Financial Management - 17

LIST OF ATTEMPTED QUESTIONS AND ANSWERS

Multiple Choice Single Answer
Question Gross Working Capital means
Correct Answer Current assets
Your Answer Current assets

Select The Blank
Question ________ approach is the mean between two extreme approaches of net income approach and net operating income approach
Correct Answer Traditional
Your Answer Traditional

True/False
Question Secured Premium notes did not carry any interest during the first three years
Correct Answer True
Your Answer True

Multiple Choice Multiple Answer
Question Objective of perpetual inventory system are
Correct Answer Maintenance of Bin Cards and Stores ledger in order to know about the stock in quantity and value at any given point of time , Continuous verification of physical stock to ensure that the physical balance and the book balance tallies
Your Answer Maintenance of Bin Cards and Stores ledger in order to know about the stock in quantity and value at any given point of time , Continuous verification of physical stock to ensure that the physical balance and the book balance tallies

True/False
Question Reorder level is calculated as Maximum Lead Time * Minimum Usage
Correct Answer False
Your Answer False

Multiple Choice Single Answer
Question A project requires an outlay of Rs. 4,00,000 and earns, an annual cash inflow of Rs. 1,00,000 for 8 years. Calculate pay back period
Correct Answer 4 years
Your Answer 4 years

Multiple Choice Multiple Answer
Question Advantages of Preference shares from shareholders point of view
Correct Answer For a corporate investor, preference dividend income , It earns a stable dividend rate
Your Answer For a corporate investor, preference dividend income , It earns a stable dividend rate

Multiple Choice Single Answer
Question A decrease in current liabilities
Correct Answer increases working capital
Your Answer increases working capital

Multiple Choice Single Answer
Question The traditional approach to financial management refers only to the procurement of funds by
Correct Answer Corporate entity
Your Answer Corporate entity

Multiple Choice Single Answer
Question The Pay Bank period is calculated as
Correct Answer Cash outlay / Annual cash inflow
Your Answer Cash outlay / Annual cash inflow

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

Multiple Choice Single Answer
Question An increase in current liabilities
Correct Answer decreases working capital
Your Answer decreases working capital

Multiple Choice Single Answer
Question Own capital of the company includes
Correct Answer Shares
Your Answer Shares

Multiple Choice Single Answer
Question The period that within which the cost of the project will be completely recovered is known as
Correct Answer Pay Back period
Your Answer Pay Back period

Select The Blank
Question For accounting and tax purposes of hire purchase agreement, ________ is treated as revenue expenditure and is considered to be a tax deductible expenditure
Correct Answer Only interest
Your Answer Only interest

Multiple Choice Single Answer
Question For the calculation of Operating Profit / Loss , Preliminary expenses written off should be
Correct Answer added to the Net Profit as per Profit and loss account
Your Answer added to the Net Profit as per Profit and loss account

Select The Blank
Question For the selection of the period for which capital expenditure budget should be prepared , ________ a period may not be useful
Correct Answer Too long
Your Answer Too long

Multiple Choice Multiple Answer
Question The advantages of leasing for the lessee are
Correct Answer The payment of lease rents is the tax deductible expenditure , It is the quickest method of financing the requirements of long term capital , Avoids risk of ownership
Your Answer The payment of lease rents is the tax deductible expenditure , It is the quickest method of financing the requirements of long term capital , Avoids risk of ownership

Select The Blank
Question ________ can be issued for the maturity period of 15 days to one year
Correct Answer Commercial Paper
Your Answer Commercial Paper

Multiple Choice Single Answer
Question Current assets are also referred to as
Correct Answer Working Capital
Your Answer Working Capital

Multiple Choice Single Answer
Question The rate of return which computes the average annual yield on the net investment in the project is known as
Correct Answer Accounting rate of return
Your Answer Return on investment

True/False
Question Debt Service Coverage Ratio is one of the most important ratios calculated by the bankers of financial institutions giving long term finance to the organisation
Correct Answer True
Your Answer True

Multiple Choice Single Answer
Question Financing consists of the raising, providing, managing of all the money, capital or funds of any kind to be used in connection with the business' is defined by
Correct Answer Bonneville and Dewey
Your Answer Bonneville and Dewey

Multiple Choice Single Answer
Question The Investment decisions are mainly concerned with
Correct Answer Application of funds
Your Answer Application of funds

Multiple Choice Single Answer
Question The Capital Structure decision mainly refers to the decision of
Correct Answer Financing
Your Answer Financing

Multiple Choice Single Answer
Question Fixed Working Capital is
Correct Answer the minimum working capital required to be maintained in the business on permanent or uninterrupted basis
Your Answer the minimum working capital required to be maintained in the business on permanent or uninterrupted basis

Select The Blank
Question Suggestions made by the Tandon committee regarding the information system were accepted by Reserve Bank of India and were made applicable to all the borrowers having the overall banking limits of more than Rs.________
Correct Answer 1 crore
Your Answer 1 crore

Multiple Choice Single Answer
Question Cash Budget is
Correct Answer the statement showing the various estimated sources of cash receipts on one hand and the various applications of cash on another hand
Your Answer the statement showing the various estimated sources of cash receipts on one hand and the various applications of cash on another hand

Match The Following
Question Correct Answer Your Answer

Nayak committee to recognize the contribution made by the SSI sector to the economy to recognize the contribution made by the SSI sector to the economy

Dahejia committee to examine the extent to which credit needs of industry and trade are likely to be inflated and how such trends could be checked to examine the extent to which credit needs of industry and trade are likely to be inflated and how such trends could be checked

Chhore committee to review mainly the system of cash credit management policy by banks to review mainly the system of cash credit management policy by banks

Marathe committee to review the credit authorization scheme to review the credit authorization scheme


Select The Blank
Question The projects having Profitability index of more than ________ will be accepted
Correct Answer one
Your Answer one

True/False
Question According to Net Operating Income Approach there exists a direct relationship between the capital structure and valuation of the firm and the cost of capital
Correct Answer False
Your Answer False

Multiple Choice Multiple Answer
Question Indicate which of these are Profitability ratios
Correct Answer Operating ratio , Gross Profit ratio
Your Answer Operating ratio , Gross Profit ratio

True/False
Question Semi-variable cost is the cost which varies in direct proportion to the sales revenue
Correct Answer False
Your Answer True

Multiple Choice Single Answer
Question The Current assets and current liabilities of a company were Rs. 10 lakhs and Rs. 5 Lakhs respectively. What will be the current ratio if the company purchases fixed assets for Rs. 4 lakhs on a Medium term loan from bank with 15% margin
Correct Answer 1.88 : 1.00
Your Answer 1.88 : 1.00

True/False
Question Internal rate of return can be computed even in the absence of the knowledge about the firm's cost of capital
Correct Answer True
Your Answer False

Select The Blank
Question ________ financing is more preferred route for venture capital funding
Correct Answer Equity
Your Answer Equity

True/False
Question In funds flow statement, net decrease in working capital is shown on sources side
Correct Answer True
Your Answer True

Multiple Choice Single Answer
Question The company granting credit may insist on giving the names of those who are currently dealing with the company. This is termed as
Correct Answer Trade Reference
Your Answer Trade Reference

Multiple Choice Multiple Answer
Question Limitations of financial leverage is
Correct Answer It ignores implicit cost of debt , It assumes that cost of debt remains constant regardless of degree of leverage which is not true
Your Answer It ignores implicit cost of debt , It assumes that cost of debt remains constant regardless of degree of leverage which is not true

Multiple Choice Multiple Answer
Question Limitations of credit rating are
Correct Answer Credit rating is based upon the evaluation made by the agencies which may vary depending upon the experience, knowledge and individual opinion of the rators which may be biased in some cases , Credit rating is primarily based upon the past performance whereas the future prospects should be given more importance while deciding the credit rating , Multiplicity of the rating agencies can be considered to be the limitation of the credit rating
Your Answer Credit rating is based upon the evaluation made by the agencies which may vary depending upon the experience, knowledge and individual opinion of the rators which may be biased in some cases , Credit rating is primarily based upon the past performance whereas the future prospects should be given more importance while deciding the credit rating , Multiplicity of the rating agencies can be considered to be the limitation of the credit rating

Multiple Choice Multiple Answer
Question Earnings / Price Approach to compute cost of equity shares is objected on the following grounds
Correct Answer 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
Your Answer 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

Multiple Choice Single Answer
Question Composite cost is calculated as
Correct Answer Total weighted cost / Total weights
Your Answer Total weighted cost / Total weights

Multiple Choice Multiple Answer
Question The causes of undercapitalisation are
Correct Answer Company following too conservative policy for paying the dividends , Future earnings may be underestimated
Your Answer Company following too conservative policy for paying the dividends , Future earnings may be underestimated

Multiple Choice Single Answer
Question The lending Bank does not commit any physical outflow of funds in a
Correct Answer Non-Fund based lending
Your Answer Non-Fund based lending

Select The Blank
Question As per the Tandon committee, variations between the projected figures and actuals may be permitted to the extent of ________
Correct Answer 0.1
Your Answer 0.1

Select The Blank
Question Till the sales revenue reaches the break even point, the company ________
Correct Answer incurs the losses
Your Answer incurs the losses

Match The Following
Question Correct Answer Your Answer

The ratio which indicates the efficiency of the organisation with which the capital employed is being utilised Capital turnover ratio Capital turnover ratio

Ratio which measures the profitability of the investments in a firm Return on Asset Return on Asset

The relation of Net Sales and Working Capital Working Capital turnover ratio Working Capital turnover ratio

The ratio which indicates the speed at which the Sundry debtors are converted in the form of cash Debtors turnover ratio Debtors turnover ratio

Read more »

Posted in: Financial Management (Set V)

Financial Management - 16

LIST OF ATTEMPTED QUESTIONS AND ANSWERS




Question
The recurring duties of Finance Executive includes
Correct Answer
Fixed Assets management , Control of funds , Working Capital Management
Your Answer
Working Capital Management , Financing re-adjustments in times of liquidity crisis , Control of funds


Question
External sources of funds are
Correct Answer
Funds from long term loans , Sale of fixed assets
Your Answer
Funds from long term loans , Sale of fixed assets


Question
Financial Institution plays the role of ________ in factoring service offered
Correct Answer
Factor
Your Answer
Customer


Question
Types of capital budgeting decisions
Correct Answer
Replacements , Expansion , Diversification
Your Answer
Expansion , Diversification , Liquidation


Question
Packing credit facility can take the following form
Correct Answer
Pre-shipment Packing credit , Post-shipment Packing credit
Your Answer
Post-shipment Packing credit , Revocable Packing credit , Confirmed Packing credit


Question
According to the Irrelevance approach of dividend policy, the value of the company
Correct Answer
remains unaffected by the dividend policy of the company
Your Answer
has direct relationship with the dividend policy of the company


Question
________ and return always go hand in hand
Correct Answer
Risk
Your Answer
Risk


Question
The classification of ratios under miscellaneous group includes
Correct Answer
Earnings per share , Dividend Payment ratio
Your Answer
Earnings per share , Dividend Payment ratio

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


Question
Fixed Income bearing securities for the computation of Capital gearing ratio consists of
Correct Answer
Debentures
Your Answer
Debentures


Question
Correct Answer
Your Answer
Recurring duties of finance executive
Raising of funds
Raising of funds
Objective of finance function
Profit maximization
Profit maximization
Treasurer
Cost management
Cost management
Finance Controller
Internal Auditing
Internal Auditing


Question
Proprietory ratio indicates the relationship between the owner's fund and ________
Correct Answer
Total assets
Your Answer
Total assets


Question
Ratio should be computed on the basis of inter-related figures which have a cause and effect relationship
Correct Answer
True
Your Answer
True


Question
The requirement of Fixed Working Capital is unaffected due to the changes in the level of activity
Correct Answer
True
Your Answer
False


Question
________ in liabilities involves outflow of funds
Correct Answer
Decrease
Your Answer
Increase


Question
Capital turnover ratio is calculated as
Correct Answer
Sales / Capital employed
Your Answer
Sales / Capital employed


Question
Goods Stolen ( Sale price Rs. 1000/- Cost Rs. 800/- ) ; Which of the accounts will be affected by this transaction
Correct Answer
Purchases Account , Loss by theft Account
Your Answer
Sales Account , Stock Account , Loss by theft Account


Question
Projects for which profitability is not the criterion are
Correct Answer
Service Department projects , Welfare projects , Educational projects
Your Answer
Welfare projects , Educational projects


Question
Current liabilities consist of
Correct Answer
Creditors
Your Answer
Debentures


Question
By issuing the debentures, the controlling position of the existing equity shareholders does not get affected as the debentures do not carry any voting rights
Correct Answer
True
Your Answer
True


Question
Live Stock is an example of
Correct Answer
Fixed Asset
Your Answer
Current Assets


Question
The combination of irrevocable and confirmed letter of credit can be considered to be a guaranteed payment on the part of the exporter
Correct Answer
True
Your Answer
False


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


Question
Redemtion of shares/debentures is categorised under ________
Correct Answer
Non-operating cash outflow
Your Answer
Non-operating cash inflow


Question
Income tax paid in the case of sole proprietor firms should be treated as a personal expense of the proprietor
Correct Answer
True
Your Answer
False


Question
If the issue of Debentures is having the maturity period of more than 18 months, the company shall create
Correct Answer
Debenture Redemption reserve
Your Answer
Debenture Redemption reserve


Question
From company's point of view return on borrowed capital is
Correct Answer
is a tax deductible expenditure
Your Answer
is a tax deductible expenditure


Question
The value created by the use of resources is more than the total of the input resources is referred to as
Correct Answer
Profit
Your Answer
Income


Question
The advantages of ratio analysis are
Correct Answer
It helps in planning and forecasting , It makes possible comparison of the performance of the different divisions of the firm , It simplifies the comprehension of financial statements
Your Answer
It helps in planning and forecasting , It makes possible comparison of the performance of the different divisions of the firm , It takes into consideration only monetary transactions


Question
Retained earnings or ploughed back profits is one of the best source of raising long term funds for the company
Correct Answer
True
Your Answer
True


Question
The advantages of continuous stock taking are
Correct Answer
The figures of stock can be readily available for the purpose of periodic Profit and Loss Account , It enables to locate slow and non-moving items
Your Answer
The figures of stock can be readily available for the purpose of periodic Profit and Loss Account , It enables to locate slow and non-moving items , A close and strict control is facilitated on the most important items


Question
Correct Answer
Your Answer
Ratio which measures the profitability of the investments in a firm
Return on Asset
Dividend Payment ratio
The relation of Net Sales and Working Capital
Working Capital turnover ratio
Working Capital turnover ratio
The ratio which indicates the speed at which the Sundry debtors are converted in the form of cash
Debtors turnover ratio
Debtors turnover ratio
The ratio which indicates the efficiency of the organisation with which the capital employed is being utilised
Capital turnover ratio
Current Assets turnover ratio


Question
If the size of the issue is more than Rs. 100 crores, the issue is required to be rated by at least ________ credit rating agencies
Correct Answer
two
Your Answer
three


Question
Advantages of cash flow statement are
Correct Answer
Helps in efficient cash management , Discloses the movements of cash , Discloses the success or failure of cash planning
Your Answer
Helps in efficient cash management , Discloses the movements of cash , Represents real liquid position


Question
________ approach is the mean between two extreme approaches of net income approach and net operating income approach
Correct Answer
Traditional
Your Answer
Net Profitability


Question
The trading Account consists of the following items
Correct Answer
Purchases , Closing Stock
Your Answer
Purchases , Closing Stock , Rent


Question
The assumptions of capital structure theories is that Operating earnings are not expected to grow
Correct Answer
True
Your Answer
True


Question
In ABC analysis C class consist of ________.
Correct Answer
a very large number of items which are less important
Your Answer
a very large number of items which are less important


Question
The lending Bank does not commit any physical outflow of funds in a
Correct Answer
Non-Fund based lending
Your Answer
Non-Fund based lending


Question
Minimum tradable lot in case of shares having the face value of Rs. 10 per share shall not be more than
Correct Answer
100 shares
Your Answer
100 shares


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


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


Question
The discounted cash inflows match with discounted cash outflows is known as
Correct Answer
Internal Rate of return
Your Answer
Discounted rate of return


Question
Net Present value considers ________ from the project throughout its life
Correct Answer
cash inflow
Your Answer
Sales revenue


Question
Earnings / Price Approach to compute cost of equity shares is objected on the following grounds
Correct Answer
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
Your 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 , It wrongly assumes that earnings per share will remain constant in future


Question
The traditional approach to financial management refers only to the procurement of funds by
Correct Answer
Corporate entity
Your Answer
Corporate entity


Question
under no circumstances , ________ term requirement of funds should be met out of short term sources of funds
Correct Answer
long
Your Answer
long

Read more »

Posted in: Financial Management (Set V)

Financial Management - 15

LIST OF ATTEMPTED QUESTIONS AND ANSWERS

Select The Blank
Question The fixed assets are expressed at ________
Correct Answer Cost - Depreciation
Your Answer Cost - Depreciation

Multiple Choice Single Answer
Question The objective of Working Capital management is to ensure
Correct Answer Optimum investment in current assets
Your Answer Optimum investment in current assets

True/False
Question With limited funds, the company must obtain the optimum combination of acceptable investment proposals
Correct Answer True
Your Answer True

True/False
Question It is only after crossing the break even point that the profit generating capacity of the company starts
Correct Answer True
Your Answer True

Multiple Choice Single Answer
Question Receivable management is also called as
Correct Answer Trade Credit management
Your Answer Trade Credit management

Select The Blank
Question In case of Mortgage, the party in whose favour the interest is so transferred is called ________
Correct Answer Mortgagee
Your Answer Mortgagee

Select The Blank
Question Proprietory ratio indicates the relationship between the owner's fund and ________
Correct Answer Total assets
Your Answer Total assets

Multiple Choice Single Answer
Question Revenue from sale of products ordinarily is reported as part of the earning in the period
Correct Answer the sale is made
Your Answer the sale is made

Multiple Choice Single Answer
Question Stock in the beginning results in
Correct Answer Application of funds
Your Answer Application of funds

True/False
Question Introduction of a heavy amount of debt capital in the capital structure will not only reduce the valuation of the firm but will also increase the cost of capital
Correct Answer True
Your Answer True

Select The Blank
Question Factor can purchase the debts of the client making the immediate payment of the same, this reduces the strain on the ________ requirements of the client
Correct Answer Working Capital
Your Answer Working Capital

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

Select The Blank
Question As per the Tandon committee, variations between the projected figures and actuals may be permitted to the extent of ________
Correct Answer 0.1
Your Answer 0.1

Select The Blank
Question The following data are extracted from the published accounts of a company : Sales Rs. 38,00,000/-, Net Profit after tax Rs. 2,50,000/-, Equity capital Rs. 10,00,000/-,General Reserve Rs. 6,50,000/-, Rs. Long term debt Rs. 7,00,000/-, Creditors Rs. 6,90,000/-, Bank credit/short term loan Rs. 2,30,000/-, Fixed Assets Rs. 17,50,000/-, Inventories Rs. 7,25,000/-, Other Current assets Rs. 5,25,000/-. The Current assets turnover ratio is ________ .
Correct Answer 3.04
Your Answer 3.04

True/False
Question A high inventory turnover ratio indicates a high holding period of the inventory
Correct Answer False
Your Answer False

Multiple Choice Single Answer
Question The relationship between the earnings belonging to the equity shareholders and the amount finally paid to them by way of dividend is termed as
Correct Answer Dividend payment ratio
Your Answer Dividend payment ratio

Multiple Choice Single Answer
Question Equity Warrants are
Correct Answer where the holders are entitled to purchase the equity shares at a specific price during the specified period
Your Answer where the holders are entitled to purchase the equity shares at a specific price during the specified period

Multiple Choice Multiple Answer
Question The effects of overcapitalisation are
Correct Answer Reduction in the market value of the shares , Credit standing of the company in the market falls down and difficulty in raising futher capital
Your Answer Reduction in the market value of the shares , Credit standing of the company in the market falls down and difficulty in raising futher capital

True/False
Question If Average credit period works out to be more than the Normal credit period, it indicates efficiency on the part of collection department of the company in collecting the dues from the customers
Correct Answer False
Your Answer False

Multiple Choice Multiple Answer
Question Advantages of Internal rate of return is
Correct Answer It considers time value of money , It considers cash inflows from the project throughout its life , It can be computed even in the absence of the knowledge about the firm's cost of capital
Your Answer It considers time value of money , It considers cash inflows from the project throughout its life

Multiple Choice Multiple Answer
Question External sources of funds are
Correct Answer Funds from long term loans , Sale of fixed assets
Your Answer Funds from long term loans , Sale of fixed assets

Multiple Choice Single Answer
Question Cash Budget is
Correct Answer the statement showing the various estimated sources of cash receipts on one hand and the various applications of cash on another hand
Your Answer the statement showing the various estimated sources of cash receipts on one hand and the various applications of cash on another hand

Multiple Choice Single Answer
Question A decrease in current liabilities
Correct Answer increases working capital
Your Answer increases working capital

Multiple Choice Multiple Answer
Question Uses of financial leverage are
Correct Answer It acts as a guideline in setting maximum limit upto which the company should use the debt capital , It gives an indication regarding the extent to which Earning per share may be affected due to every change in Earning before Interest and tax
Your Answer It acts as a guideline in setting maximum limit upto which the company should use the debt capital , It gives an indication regarding the extent to which Earning per share may be affected due to every change in Earning before Interest and tax

True/False
Question In case of cash credit, the company need not have a formal current account
Correct Answer True
Your Answer True

Select The Blank
Question The ________ collections may be useful for reducing the postal float as well as bank float
Correct Answer Decentralised
Your Answer Decentralised

Multiple Choice Multiple Answer
Question Earnings / Price Approach to compute cost of equity shares is objected on the following grounds
Correct Answer 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
Your Answer 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

Multiple Choice Multiple Answer
Question Advantages of Debentures from Investor's point of view
Correct Answer They earn a stable rate of return , They are protected by the various provisions of the debenture Trust Deed , They generally have a fixed maturity period
Your Answer They earn a stable rate of return , They are protected by the various provisions of the debenture Trust Deed , They generally have a fixed maturity period

Select The Blank
Question For accounting and tax purposes of hire purchase agreement, ________ is treated as revenue expenditure and is considered to be a tax deductible expenditure
Correct Answer Only interest
Your Answer Only interest

Multiple Choice Multiple Answer
Question The causes of undercapitalisation are
Correct Answer Company following too conservative policy for paying the dividends , Future earnings may be underestimated
Your Answer Company following too conservative policy for paying the dividends , Future earnings may be underestimated

True/False
Question Debtors turnover ratio is normally supported by the calculations of average collection period
Correct Answer True
Your Answer True

Multiple Choice Single Answer
Question The incremental cost attached with new funds raised by the company is referred to as
Correct Answer Marginal cost
Your Answer Marginal cost

True/False
Question Credit rating does not create any legal relationship between the rating agency and the investor
Correct Answer True
Your Answer True

Multiple Choice Single Answer
Question The effect of Cash collected from Debtors on the funds flow is that there will be
Correct Answer No effect on the funds flow
Your Answer No effect on the funds flow

Select The Blank
Question In ABC analysis A class consist of ________.
Correct Answer only a small percentage of total number of items handled but are most important in nature
Your Answer only a small percentage of total number of items handled but are most important in nature

Select The Blank
Question ________ implies arithmetical relationship between two related figures
Correct Answer Ratio
Your Answer Ratio

Multiple Choice Single Answer
Question The period that within which the cost of the project will be completely recovered is known as
Correct Answer Pay Back period
Your Answer Pay Back period

Multiple Choice Single Answer
Question A company cannot make the public issue of equity shares unless
Correct Answer It has made an application for listing of these equity shares in the stock exchange
Your Answer It has made an application for listing of these equity shares in the stock exchange

True/False
Question In calculating funds from operations non-business expenses like dividends paid etc. as well as non cash expenses like depreciation etc. are added back in the net profits shown by the Profit & Loss Account
Correct Answer True
Your Answer True

Multiple Choice Multiple Answer
Question The limitations of ratio analysis are
Correct Answer Ratios are based on historical financial statements rather than future happenings , Ratios are only indicators, they cannot be taken as final regarding good or bad financial position of the business , Ratio analysis takes in to consideration only monetary transactions
Your Answer Ratios are based on historical financial statements rather than future happenings , Ratios are only indicators, they cannot be taken as final regarding good or bad financial position of the business , Ratio analysis takes in to consideration only monetary transactions

Multiple Choice Multiple Answer
Question Debt Service coverage ratio may be considered to be one of the most important ratios calculated by the
Correct Answer Bankers , Financial Institutions
Your Answer Bankers , Financial Institutions

Match The Following
Question Correct Answer Your Answer

Internal rate of return less than cost of capital Project rejected Project rejected

Internal rate of return breakeven rate of borrowing for the company method by subtracting present value of cash outflows from the present value of cash inflows

Profitability Index ratio between total discounted cash inflows and total discounted cash outflows breakeven rate of borrowing for the company

Profitability Index more than one Project accepted Project accepted


True/False
Question Internal rate of return considers time value of money
Correct Answer True
Your Answer True

Match The Following
Question Correct Answer Your Answer

Nayak committee to recognize the contribution made by the SSI sector to the economy to recognize the contribution made by the SSI sector to the economy

Dahejia committee to examine the extent to which credit needs of industry and trade are likely to be inflated and how such trends could be checked to examine the extent to which credit needs of industry and trade are likely to be inflated and how such trends could be checked

Chhore committee to review mainly the system of cash credit management policy by banks to review mainly the system of cash credit management policy by banks

Marathe committee to review the credit authorization scheme to review the credit authorization scheme


Select The Blank
Question ________ indicates the symptom of liquidity crisis
Correct Answer Current ratio
Your Answer Current ratio

Multiple Choice Multiple Answer
Question The recommendations of the Chhore committee included
Correct Answer increasing role of short term loans and bill finance and curbing the role of cash credit limits , the bank should appraise and fix separate limits for normal non-peak levels and also peak levels
Your Answer increasing role of short term loans and bill finance and curbing the role of cash credit limits , the bank should appraise and fix separate limits for normal non-peak levels and also peak levels

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

Read more »

Posted in: Financial Management (Set V)