Strategic Finance - 12

LIST OF ATTEMPTED QUESTIONS AND ANSWERS
True/False
Question It is easy to find a risk free security.
Correct Answer False
Your Answer False
Multiple Choice Single Answer
Question As per the study conducted by RBI, Current assets
constitute :-
Correct Answer More than 50 % of the total assets
Your Answer More than 50 % of the total assets
Multiple Choice Multiple Answer
Question The following categories of personnel are taken into
account to calculate the actual manpower strength :-
Correct Answer Full time equivalents , Temporary staff , Part time
personnel
Your Answer Full time equivalents , Temporary staff , Part time
personnel
Select The Blank
Question Business risk & financial risk do not have any
influence on ________.
Correct Answer Accounting numbers
Your Answer Accounting numbers
Multiple Choice Multiple Answer
Question The characteristics of working capital are :-
Correct Answer It is continually required for a going concern ,
Quantum of working capital fluctuates depending on
the level of activity , It is impacted by numerous
transactions on a continuous basis
Your Answer It is continually required for a going concern ,
Quantum of working capital fluctuates depending on
the level of activity , It is impacted by numerous
transactions on a continuous basis
Multiple Choice Single Answer
Question Profitability of a company depends upon :-
Correct Answer Cost of capital
Your Answer Cost of capital
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 , Growth of the firm
Select The Blank
Question Conglomerate mergers are also called ________.
Correct Answer Concentric mergers
Your Answer Concentric mergers
True/False
Question The buyback shall be made only on stock exchanges
with electronic trading facility.
Correct Answer True
Your Answer True
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 firms use credit policy as a marketing tool for
expanding sales.
Correct Answer True
Your Answer True
Multiple Choice Single Answer
Question Tender offers are used primarily for :-
Correct Answer Large Equity repurchases
Your Answer Large Equity repurchases
Multiple Choice Single Answer
Question Which is an example out of the following to which
special consideration apply for depreciation :-
Correct Answer Regenerative natural resources
Your Answer Regenerative natural resources
Multiple Choice Single Answer
Question Which of the following is NOT A Characteristic of
declining firm :-
Correct Answer The optimum payout ratio for a declining firm is not
100 %
Your Answer The optimum payout ratio for a declining firm is not
100 %
Multiple Choice Single Answer
Question According to Net Income Approach, the average cost
of capital declines as the leverage ratio :-
Correct Answer Increases
Your Answer Increases
Multiple Choice Multiple Answer
Question Personnel services expenses is made up of:-
Correct Answer Personnel salaries , Cost of facilities , Training &
development budgets
Your Answer Personnel salaries , Cost of facilities , Training &
development budgets
Multiple Choice Multiple Answer
Question The employer in offering the job contract assumes a
range of legal obligations such as :-
Correct Answer Rewards - cash like & non cash like , Health & safety
policies , Pensions & contributions to social security
payments
Your Answer Rewards - cash like & non cash like , Health & safety
policies , Pensions & contributions to social security
payments
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
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 Best practices, a tool for review process is similar to :-
Correct Answer Bench marking
Your Answer Bench marking
True/False
Question Making decision on dividend is a very crucial area of
financial management for a firm.
Correct Answer True
Your Answer True
Match The Following
Question Correct Answer Your Answer
Mechanisms Performs or provides
energy to an activity
Performs or provides
energy to an activity
Inputs Information or material
used to produce the
output of an activity
Information or material
used to produce the
output of an activity
Controls Information or material
that constrains an
activity
Information or material
that constrains an
activity
Outputs Information or material
produced by an activity
Information or material
produced by an activity
True/False
Question According to NI Approach, decrease in leverage
decreases the overall cost of capital and increases the
firm's value.
Correct Answer False
Your Answer False
Match The Following
Question Correct Answer Your Answer
Lien The bank has a right to
retain the goods
belonging to the
company until the
debts due to the bank
are paid
The bank has a right to
retain the goods
belonging to the
company until the debts
due to the bank are
paid
Hypothecation A charge against
property for an amount
of debt
A charge against
property for an amount
of debt
Pledge Duty of the bank to
take care of movable
goods
Duty of the bank to take
care of movable goods
Mortgage Pertains to immovable
properties
Pertains to immovable
properties
Multiple Choice Single Answer
Question Investment decisions are mainly concerned with :-
Correct Answer Assets
Your Answer Assets
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 similar
Your Answer No unique optimum payout ratio , Market value per
share unaffected by the payout ratio , All dividend
policies are similar
Select The Blank
Question Buy back through book building the process should be
made through ________.
Correct Answer An electronically linked transparent facility
Your Answer An electronically linked transparent facility
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 %
Multiple Choice Multiple Answer
Question The 3 main types of accounting records followed by
an organisation are :-
Correct Answer Organisational accounting , Budgetary accounting ,
Cost accounting
Your Answer Organisational accounting , Budgetary accounting ,
Cost accounting
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 expense
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
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
Your Answer Organization element accounting
Multiple Choice Single Answer
Question Short term sources of funds include :-
Correct Answer Current Liabilities
Your Answer Current Liabilities
True/False
Question Tender offers us an alternative approach to acquire
another firm.
Correct Answer True
Your Answer True
Select The Blank
Question Segment assets are ________.
Correct Answer Directly attributable to the segment
Your Answer Directly attributable to the segment
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
Multiple Choice Multiple Answer
Question If a company is following multiple accounting system,
the activity accountant will have to match data across
:-
Correct Answer Codes , Time periods , Systems
Your Answer Codes , Time periods , Systems
Multiple Choice Single Answer
Question If competition is weak, a firm :-
Correct Answer Can manage with a smaller inventory of finished
goods
Your Answer Can manage with a smaller inventory of finished
goods
Select The Blank
Question When a firm invests in human resources by
acquisition & training, it anticipates a ________
Correct Answer Future generation of profits & services
Your Answer Future generation of profits & services
Select The Blank
Question Horizontal mergers involves firms________.
Correct Answer That operate & compete in a similar kind of business
Your Answer That operate & compete in a similar kind of business
Multiple Choice Single Answer
Question The following of total cost of assets over its useful life
is called depreciation :-
Correct Answer Distribution
Your Answer Distribution
Multiple Choice Multiple Answer
Question The different types of floats are :-
Correct Answer Postal float , Deposit float , Bank float
Your Answer Postal float , Deposit float , Bank float
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 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
True/False
Question Short term financing is meant for funding working
capital of a company.
Correct Answer True
Your Answer True
Multiple Choice Single Answer
Question Deferred payment plan is also known as:-
Correct Answer Earn out plan
Your Answer Earn out plan
Multiple Choice Single Answer
Question Estimation for determining the useful life of an asset is
required :-
Correct Answer On some reasonable basis
Your Answer On some reasonable basis