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Financial Management 12 by nirajng

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Sysmbiosis Center for Distance Learning exam papers.

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Financial Management Multiple Choice Multiple Answer Question Disadvantages of Preference shares from shareholders point of view Correct Answer Preference shareholders are vulnerable to arbitrary managerial actions , Preference Dividend rate is rather modest , Price fluctuation preference shares is greater than price fluctuation of debentures Your Answer Preference Dividend rate is rather modest , Price fluctuation preference shares is greater than price fluctuation of debentures Multiple Choice Single Answer Question The motive of the company to hold inventory to get the advantage in terms of quantity discounts connected with bulk purchasing is known as Correct Answer Speculative motive Your Answer True/False Question Speculative motive

Retained earnings involves cost in terms of dividend foregone by or withheld from the equity shareholders Correct Answer True Your Answer True

Multiple Choice Multiple Answer Question Factoring can be classified as Correct Answer Without Recourses factoring , With Recourse factoring Your Answer Without Recourses factoring , With Recourse factoring

True/False Question

Usually, the implementation of capital expenditure proposals are spread over more than one year Correct Answer True Your Answer True

Multiple Choice Multiple Answer Question The function of Bill of Materials are Correct Answer It may serve as a base for the Production department for placing the material requisition slips , It gives an indication about the orders to be executed to all the persons concerned , A bill of material prepared and valued in advance may serve as base for quoting the price for the job or production order Your Answer It may serve as a base for the Production department for placing the material requisition slips , It gives an indication about the orders to be executed to all the persons concerned , A bill of material prepared and valued in advance may serve as base for quoting the price for the job or production order

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Multiple Choice Multiple Answer Question The classification of return on Investment are Correct Answer Return on Asset , Return on Capital Employed Your Answer Return on Capital Employed , Debt Equity ratio

Select The Blank Question Retained earnings is a source of ________ finance Correct Answer Internal Your Answer Internal

Multiple Choice Single Answer Question The symptom of large inventory accumulation in anticipation of price rise in future will be indicated by Correct Answer Inventory turnover ratio Your Answer Inventory turnover ratio

Multiple Choice Multiple Answer Question Disadvantages of Net Present value Correct Answer It presupposes that the discounting rate is known , It may give dissatisfactory results if the alternative projects involve varying investment outlay , It presupposes that cash inflows can be reinvested immediately to yield the return equivalent to the discounting rate which may not be possible Your Answer It is easy to calculate , It presupposes that the discounting rate is known , It may give dissatisfactory results if the alternative projects involve varying investment outlay True/False Question

Under pledge mode of security, possession of the goods is with the Bank and the goods pledged are in the custody of the Bank 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

True/False Question

In certain cases, the capital expenditure may not involve any specific inflow of funds, but only outflow of funds Correct Answer True Your Answer True

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Multiple Choice Multiple Answer Question Dividend / Price Approach to compute cost of equity shares is objected on the following grounds Correct Answer This presupposes that an investor looks forward only to receive dividend on equity shares which may not be correct , It assumes that the company will not earn on its retained earnings which is a wrong assumption Your Answer This presupposes that an investor looks forward only to receive dividend on equity shares which may not be correct , It wrongly assumes that earnings per share will remain constant in future , All the earnings may not be distributed among the shareholders by way of dividend 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

Select The Blank Question The indication given by Internal rate of return is that it is the ________ rate at which the company will be able to pay towards the interest on amounts borrowed for investing in the projects Correct Answer maximum Your Answer minimum

Multiple Choice Single Answer Question The Pay Bank period is calculated as Correct Answer Cash outlay / Annual cash inflow Your Answer Total Profits / (Net Investment * No. of years of Profits) * 100

True/False Question

In narrow sense funds means only cash resources of the business

Correct Answer True Your Answer False

Select The Blank Question One of the tools available to the company to ensure the maintenance of ________ cash balance is to prepare cash budget Correct Answer Optimum Your Answer Zero

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

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Your Answer Permanent

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

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 , Management attitude if conservative, then credit will not be extended Multiple Choice Multiple Answer Question The book-keeping and accounting activities in relation to the receivables management undertaken by the factor includes Correct Answer Maintenance of debtors ledger , Various periodical reports about outstanding from the customers , Age-wise analysis of the outstanding Your Answer Maintenance of debtors ledger , Various periodical reports about outstanding from the customers , Preparing financial statements Multiple Choice Single Answer Question The accounting report which summarises the revenues and expenses for a specified accounting period is referred to as Correct Answer Profit and loss Account Your Answer Balance Sheet

Select The Blank Question ________ in assets involves outflow of funds Correct Answer Increase Your Answer Decrease

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

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Select The Blank Question ________ committee has extended the recommendations of Nayak committee to all the business organisations Correct Answer Vaz Your Answer Vaz

True/False Question

Fixed Assets turnover ratio is the relationship between fixed assets and owner's funds Correct Answer False Your Answer True

Multiple Choice Single Answer Question The motive of the company to hold inventory to guard against the risk of unpredictable changes in demand and supply forces is known as Correct Answer Precautionary motive Your Answer Precautionary motive

Match The Following Question Safety Stock ABC Analysis Bill of Materials

Correct Answer below which the actual stock should not be allowed to fall Vital few Trivial Many Details of the necessary materials as well as quantity of each item Maintenance of Bin Cards and Stores ledger in order to know about the stock in quantity and value at any given point of time

Your Answer below which the actual stock should not be allowed to fall Vital few Trivial Many Details of the necessary materials as well as quantity of each item Maintenance of Bin Cards and Stores ledger in order to know about the stock in quantity and value at any given point of time

Perpetual Inventory System

True/False Question

Turnover ratios indicate the efficiency of the organisation to use the various kinds of assets by converting them in the form of Sales Correct Answer True Your Answer True

Multiple Choice Single Answer Question Stock at the end results in the Correct Answer Source of funds Your Answer Sinking fund

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Multiple Choice Single Answer Question Registered Debentures are those Correct Answer which can be transferred to another person only through the company Your Answer which can be transferred to another person only through the company

Match The Following Question Important ratio from the Equity shareholder point of view in relation between the profits and investment in the firm Important ratio for a Bank granting short term loan

Correct Answer

Your Answer

Return on Shareholders funds Price Earning Ratio

Current ratio

Debt Equity ratio Capital Gearing ratio

Important ratio for Financial Debt Service Coverage Institutions and Creditors long Service term finance Important ratio for an ideal investor for comparison between the current market price and future EPS True/False Question Price Earning Ratio

Debt Service Coverage Service

The term Accrued Income and Outstanding Income have synonymous meaning Correct Answer False Your Answer True

Multiple Choice Multiple Answer Question Advantages of the issue of Bonus shares in the form of Dividend to the company are Correct Answer Remedy for undercapitalisation , Increase marketability of shares , Increase credit standing of the company in the eyes of the lending financial institutions Your Answer Remedy for undercapitalisation , Increase marketability of shares , Increase credit standing of the company in the eyes of the lending financial institutions Multiple Choice Single Answer Question The technique which tries to find out the present value of Re 1 if received or spent after n years, provided that the interest rate of I can be earned on investment is termed as Correct Answer Discounting Your Answer Compounding

Multiple Choice Multiple Answer

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Question Benefits of cash flow information Correct Answer It enhances the comparability of the reporting of operating performance by different enterprise , Historical cash flow information is often used as an indicator of the amount , timing and certainty of future cash flows , It enables the users to evaluate the changes in net assets of an enterprise Your Answer Historical cash flow information is often used as an indicator of the amount , timing and certainty of future cash flows , It enables the users to evaluate the changes in net assets of an enterprise , information is useful to construct financial statements True/False Question

In an organisation, Dividend distribution is the function of a Finance Controller Correct Answer False Your Answer True

Multiple Choice Single Answer Question Capitalisation is Correct Answer Total amount of long term funds available to the company Your Answer Total amount of long term funds available to the company

Multiple Choice Single Answer Question From the following data compute Reorder level : Normal usage 40 units per week each, Minimum usage 15 units per week each, Maximum usage 65 units per week each, Re-order quantity 400 units, Re-order period 4 to 6 weeks Correct Answer 390 units Your Answer 390 units

Select The Blank Question The factor makes the prepayment of the invoice to the selling company after keeping the ________ as stipulated Correct Answer Margin Your Answer Charges

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

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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 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 Your Answer Minimum Government regulations , Where the business is small

Multiple Choice Single Answer Question Requirement of working capital is low is case of Correct Answer Infrastructure oriented projects Your Answer Infrastructure oriented projects

True/False Question

Introduction of debt capital increases the risk of insolvency due to nonavailability of cash and variability of earnings available to equity shareholders Correct Answer True Your Answer True


								
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