FM assgn:15: Shagun Multiple Choice Single Answer Question
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FM assgn:15: Shagun Multiple Choice Single Answer Question The formula for Fixed assets turnover ratio is Correct Answer Net Sales / Fixed Assets Your Answer Fixed Assets / Net Sales Match The Following Question Correct Answer Your Answer Increase in current liabilities decreases working capital decreases working capital Increase in liabilities inflow of funds inflow of funds Decrease in liabilities outflow of funds increases working capital Increase in current assets increases working capital outflow of funds Multiple Choice Single Answer Question The combined or weighted average cost of capital of the various individual components is termed as Correct Answer Composite cost Your Answer Composite cost Multiple Choice Multiple Answer Question The normal process which may be followed under the capital rationing situations may be Correct Answer Rank the projects according to some measure of profitability , Select projects in the descending order of profitability till the available funds are exhausted Your Answer Rank the projects according to some measure of profitability , Select projects in the descending order of profitability till the available funds are exhausted , Calculate the net present value True/False Question One of the basic objectives of cash management is to maintain the optimum cash balance Correct Answer True Your Answer True Multiple Choice Single Answer Question Current assets are also referred to as Correct Answer Working Capital Your Answer Working Capital Multiple Choice Multiple Answer Question Disadvantages of Internal rate of return is - 1 – fm assgn :15: Correct Answer It is difficult to use and understand , It presupposes that the cash inflows can be reinvested immediately to yield the return equivalent to Internal rate of return which is not very realistic Your Answer It is difficult to use and understand , It presupposes that the cash inflows can be reinvested immediately to yield the return equivalent to Internal rate of return which is not very realistic Multiple Choice Single Answer Question The Investment decisions are mainly concerned with Correct Answer Application of funds Your Answer Application of funds Select The Blank Question In case of Bills Purchased, the company gets only the present worth of the amount of the bill, the difference between the face value of the bill and the amount of assistance being in the form of ________ Correct Answer discount charges Your Answer commission charges Multiple Choice Multiple Answer Question Shortcomings of Debentures from company's point of view Correct Answer The debenture interest and capital repayment are obligatory payments , Debenture financing enhances the financial risk associated with the firm Your Answer Debenture financing enhances the financial risk associated with the firm , They have lowest priority in the event of liquidation , Controlling the affairs of the company True/False Question Banks or financial institutions granting the term loans are the creditors of the company Correct Answer True Your Answer True Multiple Choice Single Answer Question Which of the following assets get generated during course of operations or get utilized within one year Correct Answer Current assets Your Answer Current assets Multiple Choice Single Answer Question Gross Profit ratio is calculated as Correct Answer [(Gross Profit / Net Sales)] * 100 Your Answer [(Gross Profit / Net Sales)] * 100 Multiple Choice Single Answer Question Current liabilities consist of - 2 – fm assgn :15: Correct Answer Creditors Your Answer Creditors Multiple Choice Single Answer Question The Capital Structure decision mainly refers to the decision of Correct Answer Financing Your Answer Investment 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 Shareholders , Bankers , Financial Institutions Multiple Choice Single Answer Question In financial terms, Profit after tax can be referred as Correct Answer Earning after tax Your Answer True/False Question Earning after tax Reorder level is calculated as Maximum Lead Time * Minimum Usage Correct Answer False Your Answer False True/False Question Capital budgeting process involves the estimation of various future aspects regarding future cash inflows, life of the project etc. Correct Answer True Your Answer True Multiple Choice Single Answer Question Discounted Payback period is an improvement over the pay back period method as it considers Correct Answer time value of money Your Answer time value of money Select The Blank Question ________ committee has extended the recommendations of Nayak committee to all the business organisations Correct Answer Vaz Your Answer Vaz - 3 – fm assgn :15: Multiple Choice Single Answer 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 Profit Match The Following Question Advantage of Net present value Correct Answer Your Answer considers cash inflows from the project throughout its life considers cash inflows from the project throughout its life Disadvantage of Accounting rate of uses profits after depreciation and uses profits after depreciation and return taxes and not the cash inflows for taxes and not the cash inflows for evaluating the projects evaluating the projects Disadvantage of Pay back period ignores time value of money Advantage of Discounted Pay back considers time value of money period ignores time value of money considers time value of money Select The Blank Question If the project is accepted, Internal Rate of return resulting from the same should be ________ than cost of capital Correct Answer more Your Answer more Select The Blank Question The amount of shares bought back by the company should not be more than ________ of total paid-up capital of the company and its free reserves Correct Answer 0.25 Your Answer 0.15 Multiple Choice Single Answer Question Expected future earnings of ABC Ltd. are Rs. 2,00,000. Find out the amount of capitalisation if the rate of return earned by similar types of companies is 10%. Correct Answer Rs. 20,00,000 Your Answer Rs. 20,000 Select The Blank Question The debt equity ratio of the company after such buy back of shares should not be more than ________ except where the Central Government allows a higher ratio in case of certain companies Correct Answer 2:1 Your Answer 2:1 Select The Blank Question ________ implies arithmetical relationship between two related figures - 4 – fm assgn :15: Correct Answer Ratio Your Answer Ratio 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 The company might have spent huge amounts during its formation stage , Company following too conservative policy for paying the dividends , Future earnings may be underestimated Multiple Choice Single Answer Question Accounting rate of return is calculated as Correct Answer [Total Profits / (Net Investment * No. of years of Profits)] * 100 Your Answer [Total Profits / (Net Investment * No. of years of Profits)] * 100 Select The Blank Question As per the Tandon Committee, the norms suggested for consumption of raw materials should be in ________ Correct Answer months Your Answer months Select The Blank Question ________ and return always go hand in hand Correct Answer Risk Your Answer Risk True/False Question The analysis of different sources and application of cash enables the management to make reliable cash flow projections for the immediate future Correct Answer True Your Answer True Select The Blank Question To meet the working capital needs of the company, banks may grant the working capital term loans for a period of ________ Correct Answer 3 to 7 years Your Answer 3 to 7 years True/False 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 - 5 – fm assgn :15: Your Answer False Multiple Choice Multiple Answer Question While using Trade credit as a source of working capital financing, following factor play an important role Correct Answer Liquidity position of the company , Earnings of the company over a period of time , Relationship of the company with the suppliers Your Answer Liquidity position of the company , Management policy , Relationship of the company with the suppliers 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 True/False Question The basic limitation of the capital budgeting process lies in this fact that it involves various estimations 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 A close and strict control is facilitated on the most important items , Maintenance of Bin Cards and Stores ledger in order to know about the stock in quantity and value at any given point of time , It may serve as a base for the Production department for placing the material requisition slips 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 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 In ABC analysis A class consist of ________. - 6 – fm assgn :15: Correct Answer only a small percentage of total number of items handled but are most important in nature Your Answer that quantity which is fixed in such a way that the total variable cost of managing the inventory can be minimised 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 norms for inventory and accounts receivables for as many as 15 industries excluding heavy engineering industry , all cash credit accounts with banks should be bifurcated in two categories Select The Blank Question ________ will be shown as source of funds net of proposed dividend Correct Answer Operating Profit Your Answer Operating Profit Multiple Choice Multiple Answer 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 Multiple Choice Multiple Answer 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 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 - 7 – fm assgn :15:
