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 Multiple Choice Single Answer

  Question  

A firm can manage with small inventory if the supply is :-

  Correct Answer  

Prompt & adequate

  Your Answer  

Prompt & adequate

 

 True/False

  Question  

A transport corporation has a substantial working capital requirement.

  Correct Answer  

False

  Your Answer  

True

 

 Multiple Choice Multiple Answer

  Question  

Implicit claims are non written promises and rights such as :-

  Correct Answer  

Right to provide service to customers , Job security for the employees

  Your Answer  

Right to provide service to customers , Crucial project information to customers , Job security for the employees

 

 Select The Blank

  Question  

As per NOI Approach - the overall capitalization rate remains ________ for all levels of financial leverage.

  Correct Answer  

Constant

  Your Answer  

Constant

 

 Select The Blank

  Question  

When a firm invests in human resources by acquisition & training, it anticipates a ________

  Correct Answer  

Future generation of profits & services

  Your Answer  

Future generation of profits & services

 

 Multiple Choice Multiple Answer

  Question  

While accounting for human assets, the following data is to be considered :-

  Correct Answer  

Full time equivalent staff , Revenues , Expenses

  Your Answer  

Full time equivalent staff , Revenues , Expenses

 

 Match The Following

Question

Correct Answer

Your Answer

Free cash flow theory

Enormous conflicts of interest between Stakeholders and shareholders

Firms have preferences by choosing a way to finance their projects

Net income approach

Cost of debt & equity do not change with a change in leverage ratio

weighted average cost of capital does not change with a change in the proportion of debt to equity in the capital structure

Net operating income approach

The overall capitalization rate remains constant for all levels of financial leverages

The overall capitalization rate remains constant for all levels of financial leverages

Modigliani - Miller Theory

weighted average cost of capital does not change with a change in the proportion of debt to equity in the capital structure

Cost of debt & equity do not change with a change in leverage ratio

 

 Select The Blank

  Question  

The processes to be identified & focused should to be on the basis of not adhering to benchmarks, bottlenecks, quality not met, time problems etc. This is called as ________.

  Correct Answer  

Process analysis

  Your Answer  

Activity analysis

 

 Multiple Choice Single Answer

  Question  

The following is not a method of payment to the acquired firm:-

  Correct Answer  

Fixed deposits of the acquiring firm

  Your Answer  

Tender offers

 

 Select The Blank

  Question  

________ is never a part of the output.

  Correct Answer  

Mechanisms

  Your Answer  

Controls

 

 True/False

  Question  

Short term financing is meant for funding working capital of a company.

  Correct Answer  

True

  Your Answer  

True

 

 Multiple Choice Single Answer

  Question  

One of the bases for determining the residual value of similar assets is :-

  Correct Answer  

Realizable value

  Your Answer  

Realizable value

 

 Select The Blank

  Question  

In case of direct placement of commercial papers it may be issued for maturities ________ from the date of issue.

  Correct Answer  

Between 15 days to 1 year

  Your Answer  

Less than 6 months

 

 Match The Following

Question

Correct Answer

Your Answer

Earning per share

Acquisition is considered to be a function of the impact of the merger on the EPS

Divide net worth by the number of equity shares outstanding

Book value

Divide net worth by the number of equity shares outstanding

Evaluate the impact of the merger on EPS & price - earning ratio

Appraisal value

Provides a list of the reasonableness of results obtained through methods base upon the going concern concept

Indicate the consensus of the investors

Market value

Indicate the consensus of the investors

Provides a list of the reasonableness of results obtained through methods base upon the going concern concept

 

 Multiple Choice Single Answer

  Question  

Book value is relevant to determine the firm's value because of the following reasons except:-

  Correct Answer  

It cannot be used as a starting point to be compared & complimented by other analysis

  Your Answer  

It cannot be used as a starting point to be compared & complimented by other analysis

 

 True/False

  Question  

Receivables constitutes a substantial portion of current assets of several firms.

  Correct Answer  

True

  Your Answer  

True

 

 True/False

  Question  

Odd lots purchase is not a method of buy back of shares.

  Correct Answer  

False

  Your Answer  

True

 

 Multiple Choice Multiple Answer

  Question  

A company is prohibited to buy back its own shares in the following circumstances :-

  Correct Answer  

Through any subsidiary company , Through any investment company , If a company defaults in repayment of deposits or interest due thereon

  Your Answer  

Through any subsidiary company , Through any investment company , If a company defaults in repayment of deposits or interest due thereon

 

 True/False

  Question  

An activity model is a tool to assist in understanding & defining the organisation.

  Correct Answer  

True

  Your Answer  

True

 

 Multiple Choice Single Answer

  Question  

A quantity discount is offered :-

  Correct Answer  

On large shipments

  Your Answer  

On large shipments

 

 True/False

  Question  

According to NI Approach, decrease in leverage decreases the overall cost of capital and increases the firm's value.

  Correct Answer  

False

  Your Answer  

True

 

 Multiple Choice Single Answer

  Question  

Human Assets accounting stands for :-

  Correct Answer  

Measurement & reporting of the cost and value of people as organisational resources

  Your Answer  

Measurement & reporting of the cost and value of people as organisational resources

 

 Multiple Choice Multiple Answer

  Question  

Shareholders returns consists of 2 components :-

  Correct Answer  

Dividend , Capital gains

  Your Answer  

Interest , Dividend

 

 Multiple Choice Single Answer

  Question  

In value of assets method the following is also to be included as they are also of value to the company :-

  Correct Answer  

Non trading assets

  Your Answer  

current assets

 

 True/False

  Question  

Usually only a single method is used for valuation of shares.

  Correct Answer  

False

  Your Answer  

False

 

 Multiple Choice Single Answer

  Question  

Where the management's estimate of the useful life of an asset of the enterprise is shorter than that envisaged under the provisions of the relevant statute, the depreciation provision is approximately computed :-

  Correct Answer  

By applying a higher rate

  Your Answer  

By applying a lower rate

 

 Multiple Choice Multiple Answer

  Question  

For M & As, the acquiring firm needs industry data on :-

  Correct Answer  

Market growth , Nature of competition , Degree of regulation

  Your Answer  

Market growth , Marketing capabilities , Degree of regulation

 

 Select The Blank

  Question  

Increase in cost of capital means decrease in ________.

  Correct Answer  

Profitability

  Your Answer  

Profitability

 

 Multiple Choice Multiple Answer

  Question  

Investments having no physical existence includes :-

  Correct Answer  

Shares , Debentures , Bonds

  Your Answer  

Shares , Debentures , Bonds

 

 Select The Blank

  Question  

Long term cash forecasting is generally for a period of ________ years.

  Correct Answer  

3 to 5 years

  Your Answer  

5 - 8 years

 

 Select The Blank

  Question  

The number of bidding centers shall not be less than ________ for buy back through book building.

  Correct Answer  

30

  Your Answer  

50

 

 Multiple Choice Single Answer

  Question  

The following of the depreciable asset may undergo subsequent changes arising due to price adjustments :-

  Correct Answer  

Historical cost

  Your Answer  

Historical cost

 

 Multiple Choice Multiple Answer

  Question  

The 3 groups of participants in a firm are :-

  Correct Answer  

Suppliers of equity , Debt suppliers , Firm Managers

  Your Answer  

Suppliers of equity , Firm Managers , Government Agencies

 

 Multiple Choice Single Answer

  Question  

A company that comes to the rescue of a firm that is being targeted for a takeover is called :-

  Correct Answer  

White knight

  Your Answer  

Controlling block

 

 Select The Blank

  Question  

________ is not a example of segment asset.

  Correct Answer  

Customer advances

  Your Answer  

Customer advances

 

 True/False

  Question  

Risk appetite decides the rate of capitalization.

  Correct Answer  

True

  Your Answer  

False

 

 Multiple Choice Single Answer

  Question  

usually the `controlling block' tends to be between :-

  Correct Answer  

20 & 40 percent

  Your Answer  

10 & 30 percent

 

 True/False

  Question  

Sometimes the mechanisms may appear to be inputs for an activity.

  Correct Answer  

True

  Your Answer  

True

 

 Select The Blank

  Question  

AS 23 - Accounting for investments in associates in consolidated financial statements comes into effect in respect of accounting periods commencing on or after ________.

  Correct Answer  

01.04.2002

  Your Answer  

01.04.2001

 

 Multiple Choice Multiple Answer

  Question  

The direct costs tier normally only includes the following :-

  Correct Answer  

The personnel payroll , Supplies , Individual rental equipment

  Your Answer  

The personnel payroll , Supplies , Individual rental equipment

 

 Multiple Choice Multiple Answer

  Question  

The following categories of personnel are taken into account to calculate the actual manpower strength :-

  Correct Answer  

Full time equivalents , Temporary staff , Part time personnel

  Your Answer  

Full time equivalents , Part time personnel , Casual workers

 

 Multiple Choice Multiple Answer

  Question  

Debt reduces :-

  Correct Answer  

Agency cost of free cash flow , Commitment to pay in time to all lenders , Freedom of decisions

  Your Answer  

Agency cost of free cash flow , Commitment to pay in time to all lenders , Freedom of decisions

 

 Multiple Choice Multiple Answer

  Question  

A firm using a conservative policy for determining the requirements of current assets :-

  Correct Answer  

Has fewer production stoppages , Ensures quick deliveries to customers , Stimulates sales

  Your Answer  

Has fewer production stoppages , Ensures quick deliveries to customers , Stimulates sales

 

 True/False

  Question  

Valuation of current investments on overall basis is not considered appropriate.

  Correct Answer  

True

  Your Answer  

False

 

 Select The Blank

  Question  

The advantage of ________ is that the company is not required to wait for the payment by the bill issuer.

  Correct Answer  

Bill discounting

  Your Answer  

Bill of exchange

 

 Multiple Choice Single Answer

  Question  

A single business segment does not include products & services :-

  Correct Answer  

With significantly differing risks & returns

  Your Answer  

With similar risks & returns

	LIST OF ATTEMPTED QUESTIONS AND ANSWERS

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Strategic Finance I Page 9 of 9

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