1.
On the recommendations of the
Finance Manager, the board of directors will accept the project if-----
a)
Benefit Cost Ratio is less than
one
b)
Net Present Value is greater than zero
c)
Internal Rate of Return is less
than cost of capital
d)
Pay Back Period is greater than
target period
2.
Identify from the following
statements , one statement which is not concerning to market analysis-----
a)
Production possibilities and
constraints
b)
Consumer behaviour, intentions,
motivations, attitudes, preferences and requirements
c)
Extent of competition and
market share
d)
Suitability of production process
3. From
the following sources of finance , find out the free source of finance-----
a)
Equity Capital
b)
Preference Capital
c)
Retained Earnings
d)
None of the above
4
From the following information,
compute the operating cycle of LMP Ltd.-No of days the raw material remain in
stock is 60 days, suppliers credit available for 15 days, production time 15
days, finished goods inventory period 15
days, realization from customers takes 25 days. The operating cycle therefore
would be-----
a)
115 days
b)
100 days
c)
75 days
d)
85 days
5
If the fixed and variable cost
at 50% production capacity are Rs.20000 and Rs.30000, respectively, the total cost at 70% capacity will be-----
a)
Rs.50000
b)
Rs.62000
c)
Rs.70000
d)
Rs.58000
6.
Commercial paper , is an short
term usance promissory note with fixed maturity period , issued by-----
a)
Corporates & primary
dealers
b)
All India
c)
(a) and (b) above
d)
None of the above
7.
Surabhi Enterprises has given
you the following information. The Re-order level 4000 units, minimum usage 300
units per week, minimum lead time 2 weeks and re-ordering quantity 2000 units.
The maximum stock level of Surabhi
Enterprises should be-----
a)
1900 units
b)
5400 units
c)
2900 units
d)
4000 units
7.
Susheel Hightech Ltd. are selling designer furniture to top
customers. There is no direct competition for their product. They are
negotiating a big order from one wealthy business magnate. While giving the
quotation they should follow ------
a.
conversions cost pricing method
b.
market based pricing
c.
marginal cost pricing
d.
full cost pricing
8.
Under cash budget system
method, working capital is determined by -----
a)
ascertaining level of current
assets
b)
ascertaining level of current
liabilities
c)
finding cash gap after taking in to account projected cash inflows and
outflows
d)
all of the above
9.
IRR is calculated for one of
the following purposes-----
a)
Working capital finance
b)
Pre-shipment finance
c)
Project finance
d)
Post shipment finance
10 Actual Sales minus Break Even Sales means-----
a)
Profit on sales
b)
Margin of safety sales
c)
Loss on sales
d)
Sales at which no profit or no
loss is resulted
11 Conversion
cost is calculated on the basis of following formula-----
a)
Direct Material plus Direct Labour
b)
Direct Material plus total overheads
c)
Direct Labour plus direct
overheads
d)
Direct Material plus
Administrative Cost
12 Under
which method, the cost s are classified under fixed and variable cost and only
variable costs are charged to products while fixed cost are written off to
Profit and Loss Account.
a.
standard costing
b.
Marginal Costing
c.
Absorption costing
d.
Job costing
13 The following
statements are pertaining to Letter of Credit (LC). One of the statements is
wrong. Choose the wrong statement
a.
All letters of credit in India
b.
The provisions of UCPDC have the
status of law
c.
The parties to a LC bind
themselves to UCPDC provisions by specifically agreeing to do.
d.
The UCPDC provisions help to
arrive at unambiguous interpretation of terms used in LC
15) Which of the following is not part of
working capital management?
(a)
credit period to buyers
(b)
proportion of current assets to
be financed by long term debt
(c)
dividend payout
(d)
cash credit limit
16)
In an operating cycle which of the following is not there
(a)
acquisition of raw material
(b)
acquisition of power
(c)
acquisition of consumables
(d)
conversion of raw material into
work-in-progress
17)
A low current assets ratio implies one of the following
(a)
greater liquidity & lower
risk
(b)
poor liquidity & higher risk
(c)
greater liquidity & greater
risk
(d)
poor liquidity & lower risk
(a)
19. Financing
temporary current assets with short term finance and permanent current assets
with long term finance refers to
(a)
matching approach
(b)
conservative approach
(c)
casual approach
(d)
conservative approach
23) The formula
for Economic Order Quantity(EOQ) is------ ( A= stock usage, C = cost of
ordering, H= cost for holding stock per unit)
a)
√2AC/H
b)
√2ACH
c)
√2CH/A
d)
√AH/2C
24) If a buyer of goods gets a discount of
1.5% on a supply of Rs. 100 , if the amount is paid within 10 days where the
normal credit period is 50 days. What is the annualized benefit to the buyer if
he pays within 10 days.
a)
12.75%
b)
13.69%
c)
14.21%
d)
13.65%
25)which of the
following is not a risk involved in
carrying inventory
a)
obsolescence of the product
b)
physical deterioration in the
goods
c)
price fluctuation in the
product
d)
increase in the price of raw material
26) Factoring
means
e)
another entity buys your debts
f)
another entity buys your
credits
g)
another entity loans an amount
to you
h)
none of the above
Question 1:
GHI Ltd. manufacturers two products
:Product G and Product H. The Variable cost of the manufacture is as follows:
Product G
|
Product H
|
|
Direct Material
|
3
|
10
|
Direct Labour (Rs.6 per hour)
|
18
|
12
|
Variable Overhead
|
4
|
4
|
Product G sells for Rs.40 and Product H at
Rs.30. During the month of January, the
Company is having only 21000 of direct labour. The maximum production capacity
of Product G is 5000 units and Product H is 10000 units.
From the above facts, answer the following:
I.
The contribution from Product G
and H together is-----
a)
Rs.32
b)
Rs.19
c)
Rs.27
d)
Rs.40
II.
The contribution per labour
hour from Product H is-----
e)
Rs. 4
f)
Rs. 2
g)
Rs. 3
h)
Rs. 5
III.
The contribution per labour
hour from Product G is-----
a)
Rs.2
b)
Rs.5
c)
Rs.15
d)
Rs.3
IV.
The company can maximize profit
if it can choose one of the following combination
e)
Product G- 3500 units and
Product H -5250 units
f)
Product G- 5000 units and
Product H -3000 units
g)
Product G- 4500 units and Product H -6000 units
h)
Product G- 4000 units and
Product H -4500 units
Question 2:
A Company producing a single product sells
it at Rs. 100 each. The marginal cost of production is Rs.60 each and fixed
cost is Rs.40000. Answer the following questions from this information:
I.
The amount of sales to earn a
profit of Rs.50000
a)
Rs.225000
b)
Rs.125000
c)
Rs.500000
d)
Rs.90000
II The new break
even sales if sales price is reduced by 10%
a)
Rs.100000
b)
Rs.120000
c)
Rs.90000
d)
Rs.110000
Question 3:
Three Investment projects have the
following net cash flows. Decide which of them should be accepted using the
payback period method.
YEAR
|
PROJECT A
|
PROJECT B
|
PROJECT C
|
Project D
|
0
|
(10000)
|
(15000)
|
(20000)
|
(30000)
|
1
|
5000
|
5000
|
10000
|
0
|
2
|
5004
|
5000
|
10000
|
0
|
3
|
20000
|
5000
|
4000
|
100000
|
4
|
1000
|
10000
|
2000
|
120000
|
5
|
-
|
5000
|
-
|
60000
|
a)
Project D
b)
Project A
c)
Project C
d)
Project B
Question 4:
The cash flow in
respect of two projects is given below. The cost of capital is 12% , the
discount factor of 12% is also given.
Year
|
Project A
|
Project B
|
Discount
Factor @ 12%
|
Discount
Factor @ 16%
|
0
|
(200)
|
(300)
|
1
|
1
|
1
|
60
|
100
|
0.8929
|
0.8620
|
2
|
60
|
100
|
0.7972
|
0.7431
|
3
|
60
|
90
|
0.7118
|
0.6406
|
4
|
60
|
70
|
0.6355
|
0.5522
|
5
|
60
|
70
|
0.5674
|
0.4761
|
Answer the
following question using the above information.
I What is the NPV of Project A (in
Rs.)
a)
216.29
b)
16.29
c)
200
d)
182.24
II What is the NPV of Project B (in
Rs.)
a)
260.28
b)
300
c)
17.27
d)
71
III What is the Profitability Index of
Project A
a)
1.30
b)
1.08
c)
1
d)
0.91
IV What is the Profitability Index of
Project B
a)
0.86
b)
1
c)
1.06
d)
1.23
V What is IRR of Project A
a)
15.24%
b)
14.24%
c)
16.24%
d)
14.50%
Question 5:
The following is
the information of XYZ Ltd for last 2 years (Rs. in Lakh).
2005
|
2004
|
Difference
|
|
Profit before
Tax
|
68
|
83
|
|
Tax
|
34
|
41
|
|
Profit after
Tax
|
34
|
42
|
|
Dividends
|
28
|
27
|
1
|
Retained
Earnings
|
6
|
15
|
( 9 )
|
How the above
information is shown in the cash flow statement-----
a)
At the sources column Rs.34 Lakh will be shown on account of Profit from operations and on uses column
dividend payment of Rs. 28 Lakh will be
shown
b)
At the sources column Rs.6 Lakh
will be shown on account of Profit from
operations and on uses column nothing is shown
c)
At the sources column nothing
is shown on account of Profit from
operations and on uses column Rs.9 Lakh
is shown
d)
At the sources column nothing
is shown on account of Profit from
operations and on uses column Rs.8 Lakh
is shown
CASELET
Read the following and answer
Cost /
unit
Raw material 50
Direct labour 20
Overheads 40
Total cost 110
No. of units 10,000
No. of units
Sold on credit 8000
Average raw material in stock : 1 month
Average work in progress
: ½ month
Average finished
goods in stock : ½ month
Credit by supplier
: 1 month
Credit to debtor : 2 months
Take 1 year = 12 months
20) Investment of working capital in raw
material inventory is
(a)
41666
(b)
50000
(c)
33333
(d)
10000
21) Investment in working capital for
finished goods is
a) 45833
b) 49090
c) 56453
d) 50000
22)current assets in respect of debtors
a)
174541
b)
146666
c)
152500
d)
154326
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