answer current

Select The Blank

Question
________ financing is more preferred route for venture capital funding

Correct Answer Equity
Your Answer Lease
Multiple Choice Multiple Answer

Question Overall profitability ratio includes
Correct Answer
Return on Asset , Return on Shareholders Funds
Multiple Choice Single Answer
Question The traditional approach to financial management refers only to the procurement of funds by
Correct Answer Corporate entity
Multiple Choice Multiple Answer

Question The recommendations of the Tandon committee included
Correct Answer
the norms for inventory and accounts receivables for as many as 15 industries excluding heavy engineering industry , that the amount of bank credit should not be decided by the capacity of the borrower to offer security to the banks but it should be decided in such a way to supplement the borrower's resources in carrying a reasonable level of current assets in relation to his production requirement

True/False

Question
In case of lease transactions, neither the assets side nor the liabilities side of the balance sheet of lessee gets affected

Correct Answer True

Multiple Choice Single Answer

Question
The effect of Purchase of machinery by issue of debentures on the funds flow is that there will be

Correct Answer No effect on the funds flow
Multiple Choice Single Answer
Question Stock in the beginning results in
Correct Answer Application of funds
True/False
Question
Issue of Bonus shares is the remedy used in the situation of overcapitalisation
Correct Answer
False
Multiple Choice Single Answer

Question
A company cannot make the public issue of equity shares unless

Correct Answer
It has made an application for listing of these equity shares in the stock exchange

Multiple Choice Multiple Answer

Question
The current ratio of a company is 2:1 ; Which of the following suggestions would improve the current ratio
Correct Answer
Payment of current liability , To sell a motor car for cash at a slight loss
Your Answer
To borrow money on an interest bearing promissory note , Payment of current liability , To purchase stocks against cash
Multiple Choice Single Answer
Question The Policy which attracts the shareholders who are willing to devote short term dividend income for long term capital gains and share in the increased prosperity of the company is termed as

Correct Answer
No immediate Dividend policy
Select The Blank

Question
Private limited company and Public limited company are the companies based on the classification of ________

Correct Answer Number of members
Your Answer Incorporation

Multiple Choice Single Answer

Question
The main function of finance under the traditional approach comprises of

Correct Answer Procurement of funds
Your Answer Working Capital management
True/False
Question :In narrow sense funds means only cash resources of the business
Correct Answer True
Multiple Choice Multiple Answer
Question Importance of capital budgeting decisions
Correct Answer
They represent the true earning assets of the firm , they are irreversible , they require assessment of future events which are uncertain

Multiple Choice Single Answer
Question
Financing consists of the raising, providing, managing of all the money, capital or funds of any kind to be used in connection with the business' is defined by

Correct Answer Bonneville and Dewey
Multiple Choice Single Answer
Question Net Profit earned plus non-working capital expenses is equal to

Correct Answer Fund provided by operations
Your Answer Source of funds
True/False

Question
Economic Order Quantity model is a very useful model of determining the order quantity

Correct Answer True
Multiple Choice Multiple Answer

Question Situation of capital rationing may involve problems in the form of
Correct Answer
Project Indivisibility , Mutually dependent project , Multi period projects

Multiple Choice Single Answer

Question Live Stock is an example of
Correct Answer Fixed Asset
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

Multiple Choice Single Answer
Question Minimum tradable lot in case of shares having the face value of Rs. 10 per share shall not be more than

Correct Answer 100 shares

Select The Blank
Question The dealing with the financial matters of the government is termed as ________ field of finance

Correct Answer Public
Select The Blank

Question Liquidity ratios indicate the ________ position of the organisation

Correct Answer Short term
Select The Blank

Question ________ are basically interested in the solvency position of the organisation

Correct Answer Financial institution lending long term finance

Match The Following
Dahejia committee
to examine the extent to which credit needs of industry and trade are likely to be inflated and how such trends could be checked
Chhore committee
to review mainly the system of cash credit management policy by banks
Marathe committee
to review the credit authorization scheme
Nayak committee
to recognize the contribution made by the SSI sector to the economy

Multiple Choice Multiple Answer

Question Unsecured loans includes
Correct Answer Fixed Deposit , Inter corporate unsecured deposits
Your Answer Inter corporate unsecured deposits , Debentures
Multiple Choice Single Answer

Question
The ratio which compares the dividend per share with the market price of the share is termed as
Correct Answer Dividend yield ratio
Your Answer Dividend payout ratio
True/False
Question
When the firm's actual bank balance is greater than the balance shown by the firm's books, the difference is called as 'payment float'
Correct Answer True
Select The Blank
Question Turnover ratios measures how efficiently the ________ are employed by the firm
Correct Answer Assets
Multiple Choice Single Answer

Question
The investor is prepared to pay the market price of the shares as he expects not only the payment of the dividend but also expects a growth in the dividend rate at a uniform rate perpetually under the

Correct Answer Dividend /Price + Growth rate Approach
True/False
Question Liquid liabilities includes all current liabilities except bills payable
Correct Answer False
True/False
Question A partnership is an incorporated association of individuals.
Correct Answer False
Multiple Choice Multiple Answer
Question The external users of financial statements are
Correct Answer Lenders , Suppliers
Your Answer Lenders , Board of Directors , Suppliers
Multiple Choice Multiple Answer

Question Measurement of cost of capital can be done through
Correct Answer Cost of Debt , Cost of Preference shares , Cost of Equity shares
Multiple Choice Multiple Answer

Question The Proprietary concern is better than the Partnership concern on the following points
Correct Answer
Minimum Government regulations , Where the business is small

Multiple Choice Single Answer

Question The semi-manufactured products which need further processing are termed as

Correct Answer Work in Progress
Multiple Choice Multiple Answer

Question
Disadvantages of factoring are

Correct Answer
The financial burden on the company increases , It may be considered to be a symptom of financial weakness on the part of the selling company , In Indian circumstances, factoring is mainly with-recourse factoring. The risk of non-payment on the part of customer is borne by the selling firm. This restricts its popularity

True/False
Question Internal rate of return indicates that the discounting rate at which net present value is zero
Correct Answer True
Multiple Choice Multiple Answer
Question The Economic Order Quantity model is based on the assumption of
Correct Answer
Placing and receiving orders is without any delay , Ordering costs and carrying costs associated with the orders are variable in nature and they behave exactly opposite to each other , The demand for the material concerned is uniform throughout the year

at 6:15 AM 0 comments Links to this post

Labels: Financial Management (Set IV)

Financial Management - 12

MANAGEMENT

LIST OF ATTEMPTED QUESTIONS AND ANSWERS

Select The Blank
Question: In case of Bills Purchased, the company gets only the present worth of the amount of
the bill, the difference between the face value of the bill and the amount of assistance
being in the form of ________
Correct Answer: discount charges
Your Answer: interest charges

Match The Following
Question Correct Answer Your Answer
Nayak committee to recognize the contribution made by the SSI sector to the economy
to determine the quantum of bank advances
Dahejia committee to examine the extent to which credit needs of industry and trade are
likely to be inflated and how such trends could be checked
to review mainly the system of cash credit management policy by
banks
Chhore committee to review mainly the system of cash credit management policy by
banks
to find measures to improve the present manner and style of lending
Marathe committee to review the credit authorization scheme
to recognize the contribution made by the SSI sector to the
economy

Multiple Choice Multiple Answer
Question: Before investing in the project, Venture capitalist is interested in ensuring that
Correct Answer: The project is technically feasible , It is commercial viable , The
entrepreneurs are technically competent
Your Answer: The project is technically feasible , It is commercial viable , The
entrepreneurs are technically competent

Multiple Choice Single Answer
Question: The reduction in the market value of the shares may cause due to
Correct Answer: Overcapitalisation
Your Answer: Overcapitalisation

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

Multiple Choice Single Answer
Question: The time required by the company to process the received cheque and deposit
the same in the bank is called
Correct Answer: Deposit float
Your Answer: Bank float



Multiple Choice Single Answer
Question: Minimum application money payable by the applicant along with the
application shall not be less than
Correct Answer: 25% of the issue price
Your Answer: 20% of the issue price

True/False
Question: Overdraft is given by the bank for a very short period of time, at the end of
which the company is supposed to repay the same
Correct Answer: True
Your Answer: True

True/False
Question: One of the basic objectives of cash management is to maintain the optimum
cash balance
Correct Answer: True
Your Answer: True

True/False
Question: Internal rate of return is difficult to use , calculate and understand
Correct Answer: True
Your Answer: True

Multiple Choice Single Answer
Question: The mix of sources from which the long term funds required by a business are
raised is termed as
Correct Answer: Capital Structure
Your Answer: Capital Budgeting

Multiple Choice Single Answer
Question: The Investment decisions are mainly concerned with
Correct Answer: Application of funds
Your Answer: Application of funds

Select The Blank
Question: Cost management is the function of a ________.
Correct Answer: Treasurer
Your Answer: Finance manager

Multiple Choice Single Answer
Question: Which of the following assets get generated during course of operations or get
utilized within one year
Correct Answer: Current assets
Your Answer: Current assets

Select The Blank
Question: The ________ has been empowered to order the company that fails to repay
any deposit to make the repayment of such deposits
Correct Answer: Company Law board
Your Answer: Company Law board



True/False
Question: With limited funds, the company must obtain the optimum combination of
acceptable investment proposals
Correct Answer True
Your Answer True

Select The Blank
Question The projects having Profitability index of less than ________ will be rejected
Correct Answer one
Your Answer one

Multiple Choice Single Answer
Question The Capital Structure decision mainly refers to the decision of
Correct Answer Financing
Your Answer Financing

Multiple Choice Single Answer
Question The value created by the use of resources is more than the total of the input
resources is referred to as
Correct Answer Profit
Your Answer Income

Multiple Choice Single Answer
Question Financing consists of the raising, providing, managing of all the money, capital
or funds of any kind to be used in connection with the business' is defined by
Correct Answer Bonneville and Dewey
Your Answer Kenneth Midgley and Ronald Burns

Multiple Choice Multiple Answer
Question The advantages of operating lease is
Correct Answer In an operating lease arrangement the equipment risk is transferred to thelessor,
It minimizes investment in equipment , Reduces expenditure on maintenance
Your Answer In an operating lease arrangement the equipment risk is transferred to the lessor ,
It minimizes investment in equipment

True/False
Question The requirement of Fixed Working Capital is unaffected due to the changes in the
level of activity
Correct Answer True
Your Answer True

Multiple Choice Single Answer
Question Undercapitalisation is
Correct Answer Excess of real worth of the assets over the aggregate of shares and debentures
outstanding
Your Answer Excess of real worth of the assets over the aggregate of shares and debentures
outstanding


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

Multiple Choice Multiple Answer
Question The cost of managing inventory includes
Correct Answer Ordering cost , Carrying cost
Your Answer Maintenance cost , Ordering cost , Carrying cost

True/False
Question Internal rate of return does not considers cash inflows from the project throughout its
Life
Correct Answer False
Your Answer False

True/False
Question If the company buys back its own shares, it shall not make further issue of Bonus
shares within a period of 24 months
Correct Answer False
Your Answer True

True/False
Question Informal method of capital budgeting does not follow any mathematical or statistical
model to consider the risk factor
Correct Answer True
Your Answer True

Multiple Choice Multiple Answer
Question Utility of cash flow analysis
Correct Answer Helps in efficient cash management , helps in internal financial management ,
Discloses the movements of cash
Your Answer Helps in efficient cash management , helps in internal financial management ,
Discloses the movements of cash

Multiple Choice Multiple Answer
Question Undue decrease in Gross Profit ratio may indicate
Correct Answer Non-consideration of sales invoices , Under-valuation of closing stock ,
Improper utilisation of infrastructural facilities
Your Answer Non-consideration of sales invoices , Under-valuation of closing stock ,
Improper utilisation of infrastructural facilities

Multiple Choice Multiple Answer
Question The techniques of Analysis and Interpretation of financial statements are
Correct Answer Ratio Analysis , Cash flow Analysis
Your Answer Profit and loss account , Balance Sheet





Multiple Choice Multiple Answer
Question The importance of various items of inventory may be decided on the following factors
Correct Answer Value of material consumption , Critical nature of inventory items , Amount
of investment in inventory
Your Answer Amount of investment in inventory , Value of material consumption , Critical
nature of inventory items

Multiple Choice Single Answer
Question Receivable management is also called as
Correct Answer Trade Credit management
Your Answer Trade Credit management

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 Commercial paper , inter-corporate bills discounting , Bank deposits
Your Answer Commercial paper , inter-corporate bills discounting , Bank deposits

Select The Blank
Question The mathematical expression of ________ is Normal Usage * Lead time for
emergency purchases
Correct Answer Danger level
Your Answer Danger level

Multiple Choice Single Answer
Question Current assets are also referred to as
Correct Answer Working Capital
Your Answer Working Capital

True/False
Question The objective of funds flow statement may be to find out uses of loans raised by the
business
Correct Answer True
Your Answer False

Match The Following
Question Correct Answer Your Answer
Contribution Sales less variable operating cost - Sales less variable operating cost
Operating Profit Contribution less Fixed Operating cost- Contribution less Fixed Operating cost
Fixed cost remains constant - remains constant
Variable cost varies in direct proportion to the sales revenue - varies in direct proportion to the
sales revenue

True/False
Question Semi-variable cost is the cost which varies in direct proportion to the sales revenue
Correct Answer False
Your Answer True





Select The Blank
Question ________ and return always go hand in hand
Correct Answer Risk
Your Answer Risk

Select The Blank
Question Inflow of funds may not necessarily result in ________
Correct Answer Inflow of cash
Your Answer Inflow of cash

Multiple Choice Single Answer
Question If the issue of Debentures is having the maturity period of more than 18 months, the
company shall create
Correct Answer Debenture Redemption reserve
Your Answer Debenture Redemption reserve

Multiple Choice Single Answer
Question Tax paid is
Correct Answer Application of funds
Your Answer Application of funds

Select The Blank
Question The most crucial financial decisions of the organisation are taken by ________
Correct Answer Board of Directors
Your Answer Vice President (finance)

Multiple Choice Single Answer
Question Unclaimed Dividends is shown in the balance sheet under the head
Correct Answer Current liabilities and Provisions
Your Answer Reserves

Select The Blank
Question ________ is clubbed with Current Assets in the Balance Sheet
Correct Answer Loans and advances
Your Answer Investments

Multiple Choice Multiple Answer
Question: The recommendations of the Chhore committee included
Correct Answer: increasing role of short term loans and bill finance and curbing the role of cash
credit limits , the bank should appraise and fix separate limits for normalnon-
peak levels and also peak levels
Your Answer: increasing role of short term loans and bill finance and curbing the role of cash
credit limits , the bank should appraise and fix separate limits for normalnon-
peak levels and also peak levels

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