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Multiple Choice Multiple AnswerQuestionDue to diversification employees seek:-Correct AnswerHigher compensation , Job security , Better opportunities within the firmYour AnswerHigher compensation , Job security , Better opportunities within the firm

Select The BlankQuestionA geographical segment cannot be ________.Correct AnswerCountries in different zonesYour AnswerA single country

Select The BlankQuestionA shareholder expects a higher rate of return as a firm's compensation for ________.

Correct AnswerIncreased riskYour AnswerIncreased risk

Multiple Choice Single AnswerQuestionMost companies focus only on :-Correct AnswerReturn on investmentYour AnswerReturn on investment

Multiple Choice Multiple AnswerQuestionAs a general rule, an asset is :-Correct AnswerA good or a right that a firm owns in a determined moment , Prepayment adjustments , Capitalized expenseYour AnswerA good or a right that a firm owns in a determined moment , Prepayment adjustments , Capitalized expense

Multiple Choice Multiple AnswerQuestionIn the disclosures in financial statements, there are significant restrictions on :-Correct AnswerThe right of ownership , Reliability of investments , The remittance of income & proceeds of disposalYour AnswerThe right of ownership , The remittance of income & proceeds of disposal , Other disclosures

Multiple Choice Single AnswerQuestionEquity includes :-Correct AnswerDevelopment Rebate ReserveYour AnswerDeferred Payment Liabilities

Match The Following

QuestionCorrect Answer

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Your AnswerFree cash flow theoryEnormous conflicts of interest between Stakeholders and shareholdersEnormous conflicts of interest between Stakeholders and shareholdersNet income approachCost of debt & equity do not change with a change in leverage ratioCost of debt & equity do not change with a change in leverage ratio

Net operating income approachThe overall capitalization rate remains constant for all levels of financial leveragesThe overall capitalization rate remains constant for all levels of financial leveragesModigliani - Miller Theoryweighted average cost of capital does not change with a change in the proportion of debt to equity in thecapital structureweighted average cost of capital does not change with a change in the proportion of debt to equity in thecapital structure

True/FalseQuestionOrganisational changes are similar to mission changes.

Correct AnswerTrueYour AnswerTrue

Multiple Choice Single AnswerQuestionWhich of the following is NOT A Characteristic of declining firm :-Correct AnswerThe optimum payout ratio for a declining firm is not 100 %Your AnswerThe firm should not reinvest any profits

Select The BlankQuestionA company shall buyback its shares through the stock exchange by making a public announcement at least________ days prior to the commencement of buyback.Correct AnswerSevenYour AnswerFourteen

True/FalseQuestionMoney becomes less valuable when received at a latter stage instead of in present time.Correct AnswerTrueYour AnswerTrue

Select The BlankQuestionThe resource theory considers that the competitive position of a firm depends on its ________ Assets.Correct AnswerSpecificYour AnswerIntangible

Multiple Choice Multiple AnswerQuestion

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A firm having aggressive policy of investing in current assets will show the following features :-Correct AnswerFrequent production stoppages , High ROIYour AnswerFrequent production stoppages , High ROI , Timely deliveries to customer

True/False

QuestionMaking decision on dividend is a very crucial area of financial management for a firm.Correct AnswerTrueYour AnswerTrue

Multiple Choice Single AnswerQuestionSegment reporting comes under :-Correct AnswerAS 17

Your AnswerAS 17

True/FalseQuestionUsually cost data is perfect for ABC Analysis & distribution.Correct AnswerFalseYour AnswerFalse

Multiple Choice Single AnswerQuestion

As per Pecking order theory, which is the costliest means of funding :-Correct AnswerEquity SharesYour AnswerEquity Shares

Match The FollowingQuestionCorrect AnswerYour AnswerMechanismsPerforms or provides energy to an activityPerforms or provides energy to an activityInputsInformation or material used to produce the output of an activityInformation or material used to produce the output of an activityControlsInformation or material that constrains an activityInformation or material that constrains an activityOutputsInformation or material produced by an activityInformation or material produced by an activity

True/FalseQuestion

According to NOI Approach, any capital structure is optimum.Correct Answer

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TrueYour AnswerTrue

Select The BlankQuestionThe ________ often gives the best insight into the borrower's short term credit needs.

Correct AnswerCash budgetYour AnswerMarket research

Select The BlankQuestionIf firms have same technology ________ makes the difference i.e. firms become more productive .Correct AnswerSolid human resource teamYour AnswerLatest & updated techniques

True/FalseQuestionExplicit cost and implicit cost are the two parts of cost of debt.Correct AnswerTrueYour AnswerTrue

Select The BlankQuestionIf a segment is not designated as a ________ it should be included as an unallocated reconciling item.Correct Answer

Reportable segmentYour AnswerBusiness segment

Multiple Choice Single AnswerQuestionResearch into true human resources accounting began in :-Correct Answer1960`sYour Answer1960`s

Select The BlankQuestionIncrease in cost of capital means decrease in ________.Correct AnswerProfitabilityYour AnswerExpected returns

True/FalseQuestionAccording to NI Approach, decrease in leverage decreases the overall cost of capital and increases the firm'svalue.Correct Answer

FalseYour Answer

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True

Multiple Choice Multiple AnswerQuestionAccrued expenses represent :-Correct AnswerCostless financing , An interest free source of financing

Your AnswerCostless financing , An interest free source of financing

Multiple Choice Multiple AnswerQuestionThe direct costs tier normally only includes the following :-Correct AnswerThe personnel payroll , Supplies , Individual rental equipmentYour AnswerThe personnel payroll , Supplies , Individual rental equipment

Multiple Choice Single Answer

QuestionFixed price tender offers are accompanied by an abnormal announcement period return of :-Correct Answer8 - 10 %Your Answer6 - 8 %

Multiple Choice Single AnswerQuestionMany companies claim their main assets are their :-Correct AnswerPeopleYour Answer

Land

Multiple Choice Multiple AnswerQuestionThe main assumptions for stock repurchase models are as follows :-Correct AnswerThe market is efficient , There is perfect competition in the securities marketYour AnswerThe market is efficient , There is perfect competition in the securities market , Investors are not very keen tmaximize the value of their investment

Multiple Choice Single AnswerQuestionThe Buy back of shares shall not be made fromCorrect AnswerThe promoters or persons in control of the companyYour AnswerThe promoters or persons in control of the company

True/FalseQuestionOpportunity costs and real costs decrease the market value of a firm.Correct AnswerTrueYour Answer

False

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True/FalseQuestionRetained earnings are the most important internal sources of financing the growth of the firm.Correct AnswerTrueYour AnswerTrue

True/FalseQuestionThe chance of bankruptcy is small when the leverage of a firm is small.Correct AnswerTrueYour AnswerTrue

Multiple Choice Multiple AnswerQuestionExamples of accounting methods used by firm are :-

Correct AnswerFIFO , LIFO , Accrual AccountingYour AnswerFIFO , LIFO , Overhead calculations

Multiple Choice Single AnswerQuestionFor the following process the valuation is needed to decide the price at which the deal will be possiblyconcluded :-Correct AnswerMergers & AcquisitionsYour AnswerComputation of wealth tax & gift tax

True/FalseQuestionDiversification helps in preserving a firm's reputation & goodwill.Correct AnswerTrueYour AnswerTrue

Multiple Choice Single AnswerQuestionAccording to Net Income Approach, the average cost of capital declines as the leverage ratio :-Correct AnswerIncreasesYour AnswerIncreases

True/FalseQuestionWhether a lease is a finance lease or an operating lease depends on the substance of the transaction ratherthan its form.Correct AnswerFalseYour AnswerTrue

Select The Blank

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QuestionForfeiting is mostly used for ________.Correct AnswerBig ticket items & durable goodsYour AnswerBig ticket items & durable goods

Multiple Choice Multiple AnswerQuestionThe financial framework of a merger decision covers 3 interrelated aspects i.e. :-Correct AnswerDetermining the firm's value , Financing techniques in mergers , Analysis of merger as a capital budgetingdecisionYour AnswerDetermining the firm's value , Financing techniques in mergers , Analysis of merger as a capital budgetingdecision

True/FalseQuestion

For determining exchange ratio, the model developed by Conn & Nielson is used.Correct AnswerTrueYour AnswerTrue

Multiple Choice Single AnswerQuestionOne of the important assumptions for capital structure theories is :-Correct AnswerDebt and equity are the 2 kinds of funds used by the firmYour AnswerDebt and equity are the 2 kinds of funds used by the firm

Select The BlankQuestion________ are not diversible.Correct AnswerMarket related risksYour AnswerMarket related risks

Multiple Choice Multiple AnswerQuestionThe financial managers of a company consume a great deal of their time in activities like :-Correct AnswerMonitoring the investment in inventories , Negotiating favourable credit terms , Administrating AccountsreceivablesYour AnswerMonitoring the investment in inventories , Negotiating favourable credit terms , Administrating Accountsreceivables

LIST OF ATTEMPTED QUESTIONS AND ANSWERS

Multiple Choice Multiple Answer

QuestionThe different types of floats are :-

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Correct AnswerPostal float , Deposit float , Bank floatYour AnswerPostal float , Deposit float , Bank float

Multiple Choice Single AnswerQuestion

A low payout policy implies :-Correct AnswerMore retention of profitsYour AnswerMore retention of profits

True/FalseQuestionoptimum cash balance under certainty i.e. Baumul`s model allows the cash flow to fluctuate.Correct AnswerFalseYour Answer

True

Multiple Choice Single AnswerQuestionCompanies often need to value its own :-Correct AnswerSharesYour AnswerLiabilities

Select The BlankQuestionPostage is an example of ________ cost.

Correct AnswerNon traceable costYour AnswerNon traceable cost

Multiple Choice Single AnswerQuestionValue added analysis :-Correct AnswerHelps to identify potential activities that may be omitted immediatelyYour AnswerHelps to identify potential activities that may be omitted immediately

Multiple Choice Multiple AnswerQuestionIntangible assets include :-Correct AnswerPreliminary expenses , Deferred revenue expenditure , Discount on issues of shares / debenture etcYour AnswerPreliminary expenses , Deferred revenue expenditure , Discount on issues of shares / debenture etc

Multiple Choice Single AnswerQuestionThe Management of the Company may enter into a negotiated purchase, which is referred to as :-Correct Answer

GreenfieldYour Answer

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Forward Contracts

Multiple Choice Single AnswerQuestionIf the segment result of a segment includes interest expense its segment liabilities include :-Correct AnswerThe related interest bearing liabilities

Your AnswerThe related interest bearing liabilities

Select The BlankQuestionAs per NOI Approach - the overall capitalization rate remains ________ for all levels of financial leverage.Correct AnswerConstantYour AnswerConstant

Match The Following

QuestionCorrect AnswerYour AnswerExit costLost efficiency prior to separation, Job vacancy cost during the new search & termination pay.Lost efficiency prior to separation, Job vacancy cost during the new search & termination pay.Historical costsSacrifice necessary to hire & train peopleSacrifice necessary to hire & train peopleSubstitution costExit costs of the leaving employee & recruiting & training of the replacementExit costs of the leaving employee & recruiting & training of the replacementOpportunity cost

An asset value when they are the target of an alternative use.An asset value when they are the target of an alternative use.

Multiple Choice Single AnswerQuestionSuppliers of equity are interested in :-Correct AnswerHigh share pricesYour AnswerHigh share prices

Multiple Choice Multiple AnswerQuestionThe 3 groups of participants in a firm are :-Correct AnswerSuppliers of equity , Debt suppliers , Firm ManagersYour AnswerSuppliers of equity , Debt suppliers , Firm Managers

True/FalseQuestionIt is possible to place a single value for the acquired firm.Correct AnswerFalseYour Answer

True

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Select The BlankQuestion________ is never a part of the output.Correct AnswerMechanismsYour AnswerMechanisms

Multiple Choice Multiple AnswerQuestionExit costs are classified into 3 categories namely :-Correct AnswerLost efficiency prior to separation , Job vacancy cost during the new search , Termination payYour AnswerRecruiting new employee as a replacement of the left employee , Lost efficiency prior to separation ,Termination pay

True/FalseQuestion

A transport corporation has a substantial working capital requirement.Correct AnswerFalseYour AnswerTrue

Select The BlankQuestion________ know the best about a firm's performance.Correct AnswerFirm ManagersYour AnswerBusiness analysts

Multiple Choice Multiple AnswerQuestionAs per AS 13 Statement, the following are not considered as investments:-Correct AnswerShares , Debentures , Other securities held as stock in tradeYour AnswerShares , Debentures , Other securities held as stock in trade

Multiple Choice Multiple AnswerQuestionThe employer in offering the job contract assumes a range of legal obligations such as :-Correct AnswerRewards - cash like & non cash like , Health & safety policies , Pensions & contributions to social securitypaymentsYour AnswerRewards - cash like & non cash like , Health & safety policies , Pensions & contributions to social securitypayments

True/FalseQuestionIt is essential that ABC must fit into the strategy of the company.Correct AnswerTrueYour Answer

False

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True/FalseQuestionTrade credit creates book debts which the firm is expected to collect in the near future.Correct AnswerTrueYour AnswerTrue

Select The BlankQuestionAt times managers invest in projects that improve the company's ________.Correct AnswerPrestige or powerYour AnswerPrestige or power

Select The BlankQuestionBusiness risk & financial risk do not have any influence on ________.

Correct AnswerAccounting numbersYour AnswerBanks

True/FalseQuestionThe objective of a dividend policy should be to maximize shareholder's return so that the value of hisinvestment is maximized.Correct AnswerFalseYour AnswerTrue

True/FalseQuestionA change in the method of depreciation is treated as a change in an accounting policy and is disclosedaccordingly.Correct AnswerTrueYour AnswerTrue

Select The BlankQuestion________ is not a characteristic of financial conglomerates.Correct AnswerProvide ineffective competitive processYour AnswerProvide ineffective competitive process

Select The BlankQuestionThere is a ________ relationship between the number of employees & the use of operating supplies.Correct AnswerNaturalYour AnswerNatural

Multiple Choice Single Answer

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QuestionIf a firm opts for restrictive policy then the investments in current assets is :-Correct AnswerLowYour AnswerLow

Match The FollowingQuestionCorrect AnswerYour AnswerAS 17Segment reportingSegment reportingAS 19LeasesLeasesAS 6Depreciation accounting

Depreciation accountingAS 10Accounting for fixed assetsRevenue recognition

True/FalseQuestionTo `gather costs', means capturing all relevant expenses that pertain to the selected model and processes.Correct AnswerTrueYour AnswerTrue

Select The BlankQuestionInvestors can reduce the company related risk by diversification of their investments in ________.Correct AnswerShares of a large number of companiesYour AnswerFixed deposits of a company

Multiple Choice Multiple AnswerQuestionFor ABC Analysis the available cost data :-Correct AnswerHas to be adjusted for change , Has to be corrected for undocumented element costs , Has to be combinedwith different types of data from alternate sourcesYour AnswerHas to be adjusted for change , Has to be corrected for undocumented element costs , Has to be combinedwith different types of data from alternate sources

Multiple Choice Multiple AnswerQuestionThe external staffing performance indicators include :-Correct AnswerCompensation per Re. Profit , Personnel services head count , Profit per headYour AnswerCompensation per Re. Profit , Personnel services head count , Profit per head

Select The Blank

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QuestionHLL the largest FMCG company has a turnover of Rs. ________.Correct Answer118 BnYour Answer118 Bn

Select The BlankQuestionSegment expense includes ________.Correct AnswerThe relevant portion of enterprise revenue that can be allocated on a reasonable basis to a segmentYour AnswerThe relevant portion of enterprise revenue that can be allocated on a reasonable basis to a segment

Multiple Choice Multiple AnswerQuestionThe important aspect of dividend policy is :-Correct Answer

To determine the amount of earnings to be distributed to shareholders , Amount to be retained in the firmYour AnswerTo determine the amount of earnings to be distributed to shareholders , Amount to be retained in the firm ,To dispatch the dividend warrants in time

Select The BlankQuestionIn today's fast moving world, the quickest way to get information on a firm is through ________.Correct AnswerInternetYour AnswerInternet

Multiple Choice Multiple AnswerQuestionThe main characteristics of operating economies are :-Correct AnswerIt is achieved through horizontal, vertical and conglomerate mergers , It occurs due to indivisibilities ofresources , It is possible in generic management functionsYour AnswerIt is achieved through horizontal, vertical and conglomerate mergers , It occurs due to indivisibilities ofresources , It is possible in generic management functions

Multiple Choice Single AnswerQuestionSegment liabilities do not include :-Correct AnswerBorrowings & other liabilities that are incurred for financing rather than operating purposeYour AnswerBorrowings & other liabilities that are incurred for financing rather than operating purpose

Multiple Choice Single AnswerQuestionWhich of the following company is reaping high market valuation due to showing human resources as anasset in its balance sheet information?Correct AnswerInfosysYour Answer

Infosys

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True/FalseQuestionIn market value approach, interested parties never manipulate the stock markets.Correct AnswerFalseYour AnswerFalse

Multiple Choice Single AnswerQuestionThe stock value for a company will be considered to be fair value for ordinary transactions if the shares are Correct AnswerListedYour AnswerListed

True/FalseQuestionPlanning helps an acquiring firm to identify the units it should drop & it should add.

Correct AnswerTrueYour AnswerTrue

Multiple Choice Single AnswerQuestionFor paying dividends, firms will have a given amount of :-Correct AnswerCash availableYour AnswerCash available

Multiple Choice Single AnswerQuestionThe depreciation rates or the useful lives of the assets are disclosed only :-Correct AnswerIf they are different from the principle rates specified in the statuteYour AnswerIf specifically asked by the Chartered accountant of the company

Select The BlankQuestionEarning power of the company approach tries to value the ________.Correct AnswerCurrent value of the assetsYour AnswerCurrent value of the assets

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Labels:Strategic Finance

Strategic Finance - 1

LIST OF ATTEMPTED QUESTIONS AND ANSWERS

Multiple Choice Single Answer

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QuestionOne of the selective developments that has taken place in recent times is companies are going in for :-Correct AnswerActivity based costing and managementYour AnswerActivity based costing and management

True/FalseQuestionDiversification helps in preserving a firm's reputation & goodwill.Correct AnswerTrueYour AnswerTrue

True/FalseQuestionCash dividends are taxable at ordinary tax rates.Correct Answer

TrueYour AnswerTrue

Multiple Choice Multiple AnswerQuestionThe 3 groups of participants in a firm are :-Correct AnswerSuppliers of equity , Debt suppliers , Firm ManagersYour AnswerSuppliers of equity , Debt suppliers , Firm Managers

Multiple Choice Multiple Answer

QuestionAs per AS 13 Statement, the following are not considered as investments:-Correct AnswerShares , Debentures , Other securities held as stock in tradeYour AnswerShares , Debentures , Other securities held as stock in trade

Match The FollowingQuestionCorrect AnswerYour AnswerOpportunity costAn asset value when they are the target of an alternative use.An asset value when they are the target of an alternative use.Exit costLost efficiency prior to separation, Job vacancy cost during the new search & termination pay.Lost efficiency prior to separation, Job vacancy cost during the new search & termination pay.Historical costsSacrifice necessary to hire & train peopleSacrifice necessary to hire & train peopleSubstitution costExit costs of the leaving employee & recruiting & training of the replacementExit costs of the leaving employee & recruiting & training of the replacement

Multiple Choice Multiple Answer

QuestionThe acquiring firm for any M & A will require data about the target firm which will include :-

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Correct AnswerQuality of management , Production capabilities , ProfitabilityYour AnswerQuality of management , Production capabilities , Profitability

Multiple Choice Single AnswerQuestion

Equity includes :-Correct AnswerDevelopment Rebate ReserveYour AnswerDevelopment Rebate Reserve

Match The FollowingQuestionCorrect AnswerYour AnswerFree cash flow theoryEnormous conflicts of interest between Stakeholders and shareholders

Enormous conflicts of interest between Stakeholders and shareholdersNet income approachCost of debt & equity do not change with a change in leverage ratioCost of debt & equity do not change with a change in leverage ratioNet operating income approachThe overall capitalization rate remains constant for all levels of financial leveragesThe overall capitalization rate remains constant for all levels of financial leveragesModigliani - Miller Theoryweighted average cost of capital does not change with a change in the proportion of debt to equity in thecapital structureweighted average cost of capital does not change with a change in the proportion of debt to equity in thecapital structure

Select The BlankQuestionIf a segment is not designated as a ________ it should be included as an unallocated reconciling item.Correct AnswerReportable segmentYour AnswerReportable segment

True/FalseQuestionFor determining exchange ratio, the model developed by Conn & Nielson is used.Correct AnswerTrueYour AnswerTrue

Select The BlankQuestionIn presenting the reconciliation segment result should be reconciled to ________.Correct AnswerEnterprise net profit or lossYour AnswerEnterprise net profit or loss

Select The Blank

QuestionIdentify disclosure on human resources as a societal concern & prepare international regulations comes

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under ________Correct AnswerThe compulsory methodYour AnswerThe compulsory method

Multiple Choice Single Answer

QuestionWhich is an example out of the following to which special consideration apply for depreciation :-Correct AnswerRegenerative natural resourcesYour AnswerRegenerative natural resources

True/FalseQuestionIt is essential that ABC must fit into the strategy of the company.Correct AnswerTrue

Your AnswerTrue

Select The BlankQuestionHLL the largest FMCG company has a turnover of Rs. ________.Correct Answer118 BnYour Answer118 Bn

Select The BlankQuestion

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

Multiple Choice Multiple AnswerQuestionThe important aspect of dividend policy is :-Correct AnswerTo determine the amount of earnings to be distributed to shareholders , Amount to be retained in the firmYour AnswerTo determine the amount of earnings to be distributed to shareholders , Amount to be retained in the firm

Multiple Choice Multiple AnswerQuestionThe main characteristics of CAPM are :-Correct AnswerIt 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 AnswerIt 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)

True/False

QuestionCurrent accounting system is able to provide actual value of employee capabilities & knowledge.

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Correct AnswerFalseYour AnswerFalse

Multiple Choice Single AnswerQuestion

In respect of depreciable assets, which do not have material value, depreciation is often allocated :-Correct AnswerFully in the accounting period for which they are acquiredYour AnswerFully in the accounting period for which they are acquired

Multiple Choice Single AnswerQuestionThe depreciation rates or the useful lives of the assets are disclosed only :-Correct AnswerIf they are different from the principle rates specified in the statuteYour Answer

If they are different from the principle rates specified in the statute

Multiple Choice Multiple AnswerQuestionDue to diversification employees seek:-Correct AnswerJob security , Better opportunities within the firm , Higher compensationYour AnswerJob security , Better opportunities within the firm , Higher compensation

Select The BlankQuestionThe ________ cost tier has the advantage of being the simplest to calculate and justify.

Correct AnswerDirectYour AnswerDirect

Multiple Choice Multiple AnswerQuestionTo gather costs means to do the following actions to support the costing of the activities :-Correct AnswerTo capture , To construct , To synthesize the correct cost figuresYour AnswerTo capture , To construct , To synthesize the correct cost figures

True/FalseQuestionOdd lots purchase is not a method of buy back of shares.Correct AnswerFalseYour AnswerFalse

Multiple Choice Multiple AnswerQuestionThe overhead expenses include :-Correct Answer

Utilities , Maintenance , SecurityYour Answer

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Utilities , Maintenance , Security

Multiple Choice Single AnswerQuestionIn a matching approach policy, :-Correct AnswerThere is a small risk if shortage of funds

Your AnswerThere is a small risk if shortage of funds

Multiple Choice Single AnswerQuestionThe most important internal sources of financing the growth of the firm is through :-Correct AnswerRetained earningsYour AnswerRetained earnings

True/False

QuestionThe intellectual assets of a company are often worth 3 or 4 times the tangible book value.Correct AnswerTrueYour AnswerTrue

Multiple Choice Multiple AnswerQuestionIndicators of the value of an investment are obtained by :-Correct AnswerReference to its market value , The investee`s assets , The expected cash flows from the investmentYour Answer

Reference to its market value , The investee`s assets , The expected cash flows from the investment

Select The BlankQuestionBuy back through book building the process should be made through ________.Correct AnswerAn electronically linked transparent facilityYour AnswerAn electronically linked transparent facility

Multiple Choice Multiple AnswerQuestionSignificant influence is the power to :-Correct AnswerParticipate in the operating policy decisions , Participate in the financial decisionsYour AnswerParticipate in the financial decisions , Participate in the operating policy decisions

True/FalseQuestionAn activity model is a tool to assist in understanding & defining the organisation.Correct AnswerTrueYour AnswerTrue

True/False

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2

QuestionDecisions related to working capital are repetitive & frequent.Correct AnswerTrueYour AnswerTrue

Select The BlankQuestion________ is not a characteristic of financial conglomerates.Correct AnswerProvide ineffective competitive processYour AnswerProvide ineffective competitive process

Multiple Choice Single AnswerQuestionIn the past, costing mainly focused on :-Correct Answer

Manufacturing costsYour AnswerManufacturing costs

Multiple Choice Multiple AnswerQuestionA firm using a conservative policy for determining the requirements of current assets :-Correct AnswerHas fewer production stoppages , Ensures quick deliveries to customers , Stimulates salesYour AnswerHas fewer production stoppages , Ensures quick deliveries to customers , Stimulates sales

Multiple Choice Multiple Answer

QuestionThe major conditions to be fulfilled for buyback of shares as per the legal provisions include :-Correct AnswerArticles of association should authorize buyback of shares , The shares which are sought to be bought backshould be fully paid up , After the buy back the ratio of debt to total capital and free reserves should not bemore than 2 : 1Your AnswerArticles of association should authorize buyback of shares , The shares which are sought to be bought backshould be fully paid up , After the buy back the ratio of debt to total capital and free reserves should not bemore than 2 : 1

Multiple Choice Single AnswerQuestionSegment liabilities do not include :-Correct AnswerBorrowings & other liabilities that are incurred for financing rather than operating purposeYour AnswerBorrowings & other liabilities that are incurred for financing rather than operating purpose

Multiple Choice Single AnswerQuestionThe difference between current assets & current liabilities is known as :-Correct AnswerNet working capitalYour Answer

Net working capital

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2

Multiple Choice Single AnswerQuestionThe bottom line of ABC Process is :-Correct AnswerTo achieve a better method of doing the right business pf the organisationYour AnswerTo achieve a better method of doing the right business pf the organisation

Select The BlankQuestionNon value added activities helps ________.Correct AnswerTo analyse the activities more carefullyYour AnswerTo analyse the activities more carefully

Multiple Choice Single AnswerQuestionIn value of assets method the following is also to be included as they are also of value to the company :-

Correct AnswerNon trading assetsYour AnswerNon trading assets

Multiple Choice Single AnswerQuestionBest practices, a tool for review process is similar to :-Correct AnswerBench markingYour AnswerBench marking

Select The BlankQuestionHLL is ________ % of subsidiary of Unilever PLC.Correct Answer0.516Your Answer0.516

Select The BlankQuestiontraditionally avails are provided by ________.Correct AnswerBanksYour AnswerBanks

Multiple Choice Single AnswerQuestion A quantity discount is offered :-Correct Answer On large shipmentsYour Answer On large shipments

Multiple Choice Multiple AnswerQuestion Indicators of the value of an investment are obtained by :-Correct Answer Reference to its market value , The investee`s assets , Theexpected cash flows from the investment

Your Answer The expected cash flows from the investment , Currentinvestment valuation , The investee`s assets

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Multiple Choice Single AnswerQuestion The following is not a method of payment to the acquired firm:-Correct Answer Fixed deposits of the acquiring firmYour Answer Convertible securitiesTrue/FalseQuestion The activity model is normally created by an activity Accountant.

Correct Answer FalseYour Answer False

Multiple Choice Multiple AnswerQuestion A company is prohibited to buy back its own shares in thefollowing circumstances :-Correct Answer Through any subsidiary company , Through any investmentcompany , If a company defaults in repayment of deposits orinterest due thereonYour Answer Through any subsidiary company , Through any investmentcompany , If a company defaults in repayment of deposits orinterest due thereon

Select The BlankQuestion If the segment result of a segment includes interest or dividendincome its segment assets will not include ________.Correct Answer PayablesYour Answer Related receivables

Select The BlankQuestion Forward or backward integration is a characteristic of ________.Correct Answer Vertical MergersYour Answer Horizontal Mergers

Multiple Choice Single Answer

Question Modigliani - Miller Theoram is based on :-Correct Answer Perfect Capital MarketsYour Answer Perfect Capital Markets

True/FalseQuestion Value based approach of HRA tracking can be divided into 2categories - Non - monetary & monetary.Correct Answer TrueYour Answer False

Select The BlankQuestion During the costing process, we look at ________.Correct Answer Resource consumptionYour Answer Resource consumption

Multiple Choice Multiple AnswerQuestion For accounting standard (AS) 27, Significant influence may begained by :-Correct Answer Share ownership , Statute , AgreementYour Answer Share ownership , Statute , Agreement

Multiple Choice Multiple AnswerQuestion As a general rule, an asset is :-Correct Answer A good or a right that a firm owns in a determined moment ,Prepayment adjustments , Capitalized expenses

Your Answer A good or a right that a firm owns in a determined moment ,Capitalized expenses

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Multiple Choice Single AnswerQuestion Deferred payment plan is also known as:-Correct Answer Earn out planYour Answer Earn out planTrue/FalseQuestion There are few methods of allocating depreciation over the useful

life of an assets.Correct Answer FalseYour Answer TrueSelect The BlankQuestion Market approach is used for companies whose shares are________ on the Stock market.Correct Answer ListedYour Answer ListedMultiple Choice Multiple AnswerQuestion Operating economies of scale are achieved through the followingmergers :-Correct Answer Horizontal , Vertical , Conglomerate

Your Answer Horizontal , Vertical , FinancialMultiple Choice Single AnswerQuestion Tender offers can be afforded by firms with :-Correct Answer A large amount of financial SlackYour Answer A large amount of financial SlackMultiple Choice Single AnswerQuestion The following method of valuation is used for listed companiesthat have an active market for their shares :-Correct Answer Market value approachYour Answer Market value approachSelect The BlankQuestion According to Altman (1984) total costs in percentage of themarket value of a firm range between ________

Correct Answer 12.1 % & 16.7 %Your Answer 12.1 % & 16.7 %Multiple Choice Single AnswerQuestion Conservative policy for determining the requirements of currentassets is also known as :-Correct Answer Flexible policyYour Answer Aggressive policyMultiple Choice Single AnswerQuestion Yield or earning approach method of valuation uses :-Correct Answer Price to earnings ratioYour Answer Price to earnings ratioMultiple Choice Multiple AnswerQuestion The main categories of organisational elements are :-Correct Answer Managerial , Support , OperationalYour Answer Managerial , Partly functional , OperationalSelect The BlankQuestion The ________ cost tier has the advantage of being the simplestto calculate and justify.Correct Answer DirectYour Answer DirectMultiple Choice Multiple AnswerQuestion The existence of significant influence by an investor is usuallyevidenced in the following ways :-Correct Answer Participation in policy making processes , Material transactionsbetween the investor & the investee , Interchange of managerial

personnelYour Answer Participation in policy making processes , Material transactions

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between the investor & the investee , Interchange of managerialpersonnelMultiple Choice Single AnswerQuestion Free Reserves is a component of :-Correct Answer EquityYour Answer EquityMatch The Following

Question Correct Answer Your AnswerSentiments and rumours No fundamental basis. No effect on valuationUnlisted shares on stockexchangeDifficult to estimate thepriceInvalid valuation of sharesManipulation of stockmarketsInvalid valuation of shares Easy to estimate the priceSelective information Valuation by variouspeople on information

availableValuation by variouspeople on informationavailableTrue/FalseQuestion Only firms with a large amount of financial slack can affordtender offers.Correct Answer TrueYour Answer TrueSelect The BlankQuestion Buy back through book building the process should be madethrough ________.Correct Answer An electronically linked transparent facility

Your Answer Through brokersMultiple Choice Multiple AnswerQuestion For M & As, the acquiring firm needs industry data on :-Correct Answer Market growth , Nature of competition , Degree of regulationYour Answer Market growth , Marketing capabilities , Nature of competitionTrue/FalseQuestion The chance of bankruptcy is small when the leverage of a firm issmall.Correct Answer TrueYour Answer FalseTrue/FalseQuestion A change in the method of depreciation is treated as a change inan accounting policy and is disclosed accordingly.Correct Answer TrueYour Answer TrueSelect The BlankQuestion Economies of scale arises with increase in volume of productionleading to________.Correct Answer Reduction in the cost of productionYour Answer Reduction in the cost of productionTrue/FalseQuestion Arbitrage process implies that security cannot sell at differentprices.Correct Answer TrueYour Answer True

Select The BlankQuestion Capital gains are taxed at ________.

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Correct Answer Preferentially lower rateYour Answer Acquisition priceMultiple Choice Single AnswerQuestion Net period - no cash discount means :-Correct Answer The seller only specifies the time period allowed for the paymentYour Answer Cash on delivery of goodsTrue/False

Question A long term investment is an investment other than a currentinvestment.Correct Answer TrueYour Answer TrueMultiple Choice Single AnswerQuestion Accounting standards (AS - 17) has come into effect in respectof accounting periods commencing :-Correct Answer On or after 01.04.2001Your Answer Prior to 01.04.2001True/FalseQuestion Accounting standards (AS - 13) is now mandatory.Correct Answer True

Your Answer TrueMultiple Choice Multiple AnswerQuestionValuation methodsare highly specific to the following for doingthe valuation :-Correct Answer To the person , To the firm , To the ConsultantYour Answer To the person , To the firm , To the ConsultantSelect The BlankQuestion ________ Assets in the balance sheet are normally excludedfrom the value of total assets.Correct Answer IntangibleYour Answer TangibleMultiple Choice Multiple AnswerQuestion The budgetary records are useful for:-

Correct Answer Validating accounting costs , Providing a rationale for division ofcosts , Replacing missing dataYour Answer Validating accounting costs , Allocating indirect costs intodifferent cost centres , Providing a rationale for division of costsMultiple Choice Multiple AnswerQuestion As per the new sections of the company's act, funds out of whichbuy back may be financed include :-Correct Answer Free reserves of the company , Securities premium account ,Proceeds of any shares or other specified securitiesYour Answer Loans taken from banks and financial institutions , Free reservesof the company , Securities premium accountMatch The FollowingQuestion Correct Answer Your AnswerPpH = P / H ( C + B ) / PSPE = R / H (C + B ) / RRR = (C + B ) / R P / HU % = R / ( C + B ) R / ( C + B )Multiple Choice Multiple AnswerQuestion Due to diversification employees seek:-Correct Answer Job security , Better opportunities within the firm , HighercompensationYour Answer Job security , Better opportunities within the firm , More perks &benefitsSelect The BlankQuestion In today's fast moving world, the quickest way to get information

on a firm is through ________.Correct Answer Internet

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Your Answer InternetMultiple Choice Single AnswerQuestion It is often not possible to directly attribute, or reasonably allocate:-Correct Answer The interest bearing liabilities to segmentsYour Answer GoodwillTrue/False

Question Odd lots purchase is not a method of buy back of shares.Correct Answer FalseYour Answer True

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Labels:Strategic Finance (Set III)

Saturday, March 7, 2009

Strategic Finance - 6

For

WOMEN's DAY SMS

(8th March)

CLICK HERE

LIST OF ATTEMPTED QUESTIONS AND ANSWERS

Multiple Choice Multiple Answer

Question A normal firm shows the following characteristics :-

Correct Answer No unique optimum payout ratio , Market value per share

unaffected by the payout ratio , All dividend policies are similarYour Answer No unique optimum payout ratio , Market value per share

unaffected by the payout ratio , All dividend policies are similar

Multiple Choice Single Answer

Question One of the bases for determining the residual value of similar

assets is :-

Correct Answer Realizable value

Your Answer Net operational value

Multiple Choice Multiple Answer

Question If a firm diversifies managerial teams formed can be shifted from

unproductive activities to productive ones which leads to :-

Correct Answer Improved profitability , Continuity , Growth of the firm

Your Answer Improved profitability , Continuity , Growth of the firm

Multiple Choice Single Answer

Question Segment liabilities do not include :-

Correct Answer Borrowings & other liabilities that are incurred for financing rather

than operating purpose

Your Answer Other payables

Multiple Choice Single Answer

Question As per Pecking order theory, which is the costliest means of

funding :-

Correct Answer Equity Shares

Your Answer Secured debt

Select The Blank

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Question Cost of ________ is more than other sources for raising short -

term finance.

Correct Answer Bank finance

Your Answer Commercial paper

Multiple Choice Multiple Answer

Question Operating economies occur due to indivisibilities of resources

like :-Correct Answer People , Equipment , Overheads

Your Answer People , Equipment , Overheads

True/False

Question If a company has resorted to buyback its shares, it cannot make

a further issue of the same kind of securities within a period of 1

year.

Correct Answer False

Your Answer True

True/False

Question In value of assets approach for computation of valuation of

shares, the total value of all the assets will be divided by the totalnumber of shares.

Correct Answer True

Your Answer True

Multiple Choice Single Answer

Question Short term sources of funds include :-

Correct Answer Current Liabilities

Your Answer Term loans

Multiple Choice Single Answer

Question Investment decisions are mainly concerned with :-

Correct Answer Assets

Your Answer AssetsMultiple 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

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

Select The Blank

Question The cost of facilities is usually included & distributed as

________.

Correct Answer Depreciation

Your Answer Fringe benefits

Multiple Choice Multiple Answer

Question Investments having no physical existence includes :-

Correct Answer Shares , Debentures , Bonds

Your Answer Bonds , Shares , Debentures

Multiple Choice Multiple Answer

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

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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 AnswerQuestion If a firm opts for restrictive policy then the investments in current

assets is :-

Correct Answer Low

Your Answer Moderate

True/False

Question According to NOI Approach, any capital structure is optimum.

Correct Answer True

Your Answer True

Select The Blank

Question Segment assets are ________.

Correct Answer Directly attributable to the segmentYour Answer Indirectly attributable to the segments

Match The Following

Question Correct Answer Your Answer

Free cash flow theory Enormous conflicts of

interest between

Stakeholders and

shareholders

Many groups of non -

investor stakeholders have

an interest in the firm

Net income approach Cost of debt & equity donot change with a change

in leverage ratio

Enormous conflicts of

interest between

Stakeholders and

shareholders

Net operating income

approach

The overall capitalization

rate remains constant for

all levels of financialleverages

Firms have preferences by

choosing a way to finance

their projects

Modigliani - Miller Theory weighted average cost of

capital does not change

with a change in the

proportion of debt to

equity in the capital

structure

Cost of debt & equity do

not change with a change

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in leverage ratio

Select The Blank

Question The processes to be identified & focused should to be on the

basis of not adhering to benchmarks, bottlenecks, quality not

met, time problems etc. This is called as ________.

Correct Answer Process analysis

Your Answer Process analysisMultiple Choice Multiple Answer

Question The main characteristics of operating economies are :-

Correct Answer It is achieved through horizontal, vertical and conglomerate

mergers , It occurs due to indivisibilities of resources , It is

possible in generic management functions

Your Answer Vertical integration has no connection with operating economies

, It is achieved through horizontal, vertical and conglomerate

mergers , It occurs due to indivisibilities of resources

Multiple Choice Single Answer

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

Correct Answer 20 & 40 percentYour Answer 10 & 30 percent

Multiple Choice Multiple Answer

Question The 3 groups of participants in a firm are :-

Correct Answer Suppliers of equity , Debt suppliers , Firm Managers

Your Answer Suppliers of equity , Debt suppliers , Firm Managers

Multiple Choice Single Answer

Question Human Assets accounting stands for :-

Correct Answer Measurement & reporting of the cost and value of people as

organisational resources

Your Answer Calculation of wages paid to casual workers

Multiple Choice Single AnswerQuestion Profitability of a company depends upon :-

Correct Answer Cost of capital

Your Answer Debt equity ratio

Select The Blank

Question Horizontal mergers involves firms________.

Correct Answer That operate & compete in a similar kind of business

Your Answer With a new & different entity

Match The Following

Question Correct Answer Your Answer

Availability of funds in the

marketCost of funds depends on

this factor

Different costs are involved

Flexibility The extent & the ease

with which the funds can

be raised & paid back are

very important

The extent & the ease with

which the funds can be

raised & paid back are very

important

Time Takes less time to take an

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overdraft from the bank

Takes less time to take an

overdraft from the bank

Creditworthiness of the

issuer

If a company has a good

creditworthiness it is notdifficult to raise short term

funds

If a company has a good

creditworthiness it is not

difficult to raise short term

funds

Multiple Choice Multiple Answer

Question A firm's current assets include :-

Correct Answer Marketable securities , Receivables , Inventory

Your Answer Marketable securities , Receivables , Inventory

Select The BlankQuestion If a segment is not designated as a ________ it should be

included as an unallocated reconciling item.

Correct Answer Reportable segment

Your Answer Operating segment

Select The Blank

Question An asset is included in segment assets, if and only if the related

depreciation or amortisation is included in ________.

Correct Answer Segment expense

Your Answer Segment liability

True/False

Question Trade credit creates book debts which the firm is expected tocollect in the near future.

Correct Answer True

Your Answer True

Multiple Choice Multiple Answer

Question Long term financing strategy is used by a firm to meet :-

Correct Answer Fixed assets requirements , Permanent working capital

requirements , Portion of fluctuating working capital requirement

Your Answer Fixed assets requirements , Permanent working capital

requirements

Multiple Choice Single Answer

Question Debt is often issued at :-Correct Answer The head office level

Your Answer The head office level

True/False

Question Determination of residual value of an asset is normally a difficult

matter.

Correct Answer True

Your Answer False

Multiple Choice Single Answer

Question Which of the following systems identifies each of the

organizational elements of the traditional bureaucratic structure

and applies the identifiable costs of that element accordingly?

Correct Answer Organization element accounting

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Your Answer Budgetary accounting

Multiple Choice Single Answer

Question Segment result represents :-

Correct Answer Operating profit or loss

Your Answer Net of financing profit or loss

Multiple Choice Single Answer

Question Which of the following is NOT a disadvantage of deferredpayment plan to the acquiring firm?

Correct Answer There is built - in cushion to the acquiring firm as total payment

is not made at the time of acquisition

Your Answer There is built - in cushion to the acquiring firm as total payment

is not made at the time of acquisition

Select The Blank

Question The resource theory considers that the competitive position of a

firm depends on its ________ Assets.

Correct Answer Specific

Your Answer Intangible

True/FalseQuestion Short term financing is meant for funding working capital of a

company.

Correct Answer True

Your Answer False

True/False

Question Money becomes less valuable when received at a latter stage

instead of in present time.

Correct Answer True

Your Answer False

True/False

Question The intellectual assets of a company are often worth 3 or 4 timesthe tangible book value.

Correct Answer True

Your Answer True

Multiple Choice Single Answer

Question One of the selective developments that has taken place in recent

times is companies are going in for :-

Correct Answer Activity based costing and management

Your Answer Activity based costing and management

Multiple Choice Multiple Answer

Question The financial managers of a company consume a great deal of

their time in activities like :-Correct Answer Monitoring the investment in inventories , Negotiating favourable

credit terms , Administrating Accounts receivables

Your Answer Monitoring the investment in inventories , Negotiating favourable

credit terms , Defining a proper strategy for product promotion

Select The Blank

Question If total external revenue attributable to reportable segments

constitutes less than ________ of the total enterprise revenue

additional segments should be identified as reportable

segments.

Correct Answer 75 percent

Your Answer 50 percent

True/False

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Question A single organisation model serves to keep all individual

initiatives to be targeted into a co-ordinated plan.

Correct Answer True

Your Answer True

True/False

Question Valuation of current investments on overall basis is not

considered appropriate.Correct Answer True

Your Answer True

at12:49 AM0 commentsLinks to this post

Labels:Strategic Finance (Set III)

Friday, January 23, 2009

Strategic Finance - 5

LIST OF ATTEMPTED QUESTIONS AND ANSWERSTrue/FalseQuestion Accounting standards (AS - 13) is now mandatory.Correct Answer TrueYour Answer TrueMultiple Choice Multiple AnswerQuestion Exit costs are classified into 3 categories namely :-Correct Answer Lost efficiency prior to separation , Job vacancy cost during the newsearch , Termination payYour Answer Job vacancy cost during the new search , Termination pay ,Recruiting new employee as a replacement of the left employeeMultiple Choice Multiple Answer

Question A firm's current assets include :-Correct Answer Marketable securities , Receivables , InventoryYour Answer Marketable securities , Receivables , InventoryMultiple Choice Multiple AnswerQuestion In a merger decision, the value of a firm depends upon:-Correct Answer Earnings , Operating characteristics of acquiring firm , Financialcharacteristics of acquiring firmYour Answer Earnings , Manpower of the acquiring firm , Financial characteristicsof acquiring firmMultiple Choice Multiple AnswerQuestion A company is permitted to buy back its shares through stockexchange in the following situations :-

Correct Answer The company shall complete the verification of acceptances within15 days of the payout , The identity of the company as a purchasershall appear on the electronic screen when the order is placed , Thebuy back shall be made only on stock exchanges with electronictrading facilityYour Answer The company shall complete the verification of acceptances within15 days of the payout , The identity of the company as a purchasershall appear on the electronic screen when the order is placed , It isnot mandatory to specify the maximum price at which the buy backwill be madeTrue/FalseQuestion A merger will make sense to the acquiring firm if its shareholdersbenefit.

Correct Answer TrueStrategic Finance II Page 2 of 8

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Your Answer TrueSelect The BlankQuestion ________ Assets in the balance sheet are normally excluded fromthe value of total assets.Correct Answer IntangibleYour Answer IntangibleMultiple Choice Single Answer

Question What is a very important factor in any kind of merger?Correct Answer Exchange ratioYour Answer Pre merger priceSelect The BlankQuestion A shareholder expects a higher rate of return as a firm'scompensation for ________.Correct Answer Increased riskYour Answer Investment in projects to improve prestige or powerTrue/FalseQuestion Usually cost data is perfect for ABC Analysis & distribution.Correct Answer FalseYour Answer True

Select The BlankQuestion Forward or backward integration is a characteristic of ________.Correct Answer Vertical MergersYour Answer Vertical MergersMultiple Choice Single AnswerQuestion Segment assets are determined after :-Correct Answer Deducting related allowances / provisions reported as direct offsetsYour Answer Deducting income tax assetsMultiple Choice Single AnswerQuestion Acceptable audit requirements cannot be overlooked even under thepressure of :-Strategic Finance II Page 3 of 8Correct Answer Timeliness & turnaround

Your Answer Mergers & acquisitionsMultiple Choice Single AnswerQuestion Which of the following is NOT a disadvantage of deferred paymentplan to the acquiring firm?Correct Answer There is built - in cushion to the acquiring firm as total payment is notmade at the time of acquisitionYour Answer Freedom of operation to the management of the newly acquired firmTrue/FalseQuestion A single organisation model serves to keep all individual initiatives tobe targeted into a co-ordinated plan.Correct Answer TrueYour Answer TrueTrue/FalseQuestion Assets held as stock - in - trade are also investments.Correct Answer FalseYour Answer TrueMultiple Choice Single AnswerQuestion In an aggressive approach :-Correct Answer There is a very large risk of shortage of fundsYour Answer There is a very large risk of shortage of fundsTrue/FalseQuestion Organisational changes are similar to mission changes.Correct Answer TrueYour Answer FalseMultiple Choice Multiple Answer

Question The internal staffing performance indicators are :-Correct Answer Sales per employee , Recovery rate , Utilization %

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Your Answer Sales per employee , Recovery rate , Utilization %Select The BlankStrategic Finance II Page 4 of 8Question The most popular kind of dividend policy is one that pays a________.Correct Answer Regular, steady dividendYour Answer Regular, steady dividend

Match The FollowingQuestion Correct Answer Your AnswerAmount involved in buybackNot to exceed 25 % of thetotal paid up capitalNot to exceed 25 % of thetotal paid up capitalArticles of Association Authorize buy back ofsecuritiesResolution permitting thebuy back of shares

Board of Directors Resolution permitting thebuy back of sharesAuthorize buy back ofsecuritiesShares to be bought back Fully paid up Fully paid upMultiple Choice Single AnswerQuestion A good accounting system does NOT have the characteristics suchas :-Correct Answer Does not cover decisions over the life cycleYour Answer Takes into account time as an important parameterMultiple Choice Single AnswerQuestion Fixed price tender offers are accompanied by an abnormalannouncement period return of :-

Correct Answer 8 - 10 %Your Answer 6 - 8 %Multiple Choice Multiple AnswerQuestion The external staffing performance indicators include :-Correct Answer Compensation per Re. Profit , Personnel services head count , Profitper headYour Answer Compensation per Re. Profit , Personnel services head count ,Recovery rateMatch The FollowingQuestion Correct Answer Your AnswerTrust receipt Specifically identified byserial number or othermeansSpecifically identified byserial number or othermeansTerminal warehouse receipt Inventory is stored with apublic or terminalInventory is stored with apublic or terminalStrategic Finance II Page 5 of 8warehousing company warehousing companyFloating lien Loose arrangement as thelender may find it difficult topolice

Well suited for financialgood inventories of capital

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goodsChattel mortgage Well suited for financialgood inventories of capitalgoodsAffords a higher degree ofcontrol over the collateralSelect The Blank

Question In today's fast moving world, the quickest way to get information on afirm is through ________.Correct Answer InternetYour Answer InternetMultiple Choice Single AnswerQuestion Companies often need to value its own :-Correct Answer SharesYour Answer SharesMultiple Choice Multiple AnswerQuestion Long term financing strategy is used by a firm to meet :-Correct Answer Fixed assets requirements , Permanent working capital requirements, Portion of fluctuating working capital requirement

Your Answer Fixed assets requirements , Permanent working capital requirementsTrue/FalseQuestion For determining exchange ratio, the model developed by Conn &Nielson is used.Correct Answer TrueYour Answer TrueSelect The BlankQuestion usually credit lines are established for a period of ________.Correct Answer 1 yearYour Answer 3 yearsMultiple Choice Multiple AnswerQuestion Shortcomings of accounting numbers consist of the following :-Strategic Finance II Page 6 of 8

Correct Answer Firms use different kind of accounting methods , Business risk andfinancial risk do not have any influence on accounting numbersYour Answer Dividend policy has lot of influence on accounting numbers ,Business risk and financial risk do not have any influence onaccounting numbers , There is a serious relationship betweeneconomic value and profitSelect The BlankQuestion Investors can reduce the company related risk by diversification oftheir investments in ________.Correct Answer Shares of a large number of companiesYour Answer Mutual fundsTrue/FalseQuestion Making decision on dividend is a very crucial area of financialmanagement for a firm.Correct Answer TrueYour Answer TrueMultiple Choice Single AnswerQuestion The following is not a factor for reduction in the life of an asset byobsolescence :-Correct Answer No study of market demand for a product / serviceYour Answer Legal restrictionsMultiple Choice Multiple AnswerQuestion Due to diversification employees seek:-Correct Answer Job security , Better opportunities within the firm , Highercompensation

Your Answer Job security , Better opportunities within the firm , More perks &benefits , Higher compensation

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Multiple Choice Single AnswerQuestion Research into true human resources accounting began in :-Correct Answer 1960`sYour Answer 1994Select The BlankQuestion Segment assets are ________.Correct Answer Directly attributable to the segment

Your Answer Directly attributable to the segmentStrategic Finance II Page 7 of 8True/FalseQuestion AS 13 statement does not deal with operating or finance leases.Correct Answer TrueYour Answer TrueSelect The BlankQuestion The costs should be gathered & allocated within the organisation atthe ________ structural layer.Correct Answer Lowest possibleYour Answer Lowest possibleMultiple Choice Single Answer

Question Value implies that something has :-Correct Answer WorthYour Answer WorthMultiple Choice Multiple AnswerQuestion Examples of accounting methods used by firm are :-Correct Answer FIFO , LIFO , Accrual AccountingYour Answer FIFO , LIFO , Accrual AccountingMultiple Choice Multiple AnswerQuestion The main assumptions for stock repurchase models are as follows :-Correct Answer The market is efficient , There is perfect competition in the securitiesmarketYour Answer The market is efficient , Offers are minimum limit offers. , Investorsare not very keen to maximize the value of their investment

Multiple Choice Multiple AnswerQuestion As a general rule, an asset is :-Correct Answer A good or a right that a firm owns in a determined moment ,Prepayment adjustments , Capitalized expensesYour Answer A good or a right that a firm owns in a determined moment ,Prepayment adjustments , Capitalized expensesTrue/FalseQuestion It is easy to find a risk free security.Correct Answer FalseStrategic Finance II Page 8 of 8Your Answer FalseMultiple Choice Single AnswerQuestion The earning power of the company approach includes :-Correct Answer Mainly discounting of all future earningsYour Answer Mainly discounting of all future earningsSelect The BlankQuestion During the costing process, we look at ________.Correct Answer Resource consumptionYour Answer Resource consumptionSelect The BlankQuestion Mature companies with stable earnings generally pay out ________.Correct Answer A high proportion of earningsYour Answer A high proportion of earnings

ATTEMPTED QUESTIONS AND ANSWERS

Multiple Choice Multiple AnswerQuestion Exit costs are classified into 3 categories namely :-

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Correct Answer Lost efficiency prior to separation , Job vacancy cost duringthe new search , Termination payMultiple Choice Multiple AnswerQuestion The 3 groups of participants in a firm are :-Correct Answer Suppliers of equity , Debt suppliers , Firm ManagersTrue/FalseQuestion Tender offers us an alternative approach to acquire another

firm.Correct Answer TRUESelect The BlankQuestion Increase in cost of capital means decrease in ________.Correct Answer ProfitabilityMultiple Choice Single AnswerQuestion To calculate depreciable amount the following is subtractedfrom its historical cost :-Correct Answer Estimated residual valueMultiple Choice Single AnswerQuestion The value of the asset does not include:-Correct Answer Price per share

Multiple Choice Multiple AnswerQuestion The main characteristics of CAPM are :-Correct Answer It is an equilibrium Model , It describes the pricing of assetsas well as derivatives , Expected security return = Riskless return + beta x )(expected market risk premiumTrue/FalseQuestion Assets held as stock - in - trade are also investments.Correct Answer FALSESelect The BlankQuestion Segment revenue includes ________.Correct Answer Revenue from transactions with other segments of theenterpriseMultiple Choice Single Answer

Question Which is an example out of the following to which specialconsideration apply for depreciation :-Correct Answer Regenerative natural resourcesMultiple Choice Single AnswerQuestion The value based approach of HRA Tracking suggeststhat the value of human resources depends upon :-Correct Answer Capacity to generate revenueTrue/FalseQuestion According to NI Approach, decrease in leverage decreasesthe overall cost of capital and increases the firm's value.Correct Answer FALSEMultiple Choice Multiple AnswerQuestion The employer in offering the job contract assumes a rangeof legal obligations such as :-Correct Answer Rewards - cash like & non cash like , Health & safety policies ,Pensions & contributions to social security paymentsMultiple Choice Multiple AnswerQuestion The main categories of organisational elements are :-Correct Answer Managerial , Support , OperationalMultiple Choice Single AnswerQuestion Controlling block is usually acquired from:-Correct Answer A single sellerMultiple Choice Multiple AnswerQuestion Personnel services expenses is made up of:-Correct Answer Personnel salaries , Cost of facilities , Training &

development budgetsTrue/False

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Question Valuation of current investments on overall basis is notconsidered appropriate.Correct Answer TRUESelect The BlankQuestion Combination of 2 or more companies into existing companyis called ________.Correct Answer Absorption

Multiple Choice Multiple AnswerQuestion 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 enterpriseTrue/FalseQuestion Organisational changes are similar to mission changes.Correct Answer TRUEMatch The FollowingQuestion Correct AnsYwoeurr AnswerFree cash Enormous conflicts of interest between Stakeholders and shareholdersflow theoryNet incomeCost of debt & equity do not change with a change in leverage ratio

approachNet opera The overall capitalization rate remains constant for all levels of financialting income approach leveragesModigliani -weighted average cost of capital does not change with a changeMiller Theory in the proportion of debt to equity in the capital structureSelect The BlankQuestion In the shareholding pattern of a company, the promoter'sholding includes________.Correct Answer Foreign PromotersMultiple Choice Single AnswerQuestion Yield or earning approach method of valuation uses :-Correct Answer Price to earnings ratioMultiple Choice Single Answer

Question As per Pecking order theory, which is the costliest meansof funding :-Correct Answer Equity SharesTrue/FalseQuestion The carrying amount for current investments is the lower ofcost & fair value.Correct Answer TRUEMultiple Choice Multiple AnswerQuestion The limitations of value of assets approach include :-Correct Answer Book value of the assets is directly dependent on theaccounting policies followed by the company , There are no standard proceduresfor valuation of intangible assets , No importance to the market value of the assetTrue/FalseQuestion Management of working capital refers to the managementof total assets and liabilities of a company.Correct Answer FALSETrue/FalseQuestion When a company is able to assess an individual's worth,it helps in increasing its own worth.Correct Answer TRUEMultiple Choice Single AnswerQuestion The Board of Directors should pass a resolution permittingthe buy back upto what percent of the paid up equity capital?Correct Answer 0.1Select The Blank

Question Long term cash forecasting is generally for a period of________ years.

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Correct Answer 3 to 5 yearsSelect The BlankQuestion Economies of scale arises with increase in volume ofproduction leading to________.Correct Answer Reduction in the cost of productionMultiple Choice Multiple AnswerQuestion The internal staffing performance indicators are :-

Correct Answer Sales per employee , Recovery rate , Utilization %Multiple Choice Single AnswerQuestion The following analysis is more targeted on similar activitiesor firms that exist in parallel within the activity model or process flow to ensurethat they are being done the same best way :-Correct Answer Comparative analysisMultiple Choice Multiple AnswerQuestion Accounting numbers are not influenced by :-Correct Answer Dividend policy , Time span of money , Financial andbusiness riskSelect The BlankQuestion Cost of ________ is more than other sources for raising

short - term finance.Correct Answer Bank financeTrue/FalseQuestion Segment result is segment revenue less segment expenses.Correct Answer TRUEMultiple Choice Single AnswerQuestion The depreciable assets are assets which are expectedto be used :-Correct Answer During more than 1 accounting periodMultiple Choice Single AnswerQuestion Research into true human resources accounting began in :-Correct Answer 1960`sSelect The Blank

Question An asset is included in segment assets, if and only if therelated depreciation or amortisation is included in ________.Correct Answer Segment expenseSelect The BlankQuestion A shareholder expects a higher rate of return as a firm'scompensation for ________.Correct Answer Increased riskSelect The BlankQuestion Segment assets are ________.Correct Answer Directly attributable to the segmentMultiple Choice Multiple AnswerQuestion Implicit claims are non written promises and rights such as :-Correct Answer Right to provide service to customers , Job security for theemployeesMultiple Choice Single AnswerQuestion Often a company borrows loans / debts by giving thefollowing as a security :-Correct Answer SharesMatch The FollowingQuestion Correct AnsYwoeurr AnswerA highly Shows the illusion of financial problemsleveraged firmFiscal advaIsntdaegdeu, ctible from the profitthe interest of financing with debtFinancing Prevents firms from investing too much

with a high percentage of debtFirms mustDiscussions about the sell out of assets must be made

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repay debtsMultiple Choice Single AnswerQuestion Arbitrage means :-Correct Answer Securities cannot sell at different pricesTrue/FalseQuestion Opportunity costs and real costs decrease the marketvalue of a firm.

Correct Answer TRUESelect The BlankQuestion the commercial paper may be issued in the multiples of ________.Correct Answer 5 lakhs

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Labels:Strategic Finance (Set IX)

Strategic Finance - 24

Question A quantity discount is offered :-

Correct Answer On large shipmentsQuestion Indicators of the value of an investment are obtained by :-Correct Answer Reference to its market value , The investee`s assets , The expected cash flowsfrom the investmentQuestion The following is not a method of payment to the acquired firm:-Correct Answer Fixed deposits of the acquiring firmQuestion The activity model is normally created by an activity Accountant.Correct Answer FalseQuestion A company is prohibited to buy back its own shares in the following circumstances :-Correct Answer Through any subsidiary company , Through any investment company , If acompany defaults in repayment of deposits or interest due thereonQuestion If the segment result of a segment includes interest or dividend income its segment

assets will not include ________.Correct Answer PayablesQuestion Forward or backward integration is a characteristic of ________.Correct Answer Vertical MergersQuestion Modigliani - Miller Theoram is based on :-Correct Answer Perfect Capital MarketsQuestion Value based approach of HRA tracking can be divided into 2 categories - Non -monetary & monetary.Correct Answer TrueQuestion During the costing process, we look at ________.Correct Answer Resource consumptionQuestion For accounting standard (AS) 27, Significant influence may be gained by :-Correct Answer Share ownership , Statute , Agreement

Question As a general rule, an asset is :-Correct Answer A good or a right that a firm owns in a determined moment , Prepaymentadjustments , Capitalized expensesQuestion Deferred payment plan is also known as:-Correct Answer Earn out planQuestion There are few methods of allocating depreciation over the useful life of an assets.Correct Answer FalseQuestion Market approach is used for companies whose shares are ________ on the Stockmarket.Correct Answer ListedQuestion Operating economies of scale are achieved through the following mergers :-Correct Answer Horizontal , Vertical , ConglomerateQuestion Tender offers can be afforded by firms with :-Correct Answer A large amount of financial SlackQuestion The following method of valuation is used for listed companies that have an active

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market for their shares :-Correct Answer Market value approachQuestion According to Altman (1984) total costs in percentage of the market value of a firmrange between ________Correct Answer 12.1 % & 16.7 %Question Conservative policy for determining the requirements of current assets is also knownas :-

Correct Answer Flexible policyQuestion Yield or earning approach method of valuation uses :-Correct Answer Price to earnings ratioQuestion The main categories of organisational elements are :-Correct Answer Managerial , Support , OperationalQuestion The ________ cost tier has the advantage of being the simplest to calculate andjustify.Correct Answer DirectQuestion The existence of significant influence by an investor is usually evidenced in thefollowing ways :-Correct Answer Participation in policy making processes , Material transactions between theinvestor & the investee , Interchange of managerial personnel

Question Free Reserves is a component of :-Correct Answer EquitySentiments and rumours No fundamental basis.No effect on valuationUnlisted shares on stock exchange Difficult to estimate the price Invalid valuation of sharesManipulation of stock markets Invalid valuation of shares Easy to estimate the priceSelective information Valuation by various people on information available Valuation byvarious people on information availableQuestion Only firms with a large amount of financial slack can afford tender offers.Correct Answer TrueQuestion Buy back through book building the process should be made through ________.Correct Answer An electronically linked transparent facilityQuestion For M & As, the acquiring firm needs industry data on :-Correct Answer Market growth , Nature of competition , Degree of regulation

Question The chance of bankruptcy is small when the leverage of a firm is small.Correct Answer TrueQuestion A change in the method of depreciation is treated as a change in an accounting policyand is disclosed accordingly.Correct Answer TrueQuestion Economies of scale arises with increase in volume of production leading to________.Correct Answer Reduction in the cost of productionQuestion Arbitrage process implies that security cannot sell at different prices.Correct Answer TrueQuestion Capital gains are taxed at ________.Correct Answer Preferentially lower rateQuestion Net period - no cash discount means :-Correct Answer The seller only specifies the time period allowed for the paymentQuestion A long term investment is an investment other than a current investment.Correct Answer TrueQuestion Accounting standards (AS - 17) has come into effect in respect of accounting periodscommencing :-Correct Answer On or after 01.04.2001Question Accounting standards (AS - 13) is now mandatory.Correct Answer TrueQuestion Valuation methods are highly specific to the following for doing the valuation :-Correct Answer To the person , To the firm , To the ConsultantQuestion ________ Assets in the balance sheet are normally excluded from the value of totalassets.Correct Answer Intangible

Question The budgetary records are useful for:-Correct Answer Validating accounting costs , Providing a rationale for division of costs ,

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Replacing missing dataQuestion As per the new sections of the company's act, funds out of which buy back may befinanced include :-Correct Answer Free reserves of the company , Securities premium account , Proceeds of anyshares or other specified securitiesPpH = P / H ( C + B ) / PSPE = R / H (C + B ) / R

RR = (C + B ) / R P / HU % = R / ( C + B ) R / ( C + B )Question Due to diversification employees seek:-Correct Answer Job security , Better opportunities within the firm , Higher compensationQuestion In today's fast moving world, the quickest way to get information on a firm is through________.Correct Answer InternetQuestion It is often not possible to directly attribute, or reasonably allocate :-Correct Answer The interest bearing liabilities to segmentsQuestion Odd lots purchase is not a method of buy back of shares.Correct Answer False

at8:38 PM0 commentsLinks to this post

Labels:Strategic Finance (Set IX)

Strategic Finance - 23

Question A normal firm shows the following characteristics :-Correct Answer No unique optimum payout ratio , Market value per share unaffected by thepayout ratio , All dividend policies are similarQuestion One of the bases for determining the residual value of similar assets is :-Correct Answer Realizable valueQuestion If a firm diversifies managerial teams formed can be shifted from unproductive

activities to productive ones which leads to :-Correct Answer Improved profitability , Continuity , Growth of the firmQuestion Segment liabilities do not include :-Correct Answer Borrowings & other liabilities that are incurred for financing rather thanoperating purposeQuestion As per Pecking order theory, which is the costliest means of funding :-Correct Answer Equity SharesQuestion Cost of ________ is more than other sources for raising short - term finance.Correct Answer Bank financeQuestion Operating econo