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Multiple Choice Multiple Answer Question Due to diversification employees seek:Correct Answer Higher compensation , Job security , Better opportunities within the firm Your Answer Higher compensation , Job security , Better opportunities within the firm Select The Blank Question A geographical segment cannot be ________. Correct Answer Countries in different zones Your Answer A single country Select The Blank Question A shareholder expects a higher rate of return as a firm's compensation for ________. Correct Answer Increased risk Your Answer Increased risk Multiple Choice Single Answer Question Most companies focus only on :Correct Answer Return on investment Your Answer Return on investment 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 Your Answer A good or a right that a firm owns in a determined moment , Prepayment adjustments , Capitalized expenses Multiple Choice Multiple Answer Question In the disclosures in financial statements, there are significant restrictions on :Correct Answer The right of ownership , Reliability of investments , The remittance of income & proceeds of disposal Your Answer The right of ownership , The remittance of income & proceeds of disposal , Other disclosures Multiple Choice Single Answer Question Equity includes :Correct Answer Development Rebate Reserve Your Answer Deferred Payment Liabilities Match The Following Question Correct Answer

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Your Answer Free cash flow theory Enormous conflicts of interest between Stakeholders and shareholders Enormous conflicts of interest between Stakeholders and shareholders Net income approach Cost of debt & equity do not change with a change in leverage ratio Cost of debt & equity do not change with a change in leverage ratio Net operating income approach The overall capitalization rate remains constant for all levels of financial leverages The overall capitalization rate remains constant for all levels of financial leverages Modigliani - Miller Theory weighted average cost of capital does not change with a change in the proportion of debt to equity in the capital structure weighted average cost of capital does not change with a change in the proportion of debt to equity in the capital structure True/False Question Organisational changes are similar to mission changes. Correct Answer True Your Answer True Multiple Choice Single Answer Question Which of the following is NOT A Characteristic of declining firm :Correct Answer The optimum payout ratio for a declining firm is not 100 % Your Answer The firm should not reinvest any profits Select The Blank Question A company shall buyback its shares through the stock exchange by making a public announcement at least ________ days prior to the commencement of buyback. Correct Answer Seven Your Answer Fourteen True/False Question Money becomes less valuable when received at a latter stage instead of in present time. Correct Answer True Your Answer True Select The Blank Question The resource theory considers that the competitive position of a firm depends on its ________ Assets. Correct Answer Specific Your Answer Intangible Multiple Choice Multiple Answer Question

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A firm having aggressive policy of investing in current assets will show the following features :Correct Answer Frequent production stoppages , High ROI Your Answer Frequent production stoppages , High ROI , Timely deliveries to customer True/False Question Making decision on dividend is a very crucial area of financial management for a firm. Correct Answer True Your Answer True Multiple Choice Single Answer Question Segment reporting comes under :Correct Answer AS 17 Your Answer AS 17 True/False Question Usually cost data is perfect for ABC Analysis & distribution. Correct Answer False Your Answer False Multiple Choice Single Answer Question As per Pecking order theory, which is the costliest means of funding :Correct Answer Equity Shares Your Answer Equity Shares Match The Following Question Correct Answer Your Answer Mechanisms Performs or provides energy to an activity Performs or provides energy to an activity Inputs Information or material used to produce the output of an activity Information or material used to produce the output of an activity Controls Information or material that constrains an activity Information or material that constrains an activity Outputs Information or material produced by an activity Information or material produced by an activity True/False Question According to NOI Approach, any capital structure is optimum. Correct Answer

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True Your Answer True Select The Blank Question The ________ often gives the best insight into the borrower's short term credit needs. Correct Answer Cash budget Your Answer Market research Select The Blank Question If firms have same technology ________ makes the difference i.e. firms become more productive . Correct Answer Solid human resource team Your Answer Latest & updated techniques True/False Question Explicit cost and implicit cost are the two parts of cost of debt. Correct Answer True Your Answer True Select The Blank Question If a segment is not designated as a ________ it should be included as an unallocated reconciling item. Correct Answer Reportable segment Your Answer Business segment Multiple Choice Single Answer Question Research into true human resources accounting began in :Correct Answer 1960`s Your Answer 1960`s Select The Blank Question Increase in cost of capital means decrease in ________. Correct Answer Profitability Your Answer Expected returns True/False Question According to NI Approach, decrease in leverage decreases the overall cost of capital and increases the firm's value. Correct Answer False Your Answer

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True Multiple Choice Multiple Answer Question Accrued expenses represent :Correct Answer Costless financing , An interest free source of financing Your Answer Costless financing , An interest free source of financing Multiple Choice Multiple Answer Question The direct costs tier normally only includes the following :Correct Answer The personnel payroll , Supplies , Individual rental equipment Your Answer The personnel payroll , Supplies , Individual rental equipment Multiple Choice Single Answer Question Fixed price tender offers are accompanied by an abnormal announcement period return of :Correct Answer 8 - 10 % Your Answer 6-8% Multiple Choice Single Answer Question Many companies claim their main assets are their :Correct Answer People Your Answer Land Multiple Choice Multiple Answer Question The main assumptions for stock repurchase models are as follows :Correct Answer The market is efficient , There is perfect competition in the securities market Your Answer The market is efficient , There is perfect competition in the securities market , Investors are not very keen to maximize the value of their investment Multiple Choice Single Answer Question The Buy back of shares shall not be made from Correct Answer The promoters or persons in control of the company Your Answer The promoters or persons in control of the company True/False Question Opportunity costs and real costs decrease the market value of a firm. Correct Answer True Your Answer False

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True/False Question Retained earnings are the most important internal sources of financing the growth of the firm. Correct Answer True Your Answer True True/False Question The chance of bankruptcy is small when the leverage of a firm is small. Correct Answer True Your Answer True Multiple Choice Multiple Answer Question Examples of accounting methods used by firm are :Correct Answer FIFO , LIFO , Accrual Accounting Your Answer FIFO , LIFO , Overhead calculations Multiple Choice Single Answer Question For the following process the valuation is needed to decide the price at which the deal will be possibly concluded :Correct Answer Mergers & Acquisitions Your Answer Computation of wealth tax & gift tax True/False Question Diversification helps in preserving a firm's reputation & goodwill. Correct Answer True Your Answer True Multiple Choice Single Answer Question According to Net Income Approach, the average cost of capital declines as the leverage ratio :Correct Answer Increases Your Answer Increases True/False Question Whether a lease is a finance lease or an operating lease depends on the substance of the transaction rather than its form. Correct Answer False Your Answer True Select The Blank

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Question Forfeiting is mostly used for ________. Correct Answer Big ticket items & durable goods Your Answer Big ticket items & durable goods Multiple Choice Multiple Answer Question The financial framework of a merger decision covers 3 interrelated aspects i.e. :Correct Answer Determining the firm's value , Financing techniques in mergers , Analysis of merger as a capital budgeting decision Your Answer Determining the firm's value , Financing techniques in mergers , Analysis of merger as a capital budgeting decision True/False Question For determining exchange ratio, the model developed by Conn & Nielson is used. Correct Answer True Your Answer True 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 Your Answer Debt and equity are the 2 kinds of funds used by the firm Select The Blank Question ________ are not diversible. Correct Answer Market related risks Your Answer Market related risks Multiple Choice Multiple Answer Question The financial managers of a company consume a great deal of their time in activities like :Correct Answer Monitoring the investment in inventories , Negotiating favourable credit terms , Administrating Accounts receivables Your Answer Monitoring the investment in inventories , Negotiating favourable credit terms , Administrating Accounts receivables LIST OF ATTEMPTED QUESTIONS AND ANSWERS

Multiple Choice Multiple Answer Question The different types of floats are :-

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Correct Answer Postal float , Deposit float , Bank float Your Answer Postal float , Deposit float , Bank float Multiple Choice Single Answer Question A low payout policy implies :Correct Answer More retention of profits Your Answer More retention of profits True/False Question optimum cash balance under certainty i.e. Baumul`s model allows the cash flow to fluctuate. Correct Answer False Your Answer True Multiple Choice Single Answer Question Companies often need to value its own :Correct Answer Shares Your Answer Liabilities Select The Blank Question Postage is an example of ________ cost. Correct Answer Non traceable cost Your Answer Non traceable cost Multiple Choice Single Answer Question Value added analysis :Correct Answer Helps to identify potential activities that may be omitted immediately Your Answer Helps to identify potential activities that may be omitted immediately Multiple Choice Multiple Answer Question Intangible assets include :Correct Answer Preliminary expenses , Deferred revenue expenditure , Discount on issues of shares / debenture etc Your Answer Preliminary expenses , Deferred revenue expenditure , Discount on issues of shares / debenture etc Multiple Choice Single Answer Question The Management of the Company may enter into a negotiated purchase, which is referred to as :Correct Answer Greenfield Your Answer

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Forward Contracts Multiple Choice Single Answer Question If the segment result of a segment includes interest expense its segment liabilities include :Correct Answer The related interest bearing liabilities Your Answer The related interest bearing liabilities Select The Blank Question As per NOI Approach - the overall capitalization rate remains ________ for all levels of financial leverage. Correct Answer Constant Your Answer Constant Match The Following Question Correct Answer Your Answer Exit cost Lost efficiency prior to separation, Job vacancy cost during the new search & termination pay. Lost efficiency prior to separation, Job vacancy cost during the new search & termination pay. Historical costs Sacrifice necessary to hire & train people Sacrifice necessary to hire & train people Substitution cost Exit costs of the leaving employee & recruiting & training of the replacement Exit costs of the leaving employee & recruiting & training of the replacement Opportunity cost An asset value when they are the target of an alternative use. An asset value when they are the target of an alternative use. Multiple Choice Single Answer Question Suppliers of equity are interested in :Correct Answer High share prices Your Answer High share prices Multiple Choice Multiple Answer Question The 3 groups of participants in a firm are :Correct Answer Suppliers of equity , Debt suppliers , Firm Managers Your Answer Suppliers of equity , Debt suppliers , Firm Managers True/False Question It is possible to place a single value for the acquired firm. Correct Answer False Your Answer True

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Select The Blank Question ________ is never a part of the output. Correct Answer Mechanisms Your Answer Mechanisms 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 Your Answer Recruiting new employee as a replacement of the left employee , Lost efficiency prior to separation , Termination pay True/False Question A transport corporation has a substantial working capital requirement. Correct Answer False Your Answer True Select The Blank Question ________ know the best about a firm's performance. Correct Answer Firm Managers Your Answer Business analysts Multiple Choice Multiple Answer Question As per AS 13 Statement, the following are not considered as investments:Correct Answer Shares , Debentures , Other securities held as stock in trade Your Answer Shares , Debentures , Other securities held as stock in trade Multiple Choice Multiple Answer Question The employer in offering the job contract assumes a range of legal obligations such as :Correct Answer Rewards - cash like & non cash like , Health & safety policies , Pensions & contributions to social security payments Your Answer Rewards - cash like & non cash like , Health & safety policies , Pensions & contributions to social security payments True/False Question It is essential that ABC must fit into the strategy of the company. Correct Answer True Your Answer False

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True/False Question Trade credit creates book debts which the firm is expected to collect in the near future. Correct Answer True Your Answer True Select The Blank Question At times managers invest in projects that improve the company's ________. Correct Answer Prestige or power Your Answer Prestige or power Select The Blank Question Business risk & financial risk do not have any influence on ________. Correct Answer Accounting numbers Your Answer Banks True/False Question The objective of a dividend policy should be to maximize shareholder's return so that the value of his investment is maximized. Correct Answer False Your Answer True True/False Question A change in the method of depreciation is treated as a change in an accounting policy and is disclosed accordingly. Correct Answer True Your Answer True Select The Blank Question ________ is not a characteristic of financial conglomerates. Correct Answer Provide ineffective competitive process Your Answer Provide ineffective competitive process Select The Blank Question There is a ________ relationship between the number of employees & the use of operating supplies. Correct Answer Natural Your Answer Natural Multiple Choice Single Answer

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Question If a firm opts for restrictive policy then the investments in current assets is :Correct Answer Low Your Answer Low Match The Following Question Correct Answer Your Answer AS 17 Segment reporting Segment reporting AS 19 Leases Leases AS 6 Depreciation accounting Depreciation accounting AS 10 Accounting for fixed assets Revenue recognition True/False Question To `gather costs', means capturing all relevant expenses that pertain to the selected model and processes. Correct Answer True Your Answer True 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 Your Answer Fixed deposits of a company Multiple Choice Multiple Answer Question For ABC Analysis the available cost data :Correct Answer Has to be adjusted for change , Has to be corrected for undocumented element costs , Has to be combined with different types of data from alternate sources Your Answer Has to be adjusted for change , Has to be corrected for undocumented element costs , Has to be combined with different types of data from alternate sources Multiple Choice Multiple Answer Question The external staffing performance indicators include :Correct Answer Compensation per Re. Profit , Personnel services head count , Profit per head Your Answer Compensation per Re. Profit , Personnel services head count , Profit per head Select The Blank

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Question HLL the largest FMCG company has a turnover of Rs. ________. Correct Answer 118 Bn Your Answer 118 Bn Select The Blank Question Segment expense includes ________. Correct Answer The relevant portion of enterprise revenue that can be allocated on a reasonable basis to a segment Your Answer The relevant portion of enterprise revenue that can be allocated on a reasonable basis to a segment Multiple Choice Multiple Answer Question The important aspect of dividend policy is :Correct Answer To determine the amount of earnings to be distributed to shareholders , Amount to be retained in the firm Your Answer To determine the amount of earnings to be distributed to shareholders , Amount to be retained in the firm , To dispatch the dividend warrants in time Select The Blank Question In today's fast moving world, the quickest way to get information on a firm is through ________. Correct Answer Internet Your Answer Internet Multiple Choice Multiple Answer Question The main characteristics of operating economies are :Correct Answer It is achieved through horizontal, vertical and conglomerate mergers , It occurs due to indivisibilities of resources , It is possible in generic management functions Your Answer It is achieved through horizontal, vertical and conglomerate mergers , It occurs due to indivisibilities of resources , It is possible in generic management functions Multiple Choice Single Answer Question Segment liabilities do not include :Correct Answer Borrowings & other liabilities that are incurred for financing rather than operating purpose Your Answer Borrowings & other liabilities that are incurred for financing rather than operating purpose Multiple Choice Single Answer Question Which of the following company is reaping high market valuation due to showing human resources as an asset in its balance sheet information? Correct Answer Infosys Your Answer Infosys

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True/False Question In market value approach, interested parties never manipulate the stock markets. Correct Answer False Your Answer False Multiple Choice Single Answer Question The stock value for a company will be considered to be fair value for ordinary transactions if the shares are :Correct Answer Listed Your Answer Listed True/False Question Planning helps an acquiring firm to identify the units it should drop & it should add. Correct Answer True Your Answer True Multiple Choice Single Answer Question For paying dividends, firms will have a given amount of :Correct Answer Cash available Your Answer Cash available Multiple Choice Single Answer Question The depreciation rates or the useful lives of the assets are disclosed only :Correct Answer If they are different from the principle rates specified in the statute Your Answer If specifically asked by the Chartered accountant of the company Select The Blank Question Earning power of the company approach tries to value the ________. Correct Answer Current value of the assets Your Answer Current value of the assets at 4:55 AM 1 comments Links to this post Labels: Strategic Finance Strategic Finance - 1 LIST OF ATTEMPTED QUESTIONS AND ANSWERS

Multiple Choice Single Answer

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Question One of the selective developments that has taken place in recent times is companies are going in for :Correct Answer Activity based costing and management Your Answer Activity based costing and management True/False Question Diversification helps in preserving a firm's reputation & goodwill. Correct Answer True Your Answer True True/False Question Cash dividends are taxable at ordinary tax rates. Correct Answer True Your Answer True Multiple Choice Multiple Answer Question The 3 groups of participants in a firm are :Correct Answer Suppliers of equity , Debt suppliers , Firm Managers Your Answer Suppliers of equity , Debt suppliers , Firm Managers Multiple Choice Multiple Answer Question As per AS 13 Statement, the following are not considered as investments:Correct Answer Shares , Debentures , Other securities held as stock in trade Your Answer Shares , Debentures , Other securities held as stock in trade Match The Following Question Correct Answer Your Answer Opportunity cost An asset value when they are the target of an alternative use. An asset value when they are the target of an alternative use. Exit cost Lost efficiency prior to separation, Job vacancy cost during the new search & termination pay. Lost efficiency prior to separation, Job vacancy cost during the new search & termination pay. Historical costs Sacrifice necessary to hire & train people Sacrifice necessary to hire & train people Substitution cost Exit costs of the leaving employee & recruiting & training of the replacement Exit costs of the leaving employee & recruiting & training of the replacement Multiple Choice Multiple Answer Question The acquiring firm for any M & A will require data about the target firm which will include :-

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Correct Answer Quality of management , Production capabilities , Profitability Your Answer Quality of management , Production capabilities , Profitability Multiple Choice Single Answer Question Equity includes :Correct Answer Development Rebate Reserve Your Answer Development Rebate Reserve Match The Following Question Correct Answer Your Answer Free cash flow theory Enormous conflicts of interest between Stakeholders and shareholders Enormous conflicts of interest between Stakeholders and shareholders Net income approach Cost of debt & equity do not change with a change in leverage ratio Cost of debt & equity do not change with a change in leverage ratio Net operating income approach The overall capitalization rate remains constant for all levels of financial leverages The overall capitalization rate remains constant for all levels of financial leverages Modigliani - Miller Theory weighted average cost of capital does not change with a change in the proportion of debt to equity in the capital structure weighted average cost of capital does not change with a change in the proportion of debt to equity in the capital structure Select The Blank Question If a segment is not designated as a ________ it should be included as an unallocated reconciling item. Correct Answer Reportable segment Your Answer Reportable segment True/False Question For determining exchange ratio, the model developed by Conn & Nielson is used. Correct Answer True Your Answer True Select The Blank Question In presenting the reconciliation segment result should be reconciled to ________. Correct Answer Enterprise net profit or loss Your Answer Enterprise net profit or loss Select The Blank Question Identify disclosure on human resources as a societal concern & prepare international regulations comes

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under ________ Correct Answer The compulsory method Your Answer The compulsory method 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 Your Answer Regenerative natural resources True/False Question It is essential that ABC must fit into the strategy of the company. Correct Answer True Your Answer True Select The Blank Question HLL the largest FMCG company has a turnover of Rs. ________. Correct Answer 118 Bn Your Answer 118 Bn Select The Blank Question There is a ________ relationship between the number of employees & the use of operating supplies. Correct Answer Natural Your Answer Natural Multiple Choice Multiple Answer Question The important aspect of dividend policy is :Correct Answer To determine the amount of earnings to be distributed to shareholders , Amount to be retained in the firm Your Answer To determine the amount of earnings to be distributed to shareholders , Amount to be retained in the firm Multiple Choice Multiple Answer Question The main characteristics of CAPM are :Correct Answer It is an equilibrium Model , It describes the pricing of assets as well as derivatives , Expected security return = Riskless return + beta x (expected market risk premium) Your Answer It is an equilibrium Model , It describes the pricing of assets as well as derivatives , Expected security return = Riskless return + beta x (expected market risk premium) True/False Question Current accounting system is able to provide actual value of employee capabilities & knowledge.

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Correct Answer False Your Answer False Multiple Choice Single Answer Question In respect of depreciable assets, which do not have material value, depreciation is often allocated :Correct Answer Fully in the accounting period for which they are acquired Your Answer Fully in the accounting period for which they are acquired Multiple Choice Single Answer Question The depreciation rates or the useful lives of the assets are disclosed only :Correct Answer If they are different from the principle rates specified in the statute Your Answer If they are different from the principle rates specified in the statute Multiple Choice Multiple Answer Question Due to diversification employees seek:Correct Answer Job security , Better opportunities within the firm , Higher compensation Your Answer Job security , Better opportunities within the firm , Higher compensation Select The Blank Question The ________ cost tier has the advantage of being the simplest to calculate and justify. Correct Answer Direct Your Answer Direct Multiple Choice Multiple Answer Question To gather costs means to do the following actions to support the costing of the activities :Correct Answer To capture , To construct , To synthesize the correct cost figures Your Answer To capture , To construct , To synthesize the correct cost figures True/False Question Odd lots purchase is not a method of buy back of shares. Correct Answer False Your Answer False Multiple Choice Multiple Answer Question The overhead expenses include :Correct Answer Utilities , Maintenance , Security Your Answer

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Utilities , Maintenance , Security Multiple Choice Single Answer Question In a matching approach policy, :Correct Answer There is a small risk if shortage of funds Your Answer There is a small risk if shortage of funds Multiple Choice Single Answer Question The most important internal sources of financing the growth of the firm is through :Correct Answer Retained earnings Your Answer Retained earnings True/False Question The intellectual assets of a company are often worth 3 or 4 times the tangible book value. Correct Answer True Your Answer True Multiple Choice Multiple Answer Question Indicators of the value of an investment are obtained by :Correct Answer Reference to its market value , The investee`s assets , The expected cash flows from the investment Your Answer Reference to its market value , The investee`s assets , The expected cash flows from the investment Select The Blank Question Buy back through book building the process should be made through ________. Correct Answer An electronically linked transparent facility Your Answer An electronically linked transparent facility Multiple Choice Multiple Answer Question Significant influence is the power to :Correct Answer Participate in the operating policy decisions , Participate in the financial decisions Your Answer Participate in the financial decisions , Participate in the operating policy decisions True/False Question An activity model is a tool to assist in understanding & defining the organisation. Correct Answer True Your Answer True True/False

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Question Decisions related to working capital are repetitive & frequent. Correct Answer True Your Answer True Select The Blank Question ________ is not a characteristic of financial conglomerates. Correct Answer Provide ineffective competitive process Your Answer Provide ineffective competitive process Multiple Choice Single Answer Question In the past, costing mainly focused on :Correct Answer Manufacturing costs Your Answer Manufacturing costs Multiple Choice Multiple Answer Question A firm using a conservative policy for determining the requirements of current assets :Correct Answer Has fewer production stoppages , Ensures quick deliveries to customers , Stimulates sales Your Answer Has fewer production stoppages , Ensures quick deliveries to customers , Stimulates sales 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 Your 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 Segment liabilities do not include :Correct Answer Borrowings & other liabilities that are incurred for financing rather than operating purpose Your Answer Borrowings & other liabilities that are incurred for financing rather than operating purpose Multiple Choice Single Answer Question The difference between current assets & current liabilities is known as :Correct Answer Net working capital Your Answer Net working capital

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Multiple Choice Single Answer Question The bottom line of ABC Process is :Correct Answer To achieve a better method of doing the right business pf the organisation Your Answer To achieve a better method of doing the right business pf the organisation Select The Blank Question Non value added activities helps ________. Correct Answer To analyse the activities more carefully Your Answer To analyse the activities more carefully Multiple Choice Single Answer Question In value of assets method the following is also to be included as they are also of value to the company :Correct Answer Non trading assets Your Answer Non trading assets Multiple Choice Single Answer Question Best practices, a tool for review process is similar to :Correct Answer Bench marking Your Answer Bench marking Select The Blank Question HLL is ________ % of subsidiary of Unilever PLC. Correct Answer 0.516 Your Answer 0.516 Select The Blank Question traditionally avails are provided by ________. Correct Answer Banks Your Answer Banks Multiple Choice Single Answer Question A quantity discount is offered :Correct Answer On large shipments Your Answer On large shipments Multiple Choice Multiple Answer Question Indicators of the value of an investment are obtained by :Correct Answer Reference to its market value , The investee`s assets , The expected cash flows from the investment Your Answer The expected cash flows from the investment , Current investment valuation , The investee`s assets

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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 Your Answer Convertible securities True/False Question The activity model is normally created by an activity Accountant. Correct Answer False Your 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 Your Answer Through any subsidiary company , Through any investment company , If a company defaults in repayment of deposits or interest due thereon Select The Blank Question If the segment result of a segment includes interest or dividend income its segment assets will not include ________. Correct Answer Payables Your Answer Related receivables Select The Blank Question Forward or backward integration is a characteristic of ________. Correct Answer Vertical Mergers Your Answer Horizontal Mergers Multiple Choice Single Answer Question Modigliani - Miller Theoram is based on :Correct Answer Perfect Capital Markets Your Answer Perfect Capital Markets True/False Question Value based approach of HRA tracking can be divided into 2 categories - Non - monetary & monetary. Correct Answer True Your Answer False Select The Blank Question During the costing process, we look at ________. Correct Answer Resource consumption Your Answer Resource consumption Multiple Choice Multiple Answer Question For accounting standard (AS) 27, Significant influence may be gained by :Correct Answer Share ownership , Statute , Agreement Your Answer Share ownership , Statute , Agreement 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 Your Answer A good or a right that a firm owns in a determined moment , Capitalized expenses

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Multiple Choice Single Answer Question Deferred payment plan is also known as:Correct Answer Earn out plan Your Answer Earn out plan True/False Question There are few methods of allocating depreciation over the useful life of an assets. Correct Answer False Your Answer True Select The Blank Question Market approach is used for companies whose shares are ________ on the Stock market. Correct Answer Listed Your Answer Listed Multiple Choice Multiple Answer Question Operating economies of scale are achieved through the following mergers :Correct Answer Horizontal , Vertical , Conglomerate Your Answer Horizontal , Vertical , Financial Multiple Choice Single Answer Question Tender offers can be afforded by firms with :Correct Answer A large amount of financial Slack Your Answer A large amount of financial Slack Multiple Choice Single Answer Question The following method of valuation is used for listed companies that have an active market for their shares :Correct Answer Market value approach Your Answer Market value approach Select The Blank Question According to Altman (1984) total costs in percentage of the market value of a firm range between ________ Correct Answer 12.1 % & 16.7 % Your Answer 12.1 % & 16.7 % Multiple Choice Single Answer Question Conservative policy for determining the requirements of current assets is also known as :Correct Answer Flexible policy Your Answer Aggressive policy Multiple Choice Single Answer Question Yield or earning approach method of valuation uses :Correct Answer Price to earnings ratio Your Answer Price to earnings ratio Multiple Choice Multiple Answer Question The main categories of organisational elements are :Correct Answer Managerial , Support , Operational Your Answer Managerial , Partly functional , Operational Select The Blank Question The ________ cost tier has the advantage of being the simplest to calculate and justify. Correct Answer Direct Your Answer Direct Multiple Choice Multiple Answer Question The existence of significant influence by an investor is usually evidenced in the following ways :Correct Answer Participation in policy making processes , Material transactions between the investor & the investee , Interchange of managerial personnel Your Answer Participation in policy making processes , Material transactions

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between the investor & the investee , Interchange of managerial personnel Multiple Choice Single Answer Question Free Reserves is a component of :Correct Answer Equity Your Answer Equity Match The Following Question Correct Answer Your Answer Sentiments and rumours No fundamental basis. No effect on valuation Unlisted shares on stock exchange Difficult to estimate the price Invalid valuation of shares Manipulation of stock markets Invalid valuation of shares Easy to estimate the price Selective information Valuation by various people on information available Valuation by various people on information available True/False Question Only firms with a large amount of financial slack can afford tender offers. Correct Answer True Your Answer True Select The Blank Question Buy back through book building the process should be made through ________. Correct Answer An electronically linked transparent facility Your Answer Through brokers Multiple Choice Multiple Answer Question For M & As, the acquiring firm needs industry data on :Correct Answer Market growth , Nature of competition , Degree of regulation Your Answer Market growth , Marketing capabilities , Nature of competition True/False Question The chance of bankruptcy is small when the leverage of a firm is small. Correct Answer True Your Answer False True/False Question A change in the method of depreciation is treated as a change in an accounting policy and is disclosed accordingly. Correct Answer True Your Answer True Select The Blank Question Economies of scale arises with increase in volume of production leading to________. Correct Answer Reduction in the cost of production Your Answer Reduction in the cost of production True/False Question Arbitrage process implies that security cannot sell at different prices. Correct Answer True Your Answer True Select The Blank Question Capital gains are taxed at ________.

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Correct Answer Preferentially lower rate Your Answer Acquisition price Multiple Choice Single Answer Question Net period - no cash discount means :Correct Answer The seller only specifies the time period allowed for the payment Your Answer Cash on delivery of goods True/False Question A long term investment is an investment other than a current investment. Correct Answer True Your Answer True Multiple Choice Single Answer Question Accounting standards (AS - 17) has come into effect in respect of accounting periods commencing :Correct Answer On or after 01.04.2001 Your Answer Prior to 01.04.2001 True/False Question Accounting standards (AS - 13) is now mandatory. Correct Answer True Your Answer True Multiple Choice Multiple Answer Question Valuation methods are highly specific to the following for doing the valuation :Correct Answer To the person , To the firm , To the Consultant Your Answer To the person , To the firm , To the Consultant Select The Blank Question ________ Assets in the balance sheet are normally excluded from the value of total assets. Correct Answer Intangible Your Answer Tangible Multiple Choice Multiple Answer Question The budgetary records are useful for:Correct Answer Validating accounting costs , Providing a rationale for division of costs , Replacing missing data Your Answer Validating accounting costs , Allocating indirect costs into different cost centres , Providing a rationale for division of costs Multiple Choice Multiple Answer Question As per the new sections of the company's act, funds out of which buy back may be financed include :Correct Answer Free reserves of the company , Securities premium account , Proceeds of any shares or other specified securities Your Answer Loans taken from banks and financial institutions , Free reserves of the company , Securities premium account Match The Following Question Correct Answer Your Answer PpH = P / H ( C + B ) / P SPE = R / H (C + B ) / R RR = (C + B ) / R P / H U%=R/(C+B)R/(C+B) Multiple Choice Multiple Answer Question Due to diversification employees seek:Correct Answer Job security , Better opportunities within the firm , Higher compensation Your Answer Job security , Better opportunities within the firm , More perks & benefits Select The Blank Question In today's fast moving world, the quickest way to get information on a firm is through ________. Correct Answer Internet

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Your Answer Internet Multiple Choice Single Answer Question It is often not possible to directly attribute, or reasonably allocate :Correct Answer The interest bearing liabilities to segments Your Answer Goodwill True/False Question Odd lots purchase is not a method of buy back of shares. Correct Answer False Your Answer True at 4:23 AM 0 comments Links to this post Labels: Strategic Finance (Set III) Saturday, March 7, 2009 Strategic Finance - 6 For WOMEN's DAY SMS (8th March) CLICK HERE

LIST OF ATTEMPTED QUESTIONS AND ANSWERS Multiple Choice Multiple Answer Question A normal firm shows the following characteristics :Correct Answer No unique optimum payout ratio , Market value per share unaffected by the payout ratio , All dividend policies are similar Your Answer No unique optimum payout ratio , Market value per share unaffected by the payout ratio , All dividend policies are similar Multiple Choice Single Answer Question One of the bases for determining the residual value of similar assets is :Correct Answer Realizable value Your Answer Net operational value Multiple Choice Multiple Answer Question If a firm diversifies managerial teams formed can be shifted from unproductive activities to productive ones which leads to :Correct Answer Improved profitability , Continuity , Growth of the firm Your Answer Improved profitability , Continuity , Growth of the firm Multiple Choice Single Answer Question Segment liabilities do not include :Correct Answer Borrowings & other liabilities that are incurred for financing rather than operating purpose Your Answer Other payables Multiple Choice Single Answer Question As per Pecking order theory, which is the costliest means of funding :Correct Answer Equity Shares Your Answer Secured debt Select The Blank

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Question Cost of ________ is more than other sources for raising short term finance. Correct Answer Bank finance Your Answer Commercial paper Multiple Choice Multiple Answer Question Operating economies occur due to indivisibilities of resources like :Correct Answer People , Equipment , Overheads Your Answer People , Equipment , Overheads True/False Question If a company has resorted to buyback its shares, it cannot make a further issue of the same kind of securities within a period of 1 year. Correct Answer False Your Answer True True/False Question In value of assets approach for computation of valuation of shares, the total value of all the assets will be divided by the total number of shares. Correct Answer True Your Answer True Multiple Choice Single Answer Question Short term sources of funds include :Correct Answer Current Liabilities Your Answer Term loans Multiple Choice Single Answer Question Investment decisions are mainly concerned with :Correct Answer Assets Your Answer Assets Multiple Choice Multiple Answer Question Debt reduces :Correct Answer Agency cost of free cash flow , Commitment to pay in time to all lenders , Freedom of decisions Your Answer Agency cost of free cash flow , Commitment to pay in time to all lenders , Freedom of decisions Multiple Choice Multiple Answer Question The main theories behind share repurchases are :Correct Answer Dividend or personal taxation hypothesis , Leverage hypothesis , Information or signalling hypothesis Your Answer Dividend or personal taxation hypothesis , Leverage hypothesis , Information or signalling hypothesis Select The Blank Question The cost of facilities is usually included & distributed as ________. Correct Answer Depreciation Your Answer Fringe benefits Multiple Choice Multiple Answer Question Investments having no physical existence includes :Correct Answer Shares , Debentures , Bonds Your Answer Bonds , Shares , Debentures Multiple Choice Multiple Answer Question An investment property is an investment in land or buildings :-

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Correct Answer Not intended to be occupied substantially for use by investing enterprise , Not intended to be in the operations of the investing enterprise Your Answer Not intended to be occupied substantially for use by investing enterprise , Not intended to be in the operations of the investing enterprise Multiple Choice Single Answer Question If a firm opts for restrictive policy then the investments in current assets is :Correct Answer Low Your Answer Moderate True/False Question According to NOI Approach, any capital structure is optimum. Correct Answer True Your Answer True Select The Blank Question Segment assets are ________. Correct Answer Directly attributable to the segment Your Answer Indirectly attributable to the segments Match The Following Question Correct Answer Your Answer Free cash flow theory Enormous conflicts of interest between Stakeholders and shareholders Many groups of non investor stakeholders have an interest in the firm Net income approach Cost of debt & equity do not change with a change in leverage ratio Enormous conflicts of interest between Stakeholders and shareholders Net operating income approach The overall capitalization rate remains constant for all levels of financial leverages Firms have preferences by choosing a way to finance their projects Modigliani - Miller Theory weighted average cost of capital does not change with a change in the proportion of debt to equity in the capital structure Cost of debt & equity do not change with a change

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in leverage ratio 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 Your Answer Process analysis Multiple Choice Multiple Answer Question The main characteristics of operating economies are :Correct Answer It is achieved through horizontal, vertical and conglomerate mergers , It occurs due to indivisibilities of resources , It is possible in generic management functions Your Answer Vertical integration has no connection with operating economies , It is achieved through horizontal, vertical and conglomerate mergers , It occurs due to indivisibilities of resources Multiple Choice Single Answer Question usually the `controlling block' tends to be between :Correct Answer 20 & 40 percent Your Answer 10 & 30 percent Multiple Choice Multiple Answer Question The 3 groups of participants in a firm are :Correct Answer Suppliers of equity , Debt suppliers , Firm Managers Your Answer Suppliers of equity , Debt suppliers , Firm Managers Multiple Choice Single Answer Question Human Assets accounting stands for :Correct Answer Measurement & reporting of the cost and value of people as organisational resources Your Answer Calculation of wages paid to casual workers Multiple Choice Single Answer Question Profitability of a company depends upon :Correct Answer Cost of capital Your Answer Debt equity ratio Select The Blank Question Horizontal mergers involves firms________. Correct Answer That operate & compete in a similar kind of business Your Answer With a new & different entity Match The Following Question Correct Answer Your Answer Availability of funds in the market Cost of funds depends on this factor Different costs are involved Flexibility The extent & the ease with which the funds can be raised & paid back are very important The extent & the ease with which the funds can be raised & paid back are very important Time Takes less time to take an

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overdraft from the bank Takes less time to take an overdraft from the bank Creditworthiness of the issuer If a company has a good creditworthiness it is not difficult to raise short term funds If a company has a good creditworthiness it is not difficult to raise short term funds Multiple Choice Multiple Answer Question A firm's current assets include :Correct Answer Marketable securities , Receivables , Inventory Your Answer Marketable securities , Receivables , Inventory Select The Blank Question If a segment is not designated as a ________ it should be included as an unallocated reconciling item. Correct Answer Reportable segment Your Answer Operating segment Select The Blank Question An asset is included in segment assets, if and only if the related depreciation or amortisation is included in ________. Correct Answer Segment expense Your Answer Segment liability True/False Question Trade credit creates book debts which the firm is expected to collect in the near future. Correct Answer True Your Answer True 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 Your Answer Fixed assets requirements , Permanent working capital requirements Multiple Choice Single Answer Question Debt is often issued at :Correct Answer The head office level Your Answer The head office level True/False Question Determination of residual value of an asset is normally a difficult matter. Correct Answer True Your Answer False Multiple Choice Single Answer Question Which of the following systems identifies each of the organizational elements of the traditional bureaucratic structure and applies the identifiable costs of that element accordingly? Correct Answer Organization element accounting

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Your Answer Budgetary accounting Multiple Choice Single Answer Question Segment result represents :Correct Answer Operating profit or loss Your Answer Net of financing profit or loss 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 Your Answer There is built - in cushion to the acquiring firm as total payment is not made at the time of acquisition Select The Blank Question The resource theory considers that the competitive position of a firm depends on its ________ Assets. Correct Answer Specific Your Answer Intangible True/False Question Short term financing is meant for funding working capital of a company. Correct Answer True Your Answer False True/False Question Money becomes less valuable when received at a latter stage instead of in present time. Correct Answer True Your Answer False True/False Question The intellectual assets of a company are often worth 3 or 4 times the tangible book value. Correct Answer True Your Answer True Multiple Choice Single Answer Question One of the selective developments that has taken place in recent times is companies are going in for :Correct Answer Activity based costing and management Your Answer Activity based costing and management Multiple Choice Multiple Answer Question The financial managers of a company consume a great deal of their time in activities like :Correct Answer Monitoring the investment in inventories , Negotiating favourable credit terms , Administrating Accounts receivables Your Answer Monitoring the investment in inventories , Negotiating favourable credit terms , Defining a proper strategy for product promotion Select The Blank Question If total external revenue attributable to reportable segments constitutes less than ________ of the total enterprise revenue additional segments should be identified as reportable segments. Correct Answer 75 percent Your Answer 50 percent True/False

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Question A single organisation model serves to keep all individual initiatives to be targeted into a co-ordinated plan. Correct Answer True Your Answer True True/False Question Valuation of current investments on overall basis is not considered appropriate. Correct Answer True Your Answer True at 12:49 AM 0 comments Links to this post Labels: Strategic Finance (Set III) Friday, January 23, 2009 Strategic Finance - 5 LIST OF ATTEMPTED QUESTIONS AND ANSWERS True/False Question Accounting standards (AS - 13) is now mandatory. Correct Answer True Your Answer True 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 Your Answer Job vacancy cost during the new search , Termination pay , Recruiting new employee as a replacement of the left employee Multiple Choice Multiple Answer Question A firm's current assets include :Correct Answer Marketable securities , Receivables , Inventory Your Answer Marketable securities , Receivables , Inventory Multiple Choice Multiple Answer Question In a merger decision, the value of a firm depends upon:Correct Answer Earnings , Operating characteristics of acquiring firm , Financial characteristics of acquiring firm Your Answer Earnings , Manpower of the acquiring firm , Financial characteristics of acquiring firm 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 Your 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 , It is not mandatory to specify the maximum price at which the buy back will be made True/False Question A merger will make sense to the acquiring firm if its shareholders benefit. Correct Answer True Strategic Finance II Page 2 of 8

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Your Answer True Select The Blank Question ________ Assets in the balance sheet are normally excluded from the value of total assets. Correct Answer Intangible Your Answer Intangible Multiple Choice Single Answer Question What is a very important factor in any kind of merger? Correct Answer Exchange ratio Your Answer Pre merger price Select The Blank Question A shareholder expects a higher rate of return as a firm's compensation for ________. Correct Answer Increased risk Your Answer Investment in projects to improve prestige or power True/False Question Usually cost data is perfect for ABC Analysis & distribution. Correct Answer False Your Answer True Select The Blank Question Forward or backward integration is a characteristic of ________. Correct Answer Vertical Mergers Your Answer Vertical Mergers Multiple Choice Single Answer Question Segment assets are determined after :Correct Answer Deducting related allowances / provisions reported as direct offsets Your Answer Deducting income tax assets Multiple Choice Single Answer Question Acceptable audit requirements cannot be overlooked even under the pressure of :Strategic Finance II Page 3 of 8 Correct Answer Timeliness & turnaround Your Answer Mergers & acquisitions 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 Your Answer Freedom of operation to the management of the newly acquired firm True/False Question A single organisation model serves to keep all individual initiatives to be targeted into a co-ordinated plan. Correct Answer True Your Answer True True/False Question Assets held as stock - in - trade are also investments. Correct Answer False Your Answer True Multiple Choice Single Answer Question In an aggressive approach :Correct Answer There is a very large risk of shortage of funds Your Answer There is a very large risk of shortage of funds True/False Question Organisational changes are similar to mission changes. Correct Answer True Your Answer False Multiple Choice Multiple Answer Question The internal staffing performance indicators are :Correct Answer Sales per employee , Recovery rate , Utilization %

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Your Answer Sales per employee , Recovery rate , Utilization % Select The Blank Strategic Finance II Page 4 of 8 Question The most popular kind of dividend policy is one that pays a ________. Correct Answer Regular, steady dividend Your Answer Regular, steady dividend Match The Following Question Correct Answer Your Answer Amount involved in buy back Not to exceed 25 % of the total paid up capital Not to exceed 25 % of the total paid up capital Articles of Association Authorize buy back of securities Resolution permitting the buy back of shares Board of Directors Resolution permitting the buy back of shares Authorize buy back of securities Shares to be bought back Fully paid up Fully paid up 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 Your Answer Takes into account time as an important parameter Multiple Choice Single Answer Question Fixed price tender offers are accompanied by an abnormal announcement period return of :Correct Answer 8 - 10 % Your Answer 6 - 8 % Multiple Choice Multiple Answer Question The external staffing performance indicators include :Correct Answer Compensation per Re. Profit , Personnel services head count , Profit per head Your Answer Compensation per Re. Profit , Personnel services head count , Recovery rate Match The Following Question Correct Answer Your Answer Trust receipt Specifically identified by serial number or other means Specifically identified by serial number or other means Terminal warehouse receipt Inventory is stored with a public or terminal Inventory is stored with a public or terminal Strategic Finance II Page 5 of 8 warehousing company warehousing company Floating lien Loose arrangement as the lender may find it difficult to police Well suited for financial good inventories of capital

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goods Chattel mortgage Well suited for financial good inventories of capital goods Affords a higher degree of control over the collateral Select The Blank Question In today's fast moving world, the quickest way to get information on a firm is through ________. Correct Answer Internet Your Answer Internet Multiple Choice Single Answer Question Companies often need to value its own :Correct Answer Shares Your 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 Your Answer Fixed assets requirements , Permanent working capital requirements True/False Question For determining exchange ratio, the model developed by Conn & Nielson is used. Correct Answer True Your Answer True Select The Blank Question usually credit lines are established for a period of ________. Correct Answer 1 year Your Answer 3 years Multiple Choice Multiple Answer Question Shortcomings of accounting numbers consist of the following :Strategic Finance II Page 6 of 8 Correct Answer Firms use different kind of accounting methods , Business risk and financial risk do not have any influence on accounting numbers Your Answer Dividend policy has lot of influence on accounting numbers , Business risk and financial risk do not have any influence on accounting numbers , There is a serious relationship between economic value and profit 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 Your Answer Mutual funds True/False Question Making decision on dividend is a very crucial area of financial management for a firm. Correct Answer True Your 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 Your Answer Legal restrictions Multiple Choice Multiple Answer Question Due to diversification employees seek:Correct Answer Job security , Better opportunities within the firm , Higher compensation Your Answer Job security , Better opportunities within the firm , More perks & benefits , Higher compensation

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Multiple Choice Single Answer Question Research into true human resources accounting began in :Correct Answer 1960`s Your Answer 1994 Select The Blank Question Segment assets are ________. Correct Answer Directly attributable to the segment Your Answer Directly attributable to the segment Strategic Finance II Page 7 of 8 True/False Question AS 13 statement does not deal with operating or finance leases. Correct Answer True Your Answer True Select The Blank Question The costs should be gathered & allocated within the organisation at the ________ structural layer. Correct Answer Lowest possible Your Answer Lowest possible Multiple Choice Single Answer Question Value implies that something has :Correct Answer Worth Your Answer Worth Multiple Choice Multiple Answer Question Examples of accounting methods used by firm are :Correct Answer FIFO , LIFO , Accrual Accounting Your Answer FIFO , LIFO , Accrual Accounting Multiple Choice Multiple Answer Question The main assumptions for stock repurchase models are as follows :Correct Answer The market is efficient , There is perfect competition in the securities market Your Answer The market is efficient , Offers are minimum limit offers. , Investors are not very keen to maximize the value of their investment 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 Your 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 Strategic Finance II Page 8 of 8 Your Answer False Multiple Choice Single Answer Question The earning power of the company approach includes :Correct Answer Mainly discounting of all future earnings Your Answer Mainly discounting of all future earnings Select The Blank Question During the costing process, we look at ________. Correct Answer Resource consumption Your Answer Resource consumption Select The Blank Question Mature companies with stable earnings generally pay out ________. Correct Answer A high proportion of earnings Your Answer A high proportion of earnings ATTEMPTED QUESTIONS AND ANSWERS Multiple Choice Multiple Answer Question Exit costs are classified into 3 categories namely :-

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Correct Answer Lost efficiency prior to separation , Job vacancy cost during the new search , Termination pay Multiple Choice Multiple Answer Question The 3 groups of participants in a firm are :Correct Answer Suppliers of equity , Debt suppliers , Firm Managers True/False Question Tender offers us an alternative approach to acquire another firm. Correct Answer TRUE Select The Blank Question Increase in cost of capital means decrease in ________. Correct Answer Profitability Multiple Choice Single Answer Question To calculate depreciable amount the following is subtracted from its historical cost :Correct Answer Estimated residual value Multiple Choice Single Answer Question The value of the asset does not include:Correct Answer Price per share Multiple Choice Multiple Answer Question The main characteristics of CAPM are :Correct Answer It is an equilibrium Model , It describes the pricing of assets as well as derivatives , Expected security return = Riskless return + beta x ) (expected market risk premium True/False Question Assets held as stock - in - trade are also investments. Correct Answer FALSE Select The Blank Question Segment revenue includes ________. Correct Answer Revenue from transactions with other segments of the enterprise 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 value based approach of HRA Tracking suggests that the value of human resources depends upon :Correct Answer Capacity to generate revenue True/False Question According to NI Approach, decrease in leverage decreases the overall cost of capital and increases the firm's value. Correct Answer FALSE Multiple Choice Multiple Answer Question The employer in offering the job contract assumes a range of legal obligations such as :Correct Answer Rewards - cash like & non cash like , Health & safety policies , Pensions & contributions to social security payments Multiple Choice Multiple Answer Question The main categories of organisational elements are :Correct Answer Managerial , Support , Operational Multiple Choice Single Answer Question Controlling block is usually acquired from:Correct Answer A single seller Multiple Choice Multiple Answer Question Personnel services expenses is made up of:Correct Answer Personnel salaries , Cost of facilities , Training & development budgets True/False

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Question Valuation of current investments on overall basis is not considered appropriate. Correct Answer TRUE Select The Blank Question Combination of 2 or more companies into existing company is called ________. Correct Answer Absorption Multiple Choice Multiple Answer Question An investment property is an investment in land or buildings :Correct Answer Not intended to be occupied substantially for use by , investing enterprise Not intended to be in the operations of the investing enterprise True/False Question Organisational changes are similar to mission changes. Correct Answer TRUE Match The Following Question Correct AnsYwoeurr Answer Free cash Enormous conflicts of interest between Stakeholders and shareholders flow theory Net incomeCost of debt & equity do not change with a change in leverage ratio approach Net opera The overall capitalization rate remains constant for all levels of financial ting income approach leverages Modigliani -weighted average cost of capital does not change with a change Miller Theory in the proportion of debt to equity in the capital structure Select The Blank Question In the shareholding pattern of a company, the promoter's holding includes________. Correct Answer Foreign Promoters Multiple Choice Single Answer Question Yield or earning approach method of valuation uses :Correct Answer Price to earnings ratio Multiple Choice Single Answer Question As per Pecking order theory, which is the costliest means of funding :Correct Answer Equity Shares True/False Question The carrying amount for current investments is the lower of cost & fair value. Correct Answer TRUE Multiple Choice Multiple Answer Question The limitations of value of assets approach include :Correct Answer Book value of the assets is directly dependent on the accounting policies followed by the company , There are no standard procedures for valuation of intangible assets , No importance to the market value of the asset True/False Question Management of working capital refers to the management of total assets and liabilities of a company. Correct Answer FALSE True/False Question When a company is able to assess an individual's worth, it helps in increasing its own worth. Correct Answer TRUE Multiple Choice Single Answer Question The Board of Directors should pass a resolution permitting the buy back upto what percent of the paid up equity capital? Correct Answer 0.1 Select The Blank Question Long term cash forecasting is generally for a period of ________ years.

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Correct Answer 3 to 5 years Select The Blank Question Economies of scale arises with increase in volume of production leading to________. Correct Answer Reduction in the cost of production Multiple Choice Multiple Answer Question The internal staffing performance indicators are :Correct Answer Sales per employee , Recovery rate , Utilization % Multiple Choice Single Answer Question The following analysis is more targeted on similar activities or firms that exist in parallel within the activity model or process flow to ensure that they are being done the same best way :Correct Answer Comparative analysis Multiple Choice Multiple Answer Question Accounting numbers are not influenced by :Correct Answer Dividend policy , Time span of money , Financial and business risk Select The Blank Question Cost of ________ is more than other sources for raising short - term finance. Correct Answer Bank finance True/False Question Segment result is segment revenue less segment expenses. Correct Answer TRUE Multiple Choice Single Answer Question The depreciable assets are assets which are expected to be used :Correct Answer During more than 1 accounting period Multiple Choice Single Answer Question Research into true human resources accounting began in :Correct Answer 1960`s Select The Blank Question An asset is included in segment assets, if and only if the related depreciation or amortisation is included in ________. Correct Answer Segment expense Select The Blank Question A shareholder expects a higher rate of return as a firm's compensation for ________. Correct Answer Increased risk Select The Blank Question Segment assets are ________. Correct Answer Directly attributable to the segment 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 Multiple Choice Single Answer Question Often a company borrows loans / debts by giving the following as a security :Correct Answer Shares Match The Following Question Correct AnsYwoeurr Answer A highly Shows the illusion of financial problems leveraged firm Fiscal advaIsntdaegdeu, ctible from the profit the interest of financing with debt Financing Prevents firms from investing too much with a high percentage of debt Firms mustDiscussions about the sell out of assets must be made

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repay debts Multiple Choice Single Answer Question Arbitrage means :Correct Answer Securities cannot sell at different prices True/False Question Opportunity costs and real costs decrease the market value of a firm. Correct Answer TRUE Select The Blank Question the commercial paper may be issued in the multiples of ________. Correct Answer 5 lakhs at 8:40 PM 0 comments Links to this post Labels: Strategic Finance (Set IX) Strategic Finance - 24 Question A quantity discount is offered :Correct Answer On large shipments Question Indicators of the value of an investment are obtained by :Correct Answer Reference to its market value , The investee`s assets , The expected cash flows from the investment Question The following is not a method of payment to the acquired firm:Correct Answer Fixed deposits of the acquiring firm Question The activity model is normally created by an activity Accountant. Correct Answer False 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 Question If the segment result of a segment includes interest or dividend income its segment assets will not include ________. Correct Answer Payables Question Forward or backward integration is a characteristic of ________. Correct Answer Vertical Mergers Question Modigliani - Miller Theoram is based on :Correct Answer Perfect Capital Markets Question Value based approach of HRA tracking can be divided into 2 categories - Non monetary & monetary. Correct Answer True Question During the costing process, we look at ________. Correct Answer Resource consumption Question For accounting standard (AS) 27, Significant influence may be gained by :Correct Answer Share ownership , Statute , Agreement 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 Question Deferred payment plan is also known as:Correct Answer Earn out plan Question There are few methods of allocating depreciation over the useful life of an assets. Correct Answer False Question Market approach is used for companies whose shares are ________ on the Stock market. Correct Answer Listed Question Operating economies of scale are achieved through the following mergers :Correct Answer Horizontal , Vertical , Conglomerate Question Tender offers can be afforded by firms with :Correct Answer A large amount of financial Slack Question The following method of valuation is used for listed companies that have an active

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market for their shares :Correct Answer Market value approach Question According to Altman (1984) total costs in percentage of the market value of a firm range between ________ Correct Answer 12.1 % & 16.7 % Question Conservative policy for determining the requirements of current assets is also known as :Correct Answer Flexible policy Question Yield or earning approach method of valuation uses :Correct Answer Price to earnings ratio Question The main categories of organisational elements are :Correct Answer Managerial , Support , Operational Question The ________ cost tier has the advantage of being the simplest to calculate and justify. Correct Answer Direct Question The existence of significant influence by an investor is usually evidenced in the following ways :Correct Answer Participation in policy making processes , Material transactions between the investor & the investee , Interchange of managerial personnel Question Free Reserves is a component of :Correct Answer Equity Sentiments and rumours No fundamental basis.No effect on valuation Unlisted shares on stock exchange Difficult to estimate the price Invalid valuation of shares Manipulation of stock markets Invalid valuation of shares Easy to estimate the price Selective information Valuation by various people on information available Valuation by various people on information available Question Only firms with a large amount of financial slack can afford tender offers. Correct Answer True Question Buy back through book building the process should be made through ________. Correct Answer An electronically linked transparent facility Question For M & As, the acquiring firm needs industry data on :Correct Answer Market growth , Nature of competition , Degree of regulation Question The chance of bankruptcy is small when the leverage of a firm is small. Correct Answer True Question A change in the method of depreciation is treated as a change in an accounting policy and is disclosed accordingly. Correct Answer True Question Economies of scale arises with increase in volume of production leading to________. Correct Answer Reduction in the cost of production Question Arbitrage process implies that security cannot sell at different prices. Correct Answer True Question Capital gains are taxed at ________. Correct Answer Preferentially lower rate Question Net period - no cash discount means :Correct Answer The seller only specifies the time period allowed for the payment Question A long term investment is an investment other than a current investment. Correct Answer True Question Accounting standards (AS - 17) has come into effect in respect of accounting periods commencing :Correct Answer On or after 01.04.2001 Question Accounting standards (AS - 13) is now mandatory. Correct Answer True Question Valuation methods are highly specific to the following for doing the valuation :Correct Answer To the person , To the firm , To the Consultant Question ________ Assets in the balance sheet are normally excluded from the value of total assets. Correct Answer Intangible Question The budgetary records are useful for:Correct Answer Validating accounting costs , Providing a rationale for division of costs ,

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Replacing missing data Question As per the new sections of the company's act, funds out of which buy back may be financed include :Correct Answer Free reserves of the company , Securities premium account , Proceeds of any shares or other specified securities PpH = P / H ( C + B ) / P SPE = R / H (C + B ) / R RR = (C + B ) / R P / H U%=R/(C+B)R/(C+B) Question Due to diversification employees seek:Correct Answer Job security , Better opportunities within the firm , Higher compensation Question In today's fast moving world, the quickest way to get information on a firm is through ________. Correct Answer Internet Question It is often not possible to directly attribute, or reasonably allocate :Correct Answer The interest bearing liabilities to segments Question Odd lots purchase is not a method of buy back of shares. Correct Answer False at 8:38 PM 0 comments Links to this post Labels: Strategic Finance (Set IX) Strategic Finance - 23 Question A normal firm shows the following characteristics :Correct Answer No unique optimum payout ratio , Market value per share unaffected by the payout ratio , All dividend policies are similar Question One of the bases for determining the residual value of similar assets is :Correct Answer Realizable value Question If a firm diversifies managerial teams formed can be shifted from unproductive activities to productive ones which leads to :Correct Answer Improved profitability , Continuity , Growth of the firm Question Segment liabilities do not include :Correct Answer Borrowings & other liabilities that are incurred for financing rather than operating purpose Question As per Pecking order theory, which is the costliest means of funding :Correct Answer Equity Shares Question Cost of ________ is more than other sources for raising short - term finance. Correct Answer Bank finance Question Operating economies occur due to indivisibilities of resources like :Correct Answer People , Equipment , Overheads Question If a company has resorted to buyback its shares, it cannot make a further issue of the same kind of securities within a period of 1 year. Correct Answer False Question In value of assets approach for computation of valuation of shares, the total value of all the assets will be divided by the total number of shares. Correct Answer True Question Short term sources of funds include :Correct Answer Current Liabilities Question Investment decisions are mainly concerned with :Correct Answer Assets Question Debt reduces :Correct Answer Agency cost of free cash flow , Commitment to pay in time to all lenders , Freedom of decisions Question The main theories behind share repurchases are :Correct Answer Dividend or personal taxation hypothesis , Leverage hypothesis , Information or signalling hypothesis Question The cost of facilities is usually included & distributed as ________.

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Correct Answer Depreciation Question Investments having no physical existence includes :Correct Answer Shares , Debentures , Bonds Question An investment property is an investment in land or buildings :Correct Answer Not intended to be occupied substantially for use by investing enterprise , Not intended to be in the operations of the investing enterprise Question If a firm opts for restrictive policy then the investments in current assets is :Correct Answer Low Question According to NOI Approach, any capital structure is optimum. Correct Answer True Question Segment assets are ________. Correct Answer Directly attributable to the segment Free cash flow theory Enormous conflicts of interest between Stakeholders and shareholders Many groups of non - investor stakeholders have an interest in the firm Net income approach Cost of debt & equity do not change with a change in leverage ratio Enormous conflicts of interest between Stakeholders and shareholders Net operating income approach The overall capitalization rate remains constant for all levels of financial leverages Firms have preferences by choosing a way to finance their projects Modigliani - Miller Theory weighted average cost of capital does not change with a change in the proportion of debt to equity in the capital structure Cost of debt & equity do not change with a change in leverage ratio 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 Question The main characteristics of operating economies are :Correct Answer It is achieved through horizontal, vertical and conglomerate mergers , It occurs due to indivisibilities of resources , It is possible in generic management functions Question usually the `controlling block' tends to be between :Correct Answer 20 & 40 percent Question The 3 groups of participants in a firm are :Correct Answer Suppliers of equity , Debt suppliers , Firm Managers Question Human Assets accounting stands for :Correct Answer Measurement & reporting of the cost and value of people as organisational resources Question Profitability of a company depends upon :Correct Answer Cost of capital Question Horizontal mergers involves firms________. Correct Answer That operate & compete in a similar kind of business Availability of funds in the market Cost of funds depends on this factor Different costs are involved Flexibility The extent & the ease with which the funds can be raised & paid back are very important The extent & the ease with which the funds can be raised & paid back are very important Time Takes less time to take an overdraft from the bank Takes less time to take an overdraft from the bank Creditworthiness of the issuerIf a company has a good creditworthiness it is not difficult to raise short term funds If a company has a good creditworthiness it is not difficult to raise short term funds Question A firm's current assets include :Correct Answer Marketable securities , Receivables , Inventory Question If a segment is not designated as a ________ it should be included as an unallocated reconciling item. Correct Answer Reportable segment Question An asset is included in segment assets, if and only if the related depreciation or amortisation is included in ________. Correct Answer Segment expense Question Trade credit creates book debts which the firm is expected to collect in the near future. Correct Answer True

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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 Question Debt is often issued at :Correct Answer The head office level Question Determination of residual value of an asset is normally a difficult matter. Correct Answer True Question Which of the following systems identifies each of the organizational elements of the traditional bureaucratic structure and applies the identifiable costs of that element accordingly? Correct Answer Organization element accounting Question Segment result represents :Correct Answer Operating profit or loss 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 Question The resource theory considers that the competitive position of a firm depends on its ________ Assets. Correct Answer Specific Question Short term financing is meant for funding working capital of a company. Correct Answer True Question Money becomes less valuable when received at a latter stage instead of in present time. Correct Answer True Question The intellectual assets of a company are often worth 3 or 4 times the tangible book value. Correct Answer True Question One of the selective developments that has taken place in recent times is companies are going in for :Correct Answer Activity based costing and management Question The financial managers of a company consume a great deal of their time in activities like :Correct Answer Monitoring the investment in inventories , Negotiating favourable credit terms , Administrating Accounts receivables Question If total external revenue attributable to reportable segments constitutes less than ________ of the total enterprise revenue additional segments should be identified as reportable segments. Correct Answer 75 percent Question A single organisation model serves to keep all individual initiatives to be targeted into a co-ordinated plan. Correct Answer True Question Valuation of current investments on overall basis is not considered appropriate. Correct Answer True LIST OF ATTEMPTED QUESTIONS AND ANSWERS Multiple Choice Multiple Answer Question The support elements consists of important functions such as :Correct Answer Accounting , Automatic data processing , Payroll Your Answer Payroll , Co-ordination , Accounting Multiple Choice Single Answer Question The value of the asset does not include:Correct Answer Price per share Your Answer Price per share Multiple Choice Single Answer Question The bottom line of ABC Process is :Correct Answer To achieve a better method of doing the right business pf the organisation Your Answer To achieve a better method of doing the right business

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pf the organisation Multiple Choice Single Answer Question When the working capital is less than its peak level :Correct Answer The surplus is invested in liquid assets Your Answer The surplus is invested in liquid assets True/False Question Articles of association should authorise buy back of securities as per the Company's Act. Correct Answer True Your Answer True Multiple Choice Single Answer Question During Share repurchase, it is necessary to transfer certain sum to :Correct Answer Capital redemption reserve Account Your Answer Capital redemption reserve Account Multiple Choice Single Answer Question Comparative analysis is :Correct Answer A review to ensure consistency within the activity model & process flow Your Answer A review to ensure consistency within the activity model & process flow 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 Your Answer Lost efficiency prior to separation , Job vacancy cost during the new search , Termination pay 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 Your Answer A good or a right that a firm owns in a determined moment , Prepayment adjustments , Capitalized expenses Select The Blank Question During the costing process, we look at ________. Correct Answer Resource consumption Your Answer Resource consumption Select The Blank Question Credit standards should be relaxed upon the point where incremental returns ________ incremental costs. Correct Answer Equals Your Answer Equals True/False Question Usually cost data is perfect for ABC Analysis & distribution. Correct Answer False Your Answer False True/False Question An activity model is a tool to assist in understanding & defining the organisation. Correct Answer True Your Answer True Multiple Choice Multiple Answer Question The acquiring firm for any M & A will require data about the target firm which will include :Correct Answer Quality of management , Production capabilities ,

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Profitability Your Answer Production capabilities , Capital & labour intensity , Profitability Select The Blank Question ________ is not a example of segment liability. Correct Answer Goodwill Your Answer Goodwill Multiple Choice Single Answer Question The value based approach of HRA Tracking suggests that the value of human resources depends upon :Correct Answer Capacity to generate revenue Your Answer Opportunity cost Select The Blank Question ________ are considered most desirable from shareholders point of view. Correct Answer Dividends Your Answer Dividends Multiple Choice Multiple Answer Question Shareholders returns consists of 2 components :Correct Answer Dividend , Capital gains Your Answer Capital gains , Dividend Multiple Choice Single Answer Question In the book building method, the company makes an offer to buy back :Correct Answer Its specified number of shares at a specified offer price range Your Answer Its specified number of shares at a specified offer price range 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 Your 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 Multiple Choice Single Answer Question Research into true human resources accounting began in :Correct Answer 1960`s Your Answer 1960`s Select The Blank Question If firms have same technology ________ makes the difference i.e. firms become more productive . Correct Answer Solid human resource team Your Answer Latest & updated techniques True/False Question It is necessary to identify all costs that may be related to an acquisition. Correct Answer True Your Answer True Multiple Choice Multiple Answer

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Question It is the activity accountant's job to do the following for the existing organisational structure :Correct Answer To define the costs , To refine the costs , To document the costs Your Answer To define the costs , To document the costs , Support the costing of the activities Multiple Choice Multiple Answer Question Debt reduces :Correct Answer Agency cost of free cash flow , Commitment to pay in time to all lenders , Freedom of decisions Your Answer Agency cost of free cash flow , Commitment to pay in time to all lenders , Freedom of decisions Select The Blank Question Stock repurchases ________ the debt / equity ratio. Correct Answer Increases Your Answer Increases Select The Blank Question If total external revenue attributable to reportable segments constitutes less than ________ of the total enterprise revenue additional segments should be identified as reportable segments. Correct Answer 75 percent Your Answer 75 percent Multiple Choice Multiple Answer Question A current investment is an investment that is by nature :Correct Answer Readily realisable , Intended to be held for not more than 1year from the date on which investment is made Your Answer Readily realisable , Intended to be held for not more than 1year from the date on which investment is made , Not similar to current assets Select The Blank Question If the segment result of a segment includes interest or dividend income its segment assets will not include ________. Correct Answer Payables Your Answer Related receivables Multiple Choice Single Answer Question What is the maximum amount involved in the buy back of the total paid up capital & free reserves of the company? Correct Answer 0.25 Your Answer 0.25 Select The Blank Question Economies of scale arises with increase in volume of production leading to________. Correct Answer Reduction in the cost of production Your Answer Reduction in the cost of production Multiple Choice Multiple Answer Question The 3 groups of participants in a firm are :Correct Answer Suppliers of equity , Debt suppliers , Firm Managers Your Answer Suppliers of equity , Debt suppliers , Firm Managers Multiple Choice Multiple Answer Question The important aspect of dividend policy is :Correct Answer To determine the amount of earnings to be distributed to shareholders , Amount to be retained in the firm Your Answer To determine the amount of earnings to be distributed to shareholders , Amount to be retained in the firm True/False

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Question Baumul`s Model is similar to EOQ model in inventory management. Correct Answer True Your Answer True True/False Question To `gather costs', means capturing all relevant expenses that pertain to the selected model and processes. Correct Answer True Your Answer True Multiple Choice Single Answer Question When the seller asks for the payment beforemaking the delivery in order to avoid all risks it is known as :Correct Answer Cash before delivery Your Answer Cash before delivery True/False Question When a company is able to assess an individual's worth, it helps in increasing its own worth. Correct Answer True Your Answer True Multiple Choice Single Answer Question The depreciation rates or the useful lives of the assets are disclosed only :Correct Answer If they are different from the principle rates specified in the statute Your Answer If they are different from the principle rates specified in the statute Select The Blank Question Depreciation is ________ of an asset. Correct Answer Loss of value Your Answer Loss of value Multiple Choice Single Answer Question usually the `controlling block' tends to be between :Correct Answer 20 & 40 percent Your Answer 20 & 40 percent True/False Question Money becomes less valuable when received at a latter stage instead of in present time. Correct Answer True Your Answer False True/False Question Diversification helps in preserving a firm's reputation & goodwill. Correct Answer True Your Answer True Multiple Choice Single Answer Question Decrease in leverage results in increasing the :Correct Answer Overall cost of capital Your Answer Overall cost of capital Multiple Choice Multiple Answer Question The limitations of value of assets approach include :Correct Answer Book value of the assets is directly dependent on the accounting policies followed by the company , There are no standard procedures for valuation of intangible assets , No importance to the market value of the asset Your Answer Book value of the assets is directly dependent on the accounting policies followed by the company , There are no standard procedures for valuation of intangible

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assets , No importance to the market value of the asset True/False Question The chance of bankruptcy is small when the leverage of a firm is small. Correct Answer True Your Answer False at 8:22 PM 0 comments Links to this post Labels: Strategic Finance (Set V) Monday, April 20, 2009 Strategic Finance - 12 LIST OF ATTEMPTED QUESTIONS AND ANSWERS True/False Question It is easy to find a risk free security. Correct Answer False Your Answer False Multiple Choice Single Answer Question As per the study conducted by RBI, Current assets constitute :Correct Answer More than 50 % of the total assets Your Answer More than 50 % of the total assets 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 Your Answer Full time equivalents , Temporary staff , Part time personnel Select The Blank Question Business risk & financial risk do not have any influence on ________. Correct Answer Accounting numbers Your Answer Accounting numbers 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 Your 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 Profitability of a company depends upon :Correct Answer Cost of capital Your Answer Cost of capital Multiple Choice Multiple Answer Question If a firm diversifies managerial teams formed can be shifted from unproductive activities to productive ones which leads to :Correct Answer Improved profitability , Continuity , Growth of the firm Your Answer Improved profitability , Growth of the firm Select The Blank

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Question Conglomerate mergers are also called ________. Correct Answer Concentric mergers Your Answer Concentric mergers True/False Question The buyback shall be made only on stock exchanges with electronic trading facility. Correct Answer True Your Answer True True/False Question Appraisal value of a firm can be acquired from an independent appraisal agency. Correct Answer True Your Answer True True/False Question firms use credit policy as a marketing tool for expanding sales. Correct Answer True Your Answer True Multiple Choice Single Answer Question Tender offers are used primarily for :Correct Answer Large Equity repurchases Your Answer Large Equity repurchases 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 Your Answer Regenerative natural resources Multiple Choice Single Answer Question Which of the following is NOT A Characteristic of declining firm :Correct Answer The optimum payout ratio for a declining firm is not 100 % Your Answer The optimum payout ratio for a declining firm is not 100 % Multiple Choice Single Answer Question According to Net Income Approach, the average cost of capital declines as the leverage ratio :Correct Answer Increases Your Answer Increases Multiple Choice Multiple Answer Question Personnel services expenses is made up of:Correct Answer Personnel salaries , Cost of facilities , Training & development budgets Your Answer Personnel salaries , Cost of facilities , Training & development budgets Multiple Choice Multiple Answer Question The employer in offering the job contract assumes a range of legal obligations such as :Correct Answer Rewards - cash like & non cash like , Health & safety policies , Pensions & contributions to social security payments Your Answer Rewards - cash like & non cash like , Health & safety policies , Pensions & contributions to social security payments Select The Blank Question Mature companies with stable earnings generally pay out ________. Correct Answer A high proportion of earnings Your Answer A high proportion of earnings

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Multiple Choice Single Answer Question Segment result represents :Correct Answer Operating profit or loss Your Answer Net of financing profit or loss Multiple Choice Single Answer Question Best practices, a tool for review process is similar to :Correct Answer Bench marking Your Answer Bench marking True/False Question Making decision on dividend is a very crucial area of financial management for a firm. Correct Answer True Your Answer True Match The Following Question Correct Answer Your Answer Mechanisms Performs or provides energy to an activity Performs or provides energy to an activity Inputs Information or material used to produce the output of an activity Information or material used to produce the output of an activity Controls Information or material that constrains an activity Information or material that constrains an activity Outputs Information or material produced by an activity Information or material produced by an activity True/False Question According to NI Approach, decrease in leverage decreases the overall cost of capital and increases the firm's value. Correct Answer False Your Answer False Match The Following Question Correct Answer Your Answer Lien The bank has a right to retain the goods belonging to the company until the debts due to the bank are paid The bank has a right to retain the goods belonging to the company until the debts due to the bank are paid Hypothecation A charge against property for an amount of debt A charge against

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property for an amount of debt Pledge Duty of the bank to take care of movable goods Duty of the bank to take care of movable goods Mortgage Pertains to immovable properties Pertains to immovable properties Multiple Choice Single Answer Question Investment decisions are mainly concerned with :Correct Answer Assets Your Answer Assets Multiple Choice Multiple Answer Question A normal firm shows the following characteristics :Correct Answer No unique optimum payout ratio , Market value per share unaffected by the payout ratio , All dividend policies are similar Your Answer No unique optimum payout ratio , Market value per share unaffected by the payout ratio , All dividend policies are similar Select The Blank Question Buy back through book building the process should be made through ________. Correct Answer An electronically linked transparent facility Your Answer An electronically linked transparent facility Multiple Choice Multiple Answer Question The internal staffing performance indicators are :Correct Answer Sales per employee , Recovery rate , Utilization % Your Answer Sales per employee , Recovery rate , Utilization % Multiple Choice Multiple Answer Question The 3 main types of accounting records followed by an organisation are :Correct Answer Organisational accounting , Budgetary accounting , Cost accounting Your Answer Organisational accounting , Budgetary accounting , Cost accounting Select The Blank Question An asset is included in segment assets, if and only if the related depreciation or amortisation is included in ________. Correct Answer Segment expense Your Answer Segment expense Select The Blank Question A company shall buyback its shares through the stock exchange by making a public announcement at least ________ days prior to the commencement of buyback. Correct Answer Seven Your Answer Seven Multiple Choice Single Answer Question Which of the following systems identifies each of the organizational elements of the traditional bureaucratic structure and applies the identifiable costs of that element accordingly? Correct Answer Organization element accounting Your Answer Organization element accounting

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Multiple Choice Single Answer Question Short term sources of funds include :Correct Answer Current Liabilities Your Answer Current Liabilities True/False Question Tender offers us an alternative approach to acquire another firm. Correct Answer True Your Answer True Select The Blank Question Segment assets are ________. Correct Answer Directly attributable to the segment Your Answer Directly attributable to the segment True/False Question Management of working capital refers to the management of total assets and liabilities of a company. Correct Answer False Your Answer False 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 Your Answer Codes , Time periods , Systems Multiple Choice Single Answer Question If competition is weak, a firm :Correct Answer Can manage with a smaller inventory of finished goods Your Answer Can manage with a smaller inventory of finished goods Select The Blank Question When a firm invests in human resources by acquisition & training, it anticipates a ________ Correct Answer Future generation of profits & services Your Answer Future generation of profits & services Select The Blank Question Horizontal mergers involves firms________. Correct Answer That operate & compete in a similar kind of business Your Answer That operate & compete in a similar kind of business Multiple Choice Single Answer Question The following of total cost of assets over its useful life is called depreciation :Correct Answer Distribution Your Answer Distribution Multiple Choice Multiple Answer Question The different types of floats are :Correct Answer Postal float , Deposit float , Bank float Your Answer Postal float , Deposit float , Bank float Select The Blank Question Segment expense includes ________. Correct Answer The relevant portion of enterprise revenue that can be allocated on a reasonable basis to a segment Your Answer The relevant portion of enterprise revenue that can be allocated on a reasonable basis to a segment Multiple Choice Multiple Answer Question Due to diversification employees seek:Correct Answer Job security , Better opportunities within the firm , Higher compensation

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Your Answer Job security , Better opportunities within the firm , Higher compensation True/False Question Short term financing is meant for funding working capital of a company. Correct Answer True Your Answer True Multiple Choice Single Answer Question Deferred payment plan is also known as:Correct Answer Earn out plan Your Answer Earn out plan Multiple Choice Single Answer Question Estimation for determining the useful life of an asset is required :Correct Answer On some reasonable basis Your Answer On some reasonable basis at 4:09 AM 0 comments Links to this post Labels: Strategic Finance (Set V) Strategic Finance - 11 LIST OF ATTEMPTED QUESTIONS AND ANSWERS Multiple Choice Single Answer Question The Buy back of shares shall not be made from Correct Answer The promoters or persons in control of the company Your Answer The promoters or persons in control of the company Multiple Choice Multiple Answer Question Operating economies of scale are achieved through the following mergers :Correct Answer Horizontal , Vertical , Conglomerate Your Answer Vertical , Conglomerate , Horizontal Multiple Choice Single Answer Question Free Reserves is a component of :Correct Answer Equity Your Answer Market Capitalization Select The Blank Question Capital gains are taxed at ________. Correct Answer Preferentially lower rate Your Answer Preferentially lower rate Select The Blank Question Forward or backward integration is a characteristic of ________. Correct Answer Vertical Mergers Your Answer Vertical Mergers True/False Question Valuation of current investments on overall basis is not considered appropriate. Correct Answer True Your Answer True Multiple Choice Multiple Answer Question The main categories of organisational elements are :Correct Answer Managerial , Support , Operational Your Answer Managerial , Support , Operational Multiple Choice Single Answer Question A firm can manage with small inventory if the supply is :Correct Answer Prompt & adequate

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Your Answer Prompt & adequate Multiple Choice Multiple Answer Question Accounting standard 19 for leases statement is applied in accounting for all leases other than :Correct Answer Lease agreements to explore for or use natural resources , Licensing agreements for items such as motion picture films , Lease agreements to use land Your Answer Lease agreements to explore for or use natural resources , Licensing agreements for items such as motion picture films , Lease agreements to use land Multiple Choice Single Answer Question Equity includes :Correct Answer Development Rebate Reserve Your Answer Deferred Payment Liabilities Select The Blank Question ________ is not a example of segment asset. Correct Answer Customer advances Your Answer Customer advances 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 Your Answer It cannot be used as a starting point to be compared & complimented by other analysis Multiple Choice Single Answer Question As per Pecking order theory, which is the costliest means of funding :Correct Answer Equity Shares Your Answer Equity Shares Multiple Choice Single Answer Question Many companies claim their main assets are their :Correct Answer People Your Answer People Multiple Choice Multiple Answer Question The net income approach is based on following 3 assumptions :Correct Answer There are no taxes , Cost of debt is less than equity capitalization rate , Use of debt doesn't change the risk perception of investors Your Answer There are no taxes , Cost of debt is less than equity capitalization rate , Use of debt doesn't change the risk perception of investors True/False Question Receivables constitutes a substantial portion of current assets of several firms. Correct Answer True Your Answer True True/False Question Decisions related to working capital are repetitive & frequent. Correct Answer True Your Answer True 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 Your Answer Debt and equity are the 2 kinds of funds used by the

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firm Select The Blank Question Liquidation value is also known as ________. Correct Answer Realizable value Your Answer Net replacement value of the assets True/False Question It is possible to place a single value for the acquired firm. Correct Answer False Your 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 Your Answer Right to provide service to customers , Job security for the employees , Commitment to pay interest in time for debentures issued Select The Blank Question According to Altman (1984) total costs in percentage of the market value of a firm range between ________ Correct Answer 12.1 % & 16.7 % Your Answer 5 % & 15 % Match The Following Question Correct Answer Your Answer Availability of funds in the market Cost of funds depends on this factor Cost of funds depends on this factor Flexibility The extent & the ease with which the funds can be raised & paid back are very important The extent & the ease with which the funds can be raised & paid back are very important Time Takes less time to take an overdraft from the bank Takes less time to take an overdraft from the bank Creditworthiness of the If a company has a If a company has a issuer good creditworthiness it is not difficult to raise short term funds good creditworthiness it is not difficult to raise short term funds Multiple Choice Multiple Answer Question A firm with a judicious mixture of debt and equity will have :Correct Answer Lowest cost of capital , High value of firm , Good market reputation Your Answer Lowest cost of capital , High value of firm , Good

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market reputation Select The Blank Question Implicit & Explicit costs are included in the ________. Correct Answer Price of a product Your Answer Price of a product Match The Following Question Correct Answer Your Answer Diversification Growth through the combination of firms in unrelated fields of business Growth through the combination of firms in unrelated fields of business Horizontal mergers 2 Firms operate & compete in a similar kind of business Combined firm is more valuable than the sum of individual firms Vertical mergers Firms in different stages of production Firms in different stages of production Conglomerate mergers Different or unrelated business activity Different or unrelated business activity Multiple Choice Multiple Answer Question The main characteristics of operating economies are :Correct Answer It is achieved through horizontal, vertical and conglomerate mergers , It occurs due to indivisibilities of resources , It is possible in generic management functions Your Answer It is achieved through horizontal, vertical and conglomerate mergers , It occurs due to indivisibilities of resources , It is possible in generic management functions Multiple Choice Single Answer Question The following analysis is more targeted on similar activities or firms that exist in parallel within the activity model or process flow to ensure that they are being done the same best way :Correct Answer Comparative analysis Your Answer Comparative analysis Multiple Choice Multiple Answer Question Every business requires funds on a continual basis for expenses incurred on for :Correct Answer Purchase of raw material , Manufacturing costs , Administration Your Answer Purchase of raw material , Manufacturing costs , Administration True/False Question There are few methods of allocating depreciation over the useful life of an assets. Correct Answer False Your Answer False Multiple Choice Single Answer

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Question For paying dividends, firms will have a given amount of :Correct Answer Cash available Your Answer Cash available Multiple Choice Multiple Answer Question Financial evaluation involves :Correct Answer Determining the earnings , Areas of risk , Best way to finance a merger Your Answer Determining the earnings , Areas of risk , Best way to finance a merger True/False Question A single organisation model serves to keep all individual initiatives to be targeted into a co-ordinated plan. Correct Answer True Your Answer True True/False Question The objective of a dividend policy should be to maximize shareholder's return so that the value of his investment is maximized. Correct Answer False Your Answer True Select The Blank Question HLL is ________ % of subsidiary of Unilever PLC. Correct Answer 0.516 Your Answer 0.5 Multiple Choice Single Answer Question In a matching approach policy, :Correct Answer There is a small risk if shortage of funds Your Answer There is a small risk if shortage of funds 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 Your Answer Between 15 days to 1 year Select The Blank Question ________ is not a characteristic of financial conglomerates. Correct Answer Provide ineffective competitive process Your Answer Provide ineffective competitive process Multiple Choice Single Answer Question Controlling block is usually acquired from:Correct Answer A single seller Your Answer A single seller Multiple Choice Multiple Answer Question A firm using a conservative policy for determining the requirements of current assets :Correct Answer Has fewer production stoppages , Ensures quick deliveries to customers , Stimulates sales Your Answer Has fewer production stoppages , Ensures quick deliveries to customers , Stimulates sales True/False Question Only firms with a large amount of financial slack can afford tender offers. Correct Answer True Your Answer True Multiple Choice Multiple Answer Question Changes in the investee`s equity includes those :-

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Correct Answer Arising from the revaluation of fixed assets , From foreign exchange translation differences , From the adjustment of differences arising on amalgamation Your Answer Arising from the revaluation of fixed assets , From foreign exchange translation differences , From the adjustment of differences arising on amalgamation True/False Question Value based approach of HRA tracking can be divided into 2 categories - Non - monetary & monetary. Correct Answer True Your Answer True Multiple Choice Single Answer Question Depreciation includes amortization of assets whose useful life is :Correct Answer Predetermined Your Answer Predetermined True/False Question Human assets accounting is still to become an accepted trend in the industry. Correct Answer True Your Answer True Multiple Choice Single Answer Question Value implies that something has :Correct Answer Worth Your Answer Worth 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 Your Answer Fixed assets requirements , Permanent working capital requirements , Portion of fluctuating working capital requirement Question 1 Decrease in leverage results in increasing the :Correct Answer Overall cost of capital Question 2 Value implies that something has :Correct Answer Worth Question 3 Organisational changes are similar to mission changes. Correct Answer True Question 4 In value of assets method the following is also to be included as they are also of value to the company :Correct Answer Non trading assets Question 5 In the reproduction value method of valuation, the value of assets is taken to be on the basis of ________ Correct Answer Replacement cost Question 6 Diversification helps in preserving a firm's reputation & goodwill. Correct Answer True Question 7 Normally the basis for identifying an enterprise segments are :Correct Answer The organizational structure of an enterprise Question 8 Investments having no physical existence includes :Correct Answer Shares , Debentures , Bonds Question 9 The 3 groups of participants in a firm are :Correct Answer Suppliers of equity , Debt suppliers , Firm Managers Question 11 A good accounting system does NOT have the characteristics such as :Correct Answer Does not cover decisions over the life cycle Question 12 The direct costs tier normally only includes the following :Correct Answer The personnel payroll , Supplies , Individual rental equipment

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Question 13 ________ are not diversible. Correct Answer Market related risks Question 14 The important aspect of dividend policy is :Correct Answer To determine the amount of earnings to be distributed to shareholders , Amount to be retained in the firm Question 15 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 Question 16 The main theories behind share repurchases are :Correct Answer Dividend or personal taxation hypothesis , Leverage hypothesis , Information or signalling hypothesis Question 17 A change in the method of depreciation is treated as a change in an accounting policy and is disclosed accordingly. Correct Answer True Question 18 The main characteristics of CAPM are :Correct Answer It is an equilibrium Model , It describes the pricing of assets as well as derivatives , Expected security return = Riskless return + beta x (expected market risk premium) Question 19 Segment result is segment revenue less segment expenses. Correct Answer True Question 20 To `gather costs', means capturing all relevant expenses that pertain to the selected model and processes. Correct Answer True Question 21 The resource theory considers that the competitive position of a firm depends on its ________ Assets. Correct Answer Specific Question 22 Segment revenue includes ________. Correct Answer Revenue from transactions with other segments of the enterprise Question 23 Deferred payment plan is also known as:Correct Answer Earn out plan Question 24 The statute governing an enterprise may provide the basis for computation of the depreciation. Correct Answer True Question 25 The final selection of the method of shares valuation depends upon ________. Correct Answer The purpose for which valuation is being done. Question 26 In a merger decision, the value of a firm depends upon:Correct Answer Earnings , Operating characteristics of acquiring firm , Financial characteristics of acquiring firm Question 27 In an aggressive approach :Correct Answer There is a very large risk of shortage of funds Question 29 Significant influence is the power to :Correct Answer Participate in the financial decisions , Participate in the operating policy decisions Question 30 The costs should be gathered & allocated within the organisation at the ________ structural layer. Correct Answer Lowest possible Question 31 A single organisation model serves to keep all individual initiatives to be targeted into a co-ordinated plan. Correct Answer True Question 32 During the costing process, we look at ________. Correct Answer Resource consumption Question 33 Money becomes less valuable when received at a latter stage instead of in present time. Correct Answer True Question 34 The external staffing performance indicators include :Correct Answer Compensation per Re. Profit , Personnel services head count , Profit per head Question 35 The Management of the Company may enter into a negotiated purchase, which is referred to as :Correct Answer Greenfield Question 36 One of the selective developments that has taken place in recent times is companies

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are going in for :Correct Answer Activity based costing and management Question 37 ________ is not a characteristic of financial conglomerates. Correct Answer Provide ineffective competitive process Question 38 An investment property is an investment in land or buildings :Correct Answer Not intended to be occupied substantially for use by investing enterprise , Not intended to be in the operations of the investing enterprise Question 39 Notes payable means the buyer signs a note that evidences a debt to the seller. Correct Answer True Question 40 Business risk & financial risk do not have any influence on ________. Correct Answer Accounting numbers Question 41 During Share repurchase, it is necessary to transfer certain sum to :Correct Answer Capital redemption reserve Account Question 42 The main assumptions for stock repurchase models are as follows :Correct Answer The market is efficient , There is perfect competition in the securities market Question 43 Cash dividends are taxable at ordinary tax rates. Correct Answer True Question 44 When a firm invests in human resources by acquisition & training, it anticipates a ________ Correct Answer Future generation of profits & services Question 45 The amount to be invested by any single investor in a commercial paper shall not be less than Rs. ________. Correct Answer 25 lacs Question 46 Tender offers are used primarily for :Correct Answer Large Equity repurchases Question 47 Many companies claim their main assets are their :Correct Answer People at 8:29 PM 0 comments Links to this post Labels: Strategic Finance (Set VI) Strategic Finance - 15 Question 1 If a company is following multiple accounting system, the activity accountant will have to match data across Correct Answer Codes , Time periods , Systems Question 2 Combination of 2 or more companies into existing company is called ________. Correct Answer Absorption Question 4 For M & As, the acquiring firm needs industry data on :Correct Answer Market growth , Nature of competition , Degree of regulation Question 5 A high payout policy on dividends implies :Correct Answer More current dividends , Less retained earnings Question 6 HLL the largest FMCG company has a turnover of Rs. ________. Correct Answer 118 Bn Question 7 The scope of the data required relates to the scope of the activity model & processes under review. Correct Answer True Question 8 The total cost of the activitymodel allocated by the applied activity drivers to the output of the activity model is called________. Correct Answer The cost of the output Question 9 The voluntary market based method means :Correct Answer Develop a consistent framework which can be operational across sectors and countries Question 10 Exit costs are classified into 3 categories namely :Correct Answer Lost efficiency prior to separation , Job vacancy cost during the new search , Termination pay Question 11 The offer price by the acquiring company should be an average of the weekly high & low for :-

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Correct Answer The last 26 months Question 12 One of the advantages of trade credit is its flexibility i.e. the firm does not :Correct Answer Have to sign a note , Pledge collateral , Adhere to strict payment schedule Question 13 A firm with a judicious mixture of debt and equity will have :Correct Answer Lowest cost of capital , High value of firm , Good market reputation Question 14 The acquirer should intimate to the target company & the concerned stock exchanges as soon as its holding touches :Correct Answer 5 % of the voting capital of the target company Question 15 What is a very important factor in any kind of merger? Correct Answer Exchange ratio Question 16 For determining exchange ratio, the model developed by Conn & Nielson is used. Correct Answer True Question 17 As per Pecking order theory, which is the costliest means of funding :Correct Answer Equity Shares Question 19 Capital gains are taxed at ________. Correct Answer Preferentially lower rate Question 20 Articles of association should authorise buy back of securities as per the Company's Act. Correct Answer True Question 21 In today's fast moving world, the quickest way to get information on a firm is through ________. Correct Answer Internet Question 22 Suppliers of equity are interested in :Correct Answer High share prices Question 23 The buyback shall be made only on stock exchanges with electronic trading facility. Correct Answer True Question 24 Accounting standard 19 for leases statement is applied in accounting for all leases other than :Correct Answer Lease agreements to explore for or use natural resources , Licensing agreements for items such as motion picture films , Lease agreements to use land Question 25 Odd lots purchase is not a method of buy back of shares. Correct Answer False Question 26 Segment liabilities do not include :Correct Answer Borrowings & other liabilities that are incurred for financing rather than operating purpose Question 27 Economic analysis usually covers :Correct Answer A small number of improvement alternatives Question 28 A firm using a conservative policy for determining the requirements of current assets :Correct Answer Has fewer production stoppages , Ensures quick deliveries to customers , Stimulates sales Question 29 Forfeiting is mostly used for ________. Correct Answer Big ticket items & durable goods Question 30 The objective of a dividend policy should be to maximize shareholder's return so that the value of his investment is maximized. Correct Answer False Question 31 firms use credit policy as a marketing tool for expanding sales. Correct Answer True Question 32 Mature companies with stable earnings generally pay out ________. Correct Answer A high proportion of earnings Question 33 As per AS 13 Statement, the following are not considered as investments:Correct Answer Shares , Debentures , Other securities held as stock in trade Question 34 Accounting numbers are not influenced by :Correct Answer Dividend policy , Time span of money , Financial and business risk Question 35 ________ Assets in the balance sheet are normally excluded from the value of total assets. Correct Answer Intangible Question 36 The development aspect of training in firms focus on :Correct Answer Promotion to higher job levels

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Question 37 work in progress means the inventories are semi manufactured products. Correct Answer True Question 38 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 Question 39 Current accounting system is able to provide actual value of employee capabilities & knowledge. Correct Answer False Question 40 The ________ cost tier has the advantage of being the simplest to calculate and justify. Correct Answer Direct Question 41 Operating economies occur due to indivisibilities of resources like :Correct Answer People , Equipment , Overheads Question 42 ________ is a variable expense that can be readily eliminated with organisational changes. Correct Answer Rental equipment Question 43 The HHI index reflects :Correct Answer Inequality & degree of concentration Question 44 ________ is never a part of the output. Correct Answer Mechanisms Question 45 It is essential that ABC must fit into the strategy of the company. Correct Answer True Question 46 In a matching approach policy, :Correct Answer There is a small risk if shortage of funds Question 47 Which is an example out of the following to which special consideration apply for depreciation :Correct Answer Regenerative natural resources at 8:28 PM 0 comments Links to this post Labels: Strategic Finance (Set VI) Strategic Finance - 14 Multiple Choice Multiple Answer Question A firm using a conservative policy for determining the requirements of current assets :Correct Answer Has fewer production stoppages , Ensures quick deliveries to customers , Stimulates sales Your Answer Has fewer production stoppages , Ensures quick deliveries to customers , Increases the ROI Multiple Choice Multiple Answer Question The main theories behind share repurchases are :Correct Answer Dividend or personal taxation hypothesis , Leverage hypothesis , Information or signalling hypothesis Your Answer Dividend or personal taxation hypothesis , Leverage hypothesis , Information or signalling hypothesis Multiple Choice Single Answer Question In respect of depreciable assets, which do not have material value, depreciation is often allocated :Correct Answer Fully in the accounting period for which they are acquired Your Answer Over the residual value Multiple Choice Single Answer Question What is the maximum amount involved in the buy back of the total paid up capital & free reserves of the company? Correct Answer 0.25

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Your Answer 0.25 True/False Question Tender offers us an alternative approach to acquire another firm. Correct Answer True Your Answer True Multiple Choice Single Answer Question Cost benefit analysis is the simplest form of comparison between :Correct Answer Ideas to determine which is faster, better or cheaper Your Answer Ideas to determine which is faster, better or cheaper Multiple Choice Multiple Answer Question For ABC Analysis the available cost data :Correct Answer Has to be adjusted for change , Has to be corrected for undocumented element costs , Has to be combined with different types of data from alternate sources Your Answer Has to be adjusted for change , Has to be corrected for undocumented element costs , Has to be combined with different types of data from alternate sources Multiple Choice Single Answer Question Today knowledge has become a key determinant for :Correct Answer Economic & business success Your Answer For determining a firm's value Select The Blank Question During the costing process, we look at ________. Correct Answer Resource consumption Your Answer Expenses Multiple Choice Single Answer Question A firm can manage with small inventory if the supply is :Correct Answer Prompt & adequate Your Answer Prompt & adequate Multiple Choice Multiple Answer Question Operating economies occur due to indivisibilities of resources like :Correct Answer People , Equipment , Overheads Your Answer People , Equipment , Overheads Select The Blank Question If firms have same technology ________ makes the difference i.e. firms become more productive . Correct Answer Solid human resource team Your Answer Solid human resource team Multiple Choice Single Answer Question Free Reserves is a component of :Correct Answer Equity Your Answer Equity True/False Question There are few methods of allocating depreciation over the useful life of an assets. Correct Answer False Your Answer True True/False Question Cash dividends are taxable at ordinary tax rates. Correct Answer True Your Answer True Multiple Choice Multiple Answer Question Financial statements classify the following into separate categories :Correct Answer Fixed assets , Investments , Current assets Your Answer Fixed assets , Current assets Multiple Choice Multiple Answer Question The cost of an investment includes charges such as :Correct Answer Brokerage , Fees , Duties Your Answer Brokerage , Advertisements , Fees , Duties

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Match The Following Question Correct Answer Your Answer Information or signalling hypothesis Management believes that the common stock of the company is undervalued Management believes that the common stock of the company is undervalued Dividend or Personal Taxation Hypothesis Cash dividends are taxable at ordinary tax rates Cash dividends are taxable at ordinary tax rates Leverage hypothesis Stock repurchases increases the debt / equity ratio Stock repurchases increases the debt / equity ratio Wealth transfer among shareholders The largest portion of wealth effect goes to the non - tendering shareholders The largest portion of wealth effect goes to the non tendering shareholders Multiple Choice Multiple Answer Question Every business requires funds on a continual basis for expenses incurred on for :Correct Answer Purchase of raw material , Manufacturing costs , Administration Your Answer Purchase of raw material , Manufacturing costs , Administration Multiple Choice Single Answer Question Short term sources of funds include :Correct Answer Current Liabilities Your Answer Current Liabilities Select The Blank Question HLL the largest FMCG company has a turnover of Rs. ________. Correct Answer 118 Bn Your Answer 118 Bn True/False Question Diversification helps in preserving a firm's reputation & goodwill. Correct Answer True Your Answer True True/False Question If a company has resorted to buyback its shares, it cannot make a further issue of the same kind of securities within a period of 1 year. Correct Answer False Your Answer True Select The Blank Question The clean up period is usually ________ months. Correct Answer 1 to 2 months Your Answer 1 to 2 months Multiple Choice Single Answer Question The bottom line of ABC Process is :Correct Answer To achieve a better method of doing the right business pf the

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organisation Your Answer To achieve a better method of doing the right business pf the organisation Select The Blank Question If a segment is not designated as a ________ it should be included as an unallocated reconciling item. Correct Answer Reportable segment Your Answer Operating segment Multiple Choice Single Answer Question If a particular item of depreciation or amortisation is included in segment expense, the related asset is included in :Correct Answer Segment assets Your Answer Segment assets True/False Question The intellectual assets of a company are often worth 3 or 4 times the tangible book value. Correct Answer True Your Answer True True/False Question Segment result is segment revenue less segment expenses. Correct Answer True Your Answer True Multiple Choice Multiple Answer Question If a firm diversifies managerial teams formed can be shifted from unproductive activities to productive ones which leads to :Correct Answer Improved profitability , Continuity , Growth of the firm Your Answer Improved profitability , Continuity , Growth of the firm True/False Question Book value is based on the balance sheet value of owner's equity. Correct Answer True Your Answer True Multiple Choice Multiple Answer Question The overhead expenses include :Correct Answer Utilities , Maintenance , Security Your Answer Daily wages , Maintenance , Security Match The Following Question Correct Answer Your Answer Amount involved in buy back Not to exceed 25 % of the total paid up capital Not to exceed 25 % of the total paid up capital Articles of Association Authorize buy back of securities The ratio of debt to total capital & free reserves should be 1 : 1 Board of Directors Resolution permitting the buy back of shares Authorize buy back of securities Shares to be bought back Fully paid up Resolution permitting the buy back of shares True/False Question It is necessary to identify all costs that may be related to an acquisition. Correct Answer True Your Answer True

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True/False Question Notes payable means the buyer signs a note that evidences a debt to the seller. Correct Answer True Your Answer True Select The Blank Question ________ know the best about a firm's performance. Correct Answer Firm Managers Your Answer Firm Managers Multiple Choice Single Answer Question The FEA Tools encompass a vast array of information & policy into :Correct Answer One evaluation Your Answer Many evaluations Multiple Choice Multiple Answer Question The employer in offering the job contract assumes a range of legal obligations such as :Correct Answer Rewards - cash like & non cash like , Health & safety policies , Pensions & contributions to social security payments Your Answer Rewards - cash like & non cash like , Health & safety policies , Pensions & contributions to social security payments Select The Blank Question Business risk & financial risk do not have any influence on ________. Correct Answer Accounting numbers Your Answer Accounting numbers Multiple Choice Multiple Answer Question A current investment is an investment that is by nature :Correct Answer Readily realisable , Intended to be held for not more than 1year from the date on which investment is made Your Answer Readily realisable , Intended to be held for not more than 1year from the date on which investment is made , Can be held for more than 1 year Multiple Choice Single Answer Question The depreciation rates or the useful lives of the assets are disclosed only :Correct Answer If they are different from the principle rates specified in the statute Your Answer If they are different from the principle rates specified in the statute Multiple Choice Multiple Answer Question The net income approach is based on following 3 assumptions :Correct Answer There are no taxes , Cost of debt is less than equity capitalization rate , Use of debt doesn't change the risk perception of investors Your Answer There are no taxes , Cost of debt is less than equity capitalization rate , Use of debt doesn't change the risk perception of investors 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 Your Answer Between 15 days to 1 year Select The Blank Question Forfeiting is mostly used for ________. Correct Answer Big ticket items & durable goods Your Answer Big ticket items & durable goods Select The Blank Question ________ government has made it mandatory to include in their annual reports information on customers, processes & human capital. Correct Answer Danish (Denmark) Your Answer Japanese Select The Blank Question ________ are those operating assets that are employed by a segment in its operating activities.

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Correct Answer Segment assets Your Answer Current assets Multiple Choice Single Answer Question When the working capital is less than its peak level :Correct Answer The surplus is invested in liquid assets Your Answer The surplus is invested in liquid assets Question Walter's model on dividend relevance is based on the following assumptions :Correct Answer 100 Per cent payout or retention , Internal financing , Constant return and cost of capital Question A firm with a judicious mixture of debt and equity will have :Correct Answer Lowest cost of capital , High value of firm , Good market reputation Question Investment are the assets held for earning income by way of :Correct Answer Dividend , Interest , Rentals Question An activity model is a tool to assist in understanding & defining the organisation. Correct Answer True Question The most popular kind of dividend policy is one that pays a ________. Correct Answer Regular, steady dividend Question Assets held as stock - in - trade are also investments. Correct Answer False Question As per Pecking order theory, which is the costliest means of funding :Correct Answer Equity Shares Question In the past, costing mainly focused on :CorrectAnswer Manufacturing costs Question Articles of association should authorise buy back of securities as per the Company's Act. Correct Answer True Question Opportunity costs and real costs decrease the market value of a firm. Correct Answer True Question Increase in cost of capital means decrease in ________. Correct Answer Profitability Question According to NI Approach, decrease in leverage decreases the overall cost of capital and increases the firm's value. Correct Answer False Question Short term sources of funds include :Correct Answer Current Liabilities Question A high payout policy means :Correct Answer More current dividends Question Baumul`s Model is similar to EOQ model in inventory management. Correct Answer True Question One of the bases for determining the residual value of similar assets is :Correct Answer Realizable value Question Investment decisions are mainly concerned with :Correct Answer Assets Question current liabilities arise in the context of :Correct Answer Current assets Question A high payout policy on dividends implies :Correct Answer More current dividends , Less retained earnings Question In the stock repurchase model one of the main assumption is that ________. Correct Answer The market is efficient Question Normally the basis for identifying an enterprise segments are :Correct Answer The organizational structure of an enterprise Question If a firm diversifies managerial teams formed can be shifted from unproductive activities to productive ones which leads to :Correct Answer Improved profitability , Continuity , Growth of the firm Question Capital gains are taxed at ________. Correct Answer Preferentially lower rate Question AS 13 Accounting for investments - Accounting standard comes into effect for financial statements covering periods commencing on or after ________. Correct Answer `April 1, 1995

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Question Comparative analysis is :Correct Answer A review to ensure consistency within the activity model & process flow Question The depreciation rates or the useful lives of the assets are disclosed only :Correct Answer If they are different from the principle rates specified in the statute Question When a firm invests in human resources by acquisition & training, it anticipates a ________ Correct Answer Future generation of profits & services Question ________ is never a part of the output. Correct Answer Mechanisms Question It is essential that ABC must fit into the strategy of the company. Correct Answer True Question The 3 groups of participants in a firm are :Correct Answer Suppliers of equity , Debt suppliers , Firm Managers Question For accounting standard (AS) 27, Significant influence may be gained by :Correct Answer Share ownership , Statute , Agreement Question Postage is an example of ________ cost. Correct Answer Non traceable cost AS 4 Contingencies & events occurring after the balance sheet date AS 13 Accounting for investments Accounting for investments AS 23 Accounting for investments in associates in consolidated financial statements Accounting for investments in associates in consolidated financial statements AS 21 Consolidated financial statements Consolidated financial statements Question The value based approach of HRA Tracking suggests that the value of human resources depends upon :Correct Answer Capacity to generate revenue Question Shortcomings of accounting numbers consist of the following :Correct Answer Firms use different kind of accounting methods , Business risk and financial risk do not have any influence on accounting numbers Exit cost Lost efficiency prior to separation, Job vacancy cost during the new search & termination pay. Lost efficiency prior to separation, Job vacancy cost during the new search & termination pay. Historical costs Sacrifice necessary to hire & train people Sacrifice necessary to hire & train people Substitution cost Exit costs of the leaving employee & recruiting & training of the replacement Exit costs of the leaving employee & recruiting & training of the replacement Opportunity cost An asset value when they are the target of an alternative use. An asset value when they are the target of an alternative use. Question It is necessary to identify all costs that may be related to an acquisition. Correct Answer True Question Cost benefit analysis is the simplest form of comparison between :Correct Answer Ideas to determine which is faster, better or cheaper Question Modigliani - Miller Theoram is based on :Correct Answer Perfect Capital Markets Question In today's fast moving world, the quickest way to get information on a firm is through ________. Correct Answer Internet Question Determination of residual value of an asset is normally a difficult matter. Correct Answer True Question The scope of the data required relates to the scope of the activity model & processes under review. Correct Answer True Question Trade credits are of the following types:Correct Answer Notes payable , Trade acceptances , Open accounts 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 Question AS 13 Does not deal with :Correct Answer The bases for recognition of interest, dividends & rentals earned on investments , Operating or finance leases , Investment in mutual funds Question Debt reduces :Correct Answer Agency cost of free cash flow , Commitment to pay in time to all lenders ,

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Freedom of decisions Question It is the activity accountant's job to do the following for the existing organisational structure :Correct Answer To define the costs , To refine the costs , To document the costs at 8:33 PM 0 comments Links to this post Labels: Strategic Finance (Set VII) Strategic Finance - 18 Question Book value of the assets is directly dependent on the accounting policies followed by the company which is used in the following areas :Correct Answer Inventory valuation , Booking depreciation , Methods of provisions Question Segment expense includes ________. Correct Answer The relevant portion of enterprise revenue that can be allocated on a reasonable basis to a segment Question During the costing process, we look at ________. Correct Answer Resource consumption Question Long term cash forecasting is generally for a period of ________ years. Correct Answer 3 to 5 years Question Decisions related to working capital are repetitive & frequent. Correct Answer True Question Share repurchase a form of restructuring comes under :Correct Answer Changes in ownership structure Question Explicit cost and implicit cost are the two parts of cost of debt. Correct Answer True Question The limitations of value of assets approach include :Correct Answer Book value of the assets is directly dependent on the accounting policies followed by the company , There are no standard procedures for valuation of intangible assets , No importance to the market value of the asset 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 Question In many companies, there is no formal record of________. Correct Answer Investment in employees Question In a merger decision, the value of a firm depends upon:Correct Answer Earnings , Operating characteristics of acquiring firm , Financial characteristics of acquiring firm Question The 3 main types of accounting records followed by an organisation are :Correct Answer Organisational accounting , Budgetary accounting , Cost accounting Question Cost of ________ is more than other sources for raising short - term finance. Correct Answer Bank finance Question Operating economies of scale are achieved through the following mergers :Correct Answer Horizontal , Vertical , Conglomerate Question The main assumption in comparative analysis is the possibility of :Correct Answer Combination or co-location of similar functions Question If the segment result of a segment includes interest or dividend income its segment assets will not include ________. Correct Answer Payables Question According to Net Income Approach, the average cost of capital declines as the leverage ratio :Correct Answer Increases Question Equity includes :Correct Answer Development Rebate Reserve 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 Question The employer in offering the job contract assumes a range of legal obligations such as :-

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Correct Answer Rewards - cash like & non cash like , Health & safety policies , Pensions & contributions to social security payments Segment liabilities Enterprise liabilities Enterprise liabilities Segment revenue Enterprise revenue Enterprise revenue Segment result Enterprise net profit or loss Enterprise net profit or loss Segment assets Enterprise assets Enterprise assets Question Organisational changes are similar to mission changes. Correct Answer True Question The number of bidding centers shall not be less than ________ for buy back through book building. Correct Answer 30 Segment liabilities Do not include borrowings that are incurred for financing purposes Does not include extra ordinary items Segment revenue Does not include extra ordinary items The qualitative characteristics include the relevance Segment expenses Does not include income tax expenses Determined after intra - enterprise balances are eliminated Segment assets Do not include income tax assets Do not include income tax assets Question Total risk reduces if operations of combining firms are ________. Correct Answer Negatively correlated Question In the reproduction value method of valuation, the value of assets is taken to be on the basis of ________ Correct Answer Replacement cost Question A good accounting system does NOT have the characteristics such as :Correct Answer Does not cover decisions over the life cycle Question The ________ cost tier has the advantage of being the simplest to calculate and justify. Correct Answer Direct Question In today's world, knowledge has become the key determinant for economic & business success. Correct Answer True Question Management of working capital refers to the management of total assets and liabilities of a company. Correct Answer False Question optimum cash balance under certainty i.e. Baumul`s model allows the cash flow to fluctuate. Correct Answer False Question A company under siege may look for support & help from its :Correct Answer Friends Question If the segment result of a segment includes interest expense its segment liabilities include :Correct Answer The related interest bearing liabilities 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 Question A firm using a conservative policy for determining the requirements of current assets :Correct Answer Has fewer production stoppages , Ensures quick deliveries to customers , Stimulates sales Question The following Act contains the provisions permitting the companies to buy back their shares :Correct Answer Companies (Amendment) Act, 1999 Question Shortage costs are mainly in the form of :Correct Answer Disruption in production schedule , Loss of sales , Loss of customer goodwill Question open account credit appears on the buyer's balance sheet as :Correct Answer Accounts payable Question Business risk & financial risk do not have any influence on ________. Correct Answer Accounting numbers Question When a company is able to assess an individual's worth, it helps in increasing its own worth. Correct Answer True

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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 Question Operating economies occur due to indivisibilities of resources like :Correct Answer People , Equipment , Overheads Question Often a company borrows loans / debts by giving the following as a security :Correct Answer Shares Question A long term investment is an investment other than a current investment. Correct Answer True Question Valuation of current investments on overall basis is not considered appropriate. Correct Answer True Question If a particular item of depreciation or amortisation is included in segment expense, the related asset is included in :Correct Answer Segment assets Question Segment result is segment revenue less segment expenses. Correct Answer True at 8:32 PM 0 comments Links to this post Labels: Strategic Finance (Set VII) Strategic Finance - 17 Question 1 The accounting records serve as the major source of cost data. Correct Answer True Question 2 ________ know the best about a firm's performance. Correct Answer Firm Managers Question 3 A merger will make sense to the acquiring firm if its shareholders benefit. Correct Answer True Question 4 The important steps involved in the analysis of mergers & acquisitions are:Correct Answer Planning , Searching & screening , Financial evaluation Question 5 Developing a consistent framework supported by rewarding mechanisms once it is introduced & approved at enterprise level is a characteristic of :Correct Answer The investing in people method in the united kingdom Question 6 Dividends increase the current returns for shareholders. Correct Answer True Question 7 Internal financing means the firm finances all investments through :Correct Answer Retained earnings Question 8 In a friendly takeover, the acquiring firm makes a financial proposal to the largest firm's ________. Correct Answer Management & board Question 10 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 Question 11 Explicit cost and implicit cost are the two parts of cost of debt. Correct Answer True Question 12 AS 13 Does not deal with :Correct Answer The bases for recognition of interest, dividends & rentals earned on investments , Operating or finance leases , Investment in mutual funds Question 13 the amount of working capital required to meet long term, minimum needs is called :Correct Answer Permanent working capital Question 14 A long term investment is an investment other than a current investment. Correct Answer True Question 15 Short term financing is meant for funding working capital of a company. Correct Answer True Question 16 Share repurchase a form of restructuring comes under :Correct Answer Changes in ownership structure Question 17 Retained earnings are the most important internal sources of financing the growth of

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the firm. Correct Answer True Question 18 Receivables constitutes a substantial portion of current assets of several firms. Correct Answer True Question 19 Investment are the assets held for earning income by way of :Correct Answer Dividend , Interest , Rentals Question 20 Personnel services expenses is made up of:Correct Answer Personnel salaries , Cost of facilities , Training & development budgets Question 21 In many companies, there is no formal record of________. Correct Answer Investment in employees Question 22 Value added analysis is a method to determine, if elements within a process flow provide the :Correct Answer Values Question 24 The Buy back of shares shall not be made from Correct Answer The promoters or persons in control of the company Question 25 traditionally avails are provided by ________. Correct Answer Banks Question 26 ________ is not a example of segment liability. Correct Answer Goodwill Question 27 Examples of accrued expenses are :Correct Answer Wages , Income tax , Property tax Question 28 Liquidation value is also known as ________. Correct Answer Realizable value Question 29 Indicators of the value of an investment are obtained by :Correct Answer Reference to its market value , The investee`s assets , The expected cash flows from the investment Question 30 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 Question 31 optimum cash balance under certainty i.e. Baumul`s model allows the cash flow to fluctuate. Correct Answer False Question 32 Cost accounted for per activity is classified under ________. Correct Answer Traceable cost Question 33 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 Question 34 The cost of facilities is usually included & distributed as ________. Correct Answer Depreciation Question 35 In value of assets approach the value of which of the following should be deducted to calculate the net assets available to the equity shareholders :Correct Answer Outstanding preference shares Question 36 usually the `controlling block' tends to be between :Correct Answer 20 & 40 percent Question 37 When competition is high in the market, it is :Correct Answer Essential to maintain a larger inventory of finished goods Question 38 Segment expense includes ________. Correct Answer The relevant portion of enterprise revenue that can be allocated on a reasonable basis to a segment Question 39 Credit standards should be relaxed upon the point where incremental returns ________ incremental costs. Correct Answer Equals Question 40 Management of working capital refers to the management of total assets and liabilities of a company. Correct Answer False Question 41 The employer in offering the job contract assumes a range of legal obligations such as Correct Answer Rewards - cash like & non cash like , Health & safety policies , Pensions &

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contributions to social security payments Question 42 The most important internal sources of financing the growth of the firm is through :Correct Answer Retained earnings Question 43 When a change in the method of depreciation is made :Correct Answer Depreciation is recalculated in accordance with the new method Question 44 Shortcomings of accounting numbers consist of the following :Correct Answer Firms use different kind of accounting methods , Business risk and financial risk do not have any influence on accounting numbers Question 45 Profitability of a company depends upon :Correct Answer Cost of capital Question 46 A normal firm shows the following characteristics :Correct Answer No unique optimum payout ratio , Market value per share unaffected by the payout ratio , All dividend policies are similar Question 47 As per residual theory of dividends the focus is on ________. Correct Answer Growth Question Any addition or extension to an existing asset which retains a separate identify & is capable of being used after the existing asset is disposed of :Correct Answer Is depreciated independently Question In market value approach, interested parties never manipulate the stock markets. Correct Answer False Question For accounting standard (AS) 27, Significant influence may be gained by :Correct Answer Share ownership , Statute , Agreement Question Accounts payable is also known as :Correct Answer Trade credit from suppliers Question Earning power of the company approach tries to value the ________. Correct Answer Current value of the assets Free cash flow theory Enormous conflicts of interest between Stakeholders and shareholders Enormous conflicts of interest between Stakeholders and shareholders Net income approach Cost of debt & equity do not change with a change in leverage ratio Cost of debt & equity do not change with a change in leverage ratio Net operating income approach The overall capitalization rate remains constant for all levels of financial leverages The overall capitalization rate remains constant for all levels of financial leverages Modigliani - Miller Theory weighted average cost of capital does not change with a change in the proportion of debt to equity in the capital structure weighted average cost of capital does not change with a change in the proportion of debt to equity in the capital structure 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 Question What is a very important factor in any kind of merger? Correct Answer Exchange ratio Question Segment expense includes ________. Correct Answer The relevant portion of enterprise revenue that can be allocated on a reasonable basis to a segment Question The depreciable assets are assets which are expected to be used :Correct Answer During more than 1 accounting period Question Arbitrage process implies that security cannot sell at different prices. Correct Answer True Question Which is an example out of the following to which special consideration apply for depreciation :Correct Answer Regenerative natural resources Question Baumul`s Model is similar to EOQ model in inventory management. Correct Answer True Question Financial evaluation involves :Correct Answer Determining the earnings , Areas of risk , Best way to finance a merger Question The difference between current assets & current liabilities is known as :Correct Answer Net working capital

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Question Stock repurchases ________ the debt / equity ratio. Correct Answer Increases Question Which of the following systems identifies each of the organizational elements of the traditional bureaucratic structure and applies the identifiable costs of that element accordingly? Correct Answer Organization element accounting 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 Question Determination of residual value of an asset is normally a difficult matter. Correct Answer True Question Free Reserves is a component of :Correct Answer Equity Question Short term sources of funds include :Correct Answer Current Liabilities Question To `gather costs', means capturing all relevant expenses that pertain to the selected model and processes. Correct Answer True Question When a company has resorted to buyback of its shares it cannot make a further issue of the same kind of securities within a period of how many months? Correct Answer 6 months Question At times managers invest in projects that improve the company's ________. Correct Answer Prestige or power Question It is the activity accountant's job to do the following for the existing organisational structure :Correct Answer To define the costs , To refine the costs , To document the costs 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 Question Assets held as stock - in - trade are also investments. Correct Answer False Question As per residual theory of dividends the focus is on ________. Correct Answer Growth Question Profitability of a company depends upon :Correct Answer Cost of capital Question HLL the largest FMCG company has a turnover of Rs. ________. Correct Answer 118 Bn 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 Question If a firm diversifies managerial teams formed can be shifted from unproductive activities to productive ones which leads to :Correct Answer Improved profitability , Continuity , Growth of the firm Question In the tender offer, the purchaser approaches :Correct Answer The shareholder 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 Question In the shareholding pattern of a company, the promoter's holding includes________. Correct Answer Foreign Promoters Question A current investment is an investment that is by nature :Correct Answer Readily realisable , Intended to be held for not more than 1year from the date on which investment is made Question Trade credit creates book debts which the firm is expected to collect in the near future. Correct Answer True Question The chance of bankruptcy is small when the leverage of a firm is small. Correct Answer True

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Question The 3 groups of participants in a firm are :Correct Answer Suppliers of equity , Debt suppliers , Firm Managers Question The financial managers of a company consume a great deal of their time in activities like :Correct Answer Monitoring the investment in inventories , Negotiating favourable credit terms , Administrating Accounts receivables Question Appraisal value of a firm can be acquired from an independent appraisal agency. Correct Answer True 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 Question Accrued expenses represent :Correct Answer Costless financing , An interest free source of financing Question There is a ________ relationship between the number of employees & the use of operating supplies. Correct Answer Natural Mechanisms Performs or provides energy to an activity Performs or provides energy to an activity Inputs Information or material used to produce the output of an activity Information or material used to produce the output of an activity Controls Information or material that constrains an activity Information or material that constrains an activity Outputs Information or material produced by an activity Information or material produced by an activity Question Value added analysis :Correct Answer Helps to identify potential activities that may be omitted immediately Question Notes payable means the buyer signs a note that evidences a debt to the seller. Correct Answer True at 8:36 PM 0 comments Links to this post Labels: Strategic Finance (Set VIII) Strategic Finance - 21 Question Accounting standards (AS - 13) is now mandatory. Correct Answer True 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 Question A firm's current assets include :Correct Answer Marketable securities , Receivables , Inventory Question In a merger decision, the value of a firm depends upon:Correct Answer Earnings , Operating characteristics of acquiring firm , Financial characteristics of acquiring firm 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 Question A merger will make sense to the acquiring firm if its shareholders benefit. Correct Answer True Question ________ Assets in the balance sheet are normally excluded from the value of total assets. Correct Answer Intangible Question What is a very important factor in any kind of merger? Correct Answer Exchange ratio Question A shareholder expects a higher rate of return as a firm's compensation for ________.

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Correct Answer Increased risk Question Usually cost data is perfect for ABC Analysis & distribution. Correct Answer False Question Forward or backward integration is a characteristic of ________. Correct Answer Vertical Mergers Question Segment assets are determined after :Correct Answer Deducting related allowances / provisions reported as direct offsets Question Acceptable audit requirements cannot be overlooked even under the pressure of :Correct Answer Timeliness & turnaround 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 Question A single organisation model serves to keep all individual initiatives to be targeted into a co-ordinated plan. Correct Answer True Question Assets held as stock - in - trade are also investments. Correct Answer False Question In an aggressive approach :Correct Answer There is a very large risk of shortage of funds Question Organisational changes are similar to mission changes. Correct Answer True Question The internal staffing performance indicators are :Correct Answer Sales per employee , Recovery rate , Utilization % Question The most popular kind of dividend policy is one that pays a ________. Correct Answer Regular, steady dividend Amount involved in buy backNot to exceed 25 % of the total paid up capital Not to exceed 25 % of the total paid up capital Articles of Association Authorize buy back of securities Resolution permitting the buy back of shares Board of Directors Resolution permitting the buy back of sharesAuthorize buy back of securities Shares to be bought back Fully paid up Fully paid up Question A good accounting system does NOT have the characteristics such as :Correct Answer Does not cover decisions over the life cycle Question Fixed price tender offers are accompanied by an abnormal announcement period return of :Correct Answer 8 - 10 % Question The external staffing performance indicators include :Correct Answer Compensation per Re. Profit , Personnel services head count , Profit per head Trust receipt Specifically identified by serial number or other means Specifically identified by serial number or other means Terminal warehouse receipt Inventory is stored with a public or terminal warehousing company Inventory is stored with a public or terminal warehousing company Floating lien Loose arrangement as the lender may find it difficult to police Well suited for financial good inventories of capital goods Chattel mortgage Well suited for financial good inventories of capital goods Affords a higher degree of control over the collateral Question In today's fast moving world, the quickest way to get information on a firm is through ________. Correct Answer Internet Question Companies often need to value its own :Correct Answer Shares 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 Question For determining exchange ratio, the model developed by Conn & Nielson is used. CorrectAnswer True Question usually credit lines are established for a period of ________. Correct Answer 1 year

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Question Shortcomings of accounting numbers consist of the following :Correct Answer Firms use different kind of accounting methods , Business risk and financial risk do not have any influence on accounting numbers Question Investors can reduce the company related risk by diversification of their investments in ________. Correct Answer Shares of a large number of companies Question Making decision on dividend is a very crucial area of financial management for a firm. 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 Question Due to diversification employees seek:Correct Answer Job security , Better opportunities within the firm , Higher compensation Question Research into true human resources accounting began in :Correct Answer 1960`s Question Segment assets are ________. Correct Answer Directly attributable to the segment Question AS 13 statement does not deal with operating or finance leases. Correct Answer True Question The costs should be gathered & allocated within the organisation at the ________ structural layer. Correct Answer Lowest possible Question Value implies that something has :Correct Answer Worth Question Examples of accounting methods used by firm are :Correct Answer FIFO , LIFO , Accrual Accounting Question The main assumptions for stock repurchase models are as follows :Correct Answer The market is efficient , There is perfect competition in the securities market 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 Question It is easy to find a risk free security. Correct Answer False Question The earning power of the company approach includes :Correct Answer Mainly discounting of all future earnings Question During the costing process, we look at ________. Correct Answer Resource consumption Question Mature companies with stable earnings generally pay out ________. Correct Answer A high proportion of earnings at 8:35 PM 0 comments Links to this post Labels: Strategic Finance (Set VIII) Strategic Finance - 20 Question A firm can manage with small inventory if the supply is :Correct Answer Prompt & adequate Question A transport corporation has a substantial working capital requirement. Correct Answer False Question Implicit claims are non written promises and rights such as :Correct Answer Right to provide service to customers , Job security for the employees Question As per NOI Approach - the overall capitalization rate remains ________ for all levels of financial leverage. Correct Answer Constant Question When a firm invests in human resources by acquisition & training, it anticipates a ________ Correct Answer Future generation of profits & services Question While accounting for human assets, the following data is to be considered :Correct Answer Full time equivalent staff , Revenues , Expenses

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Free cash flow theory Enormous conflicts of interest between Stakeholders and shareholders Firms have preferences by choosing a way to finance their projects Net income approach Cost of debt & equity do not change with a change in leverage ratio weighted average cost of capital does not change with a change in the proportion of debt to equity in the capital structure Net operating income approach The overall capitalization rate remains constant for all levels of financial leverages The overall capitalization rate remains constant for all levels of financial leverages Modigliani - Miller Theory weighted average cost of capital does not change with a change in the proportion of debt to equity in the capital structure Cost of debt & equity do not change with a change in leverage ratio 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 Question The following is not a method of payment to the acquired firm:Correct Answer Fixed deposits of the acquiring firm Question ________ is never a part of the output. Correct Answer Mechanisms Question Short term financing is meant for funding working capital of a company. Correct Answer True Question One of the bases for determining the residual value of similar assets is :Correct Answer Realizable value 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 Earning per share Acquisition is considered to be a function of the impact of the merger on the EPS Divide net worth by the number of equity shares outstanding Book value Divide net worth by the number of equity shares outstanding Evaluate the impact of the merger on EPS & price - earning ratio Appraisal value Provides a list of the reasonableness of results obtained through methods base upon the going concern concept Indicate the consensus of the investors Market value Indicate the consensus of the investors Provides a list of the reasonableness of results obtained through methods base upon the going concern concept 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 Question Receivables constitutes a substantial portion of current assets of several firms. Correct Answer True Question Odd lots purchase is not a method of buy back of shares. Correct Answer False 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 Question An activity model is a tool to assist in understanding & defining the organisation. Correct Answer True Question A quantity discount is offered :Correct Answer On large shipments Question According to NI Approach, decrease in leverage decreases the overall cost of capital and increases the firm's value. Correct Answer False Question Human Assets accounting stands for :Correct Answer Measurement & reporting of the cost and value of people as organisational resources Question Shareholders returns consists of 2 components :Correct Answer Dividend , Capital gains Question In value of assets method the following is also to be included as they are also of value to the company :Correct Answer Non trading assets

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Question Usually only a single method is used for valuation of shares. Correct Answer False 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 Question ForM & As, the acquiring firm needs industry data on :Correct Answer Market growth , Nature of competition , Degree of regulation Question Increase in cost of capital means decrease in ________. Correct Answer Profitability Question Investments having no physical existence includes :Correct Answer Shares , Debentures , Bonds Question Long term cash forecasting is generally for a period of ________ years. Correct Answer 3 to 5 years Question The number of bidding centers shall not be less than ________ for buy back through book building. Correct Answer 30 Question The following of the depreciable asset may undergo subsequent changes arising due to price adjustments :Correct Answer Historical cost Question The 3 groups of participants in a firm are :Correct Answer Suppliers of equity , Debt suppliers , Firm Managers Question A company that comes to the rescue of a firm that is being targeted for a takeover is called :Correct Answer White knight Question ________ is not a example of segment asset. Correct Answer Customer advances Question Risk appetite decides the rate of capitalization. Correct Answer True Question usually the `controlling block' tends to be between :Correct Answer 20 & 40 percent Question Sometimes the mechanisms may appear to be inputs for an activity. Correct Answer True Question AS 23 - Accounting for investments in associates in consolidated financial statements comes into effect in respect of accounting periods commencing on or after ________. Correct Answer 01.04.2002 Question The direct costs tier normally only includes the following :Correct Answer The personnel payroll , Supplies , Individual rental equipment 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 Question Debt reduces :Correct Answer Agency cost of free cash flow , Commitment to pay in time to all lenders , Freedom of decisions Question A firm using a conservative policy for determining the requirements of current assets :Correct Answer Has fewer production stoppages , Ensures quick deliveries to customers , Stimulates sales Question Valuation of current investments on overall basis is not considered appropriate. Correct Answer True Question The advantage of ________ is that the company is not required to wait for the payment by the bill issuer. Correct Answer Bill discounting Question A single business segment does not include products & services :Correct Answer With significantly differing risks & returns LIST OF ATTEMPTED QUESTIONS AND ANSWERS

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Match The Following Question Correct Answer Your Answer Lost efficiency prior to separation, Job

Opportunity cost An asset value when they are the target of an alternative use. vacancy cost during the new search & termination pay.

Exit cost Lost efficiency prior to separation, Job vacancy cost during the new search & termination pay. Exit costs of the leaving employee & recruiting & training of the replacement Historical costs Sacrifice necessary to hire & train people An asset value when they are the target of an alternative use. Substitution cost Exit costs of the leaving employee & recruiting & training of the replacement Sacrifice necessary to hire & train people 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 Your Answer It is used as a starting point True/False Question For determining exchange ratio, the model developed by Conn & Nielson is used. Correct Answer True Your Answer True Multiple Choice Single Answer Question Normally the basis for identifying an enterprise segments are :Correct Answer The organizational structure of an enterprise Your Answer Location of its customers Multiple Choice Single Answer Question FEA is a technique to analyze & evaluate :Correct Answer Alternative process improvements Your Answer Alternative process improvements True/False Question Arbitrage process implies that security cannot sell at different prices. Correct Answer True

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Your Answer False Select The Blank Question ________ is not a characteristic of financial conglomerates. Correct Answer Provide ineffective competitive process Your Answer Provide ineffective competitive process True/False Question Retained earnings are the most important internal sources of financing the growth of the firm. Correct Answer True Your Answer True Multiple Choice Multiple Answer Question Significant influence is the power to :Correct Answer Participate in the financial decisions , Participate in the operating policy decisions Your Answer Participate in the financial decisions , Participate in the operating policy decisions , Control over the policies Multiple Choice Single Answer Question For paying dividends, firms will have a given amount of :Correct Answer Cash available Your Answer Cash available 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 Your Answer The decisions related are one time decisions only , It is continually required for a going concern , Quantum of working capital fluctuates depending on the level of activity Select The Blank Question Earning power of the company approach tries to value the ________. Correct Answer Current value of the assets

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Your Answer Income / profit from the assets Multiple Choice Multiple Answer Question As per AS 13 Statement, the following are not considered as investments:Correct Answer Shares , Debentures , Other securities held as stock in trade Your Answer Land , Debentures Multiple Choice Multiple Answer Question Operating economies of scale are achieved through the following mergers :Correct Answer Horizontal , Vertical , Conglomerate Your Answer Vertical , Conglomerate , Financial True/False Question Usually only a single method is used for valuation of shares. Correct Answer False Your Answer False Select The Blank Question As per residual theory of dividends the focus is on ________. Correct Answer Growth Your Answer Growth True/False Question Management of working capital refers to the management of total assets and liabilities of a company. Correct Answer False Your Answer False Multiple Choice Multiple Answer Question The important aspect of dividend policy is :Correct Answer To determine the amount of earnings to be distributed to shareholders , Amount to be retained in the firm Your Answer To determine the amount of earnings to be distributed to shareholders , Amount to be retained in

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the firm Multiple Choice Multiple Answer Question The cost of an investment includes charges such as :Correct Answer Brokerage , Fees , Duties Your Answer Brokerage , Fees , Duties Select The Blank Question Forfeiting is mostly used for ________. Correct Answer Big ticket items & durable goods Your Answer Big ticket items & durable goods True/False Question Planning helps an acquiring firm to identify the units it should drop & it should add. Correct Answer True Your Answer True Multiple Choice Single Answer Question Segment information needs to be presented :Correct Answer Only on the basis of the consolidated financial statements Your Answer As separate financial statements Select The Blank Question Postage is an example of ________ cost. Correct Answer Non traceable cost Your Answer Input cost Match The Following Question Correct Answer Your Answer Earning per share Acquisition is considered to be a function of the impact of the merger on the EPS Divide net worth by the number of equity shares outstanding Book value Divide net worth by the number of equity shares outstanding Acquisition is considered to be a function of the impact of the merger on the EPS

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Appraisal value Provides a list of the reasonableness of results obtained through methods base upon the going concern concept Evaluate the impact of the merger on EPS & price - earning ratio Market value Indicate the consensus of the investors Decide if the acquisition is attractive on the basis if NPV

Multiple Choice Multiple Answer Question Book value of the assets is directly dependent on the accounting policies followed by the company which is used in the following areas :Correct Answer Booking depreciation , Methods of provisions , Inventory valuation Your Answer Booking depreciation , Methods of provisions , Inventory valuation Multiple Choice Multiple Answer Question Every business requires funds on a continual basis for expenses incurred on for :Correct Answer Purchase of raw material , Manufacturing costs , Administration Your Answer Purchase of raw material , Manufacturing costs , Administration Select The Blank Question Forward or backward integration is a characteristic of ________. Correct Answer Vertical Mergers Your Answer Conglomerate mergers True/False Question According to NI Approach, decrease in leverage decreases the overall cost of capital and increases the firm's value. Correct Answer False Your Answer True Multiple Choice Multiple Answer Question If a firm diversifies managerial teams formed can be shifted from unproductive activities to productive ones which leads to :Correct Answer Improved profitability , Continuity , Growth of the firm Your Answer Improved profitability , Growth of the firm , Better facilities and work conditions

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Multiple Choice Single Answer Question Best practices, a tool for review process is similar to :Correct Answer Bench marking Your Answer Value added analysis 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 Your Answer Debt and equity are the 2 kinds of funds used by the firm True/False Question If a company has resorted to buyback its shares, it cannot make a further issue of the same kind of securities within a period of 1 year. Correct Answer False Your Answer True True/False Question The scope of the data required relates to the scope of the activity model & processes under review. Correct Answer True Your Answer True Select The Blank Question The ________ cost tier has the advantage of being the simplest to calculate and justify. Correct Answer Direct Your Answer Direct Select The Blank Question Stock repurchases ________ the debt / equity ratio. Correct Answer Increases Your Answer Decreases Select The Blank

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Question The resource theory considers that the competitive position of a firm depends on its ________ Assets. Correct Answer Specific Your Answer General Multiple Choice Single Answer Question Many companies claim their main assets are their :Correct Answer People Your Answer People Multiple Choice Multiple Answer Question The important steps involved in the analysis of mergers & acquisitions are:Correct Answer Planning , Searching & screening , Financial evaluation Your Answer Planning , Searching & screening , Financial evaluation Select The Blank Question ________ is not a example of segment liability. Correct Answer Goodwill Your Answer Product warranty provision Select The Blank Question If a segment is not designated as a ________ it should be included as an unallocated reconciling item. Correct Answer Reportable segment Your Answer Business segment

Multiple Choice Multiple Answer Question The main characteristics of CAPM are :Correct Answer It is an equilibrium Model , It describes the pricing of assets as well as derivatives , Expected security return = Riskless return + beta x (expected market risk premium) Your Answer It is an equilibrium Model , It describes the pricing of assets as well as derivatives , Expected security return = Riskless return + beta x (expected market risk premium)

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Multiple Choice Single Answer Question Debt suppliers main concern is :Correct Answer Interest & debt repayment Your Answer Interest & debt repayment True/False Question Organisational changes are similar to mission changes. Correct Answer True Your Answer False Multiple Choice Single Answer Question The difference between current assets & current liabilities is known as :Correct Answer Net working capital Your Answer Working capital cycle Multiple Choice Multiple Answer Question The 3 groups of participants in a firm are :Correct Answer Suppliers of equity , Debt suppliers , Firm Managers Your Answer Suppliers of equity , Debt suppliers , Firm Managers

Multiple Choice Single Answer Question When the working capital is less than its peak level :Correct Answer The surplus is invested in liquid assets Your Answer The surplus is invested in liquid assets

Multiple Choice Single Answer Question According to a survey for reasons for share purchase, what is the percentage of cash distribution to cash holders ? Correct Answer 0.28 Your Answer 0.28 at 1:44 AM 0 comments Links to this post

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Labels: Strategic Finance (Set X) Monday, January 4, 2010 Strategic Finance - 24 LIST OF ATTEMPTED QUESTIONS AND ANSWERS

Match The Following Question Correct Answer Your Answer AS 21 Consolidated financial statements Consolidated financial statements AS 4 Contingencies & events occurring after the balance sheet date Contingencies & events occurring after the balance sheet date AS 13 Accounting for investments Accounting for investments AS 23 Accounting for investments in associates in consolidated financial statements Accounting for investments in associates in consolidated financial statements

Select The Blank Question There is a ________ relationship between the number of employees & the use of operating supplies. Correct Answer Natural Your Answer Natural

Multiple Choice Multiple Answer Question The main characteristics of CAPM are :Correct Answer It is an equilibrium Model , It describes the pricing of assets as well as derivatives , Expected security return = Riskless return + beta x (expected market risk premium) Your Answer It is an equilibrium Model , It describes the pricing of assets as well as derivatives , Expected security return = Riskless return + beta x (expected market risk premium)

Multiple Choice Multiple Answer

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Question A firm using a conservative policy for determining the requirements of current assets:Correct Answer Has fewer production stoppages , Ensures quick deliveries to customers , Stimulates sales Your Answer Has fewer production stoppages , Ensures quick deliveries to customers , Stimulates sales

Multiple Choice Single Answer Question As per Pecking order theory, which is the costliest means of funding :Correct Answer Equity Shares Your Answer Equity Shares

Multiple Choice Single Answer Question Free Reserves is a component of :Correct Answer Equity Your Answer Equity

Select The Blank Question ________ are those operating assets that are employed by a segment in its operating activities. Correct Answer Segment assets Your Answer Segment assets

Multiple Choice Multiple Answer Question The overhead expenses include :Correct Answer Utilities , Maintenance , Security Your Answer Utilities , Maintenance , Security

Multiple Choice Multiple Answer Question Examples of accrued expenses are :-

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Correct Answer Wages , Income tax , Property tax Your Answer Wages , Income tax , Property tax

Multiple Choice Single Answer Question One of the bases for determining the residual value of similar assets is :Correct Answer Realizable value Your Answer Realizable value

Select The Blank Question The number of bidding centers shall not be less than ________ for buy back through book building. Correct Answer 30 Your Answer 30

Multiple Choice Single Answer Question Conservative policy for determining the requirements of current assets is also known as :Correct Answer Flexible policy Your Answer Flexible policy

True/False Question Management of working capital refers to the management of total assets and liabilities of a company. Correct Answer False Your Answer False

Multiple Choice Single Answer

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Question usually the `controlling block' tends to be between :Correct Answer 20 & 40 percent Your Answer 20 & 40 percent

Multiple Choice Single Answer Question The difference between current assets & current liabilities is known as :Correct Answer Net working capital Your Answer Net working capital

Select The Blank Question Conglomerate mergers are also called ________. Correct Answer Concentric mergers Your Answer Concentric mergers

Multiple Choice Multiple Answer Question The main theories behind share repurchases are :Correct Answer Dividend or personal taxation hypothesis , Leverage hypothesis , Information or signalling hypothesis Your Answer Dividend or personal taxation hypothesis , Leverage hypothesis , Information or signalling hypothesis

Multiple Choice Single Answer Question In value of assets method the following is also to be included as they are also of value to the company :Correct Answer Non trading assets Your Answer Non trading assets

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Multiple Choice Multiple Answer Question Every business requires funds on a continual basis for expenses incurred on for :Correct Answer Purchase of raw material , Manufacturing costs , Administration Your Answer Purchase of raw material , Manufacturing costs , Administration

True/False Question The scope of the data required relates to the scope of the activity model & processes under review. Correct Answer True Your Answer True

Multiple Choice Single Answer Question Investment decisions are mainly concerned with :Correct Answer Assets Your Answer Assets

Match The Following Question Correct Answer Your Answer Unsecured loans Form of debt not backed by the pledge of specific assets Form of debt not backed by the pledge of specific assets Line of credit Does not constitute any legal commitments on the part of the bank Does not constitute any legal commitments on the part of the

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bank Revolving credit agreements While the commitment is in force the bank must extend credit whenever the borrower wishes to borrow While the commitment is in force the bank must extend credit whenever the borrower wishes to borrow Transaction loan The cash flow ability of the borrower to pay the loan is usually of paramount importance The cash flow ability of the borrower to pay the loan is usually of paramount importance

Multiple Choice Single Answer Question Short term sources of funds include :Correct Answer Current Liabilities Your Answer Reserves

Multiple Choice Single Answer Question Profitability of a company depends upon :Correct Answer Cost of capital Your Answer Earning per share

True/False

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Question DCF is not a method used to calculate market value of a firm. Correct Answer False Your Answer False

Multiple Choice Multiple Answer Question Shortcomings of accounting numbers consist of the following :Correct Answer Firms use different kind of accounting methods , Business risk and financial risk do not have any influence on accounting numbers Your Answer Dividend policy has lot of influence on accounting numbers , Business risk and financial risk do not have any influence on accounting numbers

Multiple Choice Multiple Answer Question Debt reduces :Correct Answer Agency cost of free cash flow , Commitment to pay in time to all lenders , Freedom of decisions Your Answer Agency cost of free cash flow , Commitment to pay in time to all lenders , Freedom of decisions

True/False Question Planning helps an acquiring firm to identify the units it should drop & it should add. Correct Answer True Your Answer True

Select The Blank Question Non value added activities helps ________. Correct Answer To analyse the activities more carefully Your Answer To take a better decision

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True/False Question Usually only a single method is used for valuation of shares. Correct Answer False Your Answer False

Select The Blank Question In the reproduction value method of valuation, the value of assets is taken to be on the basis of ________ Correct Answer Replacement cost Your Answer Replacement cost

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 Your 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 The Public announcement of share buy back has to be made at least :Correct Answer 7 Days prior to the commencement of buy back Your Answer 7 Days prior to the commencement of buy back

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Select The Blank Question Combination of 2 or more companies into existing company is called ________. Correct Answer Absorption Your Answer Absorption

Select The Blank Question ________ is not a example of segment liability. Correct Answer Goodwill Your Answer Accrued liabilities

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 Your 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

True/False Question The accounting records serve as the major source of cost data. Correct Answer True Your Answer True

Select The Blank Question AS 23 - Accounting for investments in associates in consolidated financial statements comes into effect in respect of accounting periods commencing on or

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after ________. Correct Answer 01.04.2002 Your Answer 01.04.2002

True/False Question The activity model is normally created by an activity Accountant. Correct Answer False Your Answer False

True/False Question Organisational changes are similar to mission changes. Correct Answer True Your Answer True

Multiple Choice Single Answer Question Equity includes :Correct Answer Development Rebate Reserve Your Answer Development Rebate Reserve

Select The Blank Question A geographical segment cannot be ________. Correct Answer Countries in different zones Your Answer Countries in different zones

Multiple Choice Single Answer Question The Management of the Company may enter into a negotiated purchase, which is referred to as :-

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Correct Answer Greenfield Your Answer Greenfield

Multiple Choice Single Answer Question The acquirer should intimate to the target company & the concerned stock exchanges as soon as its holding touches :Correct Answer 5 % of the voting capital of the target company Your Answer 5 % of the voting capital of the target company

Multiple Choice Multiple Answer Question Significant influence is the power to :Correct Answer Participate in the financial decisions , Participate in the operating policy decisions Your Answer Participate in the financial decisions , Participate in the operating policy decisions

Multiple Choice Multiple Answer Question An investment property is an investment in land or buildings :Correct Answer Not intended to be occupied substantially for use by investing enterprise , Not intended to be in the operations of the investing enterprise Your Answer Not intended to be occupied substantially for use by investing enterprise , Not intended to be in the operations of the investing enterprise

Multiple Choice Single Answer Question The following analysis is more targeted on similar activities or firms that exist in parallel within the activity model or process flow to ensure that they are being done the same best way :Correct Answer Comparative analysis Your Answer Comparative analysis

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at 12:31 AM 1 comments Links to this post Labels: Strategic Finance (Set X) Thursday, July 2, 2009 Strategic Finance - 26 LIST OF ATTEMPTED QUESTIONS AND ANSWERS True/False Question Odd lots purchase is not a method of buy back of shares. Correct Answer False Your Answer False Select The Blank Question As per NOI Approach - the overall capitalization rate remains ________ for all levels of financial leverage. Correct Answer Constant Your Answer Constant Multiple Choice Single Answer Question The following method of valuation is used for listed companies that have an active market for their shares :Correct Answer Market value approach Your Answer Market value approach Multiple Choice Single Answer Question The main assumption in comparative analysis is the possibility of :Correct Answer Combination or co-location of similar functions Your Answer Combination or co-location of similar functions Multiple Choice Multiple Answer Question The budgetary records are useful for:Correct Answer Validating accounting costs , Providing a rationale for division of costs , Replacing missing data Your Answer Validating accounting costs , Providing a rationale for division of costs , Replacing missing data Select The Blank Question usually credit lines are established for a period of ________. Correct Answer 1 year Your Answer 1 year Strategic Finance Multiple Choice Single Answer Question As per the study conducted by RBI, Current assets constitute :Correct Answer More than 50 % of the total assets Your Answer More than 50 % of the total assets Select The Blank Question Cost of ________ is more than other sources for raising short term finance. Correct Answer Bank finance Your Answer Bank finance Match The Following Question Correct Answer Your Answer Diversification Growth through the combination of firms in unrelated fields of business Different or unrelated business activity Horizontal mergers 2 Firms operate & compete in a similar kind

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of business 2 Firms operate & compete in a similar kind of business Vertical mergers Firms in different stages of production Firms in different stages of production Conglomerate mergers Different or unrelated business activity Growth through the combination of firms in unrelated fields of business Multiple Choice Single Answer Question in case of temporary working capital, the investment in current assets varies with :Correct Answer Seasonal requirements Your Answer Seasonal requirements Multiple Choice Multiple Answer Question Organisations have various records and reports from past actions such as :Correct Answer Logs to record workflow , Specific costs , External and internal audit reports Your Answer Logs to record workflow , Specific costs , External and internal audit reports True/False Question The carrying amount for current investments is the lower of cost & fair value. Strategic Finance Correct Answer True Your Answer True 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 Your Answer Through any subsidiary company , Through any investment company , If a company defaults in repayment of deposits or interest due thereon True/False Question Explicit cost and implicit cost are the two parts of cost of debt. Correct Answer True Your Answer True Select The Blank Question Forward or backward integration is a characteristic of ________. Correct Answer Vertical Mergers Your Answer Vertical Mergers Multiple Choice Single Answer Question As per Dorsman (1995) - financing with a high percentage of debt prevents firms from :Correct Answer Investing too much Your Answer Investing too much Multiple Choice Single Answer Question Estimation for determining the useful life of an asset is required :Correct Answer On some reasonable basis Your Answer On some reasonable basis

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True/False Question In market value approach, interested parties never manipulate the stock markets. Correct Answer False Strategic Finance Your Answer False Multiple Choice Single Answer Question Which of the following company is reaping high market valuation due to showing human resources as an asset in its balance sheet information? Correct Answer Infosys Your Answer BHEL Multiple Choice Single Answer Question Decrease in leverage results in increasing the :Correct Answer Overall cost of capital Your Answer Overall cost of capital Multiple Choice Single Answer Question Suppliers of equity are interested in :Correct Answer High share prices Your Answer High share prices Match The Following Question Correct Answer Your Answer Free cash flow theory Enormous conflicts of interest between Stakeholders and shareholders Enormous conflicts of interest between Stakeholders and shareholders Net income approach Cost of debt & equity do not change with a change in leverage ratio Cost of debt & equity do not change with a change in leverage ratio Net operating income approach The overall capitalization rate remains constant for all levels of financial leverages The overall capitalization rate remains constant for all levels of financial leverages Modigliani - Miller Theory weighted average cost of capital does not change with a change in the proportion of debt to equity in the capital structure weighted average cost of capital does not change with a change in the proportion of debt to equity in the capital structure Select The Blank

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Strategic Finance Question The date on which the announcement is made of new dividend is called ________. Correct Answer Declaration date Your Answer Ex - dividend date Multiple Choice Multiple Answer Question The net income approach is based on following 3 assumptions :Correct Answer There are no taxes , Cost of debt is less than equity capitalization rate , Use of debt doesn't change the risk perception of investors Your Answer There are no taxes , Cost of debt is less than equity capitalization rate , Use of debt doesn't change the risk perception of investors Multiple Choice Single Answer Question A single business segment does not include products & services :Correct Answer With significantly differing risks & returns Your Answer With significantly differing risks & returns True/False Question For determining exchange ratio, the model developed by Conn & Nielson is used. Correct Answer True Your Answer True Multiple Choice Single Answer Question Debt suppliers main concern is :Correct Answer Interest & debt repayment Your Answer Interest & debt repayment Multiple Choice Single Answer Question Value added analysis is a method to determine, if elements within a process flow provide the :Correct Answer Values Your Answer Values Select The Blank Question Investors can reduce the company related risk by diversification of their investments in ________. Strategic Finance Correct Answer Shares of a large number of companies Your Answer Shares of a large number of companies Multiple Choice Multiple Answer Question The 3 main types of accounting records followed by an organisation are :Correct Answer Organisational accounting , Budgetary accounting , Cost accounting Your Answer Organisational accounting , Budgetary accounting , Cost accounting Multiple Choice Multiple Answer Question The following disclosures in financial statements in relation to investments are appropriate :Correct Answer The accounting policies for the determination of carrying amount of investments , Profits & losses on disposal of current investments , The amounts included in P & L Statement Your Answer The accounting policies for the determination of carrying amount of investments , Profits & losses on disposal of current investments , The amounts included in P & L Statement Select The Blank Question In the shareholding pattern of a company, the promoter's holding includes________.

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Correct Answer Foreign Promoters Your Answer Foreign Promoters Multiple Choice Multiple Answer Question For M & As, the acquiring firm needs industry data on :Correct Answer Market growth , Nature of competition , Degree of regulation Your Answer Market growth , Marketing capabilities , Nature of competition Multiple Choice Multiple Answer Question The financial framework of a merger decision covers 3 interrelated aspects i.e. :Correct Answer Determining the firm's value , Financing techniques in mergers , Analysis of merger as a capital budgeting decision Your Answer Determining the firm's value , Financing techniques in mergers , Analysis of merger as a capital budgeting decision Multiple Choice Single Answer Question According to Net Income Approach, the average cost of capital declines as the leverage ratio :Correct Answer Increases Strategic Finance Your Answer Increases True/False Question A long term investment is an investment other than a current investment. Correct Answer True Your Answer True True/False Question The capital Asset pricing model describes the pricing of assets as well as derivatives. Correct Answer True Your Answer True Multiple Choice Multiple Answer Question Personnel services expenses is made up of:Correct Answer Personnel salaries , Cost of facilities , Training & development budgets Your Answer Cost of facilities , Training & development budgets Multiple Choice Multiple Answer Question Investments having no physical existence includes :Correct Answer Shares , Debentures , Bonds Your Answer Shares , Debentures , Bonds Select The Blank Question the commercial paper may be issued in the multiples of ________. Correct Answer 5 lakhs Your Answer 5 lakhs Multiple Choice Single Answer Question Modigliani - Miller Theoram is based on :Correct Answer Perfect Capital Markets Your Answer Perfect Capital Markets Select The Blank Strategic Finance Question The most popular kind of dividend policy is one that pays a ________. Correct Answer Regular, steady dividend Your Answer Regular, steady dividend Multiple Choice Multiple Answer Question AS 13 Does not deal with :Correct Answer The bases for recognition of interest, dividends & rentals earned on investments , Operating or finance leases , Investment in

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mutual funds Your Answer The bases for recognition of interest, dividends & rentals earned on investments , Operating or finance leases , Investment in mutual funds True/False Question According to NOI Approach, any capital structure is optimum. Correct Answer True Your Answer False 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 Your Answer The payout ratio is never 100 % Multiple Choice Single Answer Question Arbitrage means :Correct Answer Securities cannot sell at different prices Your Answer Securities cannot sell at different prices True/False Question Short term financing is meant for funding working capital of a company. Correct Answer True Your Answer True