Strategic Finance - 5

LIST OF ATTEMPTED QUESTIONS AND ANSWERS



Multiple Choice Multiple Answer
Question
The financial framework of a merger decision covers 3 interrelated aspects i.e. :-
Correct Answer
Financing techniques in mergers , Analysis of merger as a capital budgeting decision , Determining the firm's value
Your Answer
Determining the firm's value , Financing techniques in mergers , Analysis of merger as a capital budgeting decision

Select The Blank
Question
A company shall buyback its shares through the stock exchange by making a public announcement at least ________ days prior to the commencement of buyback.
Correct Answer
Seven
Your Answer
Seven

True/False
Question
Management of working capital refers to the management of total assets and liabilities of a company.
Correct Answer
False
Your Answer
False

True/False
Question
optimum cash balance under certainty i.e. Baumul`s model allows the cash flow to fluctuate.
Correct Answer
False
Your Answer
False

True/False
Question
Appraisal value of a firm can be acquired from an independent appraisal agency.
Correct Answer
True
Your Answer
True

True/False
Question
Accounting standards (AS - 13) is now mandatory.
Correct Answer
True
Your Answer
True

True/False
Question
The accounting records serve as the major source of cost data.
Correct Answer
True
Your Answer
True

Multiple Choice Multiple Answer
Question
To gather costs means to do the following actions to support the costing of the activities :-
Correct Answer
To capture , To construct , To synthesize the correct cost figures
Your Answer
To capture , To construct , To find the cost of existing organisational structure

Select The Blank
Question
If firms have same technology ________ makes the difference i.e. firms become more productive .
Correct Answer
Solid human resource team
Your Answer
Solid human resource team

Select The Blank
Question
In many companies, there is no formal record of________.
Correct Answer
Investment in employees
Your Answer
Investment in employees

True/False
Question
The activity model is normally created by an activity Accountant.
Correct Answer
False
Your Answer
False

True/False
Question
The chance of bankruptcy is small when the leverage of a firm is small.
Correct Answer
True
Your Answer
True

Select The Blank
Question
The total cost of the activity model allocated by the applied activity drivers to the output of the activity model is called________.
Correct Answer
The cost of the output
Your Answer
The cost of the output

Multiple Choice Multiple Answer
Question
A firm using a conservative policy for determining the requirements of current assets :-
Correct Answer
Has fewer production stoppages , Ensures quick deliveries to customers , Stimulates sales
Your Answer
Has fewer production stoppages , Ensures quick deliveries to customers , Stimulates sales

Multiple Choice Multiple Answer
Question
The budgetary records are useful for:-
Correct Answer
Validating accounting costs , Providing a rationale for division of costs , Replacing missing data
Your Answer
Validating accounting costs , Providing a rationale for division of costs , Replacing missing data

Multiple Choice Single Answer
Question
When a company has resorted to buyback of its shares it cannot make a further issue of the same kind of securities within a period of how many months?
Correct Answer
6 months
Your Answer
6 months

Multiple Choice Single Answer
Question
The bottom line of ABC Process is :-
Correct Answer
To achieve a better method of doing the right business pf the organisation
Your Answer
To achieve a better method of doing the right business pf the organisation

Select The Blank
Question
The most popular kind of dividend policy is one that pays a ________.
Correct Answer
Regular, steady dividend
Your Answer
Regular, steady dividend

Multiple Choice Multiple Answer
Question
Due to diversification employees seek:-
Correct Answer
Job security , Better opportunities within the firm , Higher compensation
Your Answer
Job security , Better opportunities within the firm , Higher compensation

Match The Following
Question
Correct Answer
Your Answer
Amount involved in buy back
Not to exceed 25 % of the total paid up capital
Not to exceed 25 % of the total paid up capital
Articles of Association
Authorize buy back of securities
Authorize buy back of securities
Board of Directors
Resolution permitting the buy back of shares
Resolution permitting the buy back of shares
Shares to be bought back
Fully paid up
Fully paid up

Multiple Choice Single Answer
Question
A high payout policy means :-
Correct Answer
More current dividends
Your Answer
More current dividends

Match The Following
Question
Correct Answer
Your Answer
Earning per share
Acquisition is considered to be a function of the impact of the merger on the EPS
Acquisition is considered to be a function of the impact of the merger on the EPS
Book value
Divide net worth by the number of equity shares outstanding
Divide net worth by the number of equity shares outstanding
Appraisal value
Provides a list of the reasonableness of results obtained through methods base upon the going concern concept
Provides a list of the reasonableness of results obtained through methods base upon the going concern concept
Market value
Indicate the consensus of the investors
Indicate the consensus of the investors

Select The Blank
Question
In the reproduction value method of valuation, the value of assets is taken to be on the basis of ________
Correct Answer
Replacement cost
Your Answer
Replacement cost

Select The Blank
Question
The advantage of ________ is that the company is not required to wait for the payment by the bill issuer.
Correct Answer
Bill discounting
Your Answer
Bill discounting

Multiple Choice Single Answer
Question
In a growth firm, internal rate is :-
Correct Answer
More than opportunity
Your Answer
equals opportunity

Multiple Choice Multiple Answer
Question
Shortage costs are mainly in the form of :-
Correct Answer
Disruption in production schedule , Loss of sales , Loss of customer goodwill
Your Answer
Disruption in production schedule , Loss of sales , Loss of customer goodwill

Multiple Choice Multiple Answer
Question
Shortcomings of accounting numbers consist of the following :-
Correct Answer
Firms use different kind of accounting methods , Business risk and financial risk do not have any influence on accounting numbers
Your Answer
Firms use different kind of accounting methods , Business risk and financial risk do not have any influence on accounting numbers

Multiple Choice Single Answer
Question
Internal financing means the firm finances all investments through :-
Correct Answer
Retained earnings
Your Answer
Retained earnings

Multiple Choice Single Answer
Question
The earning power of the company approach includes :-
Correct Answer
Mainly discounting of all future earnings
Your Answer
Mainly discounting of all future earnings

Multiple Choice Single Answer
Question
A firm should consider acquisition as a :-
Correct Answer
Capital budget decision
Your Answer
Capital budget decision

Multiple Choice Single Answer
Question
Firms which have marked seasonality in their operations usually have :-
Correct Answer
Highly fluctuating working capital requirement
Your Answer
Highly fluctuating working capital requirement

Multiple Choice Single Answer
Question
Decrease in leverage results in increasing the :-
Correct Answer
Overall cost of capital
Your Answer
Overall cost of capital

Select The Blank
Question
Segment expense includes ________.
Correct Answer
The relevant portion of enterprise revenue that can be allocated on a reasonable basis to a segment
Your Answer
The relevant portion of enterprise revenue that can be allocated on a reasonable basis to a segment

Multiple Choice Single Answer
Question
the amount of working capital required to meet long term, minimum needs is called :-
Correct Answer
Permanent working capital
Your Answer
Permanent working capital

Select The Blank
Question
The costs should be gathered & allocated within the organisation at the ________ structural layer.
Correct Answer
Lowest possible
Your Answer
Lowest possible

Multiple Choice Multiple Answer
Question
The acquiring firm for any M & A will require data about the target firm which will include :-
Correct Answer
Quality of management , Production capabilities , Profitability
Your Answer
Quality of management , Production capabilities , Profitability

Multiple Choice Single Answer
Question
Segment assets are determined after :-
Correct Answer
Deducting related allowances / provisions reported as direct offsets
Your Answer
Deducting related allowances / provisions reported as direct offsets

Multiple Choice Multiple Answer
Question
For M & As, the acquiring firm needs industry data on :-
Correct Answer
Market growth , Nature of competition , Degree of regulation
Your Answer
Market growth , Nature of competition , Degree of regulation

Select The Blank
Question
Implicit & Explicit costs are included in the ________.
Correct Answer
Price of a product
Your Answer
Price of a product

Multiple Choice Multiple Answer
Question
In a merger decision, the value of a firm depends upon:-
Correct Answer
Earnings , Operating characteristics of acquiring firm , Financial characteristics of acquiring firm
Your Answer
Earnings , Operating characteristics of acquiring firm , Financial characteristics of acquiring firm

True/False
Question
To `gather costs', means capturing all relevant expenses that pertain to the selected model and processes.
Correct Answer
True
Your Answer
True

True/False
Question
Segment result is segment revenue less segment expenses.
Correct Answer
True
Your Answer
True

Multiple Choice Single Answer
Question
The main factor affecting the profits is :-
Correct Answer
The magnitude of sales of the business
Your Answer
Customer reputation in the market

True/False
Question
Retained earnings are the most important internal sources of financing the growth of the firm.
Correct Answer
True
Your Answer
True

Select The Blank
Question
________ are those operating assets that are employed by a segment in its operating activities.
Correct Answer
Segment assets
Your Answer
Segment assets

Multiple Choice Multiple Answer
Question
The direct costs tier normally only includes the following :-
Correct Answer
The personnel payroll , Supplies , Individual rental equipment
Your Answer
The personnel payroll , Supplies , Individual rental equipment

Multiple Choice Multiple Answer
Question
Accounting numbers are not influenced by :-
Correct Answer
Dividend policy , Time span of money , Financial and business risk
Your Answer
Dividend policy , Time span of money , Financial and business risk