Project Finance - 1

LIST OF ATTEMPTED QUESTIONS AND ANSWERS



Select The Blank
Question
The basic difference between the feasibility study report and ________ is the level of accuracy and degree of detail.
Correct Answer
Detailed Project report
Your Answer
Audit report

True/False
Question
The cost factors of the product mixed is also taken into account to arrive at cost at various levels of production and its cost impact of the manufacturing.
Correct Answer
True
Your Answer
True

Select The Blank
Question
________ is a current asset
Correct Answer
Book debts
Your Answer
Trade credit

Multiple Choice Single Answer
Question
The formula for Break Even Point is :-
Correct Answer
Fixed cost / ( Sales Price - Variables)
Your Answer
Fixed cost / ( Sales Price - Variables)

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

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

Multiple Choice Single Answer
Question
Net Working Capital means :-
Correct Answer
Current assets less Current liabilities
Your Answer
Current assets less Current liabilities

Multiple Choice Multiple Answer
Question
Trend Projection method of demand forecasting consists of :-
Correct Answer
Linear Relationship , Exponential Relationship , Polynomial Relationship
Your Answer
Linear Relationship , Exponential Relationship , Polynomial Relationship

True/False
Question
It is mandatory for each unit to obtain necessary clearance from Pollution Control Authorities before setting up any project.
Correct Answer
True
Your Answer
True

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

Select The Blank
Question
Sometimes the term ________ is interpreted as cash equivalent i.e. cash and marketable securities.
Correct Answer
Fund
Your Answer
Investment

Multiple Choice Multiple Answer
Question
The applications of cash are :-
Correct Answer
Purchase of fixed assets , Payment of long term loans
Your Answer
Purchase of fixed assets , Payment of long term loans , Issue of new machinery

Select The Blank
Question
________ tries to have what the customer will want- where, when, in what form and at what price.
Correct Answer
Marketing
Your Answer
Marketing

Multiple Choice Multiple Answer
Question
Time Series Projection Methods of Demand forecasting consists of :-
Correct Answer
Trend Projection method , Moving Averages method
Your Answer
Trend Projection method , Consumption-level method , Moving Averages method

Multiple Choice Single Answer
Question
Disposal of fixed assets is categorised under :-
Correct Answer
Miscellaneous
Your Answer
Land and site cost

Multiple Choice Multiple Answer
Question
Financial and economic aspect of the Visit report consists of :-
Correct Answer
Company's financial year , Impact of Government policies on company operations , Comments on the last published accounts
Your Answer
Company's financial year , Impact of Government policies on company operations , Comments on the last published accounts

Match The Following
Question
Correct Answer
Your Answer
Project organisation
Finance manager
Finance manager
General category of Project report
Location of factory
Consultancy fees
Cost aspect of the project report
Consultancy fees
Location of factory
Financing plan
Unsecured loans
Unsecured loans

Multiple Choice Multiple Answer
Question
In the Detailed Project Report, Marketing aspects includes :-
Correct Answer
Demand forecasting , Promotion , Distribution
Your Answer
Demand forecasting , Promotion , Distribution

Multiple Choice Multiple Answer
Question
Marketing category of the Project report consists of :-
Correct Answer
Pricing policy , Target market , Market potential
Your Answer
Target market , Market potential , Pricing policy

Multiple Choice Multiple Answer
Question
Sources of funds includes :-
Correct Answer
Depreciation , Preliminary expenses written off , Increase in secured borrowing
Your Answer
Depreciation , Preliminary expenses written off , Increase in secured borrowing

Match The Following
Question
Correct Answer
Your Answer
Moving into new areas/product lines
Diversification Projects
Modernisation Projects
Suppliers' credit
Short term finance
Short term finance
Deferred credit
Long term finance
Long term finance
Setting up new units
New Projects
New Projects

Multiple Choice Single Answer
Question
BCG Product Portfolio Matrix analyses products on the basis of :-
Correct Answer
Relative Market share and Industry Growth rate
Your Answer
Relative Market share and Industry Growth rate

Multiple Choice Single Answer
Question
Sewerage and drainage cost of the project is categorised under :-
Correct Answer
Building cost
Your Answer
Building cost

Multiple Choice Multiple Answer
Question
General category of the Project report consists of :-
Correct Answer
Name of the Industrial concern , Proposed product , Location of the factory
Your Answer
Proposed product , Location of the factory , Land cost

True/False
Question
The ratios of one organisation compared with the ratios of the same organisation is termed as inter-firm comparison.
Correct Answer
False
Your Answer
False

Select The Blank
Question
In the GE's Stop Light Matrix, when ________ situation prevails , Products call for divestment.
Correct Answer
Average Business Strength and Low Industry attractiveness
Your Answer
Weak Business strength and high Industry attractiveness

Multiple Choice Multiple Answer
Question
Provision for tax can be treated as :-
Correct Answer
Item of current liabilities , Added back to the profit as per profit and loss account to arrive at operating profits
Your Answer
Added back to the profit as per profit and loss account to arrive at operating profits , Item of current assets , Item of working capital

Multiple Choice Single Answer
Question
The cost of Plant and Machinery may be adjusted for a possible increase known as :-
Correct Answer
Escalation
Your Answer
Escalation

Multiple Choice Single Answer
Question
Ratio analysis is a widely used tool of :-
Correct Answer
Financial analysis
Your Answer
Financial analysis

True/False
Question
The advantage of secondary sources of data is that it is readily and economically available.
Correct Answer
True
Your Answer
True

True/False
Question
Debt Equity ratio is a 'Solvency ratio'.
Correct Answer
True
Your Answer
True

Select The Blank
Question
Excessive expenditures on foreign technicians leads to ________.
Correct Answer
Cost and time overrun
Your Answer
Cost and time overrun

Multiple Choice Multiple Answer
Question
Financing plans consists of :-
Correct Answer
Share capital , Term loans , Internal accruals
Your Answer
Share capital , Term loans , Salaries

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

Select The Blank
Question
In order to meet the cost of large project, the technique of ________ has been developed so that the financial commitment and risks associated with a project are shared between the project sponsor and the lending institutions.
Correct Answer
Limited recourse financing
Your Answer
Unlimited recourse financing

True/False
Question
A high debt equity ratio may indicate that the financial stake of the creditors is more than that of the owners.
Correct Answer
True
Your Answer
True

Multiple Choice Single Answer
Question
The third phase of the technical appraisal which focuses upon appraising the likely technical gaps consists of :-
Correct Answer
Problems pertaining to the period when the project is in operation
Your Answer
Problems pertaining to the period when the project is in operation

Select The Blank
Question
More accurate the estimation of the level of current assets and current liabilities, more accurate will be estimation of the requirement of ________.
Correct Answer
Working capital
Your Answer
Working capital

True/False
Question
Ratio analysis is a technique of planning and control.
Correct Answer
False
Your Answer
True

True/False
Question
Cost and time overrun of the project may lead to loss on account of lost market opportunities.
Correct Answer
True
Your Answer
True

Multiple Choice Multiple Answer
Question
While choosing the location for a project, the following factors should be considered :-
Correct Answer
Proximity to raw materials and markets , Availability of infrastructure , Government policies and other factors
Your Answer
Proximity to raw materials and markets , Availability of infrastructure , Government policies and other factors

Multiple Choice Single Answer
Question
In the Cash flow statement, the sources of funds include :-
Correct Answer
Development rebate reserve
Your Answer
Development rebate reserve

Select The Blank
Question
Name and designation of the chief executive comes under the ________ category.
Correct Answer
General
Your Answer
Project organisation

Multiple Choice Multiple Answer
Question
As per the GE's Stop Light Matrix, Products may justify substantial commitment of funds where there is :-
Correct Answer
Strong Business Strength and high Industry attractiveness , Average Business strength and high Industry attractiveness
Your Answer
Strong Business Strength and high Industry attractiveness , Average Business strength and high Industry attractiveness

Multiple Choice Single Answer
Question
The BCG product Portfolio Matrix, General Electric Stop Light Matrix and Strategic Position and Action Evaluation Model are considered to be highly relevant as :-
Correct Answer
Portfolio Planning Tools
Your Answer
Portfolio Planning Tools

Select The Blank
Question
Position regarding requirement and training of operational staff comes under the ________ category of Project report.
Correct Answer
Project organisation
Your Answer
General category

Multiple Choice Single Answer
Question
The emphasis of the Banks and Financial institutions particularly in India has shifted from 'Sanctions', 'Disbursements' and 'Security-orientation' to 'Recovery/Recycling' and :-
Correct Answer
Activity orientation
Your Answer
Activity orientation