SCDL Assignment Financial Management - 75

This solved paper of Financial Management of SCDL Pune has been contributed by XYZ

 

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Select The Blank
Question	The most accepted interpretation of the term 'funds' is in the form of ________
Answer	Working capital
Multiple Choice Multiple Answer
Question	The assumptions for the theories of capital structure are
Answer	Firm use only long term debt capital or equity share capital to raise funds , Firm follow policy of paying 100% of its earnings by way of dividend , Operating earnings are not expected to grow
Multiple Choice Single Answer
Question	The Investment decisions are mainly concerned with
Answer	Application of funds
True/False
Question	The assumptions of capital structure theories is that Corporate Income Tax does not exist
Answer	TRUE
Multiple Choice Single Answer
Question	The function of the Bankers to the issue is to
Answer	collect the application money on behalf of the company
Multiple Choice Single Answer
Question	Equity Warrants are
Answer	where the holders are entitled to purchase the equity shares at a specific price during the specified period
True/False
Question	Accounts Receivable is an example of current assets
Answer	TRUE
Select The Blank
Question	In financial terms, the operating profit earned by the company is also referred to as ________
Answer	Profit before Interest and Taxes
True/False
Question	If the customer fails to pay the amount due from him the legal action should be initiated against the customer after the limitation period is over
Answer	FALSE
Match The Following
Question	Answer
Disadvantage of Accounting rate of return	uses profits after depreciation and taxes and not the cash inflows for evaluating the projects
Disadvantage of Pay back period	ignores time value of money
Advantage of Discounted Pay back period	considers time value of money
Advantage of Net present value	considers cash inflows from the project throughout its life
Multiple Choice Single Answer
Question	Financing consists of the raising, providing, managing of all the money, capital or funds of any kind to be used in connection with the business' is defined by
Answer	Bonneville and Dewey
Multiple Choice Single Answer
Question	The Capital Structure decision mainly refers to the decision of
Answer	Financing
True/False
Question	Banks or financial institutions granting the term loans are the creditors of the company
Answer	True
Multiple Choice Single Answer
Question	A systematic record of the events of the business leading to a presentation of a complete financial picture is known as
Answer	Accounting
Multiple Choice Multiple Answer
Question	Proprietory ratio can be calculated as
Answer	Total Assets / Owners Funds , Fixed Assets / Owners Funds , Current Assets / Owners Funds
Multiple Choice Multiple Answer
Question	Limitations of credit rating are
Answer	Credit rating is based upon the evaluation made by the agencies which may vary depending upon the experience, knowledge and individual opinion of the rators which may be biased in some cases , Credit rating is primarily based upon the past performance whereas the future prospects should be given more importance while deciding the credit rating , Multiplicity of the rating agencies can be considered to be the limitation of the credit rating
Multiple Choice Multiple Answer
Question	External sources of cash are as follows :
Answer	Issue of new shares , long term loans , short term borrowings
True/False
Question	If Average credit period works out to be more than the Normal credit period, it indicates efficiency on the part of collection department of the company in collecting the dues from the customers
Answer	False
Select The Blank
Question	As per the II method suggested by the Tandon committee, the borrower should finance ________ of current assets out of long term funds and the banks provide the remaining finance
Answer	0.25
True/False
Question	Internal rate of return is difficult to use , calculate and understand
Answer	True
True/False
Question	As per the SEBI guidelines revaluation reserve can be used for issue of bonus share
Answer	FALSE
Match The Following
Question	Answer
Advantages of Ratio Analysis	It helps in planning and forecasting
Limitation of Ratio Analysis	Facts only those which can be expressed in financial terms are considered -
Precautions before using ratio analysis technique	Impact of the inflationary conditions of changing price levels to be taken in account
Classification of ratios	Profitability ratio
Select The Blank
Question	The following data are extracted from the published accounts of a company : Sales Rs. 38,00,000/-, Net Profit after tax Rs. 2,50,000/-, Equity capital Rs. 10,00,000/-,General Reserve Rs. 6,50,000/-, Rs. Long term debt Rs. 7,00,000/-, Creditors Rs. 6,90,000/-, Bank credit/short term loan Rs. 2,30,000/-, Fixed Assets Rs. 17,50,000/-, Inventories Rs. 7,25,000/-, Other Current assets Rs. 5,25,000/-. The Fixed assets turnover ratio is ________ .
Answer	2.17
Multiple Choice Single Answer
Question	Own capital of the company includes
Answer	Shares
Multiple Choice Multiple Answer
Question	The advantages of stable Dividend policy are
Answer	Credit standing of the company in the market increases , Share price of the company increases , Enjoys Confidence of the shareholders
Multiple Choice Single Answer
Question	The company can raise the funds in the form of Public deposits which can be used
Answer	For any purpose
Multiple Choice Single Answer
Question	Collection cost in connection with accounts receivables involves
Answer	Administrative cost
Select The Blank
Question	The most crucial financial decisions of the organisation are taken by ________
Answer	Board of Directors
Select The Blank
Question	The economical use of the asset is permitted by the lessor on the payment of periodical amount which is in the form of ________.
Answer	Lease rent
Multiple Choice Single Answer
Question	The traditional approach to financial management refers only to the procurement of funds by
Answer	Corporate entity
Multiple Choice Multiple Answer
Question	Under the Business Analysis of the company done by Credit rating and Information Services of India Ltd. the following points are covered
Answer	Existing as well as potential competitors in the industry , Market position of the company

 

 

 

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