SCDL Assignments : Financial Management 9


Multiple Choice Single Answer
Question Technical terminology used to invest in the current assets being
Correct Answer Working Capital Management
Your Answer Working Capital Management

True/False
Question Reorder level is calculated as Maximum Lead Time * Minimum Usage
Correct Answer False
Your Answer False

Multiple Choice Single Answer
Question The company can raise the funds in the form of Public deposits which can be used
Correct Answer For any purpose
Your Answer For any purpose

True/False
Question Fixed Assets turnover ratio is the relationship between fixed assets and owner's funds
Correct Answer False
Your Answer False

Multiple Choice Single Answer
Question Live Stock is an example of
Correct Answer Fixed Asset
Your Answer Fixed Asset

Multiple Choice Single Answer
Question The Policy which attracts the shareholders who are willing to devote short term dividend income for long term capital gains and share in the increased prosperity of the company is termed as
Correct Answer No immediate Dividend policy
Your Answer No immediate Dividend policy

Multiple Choice Multiple Answer
Question Assuming the current ratio is 2, in which cases would the current ratio decline
Correct Answer Purchase of fixed Assets , Borrow Money on an Interest bearing promissory note
Your Answer Purchase of fixed Assets , Borrow Money on an Interest bearing promissory note

Select The Blank
Question In ABC analysis C class consist of ________.
Correct Answer a very large number of items which are less important
Your Answer a very large number of items which are less important

Select The Blank
Question Retained earnings is a source of ________ finance
Correct Answer Internal
Your Answer Internal

True/False
Question The assumptions of capital structure theories is that Operating earnings are not expected to grow
Correct Answer True
Your Answer True

Select The Blank
Question Under ________, it is not only necessary to decide profitable investments but also necessary to rank the acceptable proposals according to their relative profitabilities
Correct Answer Capital rationing
Your Answer Capital rationing

Multiple Choice Multiple Answer
Question The recurring duties of Finance Executive includes
Correct Answer Working Capital Management , Fixed Assets management , Control of funds
Your Answer Working Capital Management , Fixed Assets management , Control of funds

Multiple Choice Single Answer
Question The effect of Purchase of building against a long term loan payable on funds ( cash concept ) is
Correct Answer No change in cash
Your Answer No change in cash

Multiple Choice Multiple Answer
Question The classification of ratios under miscellaneous group includes
Correct Answer Earnings per share , Dividend Payment ratio
Your Answer Earnings per share , Dividend Payment ratio

Multiple Choice Multiple Answer
Question Shortcomings of Debentures from company's point of view
Correct Answer The debenture interest and capital repayment are obligatory payments , Debenture financing enhances the financial risk associated with the firm
Your Answer The debenture interest and capital repayment are obligatory payments , Debenture financing enhances the financial risk associated with the firm

Multiple Choice Multiple Answer
Question Earnings / Price Approach to compute cost of equity shares is objected on the following grounds
Correct Answer It wrongly assumes that earnings per share will remain constant in future , All the earnings may not be distributed among the shareholders by way of dividend
Your Answer It wrongly assumes that earnings per share will remain constant in future , All the earnings may not be distributed among the shareholders by way of dividend

True/False
Question Inventory is the intermediate stage between purchase of raw materials and consumption of raw materials
Correct Answer True
Your Answer True

True/False
Question Funds flow statements and cash flow statement are one and the same
Correct Answer False
Your Answer False

Multiple Choice Single Answer
Question The Proprietary concern is owned by
Correct Answer Only one person
Your Answer Only one person

Select The Blank
Question Modigliani - Miller approach closely resembles ________ approach
Correct Answer Net operating income
Your Answer Net operating income

Multiple Choice Single Answer
Question The main function of finance under the traditional approach comprises of
Correct Answer Procurement of funds
Your Answer Procurement of funds

Select The Blank
Question ________ financing is more preferred route for venture capital funding
Correct Answer Equity
Your Answer Equity

True/False
Question Credit rating is not a recommendation for buying, selling or holding a security
Correct Answer True
Your Answer True

Select The Blank
Question The introduction of debt capital in the capital structure increases the earnings per share of ________
Correct Answer Equity shareholders
Your Answer Equity shareholders

Select The Blank
Question The mathematical expression of ________ is ( Minimum level + Maximum level ) / 2
Correct Answer Average level
Your Answer Average level

Multiple Choice Single Answer
Question Earnings per share is calculated as
Correct Answer ( Profit after tax - Preference Dividend ) / No. of equity shares
Your Answer ( Profit after tax - Preference Dividend ) / No. of equity shares

True/False
Question The requirement of Fixed Working Capital is unaffected due to the changes in the level of activity
Correct Answer True
Your Answer True

True/False
Question Wealth maximization goal is only an extension of Profit maximization goal of the organisation
Correct Answer True
Your Answer True

Multiple Choice Multiple Answer
Question Advantages of factoring
Correct Answer Factoring is the way in which the company can finance its requirement of Working capital in respect of receivables , The company can take advantage of the expertise of the factor in various fields , With the help of factoring the company can be relieved of administrative responsibilities
Your Answer Factoring is the way in which the company can finance its requirement of Working capital in respect of receivables , The company can take advantage of the expertise of the factor in various fields , With the help of factoring the company can be relieved of administrative responsibilities

Multiple Choice Single Answer
Question Gross Profit ratio is calculated as
Correct Answer [(Gross Profit / Net Sales)] * 100
Your Answer [(Gross Profit / Net Sales)] * 100

Multiple Choice Multiple Answer
Question The Proprietary concern is better than the Partnership concern on the following points
Correct Answer Minimum Government regulations , Where the business is small
Your Answer Minimum Government regulations , Where the business is small

Multiple Choice Single Answer
Question Current assets are also referred to as
Correct Answer Working Capital
Your Answer Working Capital

Multiple Choice Multiple Answer
Question Advantages of ABC Analysis are
Correct Answer A close and strict control is facilitated on the most important items , Helps in maintaining a high inventory turnover ratio , Optimum utilisation of the available funds can be assured
Your Answer A close and strict control is facilitated on the most important items , Helps in maintaining a high inventory turnover ratio , Optimum utilisation of the available funds can be assured

Multiple Choice Multiple Answer
Question The techniques of Analysis and Interpretation of financial statements are
Correct Answer Ratio Analysis , Cash flow Analysis
Your Answer Ratio Analysis , Cash flow Analysis

Multiple Choice Single Answer
Question Accounting rate of return is calculated as
Correct Answer [Total Profits / (Net Investment * No. of years of Profits)] * 100
Your Answer [Total Profits / (Net Investment * No. of years of Profits)] * 100

Select The Blank
Question The most accepted interpretation of the term 'funds' is in the form of ________
Correct Answer Working capital
Your Answer Fixed assets

Multiple Choice Multiple Answer
Question The assumptions for the theories of capital structure are
Correct 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
Your 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
Correct Answer Application of funds
Your Answer Application of funds

True/False
Question The assumptions of capital structure theories is that Corporate Income Tax does not exist
Correct Answer True
Your Answer True

Multiple Choice Single Answer
Question The function of the Bankers to the issue is to
Correct Answer collect the application money on behalf of the company
Your Answer collect the application money on behalf of the company

Multiple Choice Single Answer
Question Equity Warrants are
Correct Answer where the holders are entitled to purchase the equity shares at a specific price during the specified period
Your Answer where the holders are entitled to purchase the equity shares at a specific price during the specified period

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