Strategic Finance - 14

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 , Increases the ROI
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
Multiple Choice Single Answer
Question In respect of depreciable assets, which do not have material value,
depreciation is often allocated :-
Correct Answer Fully in the accounting period for which they are acquired
Your Answer Over the residual value
Multiple Choice Single Answer
Question What is the maximum amount involved in the buy back of the total
paid up capital & free reserves of the company?
Correct Answer 0.25
Your Answer 0.25
True/False
Question Tender offers us an alternative approach to acquire another firm.
Correct Answer True
Your Answer True
Multiple Choice Single Answer
Question Cost benefit analysis is the simplest form of comparison between :-
Correct Answer Ideas to determine which is faster, better or cheaper
Your Answer Ideas to determine which is faster, better or cheaper
Multiple Choice Multiple Answer
Question For ABC Analysis the available cost data :-
Correct Answer Has to be adjusted for change , Has to be corrected for
undocumented element costs , Has to be combined with different
types of data from alternate sources
Your Answer Has to be adjusted for change , Has to be corrected for
undocumented element costs , Has to be combined with different
types of data from alternate sources
Multiple Choice Single Answer
Question Today knowledge has become a key determinant for :-
Correct Answer Economic & business success
Your Answer For determining a firm's value
Select The Blank
Question During the costing process, we look at ________.
Correct Answer Resource consumption
Your Answer Expenses
Multiple Choice Single Answer
Question A firm can manage with small inventory if the supply is :-
Correct Answer Prompt & adequate
Your Answer Prompt & adequate
Multiple Choice Multiple Answer
Question Operating economies occur due to indivisibilities of resources like :-
Correct Answer People , Equipment , Overheads
Your Answer People , Equipment , Overheads
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
Multiple Choice Single Answer
Question Free Reserves is a component of :-
Correct Answer Equity
Your Answer Equity
True/False
Question There are few methods of allocating depreciation over the useful life
of an assets.
Correct Answer False
Your Answer True
True/False
Question Cash dividends are taxable at ordinary tax rates.
Correct Answer True
Your Answer True
Multiple Choice Multiple Answer
Question Financial statements classify the following into separate categories :-
Correct Answer Fixed assets , Investments , Current assets
Your Answer Fixed assets , Current assets
Multiple Choice Multiple Answer
Question The cost of an investment includes charges such as :-
Correct Answer Brokerage , Fees , Duties
Your Answer Brokerage , Advertisements , Fees , Duties
Match The Following
Question Correct Answer Your Answer
Information or signalling
hypothesis
Management believes that
the common stock of the
company is undervalued
Management believes that
the common stock of the
company is undervalued
Dividend or Personal
Taxation Hypothesis
Cash dividends are taxable
at ordinary tax rates
Cash dividends are taxable
at ordinary tax rates
Leverage hypothesis Stock repurchases
increases the debt / equity
ratio
Stock repurchases increases
the debt / equity ratio
Wealth transfer among
shareholders
The largest portion of
wealth effect goes to the
non - tendering
shareholders
The largest portion of wealth
effect goes to the non -
tendering shareholders
Multiple Choice Multiple Answer
Question Every business requires funds on a continual basis for expenses
incurred on for :-
Correct Answer Purchase of raw material , Manufacturing costs , Administration
Your Answer Purchase of raw material , Manufacturing costs , Administration
Multiple Choice Single Answer
Question Short term sources of funds include :-
Correct Answer Current Liabilities
Your Answer Current Liabilities
Select The Blank
Question HLL the largest FMCG company has a turnover of Rs. ________.
Correct Answer 118 Bn
Your Answer 118 Bn
True/False
Question Diversification helps in preserving a firm's reputation & goodwill.
Correct Answer True
Your Answer True
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
Select The Blank
Question The clean up period is usually ________ months.
Correct Answer 1 to 2 months
Your Answer 1 to 2 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 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
Multiple Choice Single Answer
Question If a particular item of depreciation or amortisation is included in
segment expense, the related asset is included in :-
Correct Answer Segment assets
Your Answer Segment assets
True/False
Question The intellectual assets of a company are often worth 3 or 4 times the
tangible book value.
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 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
True/False
Question Book value is based on the balance sheet value of owner's equity.
Correct Answer True
Your Answer True
Multiple Choice Multiple Answer
Question The overhead expenses include :-
Correct Answer Utilities , Maintenance , Security
Your Answer Daily wages , Maintenance , Security
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
The ratio of debt to total
capital & free reserves
should be 1 : 1
Board of Directors Resolution permitting the
buy back of shares
Authorize buy back of
securities
Shares to be bought back Fully paid up Resolution permitting the
buy back of shares
True/False
Question It is necessary to identify all costs that may be related to an
acquisition.
Correct Answer True
Your Answer True
True/False
Question Notes payable means the buyer signs a note that evidences a debt to
the seller.
Correct Answer True
Your Answer True
Select The Blank
Question ________ know the best about a firm's performance.
Correct Answer Firm Managers
Your Answer Firm Managers
Multiple Choice Single Answer
Question The FEA Tools encompass a vast array of information & policy into :-
Correct Answer One evaluation
Your Answer Many evaluations
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 Business risk & financial risk do not have any influence on ________.
Correct Answer Accounting numbers
Your Answer Accounting numbers
Multiple Choice Multiple Answer
Question A current investment is an investment that is by nature :-
Correct Answer Readily realisable , Intended to be held for not more than 1year from
the date on which investment is made
Your Answer Readily realisable , Intended to be held for not more than 1year from
the date on which investment is made , Can be held for more than 1
year
Multiple Choice Single Answer
Question The depreciation rates or the useful lives of the assets are disclosed
only :-
Correct Answer If they are different from the principle rates specified in the statute
Your Answer If they are different from the principle rates specified in the statute
Multiple Choice Multiple Answer
Question The net income approach is based on following 3 assumptions :-
Correct Answer There are no taxes , Cost of debt is less than equity capitalization
rate , Use of debt doesn't change the risk perception of investors
Your Answer There are no taxes , Cost of debt is less than equity capitalization
rate , Use of debt doesn't change the risk perception of investors
Select The Blank
Question In case of direct placement of commercial papers it may be issued for
maturities ________ from the date of issue.
Correct Answer Between 15 days to 1 year
Your Answer Between 15 days to 1 year
Select The Blank
Question Forfeiting is mostly used for ________.
Correct Answer Big ticket items & durable goods
Your Answer Big ticket items & durable goods
Select The Blank
Question ________ government has made it mandatory to include in their
annual reports information on customers, processes & human capital.
Correct Answer Danish (Denmark)
Your Answer Japanese
Select The Blank
Question ________ are those operating assets that are employed by a
segment in its operating activities.
Correct Answer Segment assets
Your Answer Current assets
Multiple Choice Single Answer
Question When the working capital is less than its peak level :-
Correct Answer The surplus is invested in liquid assets
Your Answer The surplus is invested in liquid assets