Strategic Finance Solved Paper of SCDL Pune - 36

Note: Please tally the answers and verify them from SCDL textbooks as all answers might not be correct. 

True/False
Question	Baumul`s Model is similar to EOQ model in inventory management.
Correct Answer	TRUE
True/False
Question	Sometimes the mechanisms may appear to be inputs for an activity.
Correct Answer	TRUE
Multiple Choice Multiple Answer
Question	Accrued expenses represent :-
Correct Answer	Costless financing , An interest free source of financing
Multiple Choice Multiple Answer
Question	The different types of floats are :-
Correct Answer	Postal float , Deposit float , Bank float
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
Select The Blank
Question	The number of bidding centers shall not be less than ________ for buy back through book building.
Correct Answer	30
Select The Blank
Question	Market approach is used for companies whose shares are ________ on the Stock market.
Correct Answer	Listed
True/False
Question	In market value approach, interested parties never manipulate the stock markets.
Correct Answer	FALSE
Multiple Choice Single Answer
Question	Accounts payable is also known as :-
Correct Answer	Trade credit from suppliers
Multiple Choice Single Answer
Question	Where the management's estimate of the useful life of an asset of the enterprise is shorter than that envisaged under the provisions of the relevant statute, the depreciation provision is approximately computed :-
Correct Answer	By applying a higher rate
True/False
Question	Arbitrage process implies that security cannot sell at different prices.
Correct Answer	TRUE
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
Multiple Choice Single Answer
Question	The difference between current assets & current liabilities is known as :-
Correct Answer	Net working capital
Multiple Choice Multiple Answer
Question	The major conditions to be fulfilled for buyback of shares as per the legal provisions include :-
Correct Answer	Articles of association should authorize buyback of shares , The shares which are sought to be bought back should be fully paid up , After the buy back the ratio of debt to total capital and free reserves should not be more than 2 : 1
Multiple Choice Single Answer
Question	Free Reserves is a component of :-
Correct Answer	Equity
Multiple Choice Single Answer
Question	Short term sources of funds include :-
Correct Answer	Current Liabilities
Select The Blank
Question	At times managers invest in projects that improve the company's ________.
Correct Answer	Prestige or power
Multiple Choice Single Answer
Question	One of the important assumptions for capital structure theories is :-
Correct Answer	Debt and equity are the 2 kinds of funds used by the firm
True/False
Question	Assets held as stock - in - trade are also investments.
Correct Answer	FALSE
Multiple Choice Single Answer
Question	Profitability of a company depends upon :-
Correct Answer	Cost of capital
Select The Blank
Question	HLL the largest FMCG company has a turnover of Rs. ________.
Correct Answer	118 Bn
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
Multiple Choice Single Answer
Question	In the tender offer, the purchaser approaches :-
Correct Answer	The shareholder
Multiple Choice Multiple Answer
Question	To overcome the problems of matching data the actions can be taken as follows :-
Correct Answer	Keep extensive records of the process , Maintain detailed procedures , Keep records of assumptions as an audit trail
Select The Blank
Question	In the shareholding pattern of a company, the promoter's holding includes________.
Correct Answer	Foreign Promoters
Multiple Choice Multiple Answer
Question	The 3 groups of participants in a firm are :-
Correct Answer	Suppliers of equity , Debt suppliers , Firm Managers
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
True/False
Question	Notes payable means the buyer signs a note that evidences a debt to the seller.
Correct Answer	TRUE
Multiple Choice Single Answer
Question	A firm can manage with small inventory if the supply is :-
Correct Answer	Prompt & adequate
True/False
Question	A transport corporation has a substantial working capital requirement.
Correct Answer	FALSE
Multiple Choice Multiple Answer
Question	Implicit claims are non written promises and rights such as :-
Correct Answer	Right to provide service to customers , Job security for the employees
Select The Blank
Question	As per NOI Approach - the overall capitalization rate remains ________ for all levels of financial leverage.
Correct Answer	Constant
Select The Blank
Question	When a firm invests in human resources by acquisition & training, it anticipates a ________
Correct Answer	Future generation of profits & services
Multiple Choice Multiple Answer
Question	While accounting for human assets, the following data is to be considered :-
Correct Answer	Full time equivalent staff , Revenues , Expenses
Select The Blank
Question	The processes to be identified & focused should to be on the basis of not adhering to benchmarks, bottlenecks, quality not met, time problems etc. This is called as ________.
Correct Answer	Process analysis
Multiple Choice Single Answer
Question	The following is not a method of payment to the acquired firm:-
Correct Answer	Fixed deposits of the acquiring firm
Select The Blank
Question	________ is never a part of the output.
Correct Answer	Mechanisms
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
Multiple Choice Single Answer
Question	Book value is relevant to determine the firm's value because of the following reasons except:-
Correct Answer	It cannot be used as a starting point to be compared & complimented by other analysis
True/False
Question	Receivables constitutes a substantial portion of current assets of several firms.
Correct Answer	TRUE
True/False
Question	Odd lots purchase is not a method of buy back of shares.
Correct Answer	FALSE
Multiple Choice Multiple Answer
Question	A company is prohibited to buy back its own shares in the following circumstances :-
Correct Answer	Through any subsidiary company , Through any investment company , If a company defaults in repayment of deposits or interest due thereon
Multiple Choice Single Answer
Question	A quantity discount is offered :-
Correct Answer	On large shipments
Multiple Choice Single Answer
Question	Human Assets accounting stands for :-
Correct Answer	Measurement & reporting of the cost and value of people as organisational resources
Select The Blank
Question	Increase in cost of capital means decrease in ________.
Correct Answer	Profitability
Multiple Choice Multiple Answer
Question	Investments having no physical existence includes :-
Correct Answer	Shares , Debentures , Bonds
Multiple Choice Single Answer
Question	The following of the depreciable asset may undergo subsequent changes arising due to price adjustments :-
Correct Answer	Historical cost
Multiple Choice Single Answer
Question	A company that comes to the rescue of a firm that is being targeted for a takeover is called :-
Correct Answer	White knight
Select The Blank
Question	________ is not a example of segment asset.
Correct Answer	Customer advances
True/False
Question	Risk appetite decides the rate of capitalization.
Correct Answer	TRUE
True/False
Question	Valuation of current investments on overall basis is not considered appropriate.
Correct Answer	TRUE
Multiple Choice Single Answer
Question	A single business segment does not include products & services :-
Correct Answer	With significantly differing risks & returns
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
Multiple Choice Multiple Answer
Question	A firm's current assets include :-
Correct Answer	Marketable securities , Receivables , Inventory
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
True/False
Question	A merger will make sense to the acquiring firm if its shareholders benefit.
Correct Answer	TRUE
Select The Blank
Question	________ Assets in the balance sheet are normally excluded from the value of total assets.
Correct Answer	Intangible
Select The Blank
Question	A shareholder expects a higher rate of return as a firm's compensation for ________.
Correct Answer	Increased risk
True/False
Question	Usually cost data is perfect for ABC Analysis & distribution.
Correct Answer	FALSE
Select The Blank
Question	Forward or backward integration is a characteristic of ________.
Correct Answer	Vertical Mergers
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
True/False
Question	A single organisation model serves to keep all individual initiatives to be targeted into a co-ordinated plan.
Correct Answer	TRUE
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
Multiple Choice Single Answer
Question	Fixed price tender offers are accompanied by an abnormal announcement period return of :-
Correct Answer	8 - 10 %
Multiple Choice Multiple Answer
Question	The external staffing performance indicators include :-
Correct Answer	Compensation per Re. Profit , Personnel services head count , Profit per head
Multiple Choice Single Answer
Question	Companies often need to value its own :-
Correct 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
True/False
Question	For determining exchange ratio, the model developed by Conn & Nielson is used.
Correct Answer	TRUE
Select The Blank
Question	usually credit lines are established for a period of ________.
Correct Answer	1 year
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
True/False
Question	Making decision on dividend is a very crucial area of financial management for a firm.
Correct 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
Multiple Choice Single Answer
Question	Research into true human resources accounting began in :-
Correct Answer	1960`s
Select The Blank
Question	Segment assets are ________.
Correct Answer	Directly attributable to the segment
True/False
Question	AS 13 statement does not deal with operating or finance leases.
Correct Answer	TRUE
Multiple Choice Single Answer
Question	Value implies that something has :-
Correct Answer	Worth
Multiple Choice Multiple Answer
Question	Examples of accounting methods used by firm are :-
Correct Answer	FIFO , LIFO , Accrual Accounting
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
True/False
Question	It is easy to find a risk free security.
Correct Answer	FALSE
Select The Blank
Question	During the costing process, we look at ________.
Correct Answer	Resource consumption