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Financial Management 02

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					LIST OF ATTEMPTED QUESTIONS AND ANSWERS Multiple Choice Multiple Answer Question After the SPACE chart is constructed, we would normally get any one of the following basic strategic postures :Correct Answer Aggressive Posture , Competitive Posture , Defensive Posture Your Answer Aggressive Posture , Defensive Posture Multiple Choice Single Answer Question Borrower's contribution towards Working capital is known as :Correct Answer Margin money Your Answer Margin money

Multiple Choice Single Answer Question The sources of funding have expanded from banks, insurance companies and multilateral agencies to include the :Correct Answer Capital market Your Answer True/False Question Correct Answer Your Answer Money market

Current assets includes stock-in-process. True True

Multiple Choice Multiple Answer Question Demand technique forecasting of Commercial appraisal includes :Correct Answer Future demand of the product , Proper survey of the product , Future availability and supply of the product Your Answer Future demand of the product , Proper survey of the

product , Future availability and supply of the product Multiple Choice Multiple Answer Question Casual methods of Demand forecasting consists of :Correct Answer Consumption-level method , Econometric method Your Answer Select The Blank Question Correct Answer Your Answer Select The Blank Question Consumption-level method , Econometric method

As the plant capacity increase, the investment cost unit capacity ________. Decreases Decreases

Correct Answer Your Answer

A smaller unit into which the overall requirement of capital of a company is sub-divided is termed as ________. Share Share

Multiple Choice Single Answer Question In BCG Matrix "STARS" indicate :Correct Answer Your Answer Products which enjoy a high market share as well as a high growth rate Products which enjoy a high market share as well as a high growth rate

Multiple Choice Single Answer Question The method for evaluating the profitability of industrial projects whose object is to ascertain the period required for recovering the entire investment made in a project is known as :Correct Answer Pay back method Your Answer Pay back method

True/False Question Correct Answer Your Answer

Market potential should be determined under the Marketing aspect of the Project report. True True

Multiple Choice Single Answer Question Cost of materials include :Correct Answer Your Answer Cost of components and consumable stores Cost of components and consumable stores

Multiple Choice Multiple Answer Question The sources of cash are :Correct Answer Your Answer Cash from operations , Sale of machinery , Issue of new shares Cash from operations , Sale of machinery , Issue of new shares

Select The Blank Question Correct Answer Your Answer

Under ________ method, the forecasts are modified in the light of observed errors. Exponential smoothing Exponential smoothing

Multiple Choice Multiple Answer Question Ratios relating to working capital are :Correct Answer Your Answer Current ratio , Internal measure , Quick ratio Current ratio , Internal measure , Quick ratio

Multiple Choice Multiple Answer Question Advantages of fund flow statement are :Correct Answer It determines financial consequences of the business operations , It enables the firm to plan its financial resources properly , It helps as a reliable

guide for the future requirement of funds Your Answer It determines financial consequences of the business operations , It enables the firm to plan its financial resources properly , It helps as a reliable guide for the future requirement of funds

Select The Blank Question Correct Answer Your Answer

________ is a current liability. Trade credit Trade credit

Multiple Choice Single Answer Question Pre-operative expenses include :Correct Answer Your Answer Select The Blank Question Correct Answer Your Answer Select The Blank Question Correct Answer Your Answer Interest on deferred payments Drafting of Memorandum expenses

Detailed Project Report is generally prepared from a ________ report with additional information. Feasibility Pre-feasibility

________ profitability reduces the strain on working capital. High High

Match The Following Question Correct Answer Organisation and Management Material inputs and utilities Strikes/layoffs/lockouts etc. Stock of raw material

Your Answer Strikes/lay-offs/lockouts etc. Finished goods

Working capital Marketing

Sanctioned bank limit Pricing policy

Stock of raw material Sanctioned bank limit

Multiple Choice Multiple Answer Question The Key terms used in the BCG Product Portfolio matrix are :Correct Answer Stars , Question marks Your Answer Stars , Question marks

Match The Following Question Correct Answer Classification of ratios Profitability ratio Advantages of Ratio Analysis Limitation of Ratio analysis

Your Answer Profitability ratio

Precautions before using ratio analysis

It helps in planning and It helps in planning and forecasting forecasting Facts only those which Facts only those which can be expressed in can be expressed in financial terms are financial terms are considered considered Impact of the Impact of the inflationary conditions inflationary conditions of of changing price levels changing price levels to to be taken in account be taken in account

Select The Blank Question Correct Answer Your Answer Select The Blank Question Correct Answer Your Answer

Short term finance is normally for a period upto ________ year. One One

The Project Cycle should be in the ________ order Identification of Project - Project Appraisal Negotiations for loans Negotiation for loans - Preparation of feasibility

study - Identification of Project True/False Question Correct Answer Your Answer Select The Blank Question

Managerial problems in a project are the most pervasive. True True

Correct Answer

Your Answer

The company having ________, is appropriate for the strategic posture of Conservative under the SPACE approach. Limited competitive advantage, belonging to a not so attractive industry but enjoying financial strength and operating in a relatively stable environment Limited competitive advantage, belonging to a not so attractive industry but enjoying financial strength and operating in a relatively stable environment

Multiple Choice Single Answer Question Cost of the Project encompasses :Correct Answer Your Answer The total of all items of outlay associated with a project The total of all items of outlay associated with a project

True/False Question

Correct Answer Your Answer True/False Question

Bilateral aid is form of external aid from one government to another government which is usually project specific. True True

There is a need for studying Project finance both for the lenders as well as the borrowers as both of them have equal stake in making the Project a

success. Correct Answer Your Answer True/False Question True True

Correct Answer Your Answer True/False Question

Cost under-estimation at the project preparation and evaluation stage leads to cost and time over run. True True

Correct Answer Your Answer

The Detailed Project report spells out the modus operandi for the implementation of the Project and the realization of the Project objectives. True True

Multiple Choice Single Answer Question "Fly by night" operator mentality is a :Correct Answer Your Answer True/False Question Management quality Management quality

Correct Answer Your Answer True/False Question

Banks and Financial Institutions, world-wide, are now financing projects with strategies and terms that would have been hard to believe/imagine just a few years back. True True

Miscellaneous expenditure is written on the asset side of the Balance sheet.

Correct Answer Your Answer

True False

Multiple Choice Single Answer Question In BCG Matrix " CASH COWS" indicate :Correct Answer Your Answer Products which have high market share but low growth potential Products which have high growth potential but low market share

Multiple Choice Multiple Answer Question The permanent requirement of working capital should be financed out of :Correct Answer Cash Profits , Shares , Debentures Your Answer Select The Blank Question Cash Profits , Shares , Debentures

Correct Answer Your Answer

More accurate the estimation of the level of current assets and current liabilities, more accurate will be estimation of the requirement of ________. Working capital Working capital

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

Multiple Choice Multiple Answer Question The various aspects which need to be considered while assessing Project finance financing are :Correct Answer Environmental factors , Risk involved , Managerial compensation Your Answer Environmental factors , Risk involved , Managerial

compensation True/False Question Correct Answer Your Answer

Land and site development comes under the cost aspect of the Project report. True True

Multiple Choice Multiple Answer Question In the Detailed Project Report, Management aspects includes :Correct Answer Determination , Organisation Building , Person / system oriented Your Answer Organisation Building , Person / system oriented , Promoter's equity / stake Select The Blank Question Correct Answer Your Answer

________ in liabilities involves inflow of funds. Increase Increase

Multiple Choice Single Answer Question The entire life of the project is taken into account under :Correct Answer Average rate of return method Your Answer Average rate of return method

Multiple Choice Single Answer Question Liabilities side of Balance sheet includes :Correct Answer Your Answer Unsecured loans Miscellaneous expenditure

Multiple Choice Single Answer Question The point at which the unit neither earns profit nor incurs loss is known as :-

Correct Answer Your Answer

Break Even Point Break Even Point

Multiple Choice Multiple Answer Question Internal sources of funds are :Correct Answer Your Answer Funds from operation , Loss on sale of fixed assets , Goodwill written off Funds from operation , Loss on sale of fixed assets , Goodwill written off


				
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