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 True/False

  Question  

Accounting standards (AS - 13) is now mandatory.

  Correct Answer  

True

  Your Answer  

True

 

 Multiple Choice Multiple Answer

  Question  

Exit costs are classified into 3 categories namely :-

  Correct Answer  

Lost efficiency prior to separation , Job vacancy cost during the new search , Termination pay

  Your Answer  

Job vacancy cost during the new search , Termination pay , Recruiting new employee as a replacement of the left employee

 

 Multiple Choice Multiple Answer

  Question  

A firm's current assets include :-

  Correct Answer  

Marketable securities , Receivables , Inventory

  Your Answer  

Marketable securities , Receivables , Inventory

 

 Multiple Choice Multiple Answer

  Question  

In a merger decision, the value of a firm depends upon:-

  Correct Answer  

Earnings , Operating characteristics of acquiring firm , Financial characteristics of acquiring firm

  Your Answer  

Earnings , Manpower of the acquiring firm , Financial characteristics of acquiring firm

 

 Multiple Choice Multiple Answer

  Question  

A company is permitted to buy back its shares through stock exchange in the following situations :-

  Correct Answer  

The company shall complete the verification of acceptances within 15 days of the payout , The identity of the company as a purchaser shall appear on the electronic screen when the order is placed , The buy back shall be made only on stock exchanges with electronic trading facility

  Your Answer  

The company shall complete the verification of acceptances within 15 days of the payout , The identity of the company as a purchaser shall appear on the electronic screen when the order is placed , It is not mandatory to specify the maximum price at which the buy back will be made

 

 True/False

  Question  

A merger will make sense to the acquiring firm if its shareholders benefit.

  Correct Answer  

True

  Your Answer  

True

 

 Select The Blank

  Question  

________ Assets in the balance sheet are normally excluded from the value of total assets.

  Correct Answer  

Intangible

  Your Answer  

Intangible

 

 Multiple Choice Single Answer

  Question  

What is a very important factor in any kind of merger?

  Correct Answer  

Exchange ratio

  Your Answer  

Pre merger price

 

 Select The Blank

  Question  

A shareholder expects a higher rate of return as a firm's compensation for ________.

  Correct Answer  

Increased risk

  Your Answer  

Investment in projects to improve prestige or power

 

 True/False

  Question  

Usually cost data is perfect for ABC Analysis & distribution.

  Correct Answer  

False

  Your Answer  

True

 

 Select The Blank

  Question  

Forward or backward integration is a characteristic of ________.

  Correct Answer  

Vertical Mergers

  Your Answer  

Vertical Mergers

 

 Multiple Choice Single Answer

  Question  

Segment assets are determined after :-

  Correct Answer  

Deducting related allowances / provisions reported as direct offsets

  Your Answer  

Deducting income tax assets

 

 Multiple Choice Single Answer

  Question  

Acceptable audit requirements cannot be overlooked even under the pressure of :-

  Correct Answer  

Timeliness & turnaround

  Your Answer  

Mergers & acquisitions

 

 Multiple Choice Single Answer

  Question  

Which of the following is NOT a disadvantage of deferred payment plan to the acquiring firm?

  Correct Answer  

There is built - in cushion to the acquiring firm as total payment is not made at the time of acquisition

  Your Answer  

Freedom of operation to the management of the newly acquired firm

 

 True/False

  Question  

A single organisation model serves to keep all individual initiatives to be targeted into a co-ordinated plan.

  Correct Answer  

True

  Your Answer  

True

 

 True/False

  Question  

Assets held as stock - in - trade are also investments.

  Correct Answer  

False

  Your Answer  

True

 

 Multiple Choice Single Answer

  Question  

In an aggressive approach :-

  Correct Answer  

There is a very large risk of shortage of funds

  Your Answer  

There is a very large risk of shortage of funds

 

 True/False

  Question  

Organisational changes are similar to mission changes.

  Correct Answer  

True

  Your Answer  

False

 

 Multiple Choice Multiple Answer

  Question  

The internal staffing performance indicators are :-

  Correct Answer  

Sales per employee , Recovery rate , Utilization %

  Your Answer  

Sales per employee , Recovery rate , Utilization %

 

 Select The Blank

  Question  

The most popular kind of dividend policy is one that pays a ________.

  Correct Answer  

Regular, steady dividend

  Your Answer  

Regular, steady dividend

 

 Match The Following

Question

Correct Answer

Your Answer

Amount involved in buy back

Not to exceed 25 % of the total paid up capital

Not to exceed 25 % of the total paid up capital

Articles of Association

Authorize buy back of securities

Resolution permitting the buy back of shares

Board of Directors

Resolution permitting the buy back of shares

Authorize buy back of securities

Shares to be bought back

Fully paid up

Fully paid up

 

 Multiple Choice Single Answer

  Question  

A good accounting system does NOT have the characteristics such as :-

  Correct Answer  

Does not cover decisions over the life cycle

  Your Answer  

Takes into account time as an important parameter

 

 Multiple Choice Single Answer

  Question  

Fixed price tender offers are accompanied by an abnormal announcement period return of :-

  Correct Answer  

8 - 10 %

  Your Answer  

6 - 8 %

 

 Multiple Choice Multiple Answer

  Question  

The external staffing performance indicators include :-

  Correct Answer  

Compensation per Re. Profit , Personnel services head count , Profit per head

  Your Answer  

Compensation per Re. Profit , Personnel services head count , Recovery rate

 

 Match The Following

Question

Correct Answer

Your Answer

Trust receipt

Specifically identified by serial number or other means

Specifically identified by serial number or other means

Terminal warehouse receipt

Inventory is stored with a public or terminal warehousing company

Inventory is stored with a public or terminal warehousing company

Floating lien

Loose arrangement as the lender may find it difficult to police

Well suited for financial good inventories of capital goods

Chattel mortgage

Well suited for financial good inventories of capital goods

Affords a higher degree of control over the collateral

 

 Select The Blank

  Question  

In today's fast moving world, the quickest way to get information on a firm is through ________.

  Correct Answer  

Internet

  Your Answer  

Internet

 

 Multiple Choice Single Answer

  Question  

Companies often need to value its own :-

  Correct Answer  

Shares

  Your Answer  

Shares

 

 Multiple Choice Multiple Answer

  Question  

Long term financing strategy is used by a firm to meet :-

  Correct Answer  

Fixed assets requirements , Permanent working capital requirements , Portion of fluctuating working capital requirement

  Your Answer  

Fixed assets requirements , Permanent working capital requirements

 

 True/False

  Question  

For determining exchange ratio, the model developed by Conn & Nielson is used.

  Correct Answer  

True

  Your Answer  

True

 

 Select The Blank

  Question  

usually credit lines are established for a period of ________.

  Correct Answer  

1 year

  Your Answer  

3 years

 

 Multiple Choice Multiple Answer

  Question  

Shortcomings of accounting numbers consist of the following :-

  Correct Answer  

Firms use different kind of accounting methods , Business risk and financial risk do not have any influence on accounting numbers

  Your Answer  

Dividend policy has lot of influence on accounting numbers , Business risk and financial risk do not have any influence on accounting numbers , There is a serious relationship between economic value and profit

 

 Select The Blank

  Question  

Investors can reduce the company related risk by diversification of their investments in ________.

  Correct Answer  

Shares of a large number of companies

  Your Answer  

Mutual funds

 

 True/False

  Question  

Making decision on dividend is a very crucial area of financial management for a firm.

  Correct Answer  

True

  Your Answer  

True

 

 Multiple Choice Single Answer

  Question  

The following is not a factor for reduction in the life of an asset by obsolescence :-

  Correct Answer  

No study of market demand for a product / service

  Your Answer  

Legal restrictions

 

 Multiple Choice Multiple Answer

  Question  

Due to diversification employees seek:-

  Correct Answer  

Job security , Better opportunities within the firm , Higher compensation

  Your Answer  

Job security , Better opportunities within the firm , More perks & benefits , Higher compensation

 

 Multiple Choice Single Answer

  Question  

Research into true human resources accounting began in :-

  Correct Answer  

1960`s

  Your Answer  

1994

 

 Select The Blank

  Question  

Segment assets are ________.

  Correct Answer  

Directly attributable to the segment

  Your Answer  

Directly attributable to the segment

 

 True/False

  Question  

AS 13 statement does not deal with operating or finance leases.

  Correct Answer  

True

  Your Answer  

True

 

 Select The Blank

  Question  

The costs should be gathered & allocated within the organisation at the ________ structural layer.

  Correct Answer  

Lowest possible

  Your Answer  

Lowest possible

 

 Multiple Choice Single Answer

  Question  

Value implies that something has :-

  Correct Answer  

Worth

  Your Answer  

Worth

 

 Multiple Choice Multiple Answer

  Question  

Examples of accounting methods used by firm are :-

  Correct Answer  

FIFO , LIFO , Accrual Accounting

  Your Answer  

FIFO , LIFO , Accrual Accounting

 

 Multiple Choice Multiple Answer

  Question  

The main assumptions for stock repurchase models are as follows :-

  Correct Answer  

The market is efficient , There is perfect competition in the securities market

  Your Answer  

The market is efficient , Offers are minimum limit offers. , Investors are not very keen to maximize the value of their investment

 

 Multiple Choice Multiple Answer

  Question  

As a general rule, an asset is :-

  Correct Answer  

A good or a right that a firm owns in a determined moment , Prepayment adjustments , Capitalized expenses

  Your Answer  

A good or a right that a firm owns in a determined moment , Prepayment adjustments , Capitalized expenses

 

 True/False

  Question  

It is easy to find a risk free security.

  Correct Answer  

False

  Your Answer  

False

 

 Multiple Choice Single Answer

  Question  

The earning power of the company approach includes :-

  Correct Answer  

Mainly discounting of all future earnings

  Your Answer  

Mainly discounting of all future earnings

 

 Select The Blank

  Question  

During the costing process, we look at ________.

  Correct Answer  

Resource consumption

  Your Answer  

Resource consumption

 

 Select The Blank

  Question  

Mature companies with stable earnings generally pay out ________.

  Correct Answer  

A high proportion of earnings

  Your Answer  

A high proportion of earnings

	LIST OF ATTEMPTED QUESTIONS AND ANSWERS

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Strategic Finance II Page 5 of 8

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