a)

b)

c)

d)

Many evaluations

One evaluation

One procedure

Many procedures

6.	The FEA Tools encompass a vast array of information & policy into :-

True

False

7.	optimum cash balance under certainty i.e. Baumul`s model allows the cash flow to fluctuate.

Top of Form

 

 Match The Following

Question

Correct Answer

Your Answer

AS 4

Contingencies & events occurring after the balance sheet date

Contingencies & events occurring after the balance sheet date

AS 13

Accounting for investments

Accounting for investments

AS 23

Accounting for investments in associates in consolidated financial statements

Accounting for investments in associates in consolidated financial statements

AS 21

Consolidated financial statements

Consolidated financial statements

 

 Select The Blank

  Question  

There is a ________ relationship between the number of employees & the use of operating supplies.

  Correct Answer  

Natural

  Your Answer  

Natural

 

 True/False

  Question  

Planning helps an acquiring firm to identify the units it should drop & it should add.

  Correct Answer  

True

  Your Answer  

True

 

 Select The Blank

  Question  

Non value added activities helps ________.

  Correct Answer  

To analyse the activities more carefully

  Your Answer  

To take a better decision

 

 True/False

  Question  

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

  Correct Answer  

False

  Your Answer  

False

 

 Select The Blank

  Question  

In the reproduction value method of valuation, the value of assets is taken to be on the basis of ________

  Correct Answer  

Replacement cost

  Your Answer  

Replacement cost

 

 Multiple Choice Multiple Answer

  Question  

The major conditions to be fulfilled for buyback of shares as per the legal provisions include :-

  Correct Answer  

Articles of association should authorize buyback of shares , The shares which are sought to be bought back should be fully paid up , After the buy back the ratio of debt to total capital and free reserves should not be more than 2 : 1

  Your Answer  

Articles of association should authorize buyback of shares , The shares which are sought to be bought back should be fully paid up , After the buy back the ratio of debt to total capital and free reserves should not be more than 2 : 1

 

 Multiple Choice Single Answer

  Question  

The Public announcement of share buy back has to be made at least :-

  Correct Answer  

7 Days prior to the commencement of buy back

  Your Answer  

7 Days prior to the commencement of buy back

 

 Select The Blank

  Question  

Combination of 2 or more companies into existing company is called ________.

  Correct Answer  

Absorption

  Your Answer  

Absorption

 

 Select The Blank

  Question  

________ is not a example of segment liability.

  Correct Answer  

Goodwill

  Your Answer  

Accrued liabilities

	LIST OF ATTEMPTED QUESTIONS AND ANSWERS

Bottom of Form

a)

b)

c)

d)

Decision regarding firm's payout of dividend

Retention of dividend for internal financing

Its investment policy

Investment opportunities available

a)

b)

c)

d)

2 - 3 %

6 - 8 %

8 - 10 %

10 - 15 %

True

False

17.	According to Merton Miller & Franco Modigliani, the only important determinant of a company's market value is :-
24.	Fixed price tender offers are accompanied by an abnormal announcement period return of :-
30.	Opportunity costs and real costs decrease the market value of a firm.

43.	HLL is % of subsidiary of Unilever PLC.

.75,0.5,0.25,0.516

True

False

True

False

47.			The statute governing an enterprise may provide the basis for computation of the depreciation.
1. Line of credit				1.  The cash flow ability of the borrower to pay the loan is usually of paramount importance
2. Revolving credit agreements				2.  Does not constitute any legal commitments on the part of the bank
3. Transaction loan				3.  The clean up period is more than 6 months
4. Unsecured loans				4.  While the commitment is in force the bank must extend credit whenever the borrower wishes to borrow
				5.  Form of debt not backed by the pledge of specific assets
				6.  Borrower does not have to pay a commitment fees
51.	A single organisation model serves to keep all individual initiatives to be targeted into a co-ordinated plan.

Top of Form

 

 Match The Following

Question

Correct Answer

Your Answer

AS 21

Consolidated financial statements

Consolidated financial statements

AS 4

Contingencies & events occurring after the balance sheet date

Contingencies & events occurring after the balance sheet date

AS 13

Accounting for investments

Accounting for investments

AS 23

Accounting for investments in associates in consolidated financial statements

Accounting for investments in associates in consolidated financial statements

 

 Select The Blank

  Question  

There is a ________ relationship between the number of employees & the use of operating supplies.

  Correct Answer  

Natural

  Your Answer  

Natural

 

 Multiple Choice Multiple Answer

  Question  

The main characteristics of CAPM are :-

  Correct Answer  

It is an equilibrium Model , It describes the pricing of assets as well as derivatives , Expected security return = Riskless return + beta x (expected market risk premium)

  Your Answer  

It is an equilibrium Model , It describes the pricing of assets as well as derivatives , Expected security return = Riskless return + beta x (expected market risk premium)

 

 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

 

 Multiple Choice Single Answer

  Question  

As per Pecking order theory, which is the costliest means of funding :-

  Correct Answer  

Equity Shares

  Your Answer  

Equity Shares

 

 Multiple Choice Single Answer

  Question  

Free Reserves is a component of :-

  Correct Answer  

Equity

  Your Answer  

Equity

 

 Select The Blank

  Question  

________ are those operating assets that are employed by a segment in its operating activities.

  Correct Answer  

Segment assets

  Your Answer  

Segment assets

 

 Multiple Choice Multiple Answer

  Question  

The overhead expenses include :-

  Correct Answer  

Utilities , Maintenance , Security

  Your Answer  

Utilities , Maintenance , Security

 

 Multiple Choice Multiple Answer

  Question  

Examples of accrued expenses are :-

  Correct Answer  

Wages , Income tax , Property tax

  Your Answer  

Wages , Income tax , Property tax

 

 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  

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

  Correct Answer  

30

  Your Answer  

30

 

 Multiple Choice Single Answer

  Question  

Conservative policy for determining the requirements of current assets is also known as :-

  Correct Answer  

Flexible policy

  Your Answer  

Flexible policy

 

 True/False

  Question  

Management of working capital refers to the management of total assets and liabilities of a company.

  Correct Answer  

False

  Your Answer  

False

 

 Multiple Choice Single Answer

  Question  

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

  Correct Answer  

20 & 40 percent

  Your Answer  

20 & 40 percent

 

 Multiple Choice Single Answer

  Question  

The difference between current assets & current liabilities is known as :-

  Correct Answer  

Net working capital

  Your Answer  

Net working capital

 

 Select The Blank

  Question  

Conglomerate mergers are also called ________.

  Correct Answer  

Concentric mergers

  Your Answer  

Concentric mergers

 

 Multiple Choice Multiple Answer

  Question  

The main theories behind share repurchases are :-

  Correct Answer  

Dividend or personal taxation hypothesis , Leverage hypothesis , Information or signalling hypothesis

  Your Answer  

Dividend or personal taxation hypothesis , Leverage hypothesis , Information or signalling hypothesis

 

 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  

Non trading assets

 

 Multiple Choice Multiple Answer

  Question  

Every business requires funds on a continual basis for expenses incurred on for :-

  Correct Answer  

Purchase of raw material , Manufacturing costs , Administration

  Your Answer  

Purchase of raw material , Manufacturing costs , Administration

 

 True/False

  Question  

The scope of the data required relates to the scope of the activity model & processes under review.

  Correct Answer  

True

  Your Answer  

True

 

 Multiple Choice Single Answer

  Question  

Investment decisions are mainly concerned with :-

  Correct Answer  

Assets

  Your Answer  

Assets

 

 Match The Following

Question

Correct Answer

Your Answer

Unsecured loans

Form of debt not backed by the pledge of specific assets

Form of debt not backed by the pledge of specific assets

Line of credit

Does not constitute any legal commitments on the part of the bank

Does not constitute any legal commitments on the part of the bank

Revolving credit agreements

While the commitment is in force the bank must extend credit whenever the borrower wishes to borrow

While the commitment is in force the bank must extend credit whenever the borrower wishes to borrow

Transaction loan

The cash flow ability of the borrower to pay the loan is usually of paramount importance

The cash flow ability of the borrower to pay the loan is usually of paramount importance

 

 Multiple Choice Single Answer

  Question  

Short term sources of funds include :-

  Correct Answer  

Current Liabilities

  Your Answer  

Reserves

 

 Multiple Choice Single Answer

  Question  

Profitability of a company depends upon :-

  Correct Answer  

Cost of capital

  Your Answer  

Earning per share

 

 True/False

  Question  

DCF is not a method used to calculate market value of a firm.

  Correct Answer  

False

  Your Answer  

False

 

 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

 

 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

 

 True/False

  Question  

Planning helps an acquiring firm to identify the units it should drop & it should add.

  Correct Answer  

True

  Your Answer  

True

 

 Select The Blank

  Question  

Non value added activities helps ________.

  Correct Answer  

To analyse the activities more carefully

  Your Answer  

To take a better decision

 

 True/False

  Question  

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

  Correct Answer  

False

  Your Answer  

False

 

 Select The Blank

  Question  

In the reproduction value method of valuation, the value of assets is taken to be on the basis of ________

  Correct Answer  

Replacement cost

  Your Answer  

Replacement cost

 

 Multiple Choice Multiple Answer

  Question  

The major conditions to be fulfilled for buyback of shares as per the legal provisions include :-

  Correct Answer  

Articles of association should authorize buyback of shares , The shares which are sought to be bought back should be fully paid up , After the buy back the ratio of debt to total capital and free reserves should not be more than 2 : 1

  Your Answer  

Articles of association should authorize buyback of shares , The shares which are sought to be bought back should be fully paid up , After the buy back the ratio of debt to total capital and free reserves should not be more than 2 : 1

 

 Multiple Choice Single Answer

  Question  

The Public announcement of share buy back has to be made at least :-

  Correct Answer  

7 Days prior to the commencement of buy back

  Your Answer  

7 Days prior to the commencement of buy back

 

 Select The Blank

  Question  

Combination of 2 or more companies into existing company is called ________.

  Correct Answer  

Absorption

  Your Answer  

Absorption

 

 Select The Blank

  Question  

________ is not a example of segment liability.

  Correct Answer  

Goodwill

  Your Answer  

Accrued liabilities

 

 Multiple Choice Multiple Answer

  Question  

The characteristics of working capital are :-

  Correct Answer  

It is continually required for a going concern , Quantum of working capital fluctuates depending on the level of activity , It is impacted by numerous transactions on a continuous basis

  Your Answer  

It is continually required for a going concern , Quantum of working capital fluctuates depending on the level of activity , It is impacted by numerous transactions on a continuous basis

 

 True/False

  Question  

The accounting records serve as the major source of cost data.

  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  

01.04.2002

 

 True/False

  Question  

The activity model is normally created by an activity Accountant.

  Correct Answer  

False

  Your Answer  

False

 

 True/False

  Question  

Organisational changes are similar to mission changes.

  Correct Answer  

True

  Your Answer  

True

 

 Multiple Choice Single Answer

  Question  

Equity includes :-

  Correct Answer  

Development Rebate Reserve

  Your Answer  

Development Rebate Reserve

 

 Select The Blank

  Question  

A geographical segment cannot be ________.

  Correct Answer  

Countries in different zones

  Your Answer  

Countries in different zones

 

 Multiple Choice Single Answer

  Question  

The Management of the Company may enter into a negotiated purchase, which is referred to as :-

  Correct Answer  

Greenfield

  Your Answer  

Greenfield

 

 Multiple Choice Single Answer

  Question  

The acquirer should intimate to the target company & the concerned stock exchanges as soon as its holding touches :-

  Correct Answer  

5 % of the voting capital of the target company

  Your Answer  

5 % of the voting capital of the target company

 

 Multiple Choice Multiple Answer

  Question  

Significant influence is the power to :-

  Correct Answer  

Participate in the financial decisions , Participate in the operating policy decisions

  Your Answer  

Participate in the financial decisions , Participate in the operating policy decisions

 

 Multiple Choice Multiple Answer

  Question  

An investment property is an investment in land or buildings :-

  Correct Answer  

Not intended to be occupied substantially for use by investing enterprise , Not intended to be in the operations of the investing enterprise

  Your Answer  

Not intended to be occupied substantially for use by investing enterprise , Not intended to be in the operations of the investing enterprise

 

 Multiple Choice Single Answer

  Question  

The following analysis is more targeted on similar activities or firms that exist in parallel within the activity model or process flow to ensure that they are being done the same best way :-

  Correct Answer  

Comparative analysis

  Your Answer  

Comparative analysis

	LIST OF ATTEMPTED QUESTIONS AND ANSWERS

Bottom of Form

Strategic Finance

- 3 -

my88.doc

---