LIST OF ATTEMPTED QUESTIONS AND ANSWERS
True/False
Question Accounting standards (AS - 13) is now mandatory.
Correct Answer True
Your Answer True
Multiple Choice Multiple Answer
Question Exit costs are classified into 3 categories namely :-
Correct Answer Lost efficiency prior to separation , Job vacancy cost during the new
search , Termination pay
Your Answer Job vacancy cost during the new search , Termination pay ,
Recruiting new employee as a replacement of the left employee
Multiple Choice Multiple Answer
Question A firm's current assets include :-
Correct Answer Marketable securities , Receivables , Inventory
Your Answer Marketable securities , Receivables , Inventory
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 , Manpower of the acquiring firm , Financial characteristics
of acquiring firm
Multiple Choice Multiple Answer
Question A company is permitted to buy back its shares through stock
exchange in the following situations :-
Correct Answer The company shall complete the verification of acceptances within
15 days of the payout , The identity of the company as a purchaser
shall appear on the electronic screen when the order is placed , The
buy back shall be made only on stock exchanges with electronic
trading facility
Your Answer The company shall complete the verification of acceptances within
15 days of the payout , The identity of the company as a purchaser
shall appear on the electronic screen when the order is placed , It is
not mandatory to specify the maximum price at which the buy back
will be made
True/False
Question A merger will make sense to the acquiring firm if its shareholders
benefit.
Correct Answer True
Strategic Finance II Page 2 of 8
Your Answer True
Select The Blank
Question ________ Assets in the balance sheet are normally excluded from
the value of total assets.
Correct Answer Intangible
Your Answer Intangible
Multiple Choice Single Answer
Question What is a very important factor in any kind of merger?
Correct Answer Exchange ratio
Your Answer Pre merger price
Select The Blank
Question A shareholder expects a higher rate of return as a firm's
compensation for ________.
Correct Answer Increased risk
Your Answer Investment in projects to improve prestige or power
True/False
Question Usually cost data is perfect for ABC Analysis & distribution.
Correct Answer False
Your Answer True
Select The Blank
Question Forward or backward integration is a characteristic of ________.
Correct Answer Vertical Mergers
Your Answer Vertical Mergers
Multiple Choice Single Answer
Question Segment assets are determined after :-
Correct Answer Deducting related allowances / provisions reported as direct offsets
Your Answer Deducting income tax assets
Multiple Choice Single Answer
Question Acceptable audit requirements cannot be overlooked even under the
pressure of :-
Strategic Finance II Page 3 of 8
Correct Answer Timeliness & turnaround
Your Answer Mergers & acquisitions
Multiple Choice Single Answer
Question Which of the following is NOT a disadvantage of deferred payment
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 Freedom of operation to the management of the newly acquired firm
True/False
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 Assets held as stock - in - trade are also investments.
Correct Answer False
Your Answer True
Multiple Choice Single Answer
Question In an aggressive approach :-
Correct Answer There is a very large risk of shortage of funds
Your Answer There is a very large risk of shortage of funds
True/False
Question Organisational changes are similar to mission changes.
Correct Answer True
Your Answer False
Multiple Choice Multiple Answer
Question The internal staffing performance indicators are :-
Correct Answer Sales per employee , Recovery rate , Utilization %
Your Answer Sales per employee , Recovery rate , Utilization %
Select The Blank
Strategic Finance II Page 4 of 8
Question The most popular kind of dividend policy is one that pays a
________.
Correct Answer Regular, steady dividend
Your Answer Regular, steady dividend
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
Resolution permitting the
buy back of shares
Board of Directors Resolution permitting the
buy back of shares
Authorize buy back of
securities
Shares to be bought back Fully paid up Fully paid up
Multiple Choice Single Answer
Question A good accounting system does NOT have the characteristics such
as :-
Correct Answer Does not cover decisions over the life cycle
Your Answer Takes into account time as an important parameter
Multiple Choice Single Answer
Question Fixed price tender offers are accompanied by an abnormal
announcement period return of :-
Correct Answer 8 - 10 %
Your Answer 6 - 8 %
Multiple Choice Multiple Answer
Question The external staffing performance indicators include :-
Correct Answer Compensation per Re. Profit , Personnel services head count , Profit
per head
Your Answer Compensation per Re. Profit , Personnel services head count ,
Recovery rate
Match The Following
Question Correct Answer Your Answer
Trust receipt Specifically identified by
serial number or other
means
Specifically identified by
serial number or other
means
Terminal warehouse receipt Inventory is stored with a
public or terminal
Inventory is stored with a
public or terminal
Strategic Finance II Page 5 of 8
warehousing company warehousing company
Floating lien Loose arrangement as the
lender may find it difficult to
police
Well suited for financial
good inventories of capital
goods
Chattel mortgage Well suited for financial
good inventories of capital
goods
Affords a higher degree of
control over the collateral
Select The Blank
Question In today's fast moving world, the quickest way to get information on a
firm is through ________.
Correct Answer Internet
Your Answer Internet
Multiple Choice Single Answer
Question Companies often need to value its own :-
Correct Answer Shares
Your Answer Shares
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
True/False
Question For determining exchange ratio, the model developed by Conn &
Nielson is used.
Correct Answer True
Your Answer True
Select The Blank
Question usually credit lines are established for a period of ________.
Correct Answer 1 year
Your Answer 3 years
Multiple Choice Multiple Answer
Question 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 and
financial risk do not have any influence on accounting numbers
Your Answer Dividend policy has lot of influence on accounting numbers ,
Business risk and financial risk do not have any influence on
accounting numbers , There is a serious relationship between
economic value and profit
Select The Blank
Question Investors can reduce the company related risk by diversification of
their investments in ________.
Correct Answer Shares of a large number of companies
Your Answer Mutual funds
True/False
Question Making decision on dividend is a very crucial area of financial
management for a firm.
Correct Answer True
Your Answer True
Multiple Choice Single Answer
Question The following is not a factor for reduction in the life of an asset by
obsolescence :-
Correct Answer No study of market demand for a product / service
Your Answer Legal restrictions
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 , More perks &
benefits , Higher compensation
Multiple Choice Single Answer
Question Research into true human resources accounting began in :-
Correct Answer 1960`s
Your Answer 1994
Select The Blank
Question Segment assets are ________.
Correct Answer Directly attributable to the segment
Your Answer Directly attributable to the segment
Strategic Finance II Page 7 of 8
True/False
Question AS 13 statement does not deal with operating or finance leases.
Correct Answer True
Your Answer True
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 Single Answer
Question Value implies that something has :-
Correct Answer Worth
Your Answer Worth
Multiple Choice Multiple Answer
Question Examples of accounting methods used by firm are :-
Correct Answer FIFO , LIFO , Accrual Accounting
Your Answer FIFO , LIFO , Accrual Accounting
Multiple Choice Multiple Answer
Question The main assumptions for stock repurchase models are as follows :-
Correct Answer The market is efficient , There is perfect competition in the securities
market
Your Answer The market is efficient , Offers are minimum limit offers. , Investors
are not very keen to maximize the value of their investment
Multiple Choice Multiple Answer
Question 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 ,
Prepayment adjustments , Capitalized expenses
True/False
Question It is easy to find a risk free security.
Correct Answer False
Strategic Finance II Page 8 of 8
Your Answer False
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
Select The Blank
Question During the costing process, we look at ________.
Correct Answer Resource consumption
Your Answer Resource consumption
Select The Blank
Question Mature companies with stable earnings generally pay out ________.
Correct Answer A high proportion of earnings
Your Answer A high proportion of earnings
True/False
Question Accounting standards (AS - 13) is now mandatory.
Correct Answer True
Your Answer True
Multiple Choice Multiple Answer
Question Exit costs are classified into 3 categories namely :-
Correct Answer Lost efficiency prior to separation , Job vacancy cost during the new
search , Termination pay
Your Answer Job vacancy cost during the new search , Termination pay ,
Recruiting new employee as a replacement of the left employee
Multiple Choice Multiple Answer
Question A firm's current assets include :-
Correct Answer Marketable securities , Receivables , Inventory
Your Answer Marketable securities , Receivables , Inventory
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 , Manpower of the acquiring firm , Financial characteristics
of acquiring firm
Multiple Choice Multiple Answer
Question A company is permitted to buy back its shares through stock
exchange in the following situations :-
Correct Answer The company shall complete the verification of acceptances within
15 days of the payout , The identity of the company as a purchaser
shall appear on the electronic screen when the order is placed , The
buy back shall be made only on stock exchanges with electronic
trading facility
Your Answer The company shall complete the verification of acceptances within
15 days of the payout , The identity of the company as a purchaser
shall appear on the electronic screen when the order is placed , It is
not mandatory to specify the maximum price at which the buy back
will be made
True/False
Question A merger will make sense to the acquiring firm if its shareholders
benefit.
Correct Answer True
Strategic Finance II Page 2 of 8
Your Answer True
Select The Blank
Question ________ Assets in the balance sheet are normally excluded from
the value of total assets.
Correct Answer Intangible
Your Answer Intangible
Multiple Choice Single Answer
Question What is a very important factor in any kind of merger?
Correct Answer Exchange ratio
Your Answer Pre merger price
Select The Blank
Question A shareholder expects a higher rate of return as a firm's
compensation for ________.
Correct Answer Increased risk
Your Answer Investment in projects to improve prestige or power
True/False
Question Usually cost data is perfect for ABC Analysis & distribution.
Correct Answer False
Your Answer True
Select The Blank
Question Forward or backward integration is a characteristic of ________.
Correct Answer Vertical Mergers
Your Answer Vertical Mergers
Multiple Choice Single Answer
Question Segment assets are determined after :-
Correct Answer Deducting related allowances / provisions reported as direct offsets
Your Answer Deducting income tax assets
Multiple Choice Single Answer
Question Acceptable audit requirements cannot be overlooked even under the
pressure of :-
Strategic Finance II Page 3 of 8
Correct Answer Timeliness & turnaround
Your Answer Mergers & acquisitions
Multiple Choice Single Answer
Question Which of the following is NOT a disadvantage of deferred payment
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 Freedom of operation to the management of the newly acquired firm
True/False
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 Assets held as stock - in - trade are also investments.
Correct Answer False
Your Answer True
Multiple Choice Single Answer
Question In an aggressive approach :-
Correct Answer There is a very large risk of shortage of funds
Your Answer There is a very large risk of shortage of funds
True/False
Question Organisational changes are similar to mission changes.
Correct Answer True
Your Answer False
Multiple Choice Multiple Answer
Question The internal staffing performance indicators are :-
Correct Answer Sales per employee , Recovery rate , Utilization %
Your Answer Sales per employee , Recovery rate , Utilization %
Select The Blank
Strategic Finance II Page 4 of 8
Question The most popular kind of dividend policy is one that pays a
________.
Correct Answer Regular, steady dividend
Your Answer Regular, steady dividend
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
Resolution permitting the
buy back of shares
Board of Directors Resolution permitting the
buy back of shares
Authorize buy back of
securities
Shares to be bought back Fully paid up Fully paid up
Multiple Choice Single Answer
Question A good accounting system does NOT have the characteristics such
as :-
Correct Answer Does not cover decisions over the life cycle
Your Answer Takes into account time as an important parameter
Multiple Choice Single Answer
Question Fixed price tender offers are accompanied by an abnormal
announcement period return of :-
Correct Answer 8 - 10 %
Your Answer 6 - 8 %
Multiple Choice Multiple Answer
Question The external staffing performance indicators include :-
Correct Answer Compensation per Re. Profit , Personnel services head count , Profit
per head
Your Answer Compensation per Re. Profit , Personnel services head count ,
Recovery rate
Match The Following
Question Correct Answer Your Answer
Trust receipt Specifically identified by
serial number or other
means
Specifically identified by
serial number or other
means
Terminal warehouse receipt Inventory is stored with a
public or terminal
Inventory is stored with a
public or terminal
Strategic Finance II Page 5 of 8
warehousing company warehousing company
Floating lien Loose arrangement as the
lender may find it difficult to
police
Well suited for financial
good inventories of capital
goods
Chattel mortgage Well suited for financial
good inventories of capital
goods
Affords a higher degree of
control over the collateral
Select The Blank
Question In today's fast moving world, the quickest way to get information on a
firm is through ________.
Correct Answer Internet
Your Answer Internet
Multiple Choice Single Answer
Question Companies often need to value its own :-
Correct Answer Shares
Your Answer Shares
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
True/False
Question For determining exchange ratio, the model developed by Conn &
Nielson is used.
Correct Answer True
Your Answer True
Select The Blank
Question usually credit lines are established for a period of ________.
Correct Answer 1 year
Your Answer 3 years
Multiple Choice Multiple Answer
Question 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 and
financial risk do not have any influence on accounting numbers
Your Answer Dividend policy has lot of influence on accounting numbers ,
Business risk and financial risk do not have any influence on
accounting numbers , There is a serious relationship between
economic value and profit
Select The Blank
Question Investors can reduce the company related risk by diversification of
their investments in ________.
Correct Answer Shares of a large number of companies
Your Answer Mutual funds
True/False
Question Making decision on dividend is a very crucial area of financial
management for a firm.
Correct Answer True
Your Answer True
Multiple Choice Single Answer
Question The following is not a factor for reduction in the life of an asset by
obsolescence :-
Correct Answer No study of market demand for a product / service
Your Answer Legal restrictions
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 , More perks &
benefits , Higher compensation
Multiple Choice Single Answer
Question Research into true human resources accounting began in :-
Correct Answer 1960`s
Your Answer 1994
Select The Blank
Question Segment assets are ________.
Correct Answer Directly attributable to the segment
Your Answer Directly attributable to the segment
Strategic Finance II Page 7 of 8
True/False
Question AS 13 statement does not deal with operating or finance leases.
Correct Answer True
Your Answer True
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 Single Answer
Question Value implies that something has :-
Correct Answer Worth
Your Answer Worth
Multiple Choice Multiple Answer
Question Examples of accounting methods used by firm are :-
Correct Answer FIFO , LIFO , Accrual Accounting
Your Answer FIFO , LIFO , Accrual Accounting
Multiple Choice Multiple Answer
Question The main assumptions for stock repurchase models are as follows :-
Correct Answer The market is efficient , There is perfect competition in the securities
market
Your Answer The market is efficient , Offers are minimum limit offers. , Investors
are not very keen to maximize the value of their investment
Multiple Choice Multiple Answer
Question 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 ,
Prepayment adjustments , Capitalized expenses
True/False
Question It is easy to find a risk free security.
Correct Answer False
Strategic Finance II Page 8 of 8
Your Answer False
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
Select The Blank
Question During the costing process, we look at ________.
Correct Answer Resource consumption
Your Answer Resource consumption
Select The Blank
Question Mature companies with stable earnings generally pay out ________.
Correct Answer A high proportion of earnings
Your Answer A high proportion of earnings
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