FINANCIAL MANAGEMENT II SEMESTER MBA

1)In ______ leasing ,leasing facility is provided on a period to period basis. No long term obligation is there a)operating lease b)financial c) combined d)none (a)

2)_______ leasing is a non cancellable contract covering intermediate to long term period a)operating lease b)financial lease c) both d)combined (b )

3)_____ is the written agreement allowing the economic use of the assets for a stated period of time. a)lease b)hirepurchase c)financial lease d) operating lease (a )

4)the goal of financial management is a)wealth maximization b) profit maximization c)both d)none (a )

5)The combination of debt and equity is called a)capital b) cost of capital c)capital structure d) WACC (c )

6)EBIT is also called as a) net profit b) Gross profit c) core profit d) operating profit (d )

7)The goal of profit maximization is a)Vague b)Ignores time value c)Ignores Risk d) All (d )

8)A method to increase the number of outstanding shares through a proportional reduction in the par value of the share

a)stock split 9)Trade credit means

b)

bonus shares

c)reverse split d)none

( a)

a)selling goods on credit basis b) selling goods on cash basis c)selling goods with profit d)selling goods on loss ( a)

10)%change in EPS/%change in EBIT a) degree of financial leverage b)degree of operating leverage c)combined leverage d) none ( a)

11)contribution/operating profit is the formula for a)financial leverage b) operating leverage c)combined leverage d) none (b )

12)%change in EPS/%change in sales a) leverage b)operating leverage c)financial leveraged) combined leverage (d )

13)Break even analysis is otherwise called as a)CVP analysis b)MVP analysis c)ABC analysis d)VED analysis ( a)

14)The point where there is no profit and no loss is called as a)marginal point b) optimal point c)break even point d) gain point (c )

15)One of the following is not a traditional method in capital budgeting techniques a)NPV b)payback c)ARR d) none (A)

16)profitability index is a

a)discounted cash flow method c)both

b)non discounted cash flow method d)only a (D)

17)Investment(cash outlay)/annual cash inflow is the formula for a)pay back period b) IRR c)ARR d)PI ( a)

18)The ideal current ratio for a sound business is a)2:1 b) 1:2 c) 1:4 d)4:1 (a )

19)_______ is getting equal cash inflows every year a)annuity b) discounting c) present value d) none (a )

20)The use of fixed charges sources of funds, such as debt and preference capital along with the shareholders equity in the capital structure is known as a)financial leverage b) operating leverage c) combined d)none ( a)

21)The more the fixed costs in the production process, the more will be a) leverageb)financial leveragec) operating leverage d)none (c )

22)Operating leverage increases if _______ cost increases a)operating costs b) fixed costs c) semi variable d)variable (b )

23)The part of earnings which is distributed among the equity shareholders is called a)dividend b) surplus c)reserve d)gross profit (a )

24)Motives of holding cash

a)Transaction motive c)Speculative

b)Precautionary motive d)All (D)

25)____ refers to the credit extended by a company to its customers. a)Accounts receivables b)bills paid c)bills of exchange d)trade credit (a )

26)FSN analysis means

(a)

a)fast moving, slow moving, non moving b)Fast,Superior,Marketable c)Fast, Semi fast,Medium d)none

27)VED analysis a)Very Essential Desired c)Vital,Essential,Demand

(b) b)Vital,essential,desirable analysis d)none

28)JIT is an a)inventory control technique b)cash management method c)Fund management method d) none (a )

29)A statement of changes in the financial position of a firm on cash basis is called _______ statement a)fund flow b)cash flow c)common size d)working capital (b )

30)_______ statement helps in explaining causes for changes in financial position and the effect of these changes on liquidity position

a)fundflow

b)cash flow

c)common size d)working capital

(a )

31)The excess of current assets over current liabilities is known as a)working capital b)cost of capital c) debt capital d)equity capital (a )

32)Actual sales-break even sales gives a) safety b)marginal costing c) margin of safety d)security (c )

33)The method which takes time element in to consideration is a)NPV b)pay back c)discounted method d)ARR (a)

34)Present value of cash inflows present value of cash outflows gives a)CVP b)PI c)NPV d)IRR (c )

35)Schedule of changes in working capital is to be calculated before preparing a)cash flow statement b)fund flow statement c)common size statement d)all (b )

36)Net change in working capital forms the component under ____ of funds in funds flow statement a)inflows b)applications c) utilization d)sources (d )

37)Purchases of plant, taxes paid, investment purchases and interim dividend paid etc form components of ___________ of funds in fund flow statement. a)applications b)sources c)outflows d)inflows (a )

38)_______ is the process of making investment decisions regarding capital expenditure. a)capital budgeting b)capital structure c)cost of capital d)dividend decision (a )

39) statement helps to study changes in the financial position of a business enterprise between beginning and ending dates of financial statements. a)cash flow b)Fund flow statement c)working capital d) none (b )

40)________ shows the assets, liabilities and capital as on particular date a)balance sheet b)cash flow statement c)fund flow statement d)working capital statement

(a)

41)In _______ statement each item is stated as a percentage of the total, of which that item is a part. This statement is a tool of studying key changes and trends in financial position of a company a) b) c) d) ()

42)One of the following is not a liquidity ratio a)leverage ratios b)liquidity ratios c)profitability ratios d)all (a )

43)Debt equity ratio forms part of ________ ratios a)leverage b)profitability c)liquidity d)none (a )

44)price earning ratio a)market share/EPS b)EPS/market share c)Dividend per share/earnings per share d)none ( a)

45)________ ratios are designed to measure the contribution of the companys owners i.e funds provided by its creditors. a) b) c) d) ()

46)debtors/sales x365 is a)leverage ratio b)liquidity ratio c) debtor turnover ratio d)none ( c)

47)Types of decisions in FM a)Financial Investment b)dividend c)Liquidity d)All (D)

48)One of the following is not types of dividends a)Stock b)Bonus shares c)Property d)Cheques (D)

49)Methods of Cash Management a)accelerating cash collections b)slowing disbursements c)only a d)both a & b 50)lock box system is a method under a)slowing disbursements b)decentralized collection system c)accelerating cash collections d)all (c) (D)

51)centralized payment is a method under a) lock box system b) slowing disbursements c) Accelerating cash collections d)none (b )

52)playing the float is a method under a)slowing disbursements c)lock box system b)Accelerating cash collections d)centralized payment system ( a)

53)contribution= a)sales/pv ratio b)cost/PV ratio c)pv/selling cost d) (a )

54)Standard deviation, capital rationing , decision tree are ______ analysis techniques a)risk b) c) d) ()

55)profitability index a)PV of cash inflows/PV of cash outflows b) c) d) ()

56)If PI=1,project can be a)accepted b) rejected c)only partly accepted d) none ( a)

57)If NPV is +ve , project can be a)rejected b) accepted c)partly rejected d)all (b )

58)In ARR, projects with ARR>cut off rate can be a)accepted b)rejected c)partly accepted d)none (a )

59)The rate of discount that sets the net present value equal to zero is a)IRR b)NPV c)ARR d)PI (a )

60)The rate of return which the company must pay to the suppliers of capital for use of their funds a) capital structure b) cost of capital c)financial leveraged) prime lending rate (b )

61)Cost of short term debt a)Kd=R(1-T) b)Kd=R/(1-T) c)Kd=R(1-T)/T d)Kd=R/T (a )

62)Formula used to determine cost of equity capital under dividend price approach a)Ke=DP/MP b)Ke=R(1-T) c)Ke=DP.MP d)none ( a)

63)cost of equity share capital when growth factor is taken a)Ke=DP/MP+g b) Ke=DP.MP c)Ke=R(1-T) d) Ke=DP/MP (a )

64)The average of the costs of each source of funds employed by the company properly weighted by the proportion they hold in the capital structure of the firm a)weighted cost of capital b) Cost of debt (a )

c)cost of equity d)cost of preference shares

65)Gross working capital comprising of a)current assets b)liabilities c) liquid liabilities d)current liabilities (a )

66)net working capital a)current assets-current liabilities b) c) d) ()

67)Receivables to a firm arises when there are a)credit sales b) c) d) ()

68)If demand decreases sales decreases, then the company adopts________ credit policy is a)lenient b)flexible c) moderate credit d) stringent ( d)

69)_______ policy is said to be followed by a firm if it offers shorter credit period a) moderate credit b)flexible c)stringent d) lenient ( c)

70)2/15 net 60 means

( a)

a) 2%discount if paid before 15 days,credit period 6o days b)2%discount or 15% discount for a credit period of 6o days c)2%interest if paid before 15 days ,credit period 60 days d)none

71)One of the following is not a marketable security a)TBs b)bonds c)promissory notes d)equity shares (d )

72)CPs are issued by a)corporate houses b)banks c)treasury bills d)government ( a)

73)CD are issued by a)banks b)corporate houses c) treasury bills d) government (a )

74)TBs are issued by a)Government b)banks c)corporate houses d)TBs ( a)

75)Formula for EOQ

(b )

a) (2xcxo)/A b)(2AO)/c c) (2AO/A d)none

76)ABC analysis is a a)inventory control technique c)receivables management technique b)cash management technique d)manufacturing technique (a )

77)A-items in ABC analysis corresponds to a)more in quantity and more in value b) more quantity, less value c)less quantity less value d)less quantity more value ( d)

78)C- items in ABC analysis corresponds to a)less in quantity and more in value b) more quantity, less value c)less quantity less value d) more in quantity and more in value

(b)

79)B-items in ABC analysis corresponds to a)medium quantity and medium value b)more in quantity and more in value c)less quantity less value d) more quantity, less value

(a )

80)For preparing cash budget _________ should be made a)cash forecast b)capital structure (a )

c)fund flow statement d)cash from operations

81)Cash inflows and cash outflows are components of a)cash b)fund flow statement c) cash budget d)balance sheet (c )

82)The time gap between placing and receiving of order is a)set up time b)lead time c)lag time d)on set time (b )

83)carrying cost components are a) storage costs b)record keeping costs c)both d)none ( b)

84)carrying cost is for ___________ of inventory. a) procurement b)maintenance c)processing d)none ( b)

85)______ is that quantity where ordering cost and carrying cost are minimum or ordering cost and carrying cost intersect . a)EOQ b) JIT c) FIFO d) LIFO ( a)

86)JIT is an inventory control technique developed by a)USA b)INDIA c)JAPAN d)sweden ( c)

87)CRISIL & ICRA are_________ for credit analysis. a)Funding agencies b)regulatory agencies c)credit rating agencies d)control bodies ( c)

88)Buy back of shares means a)A company buying back its own shares c)splitting of shares d)reverse splits b)initial public offer

(a )

(a )

89)Cash flow statement is prepared to know________ balance of the firms a)cash b)credit c)debt d)loss

(a)

90)________ is prepared before preparing cash flow statement a)Cash from operations b)funds from operations c)cash from manufacturing d)all 91)_______market is for short term capital requirements a)capital b)money c)both d)none 92)_________ market is for long term capital requirements a)capital b)money c)both d)none (a) (b)

(a)

93)SEBI stands for a)Scrip Exchange Board of India b)State Exchange Board of India c)Securities Exchange Board of India d)Stock Evaluation Board of India 94)Types of leasing a)operating lease b)financial lease c)both d)none (c)

(c)

95)If a firm has more debt content, the firm is said to have more a)financial leverage b)operating leverage c)combined leverage d)none

(a)

96) If a firm has more fixed charges, the firm is said to have more (a) a)operating leverage b)Financial leverage c)combined leverage d)all 97)Good will is a ________ item in cash from operations statement while preparing cash flow statement a)non cash income b)non cah expense c)cash d)none 98)Work in process forms part of a)inventory management b)balance sheet c)cash flow analysis d)fund flow analysis 99)cash-rawmaterials-work in process-finished goods-cash, this is called a)working cycle b)operating cycle c)manufacturing cycle d)capital cycle 100)SEBI was established on (c) (b) (a) (a)

a)APR 12,1977 b)APR15,1988 c)APR,12,1988 d)APR 15,1988