Project Finance Combined

LIST OF ATTEMPTED QUESTIONS AND ANSWERS Match The Following Question Correct Answer Your Answer Project Financing Help improving Corporate Return on Equity Industrial Finance Corporation of India Finance in international financial markets Issue of Euro bonds Issue of Euro bonds International financial institutions World Bank Increasing emphasis on the Private initiative Policy of Liberalisation, Privatisation and Globalisation Increasing emphasis on the Private initiative Help improving Corporate Return on Equity Multiple Choice Multiple Answer Question The data for ratio analysis is obtained from :Correct Answer Profit and Loss Account , Balance Sheet Your Answer Profit and Loss Account , Auditors report , Balance Sheet Multiple Choice Single Answer Question Delays in infrastructure Development by State Agencies may lead to :Correct Answer Cost and time overrun Your Answer Management problems Select The Blank Question The Project Cycle should be in the ________ order Correct Answer Identification of Project - Project Appraisal - Negotiations for loans Your Answer Identification of Project - Project Appraisal - Negotiations for loans True/False Question Change in the project concept itself may lead to cost and time overrun. Correct Answer True Your Answer True Multiple Choice Single Answer Question The industrial concern earned profits by increasing the sales volume under the :Correct Answer Sales concept Your Answer Marketing concept True/False Question Cost and time overrun of the project may lead to loss on account of lost market opportunities.

Correct Answer True Your Answer True Multiple Choice Multiple Answer Question Management qualities includes :Correct Answer Honesty , Financial resources , Initiative Your Answer Honesty , Initiative , Too ambitious promoters Multiple Choice Multiple Answer Question Trend Projection method of demand forecasting consists of :Correct Answer Linear Relationship , Exponential Relationship , Polynomial Relationship Your Answer Linear Relationship , Chain ratio Relationship , Exponential Relationship True/False Question Financial analysis based on accounting ratios will give mis-leading results if the effects of changes in price level are not taken into account. Correct Answer True Your Answer True Multiple Choice Multiple Answer Question The objectives of the funds flow statement is as follows :Correct Answer To find out the uses of loans raised by the business , To indicate the financial strength and weakness of the business , To help to understand the changes in assets as well as asset sources which are not revealed by the income statement Your Answer To indicate the financial strength and weakness of the business , To help to understand the changes in assets as well as asset sources which are not revealed by the income statement , Helps to prepare financial statements True/False Question The maximum Seed Capital assistance provided by IDBI under the project will be restricted to 50% of the required promoter's contribution or Rs. 50 lakhs whichever is lower. Correct Answer False Your Answer True Multiple Choice Single Answer Question Every project involves financial outlay which can be referred to as :Correct Answer Project finance Your Answer Project finance Multiple Choice Multiple Answer Question A project objective can be said to have the following dimensions viz.: Correct Answer Strategic perspective , Time span , Finance cost aspect Your Answer Strategic perspective , Time span , Finance cost aspect , Social aspect

Multiple Choice Single Answer Question Strategic Position and Action Evaluation Model :Correct Answer Is an approach to hammer out an appropriate strategic posture for a firm and its individual business Your Answer Which is highly respected for the sophistication, maturity and quality in its planning systems Multiple Choice Single Answer Question The Projects which are undertaken to manufacture certain products which are being used as raw material by the existing units is known as :Correct Answer Backward Integration Projects Your Answer Backward Integration Projects Multiple Choice Multiple Answer Question Technical appraisal is basically concerned with :Correct Answer Technology , Layout of the plant , Design of the plant Your Answer Technology , Layout of the plant , Design of the plant True/False Question It is mandatory for each unit to obtain necessary clearance from Pollution Control Authorities before setting up any project. Correct Answer True Your Answer True Multiple Choice Multiple Answer Question While choosing the location for a project, the following factors should be considered :Correct Answer Proximity to raw materials and markets , Availability of infrastructure , Government policies and other factors Your Answer Proximity to raw materials and markets , Availability of infrastructure , Government policies and other factors Multiple Choice Single Answer Question The basic characteristic of a project is :Correct Answer That it involves current outlay of funds in expectation of future benefits Your Answer That it involves current outlay of funds in expectation of future benefits Select The Blank Question Longer the duration of production cycle, higher the requirement of ________. Correct Answer Working capital Your Answer Working capital Select The Blank Question Inflow of funds may not necessarily result in ________.

Correct Answer Inflow of cash Your Answer Inflow of cash Multiple Choice Single Answer Question Infrastructural projects include :Correct Answer Power Generation and Distribution Your Answer Power Generation and Distribution Select The Blank Question Details regarding Administrative / controlling office comes under the ________ category. Correct Answer General Your Answer Project organisation Multiple Choice Multiple Answer Question Ratios relating to working capital are :Correct Answer Current ratio , Internal measure , Quick ratio Your Answer Current ratio , Debt Equity ratio , Quick ratio Select The Blank Question Depreciation is sometimes treated as ________ funds. Correct Answer Source Your Answer Source Multiple Choice Single Answer Question Miscellaneous fixed assets includes :Correct Answer Cables Your Answer Cables Multiple Choice Single Answer Question In BCG Matrix "STARS" indicate :Correct Answer Products which enjoy a high market share as well as a high growth rate Your Answer Products which enjoy a high market share as well as a high growth rate Select The Blank Question ________ is a current liability. Correct Answer Trade credit Your Answer Unsecured loans Match The Following Question Correct Answer Your Answer Econometric method Mathematical representation of economic relationship Suitable for forecasting the demand for intermediate products

Primary source of data Market survey Market survey Secondary source of data Collected in some other context Collected in some other context Leading indicators Variables that change faster than others Mathematical representation of economic relationship Multiple Choice Multiple Answer Question Sources of funds includes :Correct Answer Depreciation , Preliminary expenses written off , Increase in secured borrowing Your Answer Depreciation , Increase in secured borrowing True/False Question The construction of National Golden Quadrilateral can be recognised as Project. Correct Answer True Your Answer True True/False Question The cost factors of the product mixed is also taken into account to arrive at cost at various levels of production and its cost impact of the manufacturing. Correct Answer True Your Answer True Multiple Choice Single Answer Question Capital Issue expenses include :Correct Answer Brokerage fees to registrars Your Answer Market research expenses Select The Blank Question Having decided on the location and product, the promoter takes into account the ________ that is to be adopted for producing the product. Correct Answer Manufacturing process and technology Your Answer Manufacturing process and technology Multiple Choice Single Answer Question Past trend method of Commercial appraisal technique is :Correct Answer Adopted as a guide depending on the consumption pattern of the society as a whole Your Answer A list of industries wherein the product is used is made and quantity and volume is arrived at Multiple Choice Multiple Answer

Question Management category of Visit report consists of :Correct Answer Managing Director , Institutional nominees , Committees of the board Your Answer Managing Director , Electrical engineers , Committees of the board Multiple Choice Single Answer Question Sanctioned bank limits is categorised under :Correct Answer Working capital Your Answer Production, Sales and Profitability Multiple Choice Single Answer Question General Electric Stop Light Matrix analyses products in terms of :Correct Answer Business strength and Industrial Attractiveness Your Answer Business strength and Industrial Attractiveness Multiple Choice Multiple Answer Question Production and sales aspect of Visit report consists of :Correct Answer Utilisation of installed capacity , Input availability , Sales trends Your Answer Utilisation of installed capacity , Input availability , Sales trends Multiple Choice Single Answer Question Cost of overheads include :Correct Answer Cost of repairs and maintenance Your Answer Cost of repairs and maintenance Multiple Choice Multiple Answer Question External sources of cash are as follows :Correct Answer Issue of new shares , Long term loans , Short term borrowings Your Answer Issue of new shares , Long term loans , Short term borrowings Select The Blank Question The company having ________, is appropriate for the strategic posture of Conservative under the SPACE approach. Correct Answer Limited competitive advantage, belonging to a not so attractive industry but enjoying financial strength and operating in a relatively stable environment Your Answer High financial strength, high industrial strength, enjoying a competitive advantage and belonging to an attractive industry, operating in a relatively stable environmental conditions True/False Question Sensitivity analysis consists of assessing the degree of risk. Correct Answer True Your Answer True True/False Question A high debt equity ratio may indicate that the financial stake of the creditors is more than that of the owners.

Correct Answer True Your Answer True Multiple Choice Single Answer Question The cost of Plant and Machinery includes :Correct Answer Cost of stores and spares Your Answer Building and civil construction Select The Blank Question The basic difference between the feasibility study report and ________ is the level of accuracy and degree of detail. Correct Answer Detailed Project report Your Answer Audit report

LIST OF ATTEMPTED QUESTIONS AND ANSWERS Multiple Choice Multiple Answer Question The sources of long term and medium term finance are :Correct Answer Public deposit , Equity shares Your Answer

Equity shares , Bridge loan , Working capital loan

Multiple Choice Multiple Answer Question Disposition of funds includes :Correct Answer Increase in working capital , Preliminary expenses , Dividend Your Answer

Increase in working capital , Dividend , Preliminary expenses written off

Select The Blank Question The company having ________, is appropriate for the strategic posture of Conservative under the SPACE approach. Correct Answer Limited competitive advantage, belonging to a not so attractive industry but enjoying financial strength and operating in a relatively stable environment Your Answer Limited financial strength, enjoying competitive advantage, belonging to attractive industry and operating in a relatively volatile environment Select The Blank Question A market survey generally is a ________ survey. Correct Answer Sample Your Answer

Sample

Multiple Choice Single Answer Question The ratio which covers those assets which can be converted into cash immediately is known as :Correct Answer Quick ratio Your Answer

Quick ratio

Multiple Choice Single Answer Question Delay in arrival of domestic/foreign machinery and technicians may lead to :Correct Answer Cost and time overrun Your Answer

Cost and time overrun

Multiple Choice Multiple Answer Question Casual methods of Demand forecasting consists of :Correct Answer Consumption-level method , Econometric method Your Answer

Consumption-level method , Econometric method

Select The Blank Question Having decided on the location and product, the promoter takes into account the ________ that is to be adopted for producing the product. Correct Answer Manufacturing process and technology Your Answer

Manufacturing process and technology

Multiple Choice Multiple Answer Question The objectives of the funds flow statement is as follows :Correct Answer To find out the uses of loans raised by the business , To indicate the financial strength and weakness of the business , To help to understand the changes in assets as well as asset sources which are not revealed by the income statement Your Answer To find out the uses of loans raised by the business , To help to understand the changes in assets as well as asset sources which are not revealed by the income statement , Helps to prepare financial statements Multiple Choice Multiple Answer Question The data for ratio analysis is obtained from :Correct Answer Profit and Loss Account , Balance Sheet Your Answer

Profit and Loss Account , Balance Sheet , Cash flow statement

Select The Blank Question ________ in assets involves outflow of funds. Correct Answer Increase Your Answer

Increase

Multiple Choice Single Answer Question Technology, design, layout of the plant as well as inputs and infrastructural facilities are to be considered under :Correct Answer Technical appraisal Your Answer

Technical appraisal

True/False Question

The Detailed Project report must indicate the gestation period of the project. Correct Answer True Your Answer

False

True/False Question

Interest and Dividend are to be considered while calculating Operating ratio. Correct Answer False Your Answer

False

Multiple Choice Single Answer Question Short supplies of materials may lead to :Correct Answer Cost and time overrun Your Answer

Cost and time overrun

True/False Question

Ratio should be computed on the basis of inter-related figures which have a cause and effect relationship. Correct Answer True Your Answer

True

Multiple Choice Single Answer Question A project objective which states What "achieving it " would cost is known as :Correct Answer Finance cost aspect Your Answer

Finance cost aspect

Select The Blank Question More accurate the estimation of the level of current assets and current liabilities, more accurate will be estimation of the requirement of ________. Correct Answer Working capital Your Answer

Working capital

Multiple Choice Single Answer Question The rate of discount which would equate the present value of investments to the present value of benefits over the life of the

project is known as :Correct Answer Internal rate of return Your Answer

Net Present value

Multiple Choice Multiple Answ er Question The various aspects which need to be considered while assessing Project finance financing are :Correct Answer Environmental factors , Risk involved , Managerial compensation Your Answer

Environmental factors , Risk involved , Political issues

Match The Following Question

Correct Answer

Your Answer

Private investment

Power generation

Nearness to market

Project

Time -bound

Time -bound

Programme

Not necessarily time bound

Not necessarily time bound

Foreign direct investment Machine tools

Power generation

True/False Question

The advantage of secondary sources of data is that it is readily and economically available. Correct Answer True Your Answer

False

Multiple Choice Single Answer Question A project objective which states "What' is to be viewed" is termed as :Correct Answer Strategic perspective Your Answer

Strategic perspective

Multiple Choice Multiple Answer Question A project objective can be said to have the following dimensions viz.: Correct Answer Strategic perspective , Time span , Finance cost aspect Your Answer True/False

Strategic perspective , Time span , Finance cost aspect

Question

A project is unique and no two projects are similar.

Correct Answer True Your Answer

True

Multiple Choice Multiple Answer Question The sources of cash are :Correct Answer Cash from operations , Sale of machinery , Issue of new shares Your Answer

Cash from operations , Sale of machinery , Issue of new shares

Multiple Choice Single Answer Question Profit is the result of customer satisfaction, indeed customer delight under the :Correct Answer Marketing concept Your Answer

Marketing concept

Multiple Choice Multiple Answer Question Management qualities includes :Correct Answer Honesty , Financial resources , Initiative Your Answer

Honesty , Financial resources , Initiative

Multiple Choice Single Answer Question The basic characteristic of a project is :Correct Answer That it involves current outlay of funds in expectation of future benefits Your Answer That it involves current outlay of funds in expectation of future benefits Select The Blank Question ________ is the summary of cash book or Receipts and Payments statement. Correct Answer Cash flow statement Your Answer

Cash flow statement

Select The Blank Question Under the SPACE Model, Customer loyalty is determined under the ________ dimension. Correct Answer Company's competitive advantage Your Answer

Company's competitive advantage

True/False Question

The 'BCG Matrix 'analysis various products of the organisation in the terms of Business strength and Industry Attractiveness. Correct Answer False Your Answer

False

Select The Blank Question A smaller unit into which the overall requirement of capital of a company is sub-divided is termed as ________. Correct Answer Share Your Answer

Share

Multiple Choice Multiple Answer Question As per the GE's Stop Light Matrix, Products may justify substantial commitment of funds where there is :Correct Answer Strong Business Strength and high Industry attractiveness , Average Business strength and high Industry attractiveness Your Answer Average Business Strength and Medium Industry Attractiveness , Average Business strength and high Industry attractiveness , Average Business Strength and Low Industry attractiveness Multiple Choice Single Answer Question The ratio which indicates the ability of the company to meet current obligations is termed as :Correct Answer Current ratio Your Answer

Current ratio

True/False Question

The General Electric Company incorporated in the USA, is highly respected for the sophistication, maturity and quality in its planning systems. Correct Answer True Your Answer

False

Select The Blank Question Inflow of funds may not necessarily result in ________. Correct Answer Inflow of cash Your Answer

Outflow of cash

Match The Following

Question

Correct Answer

Your Answer

Current ratio

Liquidity ratio

Current liability

Debt-Equity ratio

Solvency ratio

Debt

External liabilities

Debt

Relationship between Net Profit after taxes and total shareholders funds

Shareholders funds

Equity

Equity

True/False Question

There is a need for studying Project finance both for the lenders as well as the borrowers as both of them have equal stake in making the Project a success. Correct Answer True Your Answer

True

Select The Blank Question Sometimes the term ________ is interpreted as cash equivalent i.e. cash and marketable securities. Correct Answer Fund Your Answer

Investment

Multiple Choice Single Answer Question Every project involves financial outlay which can be referred to as :Correct Answer Project finance Your Answer

Balance Sheet

Multiple Choice Multiple Answer Question In the Detailed Project Report, Management aspects includes :Correct Answer Determination , Organisation Building , Person / system oriented Your Answer

Determination , Organisation Building , Person / system oriented

Select The Blank Question Depreciation is sometimes treated as ________ funds. Correct Answer Source Your Answer

Source

True/False Question

It is mandatory for each unit to obtain necessary clearance from Pollution Control Authorities before setting up any project. Correct Answer True Your Answer

True

Multiple Choice Single Answer Question In BCG Matrix "QUESTION MARKS" indicate :Correct Answer Products which have high growth potential but low market share Your Answer

Products which have high growth potential but low market share

True/False Question

Production line diagrams show the organisation structure of the project along with information on location, personnel required for various departments, and their inter-relationship. Correct Answer False Your Answer

True

PROJECT FINANCE Multiple Choice Multiple Answer Question The objectives of the funds flow statement is as follows :Correct Answer To help to understand the changes in assets as well as asset sources which are not revealed by the income statement , To find out the uses of loans raised by the business , To indicate the financial strength and weakness of the business Your Answer To find out the uses of loans raised by the business , To help to understand the changes in assets as well as asset sources which are not revealed by the income statement , Helps to prepare financial statements Select The Blank Question Inflow of funds may not necessarily result in ________. Correct Answer Inflow of cash Your Answer Inflow of cash

Multiple Choice Single Answer Question Every project involves financial outlay which can be referred to as :Correct Answer Project finance Your Answer Project finance True/False Question The Detailed Project report spells out the modus operandi for the implementation of the Project and the realization of the Project objectives. Correct Answer True Your Answer True Select The Blank Question As the plant capacity increase, the investment cost unit capacity ________. Correct Answer Decreases Your Answer Decreases Multiple Choice Multiple Answer Question Internal sources of funds are :Correct Answer Funds from operation , Loss on sale of fixed assets , Goodwill written off Your Answer Funds from operation , Loss on sale of fixed assets

Multiple Choice Single Answer Question End use method of Commercial appraisal technique is :Correct Answer A list of industries wherein the product is used is made and quantity and volume is arrived at Your Answer A list of industries wherein the product is used is made and quantity and volume is arrived at Multiple Choice Multiple Answer Question The applications of cash are :Correct Answer Purchase of fixed assets , Payment of long term loans

Your Answer Purchase of fixed assets , Payment of long term loans

True/False Question In small scale organisation, requirement of working capital is quite high due to high amount of overheads, high buying costs and high selling cost. Correct Answer True Your Answer True

Qnt. Project Manager General category of Project report Cost aspect of the project Financing plan

Correct Finance Manager Location of factory

Your Ans Finance Manager Location of factory

Consultancy fees Unsecured

Consultancy fees Unsecured

Select The Blank Question Longer the duration of production cycle, higher the requirement of ________. Correct Answer Working capital Your Answer Working capital Multiple Choice Single Answer Question Sanctioned bank limits is categorised under :Correct Answer Working capital Your Answer Production, Sales and Profitability

Select The Blank Question Cost of fencing comes under the ________ category of the Project report. Correct Answer Land and site development Your Answer Land and site development

True/False Question Trend projection method is the important technique for forecasting demand. Correct Answer True Your Answer True

True/False Question The emphasis of a finance manager should be on taking a synergistic view of the project rather than looking at it only from the financial aspects. Correct Answer True Your Answer True Select The Blank Question ________ in assets involves outflow of funds. Correct Answer Increase Your Answer Increase Select The Blank Question The basic difference between the feasibility study report and ________ is the level of accuracy and degree of detail. Correct Answer Detailed Project report Your Answer Detailed Project report

Multiple Choice Single Answer Question Delays in infrastructure Development by State Agencies may lead to :Correct Answer Cost and time overrun Your Answer Cost and time overrun Select The Blank Question Location of the factory comes under the ________ category of the Project report. Correct Answer General

Your Answer General

Multiple Choice Multiple Answer Question Financing plans consists of :Correct Answer Share capital , Term loans , Internal accruals Your Answer Share capital , Term loans , Internal accruals

Multiple Choice Single Answer Question Infrastructural projects include :Correct Answer Power Generation and Distribution Your Answer Power Generation and Distribution

True/False Question Market potential should be determined under the Marketing aspect of the Project report. Correct Answer True Your Answer True Select The Blank Question ________ tries to have what the customer will want- where, when, in what form and at what price. Correct Answer Marketing Your Answer Marketing

Multiple Choice Single Answer Question A project objective which states What "achieving it " would cost is known as :Correct Answer Finance cost aspect Your Answer Strategic perspective

Multiple Choice Single Answer Question A project objective which states "What' is to be viewed" is termed as :Correct Answer Strategic perspective Your Answer Social aspect True/False Question Nominal maximum capacity is the capacity that is technically attainable and this corresponds to the supplier's guaranteed capacity. Correct Answer True Your Answer True Select The Blank Question In order to meet the cost of large project, the technique of ________ has been developed so that the financial commitment and risks associated with a project are shared between the project sponsor and the lending institutions. Correct Answer Limited recourse financing Your Answer Long term financing Multiple Choice Single Answer Question The basic characteristic of a project is :Correct Answer That it involves current outlay of funds in expectation of future benefits Your Answer That it involves current outlay of funds in expectation of future benefits

Multiple Choice Single Answer Question Past trend method of Commercial appraisal technique is :Correct Answer Adopted as a guide depending on the consumption pattern of the society as a whole Your Answer Adopted as a guide depending on the consumption pattern of the society as a whole

Multiple Choice Single Answer

Question The norms for providing open areas have to be strictly followed for safety of labour and allow sufficient space for outflow of effluents safely in case of :Correct Answer Chemical unit Your Answer Chemical unit

Multiple Choice Single Answer Question Short supplies of materials may lead to :Correct Answer Cost and time overrun Your Answer Cost and time overrun

Select The Blank Question Investors who invest in the debentures of the company are the ________ of the company. Correct Answer Creditors Your Answer Creditors Match The Following QuestionCorrect Answer Your Answer

Private investment Project Programme Foreign direct investment

Power generation Time-bound Not necessarily time bound Machine tools

Multiple Choice Multiple Answer Question As per the GE's Stop Light Matrix, Products may justify substantial commitment of funds where there is :Correct Answer Strong Business Strength and high Industry attractiveness , Average Business strength and high Industry attractiveness Your Answer Strong Business Strength and high Industry attractiveness , Average Business strength and high Industry attractiveness

Multiple Choice Multiple Answer Question Management qualities includes :Correct Answer Honesty , Financial resources , Initiative Your Answer Honesty , Financial resources , Initiative Multiple Choice Single Answer Question The industrial concern earned profits by increasing the sales volume under the :Correct Answer Sales concept Your Answer Sales concept

True/False Question The 'BCG Matrix 'analysis various products of the organisation in the terms of Business strength and Industry Attractiveness. Correct Answer False Your Answer False

Select The Blank Question Detailed Project Report is generally prepared from a ________ report with additional information. Correct Answer Feasibility Your Answer Feasibility Multiple Choice Single Answer Question Delay in arrival of domestic/foreign machinery and technicians may lead to :Correct Answer Cost and time overrun Your Answer Cost and time overrun

True/False

Question Miscellaneous expenditure is written on the asset side of the Balance sheet. Correct Answer True Your Answer True Multiple Choice Multiple Answer Question General category of the Project report consists of :Correct Answer Name of the Industrial concern , Proposed product , Location of the factory Your Answer Name of the Industrial concern , Proposed product , Location of the factory

Multiple Choice Single Answer Question A Project is a temporary endeavor to achieve some specific objectives within a :Correct Answer Predefined time Your Answer Predefined time

Multiple Choice Multiple Answer Question While choosing the location for a project, the following factors should be considered :Correct Answer Proximity to raw materials and markets , Availability of infrastructure , Government policies and other factors Your Answer Proximity to raw materials and markets , Availability of infrastructure , Government policies and other factors

Multiple Choice Multiple Answer Question The sources of long term and medium term finance are :Correct Answer Equity shares , Public deposit Your Answer Equity shares , Public deposit Multiple Choice Single Answer Question The cost which change in the same proportion in which the level of production changes is known as :-

Correct Answer Variable cost Your Answer Variable cost Multiple Choice Single Answer Question The second phase of the technical appraisal which focuses upon appraising the likely technical gaps consists of :Correct Answer Problems faced during the Construction and Project implementation Your Answer Problems faced during the Construction and Project implementation Multiple Choice Single Answer Question The third phase of the technical appraisal which focuses upon appraising the likely technical gaps consists of :Correct Answer Problems pertaining to the period when the project is in operation Your Answer Problems pertaining to the period when the project is in operation True/False Question In the BCG Matrix, the key term of Cash Cows require further commitment of funds. Correct Answer False Your Answer False Select The Blank Question In the GE's Stop Light Matrix, when ________ situation prevails , Products call for divestment. Correct Answer Average Business Strength and Low Industry attractiveness Your Answer Average Business Strength and Low Industry attractiveness Multiple Choice Single Answer Question The basic characteristic of a project is :Correct Answer That it involves current outlay of funds in expectation of future benefits Your Answer That it involves current outlay of funds in expectation of future benefits Select The Blank Question ________ tries to have what the customer will want- where, when, in what form and at what price. Correct Answer Marketing Your Answer Finance Multiple Choice Single Answer Question Financial aspect of Detailed Project report includes :-

Correct Answer Fixation of means of financial structure Your Answer Fixation of means of financial structure Multiple Choice Single Answer Question A project can be regarded as the sum of the activities directed towards a :Correct Answer Specific result Your Answer Specific result Multiple Choice Single Answer Question Sewerage and drainage cost of the project is categorised under :Correct Answer Building cost Your Answer Building cost Multiple Choice Single Answer Question The BCG Product Portfolio Matrix :Correct Answer Is a tool for strategic ( product ) planning and resource allocation Your Answer Is a tool for strategic ( product ) planning and resource allocation Multiple Choice Single Answer Question End use method of Commercial appraisal technique is :Correct Answer A list of industries wherein the product is used is made and quantity and volume is arrived at Your Answer A list of industries wherein the product is used is made and quantity and volume is arrived at Select The Blank Question ________ capital represents permanent capital. Correct Answer Equity Your Answer Debentures Multiple Choice Multiple Answer Question Trend Projection method of demand forecasting consists of :Correct Answer Linear Relationship , Exponential Relationship , Polynomial Relationship Your Answer Linear Relationship , Exponential Relationship , Polynomial Relati onship

Multiple Choice Multiple Answer Question After the SPACE chart is constructed, we would normally get any one of the following basic strategic postures :-

Correct Answer Aggressive Posture , Competitive Posture , Defensive Posture Your Answer Aggressive Posture , Competitive Posture , Defensive Posture Select The Blank Question ________ in liabilities involves inflow of funds. Correct Answer Increase Your Answer Cash Select The Blank Question ________ occupies a unique position in the macro economic development which helps in induction of new technology and facilitates, greater efficiency as well as higher productivity. Correct Answer Investment Your Answer Investment Multiple Choice Single Answer Question Every project involves financial outlay which can be referred to as :Correct Answer Project finance Your Answer Project finance True/False Question Financial analysis based on accounting ratios will give mis-leading results if the effects of changes in price level are not taken into account. Correct Answer True Your Answer True Select The Blank Question Excessive expenditures on foreign technicians leads to ________. Correct Answer Cost and time overrun Your Answer Management problems Multiple Choice Single Answer Question Appointments made at senior level during the half-year is categorised under :Correct Answer Organisation and management Your Answer Organisation and management Multiple Choice Single Answer Question Infrastructural projects include :Correct Answer Power Generation and Distribution Your Answer Power Generation and Distribution Multiple Choice Single Answer Question Delays in infrastructure Development by State Agencies may lead to :-

Correct Answer Cost and time overrun Your Answer Cost and time overrun Multiple Choice Multiple Answer Question As per the GE's Stop Light Matrix, Products may justify substantial commitment of funds where there is :Correct Answer Strong Business Strength and high Industry attractiveness , Average Business strength and high Industry attractiveness Your Answer Strong Business Strength and high Industry attractiveness , Average Business strength and high Industry attractiveness Multiple Choice Single Answer Question The cost of Plant and Machinery may be adjusted for a possible increase known as :Correct Answer Escalation Your Answer Inflation Multiple Choice Multiple Answer Question Demand technique forecasting of Commercial appraisal includes :Correct Answer Future demand of the product , Proper survey of the product , Future availability and supply of the product Your Answer Future demand of the product , Proper survey of the product , Future availability and supply of the product Multiple Choice Single Answer Question The BCG product Portfolio Matrix, General Electric Stop Light Matrix and Strategic Position and Action Evaluation Model are considered to be highly relevant as :Correct Answer Portfolio Planning Tools Your Answer Portfolio Planning Tools Select The Blank Question As the plant capacity increase, the investment cost unit capacity ________. Correct Answer Decreases Your Answer Decreases Multiple Choice Multiple Answer Question The applications of cash are :Correct Answer Purchase of fixed assets , Payment of long term loans Your Answer Purchase of fixed assets , Issue of new machinery True/False Question A high debt equity ratio may indicate that the financial stake of the creditors is more than that of the owners.

Correct Answer True Your Answer True Multiple Choice Multiple Answer Question The permanent requirement of working capital should be financed out of :Correct Answer Cash Profits , Shares , Debentures Your Answer Cash Profits , Shares , Debentures True/False Question Ratio analysis is a technique of planning and control. Correct Answer False Your Answer False True/False Question Miscellaneous expenditure is written on the asset side of the Balance sheet. Correct Answer True Your Answer False Select The Blank Question Cost of fencing comes under the ________ category of the Project report. Correct Answer Land and site development Your Answer Land and site development Multiple Choice Single Answer Question The ratio which covers those assets which can be converted into cash immediately is known as :Correct Answer Quick ratio Your Answer Quick ratio Multiple Choice Single Answer Question The Projects which are undertaken to manufacture certain products which are being used as raw material by the existing units is known as :Correct Answer Backward Integration Projects Your Answer Backward Integration Projects Select The Blank Question Retained earnings indicates that whatever profits are earned by the company are not distributed by it by way of ________ but are kept aside for use in future for expansion or other purpose. Correct Answer Dividend Your Answer Dividend Multiple Choice Multiple Answer Question Time Series Projection Methods of Demand forecasting consists of :-

Correct Answer Trend Projection method , Moving Averages method Your Answer Trend Projection method , Moving Averages method True/False Question Unlike financial projections, there cannot be any fixed, well-recognised or structure formula/steps for management evaluation/appraisal. Correct Answer True Your Answer True True/False Question Production line diagrams show the organisation structure of the project along with information on location, personnel required for various departments, and their inter-relationship. Correct Answer False Your Answer False Select The Blank Question ________ is a current asset Correct Answer Book debts Your Answer Trade credit True/False Question For computing Interest coverage ratio, Profit after Interest and taxes are taken into account. Correct Answer False Your Answer True Select The Blank Question Details regarding Internal accruals comes under the ________ category of Project report. Correct Answer Financing plan Your Answer Cost aspect Multiple Choice Multiple Answer Question Management category of Visit report consists of :Correct Answer Managing Director , Institutional nominees , Committees of the board Your Answer Managing Director , Institutional nominees , Committees of the board True/False Question Nominal maximum capacity is the capacity that is technically attainable and this corresponds to the supplier's guaranteed capacity. Correct Answer True Your Answer False

Multiple Choice Single Answer Question The ratio that roughly measures the company's potential reserve of cash is termed as :Correct Answer Net Working capital to total assets Your Answer Net Working capital to total assets Multiple Choice Multiple Answer Question The following are the sources of funds :Correct Answer Operating Profit , Non operating Income Your Answer Operating Profit , Dividends True/False Question Change in the project concept itself may lead to cost and time overrun. Correct Answer True Your Answer True

LIST OF ATTEMPTED QUESTIONS AND ANSWERS Multiple Choice Single Answer Question Borrower's contribution towards Working capital is known as :Correct Answer Margin money Your Answer Margin money Multiple Choice Multiple Answer Question Building cost consists of :Correct Answer Factory building , Auxiliary buildings , Administrative block Your Answer Factory building , Auxiliary buildings , Administrative block Multiple Choice Single Answer Question In BCG Matrix " CASH COWS" indicate :Correct Answer Products which have high market share but low growth potential Your Answer Products which have high market share but low growth potential Multiple Choice Multiple Answer Question In the Detailed Project Report, Marketing aspects includes :Correct Answer Demand forecasting , Promotion , Distribution Your Answer Demand forecasting , Promotion , Distribution Multiple Choice Single Answer Question Cost of the Project encompasses :Correct Answer The total of all items of outlay associated with a project Your Answer The total of all items of outlay associated with a project True/False Question In both the extreme situations of trade cycles i.e. Inflation and depression, requirement of working capital may be high. Correct Answer True Your Answer True True/False Question Name of the finance manager comes under the Project organisation category of the Project report. Correct Answer True Your Answer True True/False Question It is mandatory for each unit to obtain necessary clearance from Pollution Control Authorities before setting up any project. Correct Answer True Your Answer True Multiple Choice Multiple Answer Question A project objective can be said to have the following dimensions viz.: Correct Answer Strategic perspective , Time span , Finance cost aspect Your Answer Strategic perspective , Time span , Finance cost aspect Match The Following Question Correct Answer Your Answer Management problems Lack of exposure Lack of exposure Management Quality Initiative Initiative

Management Perception Aspiration level/ conservative Aspiration level/ conservative Organisational Climate Person oriented Person oriented Multiple Choice Single Answer Question Infrastructural projects include :Correct Answer Power Generation and Distribution Your Answer Power Generation and Distribution Multiple Choice Single Answer Question BCG Product Portfolio Matrix analyses products on the basis of :Correct Answer Relative Market share and Industry Growth rate Your Answer Relative Market share and Industry Growth rate Select The Blank Question ________ profitability reduces the strain on working capital. Correct Answer High Your Answer Stable Multiple Choice Single Answer Question The basic characteristic of a project is :Correct Answer That it involves current outlay of funds in expectation of future benefits Your Answer That it involves current outlay of funds in expectation of future benefits Multiple Choice Multiple Answer Question The various aspects which need to be considered while assessing Project finance financing are :Correct Answer Environmental factors , Risk involved , Managerial compensation Your Answer Environmental factors , Risk involved , Managerial compensation Multiple Choice Single Answer Question "Fly by night" operator mentality is a :Correct Answer Management quality Your Answer Management quality Multiple Choice Single Answer Question Every project involves financial outlay which can be referred to as :Correct Answer Project finance Your Answer Project finance Select The Blank Question As the plant capacity increase, the investment cost unit capacity ________. Correct Answer Decreases Your Answer Increases Multiple Choice Multiple Answer Question Debt Service coverage ratio may be considered to be one of the most important ratios calculated by the :Correct Answer Bankers , Financial Institutions Your Answer Shareholders , Bankers , Financial Institutions Multiple Choice Single Answer Question A project objective which states What "achieving it " would cost is known as :Correct Answer Finance cost aspect

Your Answer Finance cost aspect True/False Question A project is unique and no two projects are similar. Correct Answer True Your Answer True Multiple Choice Multiple Answer Question Limitations of fund flow statement are :Correct Answer It does not provide any new information but only rearranges the various facts , It does not consider non-fund transactions Your Answer It does not provide any new information but only rearranges the various facts , It does not consider non-fund transactions , It does not help in determining future requirement of funds Multiple Choice Single Answer Question The third phase of the technical appraisal which focuses upon appraising the likely technical gaps consists of :Correct Answer Problems pertaining to the period when the project is in operation Your Answer Problems pertaining to the period when the project is in operation Multiple Choice Single Answer Question Receivables is categorised under :Correct Answer Current assets and liabilities Your Answer Current assets and liabilities Multiple Choice Single Answer Question It is said that a second rate project in the hands of first rate management is better than a first rate project in the hands of :Correct Answer Second rate management Your Answer Second rate management Select The Blank Question The company having ________, is appropriate for the strategic posture of Defensive under the SPACE approach. Correct Answer Lacks both competitive advantage as well as financial strength and belongs to a not so attractive industry, operating in an unstable environment Your Answer Lacks both competitive advantage as well as financial strength and belongs to a not so attractive industry, operating in an unstable environment Select The Blank Question Excessive expenditures on foreign technicians leads to ________. Correct Answer Cost and time overrun Your Answer Profit maximisation True/False Question The 'BCG Matrix 'analysis various products of the organisation in the terms of Business strength and Industry Attractiveness. Correct Answer False Your Answer False Select The Blank Question Having decided on the location and product, the promoter takes into account the ________ that is to be adopted for producing the product. Correct Answer Manufacturing process and technology Your Answer Manufacturing process and technology

Multiple Choice Multiple Answer Question Financial and economic aspect of the Visit report consists of :Correct Answer Company's financial year , Impact of Government policies on company operations , Comments on the last published accounts Your Answer Company's financial year , Impact of Government policies on company operations , Comments on the last published accounts True/False Question Sensitivity analysis consists of assessing the degree of risk. Correct Answer True Your Answer True Multiple Choice Single Answer Question A project objective which states "What' is to be viewed" is termed as :Correct Answer Strategic perspective Your Answer Strategic perspective Multiple Choice Multiple Answer Question The permanent requirement of working capital should be financed out of :Correct Answer Cash Profits , Shares , Debentures Your Answer Cash Profits , Shares , Debentures True/False Question In the BCG Matrix "DOGS" indicate products which are generally during the stage of Decline of a Product Life Cycle. Correct Answer True Your Answer True True/False Question The construction of National Golden Quadrilateral can be recognised as Project. Correct Answer True Your Answer True Select The Blank Question Under the SPACE Model, Customer loyalty is determined under the ________ dimension. Correct Answer Company's competitive advantage Your Answer Company's competitive advantage True/False Question The cost factors of the product mixed is also taken into account to arrive at cost at various levels of production and its cost impact of the manufacturing. Correct Answer True Your Answer True True/False Question The emphasis of a finance manager should be on taking a synergistic view of the project rather than looking at it only from the financial aspects. Correct Answer True Your Answer True Multiple Choice Single Answer Question Miscellaneous fixed assets includes :Correct Answer Cables Your Answer Cables Multiple Choice Multiple Answer

Question In the Detailed Project Report, Technical aspects includes :Correct Answer Plant capacity , Quality standards , Raw material requirement Your Answer Quality standards , Raw material requirement , Power / telecom facilities Multiple Choice Multiple Answer Question Trend Projection method of demand forecasting consists of :Correct Answer Linear Relationship , Exponential Relationship , Polynomial Relationship Your Answer Linear Relationship , Exponential Relationship , Polynomial Relationship True/False Question Market potential should be determined under the Marketing aspect of the Project report. Correct Answer True Your Answer True Multiple Choice Single Answer Question Ratio analysis is a widely used tool of :Correct Answer Financial analysis Your Answer Financial analysis Multiple Choice Single Answer Question Preoperative expenses includes :Correct Answer Bank guarantees Your Answer Bank guarantees Select The Blank Question A Project has a ________ represented by growth, maturity and decay. Correct Answer Life cycle Your Answer Life cycle True/False Question If the organisation is a trading organisation, the requirement of working capital will be on the lower side. Correct Answer False Your Answer True

LIST OF ATTEMPTED QUESTIONS AND ANSWERS True/False Question In the BCG Matrix, the key term of Cash Cows require further commitment of funds. Correct Answer False Your Answer False Select The Blank Question In the GE's Stop Light Matrix, when ________ situation prevails , Products call for divestment. Correct Answer Average Business Strength and Low Industry attractiveness Your Answer Average Business Strength and Low Industry attractiveness Multiple Choice Single Answer Question The basic characteristic of a project is :Correct Answer That it involves current outlay of funds in expectation of future benefits Your Answer That it involves current outlay of funds in expectation of future benefits Select The Blank Question ________ tries to have what the customer will want- where, when, in what form and at what price. Correct Answer Marketing Your Answer Finance Multiple Choice Single Answer Question Financial aspect of Detailed Project report includes :Correct Answer Fixation of means of financial structure Your Answer Fixation of means of financial structure Multiple Choice Single Answer Question A project can be regarded as the sum of the activities directed towards a :Correct Answer Specific result Your Answer Specific result Multiple Choice Single Answer Question Sewerage and drainage cost of the project is categorised under :Correct Answer Building cost Your Answer Building cost Multiple Choice Single Answer Question The BCG Product Portfolio Matrix :Correct Answer Is a tool for strategic ( product ) planning and resource allocation Your Answer Is a tool for strategic ( product ) planning and resource allocation

Multiple Choice Single Answer Question End use method of Commercial appraisal technique is :Correct Answer A list of industries wherein the product is used is made and quantity and volume is arrived at Your Answer A list of industries wherein the product is used is made and quantity and volume is arrived at Select The Blank Question ________ capital represents permanent capital. Correct Answer Equity Your Answer Debentures Match The Following Question Correct Answer Your Answer Export market technique of Commercial appraisal Government provides ample encouragement Government provides ample encouragement Demand Technique forecasting of Commercial appraisal Future demand of the product Future demand of the product Past trend method of Commercial appraisal Adopted as a guide depending on the consumption pattern of the society as a whole Adopted as a guide depending on the consumption pattern of the society as a whole End use method of Commercial appraisal A list of industries wherein the product is used is made and quantity and volume is arrived at A list of industries wherein the product is used is made and quantity and volume is arrived at Multiple Choice Multiple Answer Question Trend Projection method of demand forecasting consists of :Correct Answer Linear Relationship , Exponential Relationship , Polynomial Relationship Your Answer Linear Relationship , Exponential Relationship , Polynomial Relationship Multiple Choice Multiple Answer Question After the SPACE chart is constructed, we would normally get any one of the following basic strategic postures :Correct Answer Aggressive Posture , Competitive Posture , Defensive Posture Your Answer Aggressive Posture , Competitive Posture , Defensive Posture Select The Blank Question ________ in liabilities involves inflow of funds. Correct Answer Increase

Your Answer Cash Select The Blank Question ________ occupies a unique position in the macro economic development which helps in induction of new technology and facilitates, greater efficiency as well as higher productivity. Correct Answer Investment Your Answer Investment Multiple Choice Single Answer Question Every project involves financial outlay which can be referred to as :Correct Answer Project finance Your Answer Project finance True/False Question Financial analysis based on accounting ratios will give mis-leading results if the effects of changes in price level are not taken into account. Correct Answer True Your Answer True Select The Blank Question Excessive expenditures on foreign technicians leads to ________. Correct Answer Cost and time overrun Your Answer Management problems Multiple Choice Single Answer Question Appointments made at senior level during the half-year is categorised under :Correct Answer Organisation and management Your Answer Organisation and management Multiple Choice Single Answer Question Infrastructural projects include :Correct Answer Power Generation and Distribution Your Answer Power Generation and Distribution Multiple Choice Single Answer Question Delays in infrastructure Development by State Agencies may lead to :Correct Answer Cost and time overrun Your Answer Cost and time overrun Multiple Choice Multiple Answer Question As per the GE's Stop Light Matrix, Products may justify substantial commitment of funds where there is :Correct Answer Strong Business Strength and high Industry attractiveness , Average Business strength and high Industry attractiveness

Your Answer Strong Business Strength and high Industry attractiveness , Average Business strength and high Industry attractiveness Match The Following Question Correct Answer Your Answer Source of funds Depreciation Equity capital Fixed assets Building Building Current assets Debtors Investment Current liability Trade credit Debtors Multiple Choice Single Answer Question The cost of Plant and Machinery may be adjusted for a possible increase known as :Correct Answer Escalation Your Answer Inflation Multiple Choice Multiple Answer Question Demand technique forecasting of Commercial appraisal includes :Correct Answer Future demand of the product , Proper survey of the product , Future availability and supply of the product Your Answer Future demand of the product , Proper survey of the product , Future availability and supply of the product Multiple Choice Single Answer Question The BCG product Portfolio Matrix, General Electric Stop Light Matrix and Strategic Position and Action Evaluation Model are considered to be highly relevant as :Correct Answer Portfolio Planning Tools Your Answer Portfolio Planning Tools Select The Blank Question As the plant capacity increase, the investment cost unit capacity ________. Correct Answer Decreases Your Answer Decreases Multiple Choice Multiple Answer Question The applications of cash are :Correct Answer Purchase of fixed assets , Payment of long term loans Your Answer Purchase of fixed assets , Issue of new machinery True/False

Question A high debt equity ratio may indicate that the financial stake of the creditors is more than that of the owners. Correct Answer True Your Answer True Multiple Choice Multiple Answer Question The permanent requirement of working capital should be financed out of :Correct Answer Cash Profits , Shares , Debentures Your Answer Cash Profits , Shares , Debentures True/False Question Ratio analysis is a technique of planning and control. Correct Answer False Your Answer False True/False Question Miscellaneous expenditure is written on the asset side of the Balance sheet. Correct Answer True Your Answer False Select The Blank Question Cost of fencing comes under the ________ category of the Project report. Correct Answer Land and site development Your Answer Land and site development Multiple Choice Single Answer Question The ratio which covers those assets which can be converted into cash immediately is known as :Correct Answer Quick ratio Your Answer Quick ratio Multiple Choice Single Answer Question The Projects which are undertaken to manufacture certain products which are being used as raw material by the existing units is known as :Correct Answer Backward Integration Projects Your Answer Backward Integration Projects Select The Blank Question Retained earnings indicates that whatever profits are earned by the company are not distributed by it by way of ________ but are kept aside for use in future for expansion or other purpose. Correct Answer Dividend Your Answer Dividend Multiple Choice Multiple Answer Question Time Series Projection Methods of Demand forecasting consists of :-

Correct Answer Trend Projection method , Moving Averages method Your Answer Trend Projection method , Moving Averages method True/False Question Unlike financial projections, there cannot be any fixed, well-recognised or structure formula/steps for management evaluation/appraisal. Correct Answer True Your Answer True True/False Question Production line diagrams show the organisation structure of the project along with information on location, personnel required for various departments, and their interrelationship. Correct Answer False Your Answer False Select The Blank Question ________ is a current asset Correct Answer Book debts Your Answer Trade credit True/False Question For computing Interest coverage ratio, Profit after Interest and taxes are taken into account. Correct Answer False Your Answer True Select The Blank Question Details regarding Internal accruals comes under the ________ category of Project report. Correct Answer Financing plan Your Answer Cost aspect Multiple Choice Multiple Answer Question Management category of Visit report consists of :Correct Answer Managing Director , Institutional nominees , Committees of the board Your Answer Managing Director , Institutional nominees , Committees of the board True/False Question Nominal maximum capacity is the capacity that is technically attainable and this corresponds to the supplier's guaranteed capacity. Correct Answer True Your Answer False Multiple Choice Single Answer

Question The ratio that roughly measures the company's potential reserve of cash is termed as :Correct Answer Net Working capital to total assets Your Answer Net Working capital to total assets Multiple Choice Multiple Answer Question The following are the sources of funds :Correct Answer Operating Profit , Non operating Income Your Answer Operating Profit , Dividends True/False Question Change in the project concept itself may lead to cost and time overrun. Correct Answer True Your Answer True LIST OF ATTEMPTED QUESTIONS AND ANSWERS True/False Question 1 The advantage of secondary sources of data is that it is readily and economically available. Correct Answer True Your Answer True True/False Question2 In small scale organisation, requirement of working capital is quite high due to high amount of overheads, high buying costs and high selling cost. Correct Answer True Your Answer True True/False Question3 Banks and Financial Institutions, world-wide, are now financing projects with strategies and terms that would have been hard to believe/imagine just a few years back. Correct Answer True Your Answer True Select The Blank Question 4 ________ is a current asset Correct Answer Book debts Your Answer Furniture Multiple Choice Multiple Answer Question 5 Trend Projection method of demand forecasting consists of :Correct Answer Linear Relationship , Exponential Relationship , Polynomial Relationship

Your Answer Linear Relationship , Exponential Relationship , Polynomial Relationship Multiple Choice Single Answer Question 6 Delays in infrastructure Development by State Agencies may lead to :Correct Answer Cost and time overrun Your Answer Management problems Multiple Choice Single Answer Question 7 Technical aspect of detailed project report includes :Correct Answer Detailed Project Engineering Your Answer Detailed Project Engineering Multiple Choice Multiple Answer Question 8 Sources of funds includes :Correct Answer Depreciation , Preliminary expenses written off , Increase in secured borrowing Your Answer Preliminary expenses written off , Increase in secured borrowing Multiple Choice Single Answer Question 9 Delay in arrival of domestic/foreign machinery and technicians may lead to :Correct Answer Cost and time overrun Your Answer Cost and time overrun Select The Blank Question 10 A smaller unit into which the overall requirement of capital of a company is sub-divided is termed as ________. Correct Answer Share Your Answer Share Multiple Choice Single Answer Question11 A project objective which states "What' is to be viewed" is termed as :Correct Answer Strategic perspective Your Answer Strategic perspective Multiple Choice Single Answer Question 12 Sewerage and drainage cost of the project is categorised under :Correct Answer Building cost Your Answer Building cost Multiple Choice Multiple Answer Question13 Internal sources of funds are :Correct Answer Funds from operation , Loss on sale of fixed assets , Goodwill written off Your Answer Funds from operation , Goodwill written off

Multiple Choice Multiple Answer Question14 In the Detailed Project Report, Management aspects includes :Correct Answer Determination , Organisation Building , Person / system oriented Your Answer Determination , Organisation Building , Person / system oriented Select The Blank Question15 Short term finance is normally for a period upto ________ year. Correct Answer One Your Answer One True/False Question16 Current assets includes stock-in-process. Correct Answer True Your Answer True Multiple Choice Single Answer Question17 The basic characteristic of a project is :Correct Answer That it involves current outlay of funds in expectation of future benefits Your Answer That it involves current outlay of funds in expectation of future benefits Multiple Choice Multiple Answer Question18 Time Series Projection Methods of Demand forecasting consists of :Correct Answer Trend Projection method , Moving Averages method Your Answer Trend Projection method , Moving Averages method Select The Blank Question 19 ________ is a current liability. Correct Answer Trade credit Your Answer Trade credit True/False Question20 Managerial problems in a project are the most pervasive. Correct Answer True Your Answer True Select The Blank Question21 Longer the duration of production cycle, higher the requirement of ________. Correct Answer Working capital Your Answer Working capital Select The Blank Question22 Retained earnings is a source of ________ finance. Correct Answer Internal

Your Answer Short term Select The Blank Question23 ________ is the summary of cash book or Receipts and Payments statement. Correct Answer Cash flow statement Your Answer Trial balance True/False Question24 In the BCG Matrix, the key term of Cash Cows require further commitment of funds. Correct Answer False Your Answer True True/False Question25 Cost and time overrun of the project may lead to loss on account of lost market opportunities. Correct Answer True Your Answer True Multiple Choice Single Answer Question26 A project objective which states What "achieving it " would cost is known as :Correct Answer Finance cost aspect Your Answer Finance cost aspect Multiple Choice Multiple Answer Question27 Casual methods of Demand forecasting consists of :Correct Answer Consumption-level method , Econometric method Your Answer Consumption-level method , Econometric method Multiple Choice Single Answer Question 28 In BCG Matrix "STARS" indicate :Correct Answer Products which enjoy a high market share as well as a high growth rate Your Answer Products which enjoy a high market share as well as a high growth rate Multiple Choice Single Answer Question 29 Psychographic market appraisal answers to :Correct Answer Why they buy? Your Answer Why they buy? True/False Question30 Production line diagrams show the organisation structure of the project along with information on location, personnel required for various departments, and their inter-relationship.

Correct Answer False Your Answer False Multiple Choice Multiple Answer Question31 While choosing the location for a project, the following factors should be considered :Correct Answer Proximity to raw materials and markets , Availability of infrastructure , Government policies and other factors Your Answer Proximity to raw materials and markets , Availability of infrastructure , Government policies and other factors Multiple Choice Single Answer Question32 The cost which change in the same proportion in which the level of production changes is known as :Correct Answer Variable cost Your Answer Variable cost Select The Blank Question33 Goods purchased on credit ________ in flow of funds. Correct Answer Does not result Your Answer Decreases Multiple Choice Multiple Answer Question34 Ratios relating to working capital are :Correct Answer Current ratio , Internal measure , Quick ratio Your Answer Current ratio , Debt Equity ratio , Quick ratio Multiple Choice Single Answer Question35 Appointments made at senior level during the half-year is categorised under :Correct Answer Organisation and management Your Answer Organisation and management Multiple Choice Single Answer Question36 Cost of the Project encompasses :Correct Answer The total of all items of outlay associated with a project Your Answer The total of all items of outlay associated with a project Multiple Choice Multiple Answer Question37 Production and sales aspect of Visit report consists of :Correct Answer Utilisation of installed capacity , Input availability , Sales trends Your Answer Utilisation of installed capacity , Input availability , Sales trends Match The Following Question38 Correct Answer Your Answer

Source of funds Depreciation Equity capital Fixed assets Building Building Current assets Debtors Debtors Current liability Trade credit Trade credit Multiple Choice Single Answer Question39 Every project involves financial outlay which can be referred to as :Correct Answer Project finance Your Answer Project finance Multiple Choice Multiple Answer Question 40 General category of the Project report consists of :Correct Answer Name of the Industrial concern , Proposed product , Location of the factory Your Answer Name of the Industrial concern , Proposed product , Location of the factory Multiple Choice Multiple Answer Question 41 The data for ratio analysis is obtained from :Correct Answer Profit and Loss Account , Balance Sheet Your Answer Profit and Loss Account , Balance Sheet Multiple Choice Single Answer Question42 Short supplies of materials may lead to :Correct Answer Cost and time overrun Your Answer Cost and time overrun Multiple Choice Multiple Answer Question43 After the SPACE chart is constructed, we would normally get any one of the following basic strategic postures :Correct Answer Aggressive Posture , Competitive Posture , Defensive Posture Your Answer Aggressive Posture , Competitive Posture , Defensive Posture Select The Blank Question 44 ________ occupies a unique position in the macro economic development which helps in induction of new technology and facilitates, greater efficiency as well as higher productivity. Correct Answer Investment Your Answer Marketing Multiple Choice Single Answer Question45 Infrastructural projects include :-

Correct Answer Power Generation and Distribution Your Answer Power Generation and Distribution Select The Blank Question46 Name and designation of the chief executive comes under the ________ category. Correct Answer General Your Answer General Match The Following Question47 Correct Answer Your Answer Private investment Power generation Machine tools Project Time -bound Time -bound Programme Not necessarily time bound Not necessarily time bound Foreign direct investment Machine tools Power generation

Project Finance _15

LIST OF ATTEMPTED QUESTIONS AND ANSWERS Multiple Choice Multiple Answer Question The objectives of the funds flow statement is as follows :Correct Answer To help to understand the changes in assets as well as asset sources which are not revealed by the income statement , To find out the uses of loans raised by the business , To indicate the financial strength and weakness of the business Your Answer To find out the uses of loans raised by the business , To help to understand the changes in assets as well as asset sources which are not revealed by the income statement , Helps to prepare financial statements Select The Blank Question Inflow of funds may not necessarily result in ________. Correct Answer Inflow of cash Your Answer

Inflow of cash

Multiple Choice Single Answer Question Every project involves financial outlay which can be referred to as :Correct Answer Project finance Your Answer

Project finance

True/False Question

The Detailed Project report spells out the modus operandi for the implementation of the Project and the realization of the Project objectives. Correct Answer True Your Answer

True

Select The Blank Question As the plant capacity increase, the investment cost unit capacity ________. Correct Answer Decreases Your Answer

Decreases

Multiple Choice Multiple Answer Question Internal sources of funds are :Correct Answer Funds from operation , Loss on sale of fixed assets , Goodwill written off

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Project Finance _15 Your Answer

Funds from operation , Loss on sale of fixed assets

Multiple Choice Single Answer Question End use method of Commercial appraisal technique is :Correct Answer A list of industries wherein the product is used is made and quantity and volume is arrived at Your Answer A list of industries wherein the product is used is made and quantity and volume is arrived at Multiple Choice Multiple Answer Question The applications of cash are :Correct Answer Purchase of fixed assets , Payment of long term loans Your Answer

Purchase of fixed assets , Payment of long term loans

True/False Question

In small scale organisation, requirement of working capital is quite high due to high amount of overheads, high buying costs and high selling cost. Correct Answer True Your Answer

True

Match The Following Question

Correct Answer

Your Answer

Project organisation

Finance manager

Finance manager

General category of Project report

Location of factory

Location of factory

Cost aspect of the project Consultancy fees report

Consultancy fees

Financing plan

Unsecured loans

Unsecured loans

Select The Blank Question Longer the duration of production cycle, higher the requirement of ________. Correct Answer Working capital Your Answer

Working capital

Multiple Choice Single Answer Question Sanctioned bank limits is categorised under :-

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Project Finance _15 Correct Answer Working capital Your Answer

Production, Sales and Profitability

Select The Blank Question Cost of fencing comes under the ________ category of the Project report. Correct Answer Land and site development Your Answer

Land and site development

True/False Question

Trend projection method is the important technique for forecasting demand. Correct Answer True Your Answer

True

True/False Question

The emphasis of a finance manager should be on taking a synergistic view of the project rather than looking at it only from the financial aspects. Correct Answer True Your Answer

True

Select The Blank Question ________ in assets involves outflow of funds. Correct Answer Increase Your Answer

Increase

Select The Blank Question The basic difference between the feasibility study report and ________ is the level of accuracy and degree of detail. Correct Answer Detailed Project report Your Answer

Detailed Project report

Multiple Choice Single Answer Question Delays in infrastructure Development by State Agencies may lead to :Correct Answer Cost and time overrun Your Answer

Cost and time overrun

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Project Finance _15

Select The Blank Question Location of the factory comes under the ________ category of the Project report. Correct Answer General Your Answer

General

Multiple Choice Multiple Answer Question Financing plans consists of :Correct Answer Share capital , Term loans , Internal accruals Your Answer

Share capital , Term loans , Internal accruals

Multiple Choice Single Answer Question Infrastructural projects include :Correct Answer Power Generation and Distribution Your Answer

Power Generation and Distribution

True/False Question

Market potential should be determined under the Marketing aspect of the Project report. Correct Answer True Your Answer

True

Select The Blank Question ________ tries to have what the customer will want- where, when, in what form and at what price. Correct Answer Marketing Your Answer

Marketing

Multiple Choice Single Answer Question A project objective which states What "achieving it " would cost is known as :Correct Answer Finance cost aspect Your Answer

Strategic perspective

Multiple Choice Single Answer Question A project objective which states "What' is to be viewed" is termed as :-

-4 -

Project Finance _15 Correct Answer Strategic perspective Your Answer

Social aspect

True/False Question

Nominal maximum capacity is the capacity that is technically attainable and this corresponds to the supplier's guaranteed capacity. Correct Answer True Your Answer

True

Select The Blank Question In order to meet the cost of large project, the technique of ________ has been developed so that the financial commitment and risks associated with a project are shared between the project sponsor and the lending institutions. Correct Answer Limited recourse financing Your Answer

Long term financing

Multiple Choice Single Answer Question The basic characteristic of a project is :Correct Answer That it involves current outlay of funds in expectation of future benefits Your Answer That it involves current outlay of funds in expectation of future benefits Multiple Choice Single Answer Question Past trend method of Commercial appraisal technique is :Correct Answer Adopted as a guide depending on the consumption pattern of the society as a whole Your Answer Adopted as a guide depending on the consumption pattern of the society as a whole Multiple Choice Single Answer Question The norms for providing open areas have to be strictly followed for safety of labour and allow sufficient space for outflow of effluents safely in case of :Correct Answer Chemical unit Your Answer

Chemical unit

Multiple Choice Single Answer Question Short supplies of materials may lead to :-

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Project Finance _15 Correct Answer Cost and time overrun Your Answer

Cost and time overrun

Select The Blank Question Investors who invest in the debentures of the company are the ________ of the company. Correct Answer Creditors Your Answer

Creditors

Match The Following Question

Correct Answer

Your Answer

Private investment

Power generation

Power generation

Project

Time -bound

Time -bound

Programme

Not necessarily time bound

Not necessarily time bound

Foreign direct investment Machine tools

Machine tools

Multiple Choice Multiple Answer Question As per the GE's Stop Light Matrix, Products may justify substantial commitment of funds where there is :Correct Answer Strong Business Strength and high Industry attractiveness , Average Business strength and high Industry attractiveness Your Answer Strong Business Strength and high Industry attractiveness , Average Business strength and high Industry attractiveness Multiple Choice Multiple Answer Question Management qualities includes :Correct Answer Honesty , Financial resources , Initiative Your Answer

Honesty , Financial resources , Initiative

Multiple Choice Single Answer Question The industrial concern earned profits by increasing the sales volume under the :Correct Answer Sales concept Your Answer

Sales concept

True/False

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Project Finance _15 Question

The 'BCG Matrix 'analysis various products of the organisation in the terms of Business strength and Industry Attractiveness. Correct Answer False Your Answer

False

Select The Blank Question Detailed Project Report is generally prepared from a ________ report with additional information. Correct Answer Feasibility Your Answer

Feasibility

Multiple Choice Single Answer Question Delay in arrival of domestic/foreign machinery and technicians may lead to :Correct Answer Cost and time overrun Your Answer

Cost and time overrun

True/False Question

Miscellaneous expenditure is written on the asset side of the Balance sheet. Correct Answer True Your Answer

True

Multiple Choice Multiple Answer Question General category of the Project report consists of :Correct Answer Name of the Industrial concern , Proposed product , Location of the factory Your Answer Name of the Industrial concern , Proposed product , Location of the factory Multiple Choice Single Answer Question A Project is a temporary endeavor to achieve some specific objectives within a :Correct Answer Predefined time Your Answer

Predefined time

Multiple Choice Multiple Answer Question While choosing the location for a project, the following factors should be considered :Correct Answer Proximity to raw materials and markets , Availability of infrastructure , Government policies and other factors

-7 -

Project Finance _15 Your Answer

Proximity to raw materials and markets , Availability of infrastructure , Government policies and other factors

Multiple Choice Multiple Answer Question The sources of long term and medium term finance are :Correct Answer Equity shares , Public deposit Your Answer

Equity shares , Public deposit

Multiple Choice Single Answer Question The cost which change in the same proportion in which the level of production changes is known as :Correct Answer Variable cost Your Answer

Variable cost

Multiple Choice Single Answer Question The second phase of the technical appraisal which focuses upon appraising the likely technical gaps consists of :Correct Answer Problems faced during the Construction and Project implementation Your Answer Problems faced during the Construction and Project implementation Multiple Choice Single Answer Question The third phase of the technical appraisal which focuses upon appraising the likely technical gaps consists of :Correct Answer Problems pertaining to the period when the project is in operation Your Answer Problems pertaining to the period when the project is in operation

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Project Finance _16

LIST OF ATTEMPTED QUESTIONS AND ANSWERS Select The Blank Question Depreciation is sometimes treated as ________ funds. Correct Answer

Source

Your Answer

Source

Multiple Choice Multiple Answer Question External sources of cash are as follows :Correct Answer Your Answer

Issue of new shares , Long term loans , Short term borrowings Long term loans , Short term borrowings , Issue of new shares

Multiple Choice Single Answer Question In BCG Matrix " CASH COWS" indicate :Correct Answer Your Answer

Products which have high market share but low growth potential Products which have high market share but low growth potential

Select The Blank Question ________ tries to have what the customer will want- where, when, in what form and at what price. Correct Answer Marketing Your Answer

Marketing

Multiple Choice Multiple Answer Question Financial and economic aspect of the Visit report consists of :Correct Answer Company's financial year , Impact of Government policies on company operations , Comments on the last published accounts Your Answer Company's financial year , Impact of Government policies on company operations , Comments on the last published accounts True/False Question

Ratio should be computed on the basis of inter-related figures which have a cause and effect relationship.

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Project Finance _16 Correct Answer

True

Your Answer

True

Multiple Choice Single Answer Question Preoperative expenses includes :Correct Answer

Bank guarantees

Your Answer

Bank guarantees

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

Internal

Your Answer

Internal

Select The Blank Question ________ profitability reduces the strain on working capital. Correct Answer

High

Your Answer

High

Multiple Choice Multiple Answer Question The data for ratio analysis is obtained from :Correct Answer

Profit and Loss Account , Balance Sheet

Your Answer

Profit and Loss Account , Balance Sheet

True/False Question

Cost under-estimation at the project preparation and evaluation stage leads to cost and time over run. Correct Answer True Your Answer

False

Multiple Choice Single Answer Question Cost of laying roads comes under :Correct Answer Land and site cost Your Answer

Preoperative cost

-2 -

Project Finance _16 Multiple Choice Multiple Answer Question Ratios relating to working capital are :Correct Answer Current ratio , Internal measure , Quick ratio Your Answer

Current ratio , Internal measure , Quick ratio

True/False Question

A project is unique and no two projects are similar.

Correct Answer

True

Your Answer

True

Multiple Choice Single Answer Question Borrower's contribution towards Working capital is known as :Correct Answer Margin money Your Answer

Margin money

Multiple Choice Multiple Answer Question General category of the Project report consists of :Correct Answer Your Answer

Name of the Industrial concern , Proposed product , Location of the factory Name of the Industrial concern , Proposed product , Location of the factory

Multiple Choice Multiple Answer Question A project objective can be said to have the following dimensions viz.: Correct Answer Strategic perspective , Time span , Finance cost aspect Your Answer

Time span , Finance cost aspect , Strategic perspective

Multiple Choice Single Answer Question Cost of overheads include :Correct Answer Cost of repairs and maintenance Your Answer

Cost of repairs and maintenance

Multiple Choice Single Answer Question Short supplies of materials may lead to :-

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Project Finance _16 Correct Answer

Cost and time overrun

Your Answer

Cost and time overrun

True/False Question Correct Answer

Unlike financial projections, there cannot be any fixed, well-recognised or structure formula/steps for management evaluation/appraisal. True

Your Answer

True

Multiple Choice Multiple Answer Question Management qualities includes :Correct Answer

Honesty , Financial resources , Initiative

Your Answer

Honesty , Financial resources , Initiative

Match The Following Question

Correct Answer

Your Answer

Preliminary and capital Brokerage and issue expenses commission

Foundation and erection charges

Land and site development cost

Cost of laying roads

Brokerage and commission

Building cost

Cost of factory building Cost of factory building

Plant and machinery cost

Foundation and erection charges

Cost of laying roads

Multiple Choice Single Answer Question The basic characteristic of a project is :Correct Answer Your Answer

That it involves current outlay of funds in expectation of future benefits That it involves current outlay of funds in expectation of future benefits

Select The Blank Question ________ capital represents permanent capital. Correct Answer

Equity

Your Answer

Equity

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Project Finance _16

Multiple Choice Multiple Answer Question As per the GE's Stop Light Matrix, Products may justify substantial commitment of funds where there is :Correct Answer Strong Business Strength and high Industry attractiveness , Average Business strength and high Industry attractiveness Your Answer Strong Business Strength and high Industry attractiveness , Average Business strength and high Industry attractiveness Multiple Choice Single Answer Question The entire life of the project is taken into account under Correct Answer Average rate of return method Your Answer

Pay back method

Select The Blank Question ________ in liabilities involves inflow of funds. Correct Answer

Increase

Your Answer

Increase

Multiple Choice Single Answer Question BCG Product Portfolio Matrix analyses products on the basis of :Correct Answer Relative Market share and Industry Growth rate Your Answer True/False Question

Relative Market share and Industry Growth rate

Correct Answer

A high debt equity ratio may indicate that the financial stake of the creditors is more than that of the owners. True

Your Answer

True

Match The Following Question

Correct Answer

Project Financing

Help improving Corporate Return on Equity Finance in international Issue of Euro bonds financial markets

-5 -

Your Answer Help improving Corporate Return on Equity World Bank

Project Finance _16 International financial World Bank institutions

Issue of Euro bonds

Policy of Liberalisation, Increasing emphasis on Increasing emphasis on Privatisation and the Private initiative the Private initiative Globalisation True/False Question Correct Answer

Land and site development comes under the cost aspect of the Project report. True

Your Answer

True

Select The Blank Question In order to meet the cost of large project, the technique of ________ has been developed so that the financial commitment and risks associated with a project are shared between the project sponsor and the lending institutions. Correct Answer Limited recourse financing Your Answer

Limited recourse financing

Multiple Choice Multiple Answer Question Debt Service coverage ratio may be considered to be one of the most important ratios calculated by the :Correct Answer Bankers , Financial Institutions Your Answer

Bankers , Financial Institutions

True/False Question

Debt Equity ratio is a 'Solvency ratio'.

Correct Answer

True

Your Answer

True

Multiple Choice Single Answer Question Technical aspect of detailed project report includes :Correct Answer

Detailed Project Engineering

Your Answer

Detailed Project Engineering

True/False

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Project Finance _16 Question Correct Answer

Cost and time overrun of the project may lead to loss on account of lost market opportunities. True

Your Answer

True

Select The Blank Question A smaller unit into which the overall requirement of capital of a company is sub-divided is termed as ________. Correct Answer Share Your Answer True/False Question

Share

Correct Answer

There is a need for studying Project finance both for the lenders as well as the borrowers as both of them have equal stake in making the Project a success. True

Your Answer

True

Select The Blank Question ________ in assets involves outflow of funds. Correct Answer

Increase

Your Answer

Increase

Multiple Choice Multiple Answer Question Production and sales aspect of Visit report consists of :Correct Answer Your Answer

Utilisation of installed capacity , Input availability , Sales trends Utilisation of installed capacity , Input availability , Sales trends

Multiple Choice Single Answer Question The rate of discount which would equate the present value of investments to the present value of benefits over the life of the project is known as :Correct Answer Internal rate of return Your Answer

Internal rate of return

Select The Blank

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Project Finance _16 Question

________ is a current asset

Correct Answer

Book debts

Your Answer

Book debts

Multiple Choice Multiple Answer Question Building cost consists of :Correct Answer Your Answer True/False Question

Factory building , Auxiliary buildings , Administrative block Factory building , Auxiliary buildings , Administrative block

Correct Answer

Nominal maximum capacity is the capacity that is technically attainable and this corresponds to the supplier's guaranteed capacity. True

Your Answer

True

Multiple Choice Single Answer Question In the Cash flow statement, the sources of funds include Correct Answer

Share Issue

Your Answer

Share Issue

Multiple Choice Multiple Answer Question The permanent requirement of working capital should be financed out of :Correct Answer Cash Profits , Shares , Debentures Your Answer

Cash Profits , Shares , Debentures

Select The Blank Question Inflow of funds may not necessarily result in ________. Correct Answer

Inflow of cash

Your Answer

Inflow of cash

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Project Finance _17

LIST OF ATTEMPTED QUESTIONS AND ANSWERS Multiple Choice Single Answer Question Borrower's contribution towards Working capital is known as :Correct Answer Margin money Your Answer Margin money Multiple Choice Multiple Answer Question Building cost consists of :Correct Answer Factory building , Auxiliary buildings , Administrative block Your Answer Factory building , Auxiliary buildings , Administrative block Multiple Choice Single Answer Question In BCG Matrix " CASH COWS" indicate :Correct Answer Products which have high market share but low growth potential Your Answer Products which have high market share but low growth potential Multiple Choice Multiple Answer Question In the Detailed Project Report, Marketing aspects includes :Correct Answer Demand forecasting , Promotion , Distribution Your Answer Demand forecasting , Promotion , Distribution Multiple Choice Single Answer Question Cost of the Project encompasses :Correct Answer The total of all items of outlay associated with a project Your Answer The total of all items of outlay associated with a project True/False Question In both the extreme situations of trade cycles i.e. Inflation and depression, requirement of working capital may be high. Correct Answer True Your Answer True True/False Question Name of the finance manager comes under the Project organisation category of the Project report. Correct Answer True Your Answer True True/False Question It is mandatory for each unit to obtain necessary clearance from Pollution Control Authorities before setting up any project. Correct Answer True Your Answer True Multiple Choice Multiple Answer Question A project objective can be said to have the following dimensions viz.: Correct Answer Strategic perspective , Time span , Finance cost aspect Your Answer Strategic perspective , Time span , Finance cost aspect Match The Following Question Correct Answer Your Answer Management problems Lack of exposure Lack of exposure Management Quality Initiative Initiative

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Project Finance _17

Management Perception Aspiration level/ conservative Aspiration level/ conservative Organisational Climate Person oriented Person oriented Multiple Choice Single Answer Question Infrastructural projects include :Correct Answer Power Generation and Distribution Your Answer Power Generation and Distribution Multiple Choice Single Answer Question BCG Product Portfolio Matrix analyses products on the basis of :Correct Answer Relative Market share and Industry Growth rate Your Answer Relative Market share and Industry Growth rate Select The Blank Question ________ profitability reduces the strain on working capital. Correct Answer High Your Answer Stable Multiple Choice Single Answer Question The basic characteristic of a project is :Correct Answer That it involves current outlay of funds in expectation of future benefits Your Answer That it involves current outlay of funds in expectation of future benefits Multiple Choice Multiple Answer Question The various aspects which need to be considered while assessing Project finance financing are :Correct Answer Environmental factors , Risk involved , Managerial compensation Your Answer Environmental factors , Risk involved , Managerial compensation Multiple Choice Single Answer Question "Fly by night" operator mentality is a :Correct Answer Management quality Your Answer Management quality Multiple Choice Single Answer Question Every project involves financial outlay which can be referred to as :Correct Answer Project finance Your Answer Project finance Select The Blank Question As the plant capacity increase, the investment cost unit capacity ________. Correct Answer Decreases Your Answer Increases Multiple Choice Multiple Answer Question Debt Service coverage ratio may be considered to be one of the most important ratios calculated by the :Correct Answer Bankers , Financial Institutions Your Answer Shareholders , Bankers , Financial Institutions Multiple Choice Single Answer Question A project objective which states What "achieving it " would cost is known as :Correct Answer Finance cost aspect

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Project Finance _17

Your Answer Finance cost aspect True/False Question A project is unique and no two projects are similar. Correct Answer True Your Answer True Multiple Choice Multiple Answer Question Limitations of fund flow statement are :Correct Answer It does not provide any new information but only rearranges the various facts , It does not consider non-fund transactions Your Answer It does not provide any new information but only rearranges the various facts , It does not consider non-fund transactions , It does not help in determining future requirement of funds Multiple Choice Single Answer Question The third phase of the technical appraisal which focuses upon appraising the likely technical gaps consists of :Correct Answer Problems pertaining to the period when the project is in operation Your Answer Problems pertaining to the period when the project is in operation Multiple Choice Single Answer Question Receivables is categorised under :Correct Answer Current assets and liabilities Your Answer Current assets and liabilities Multiple Choice Single Answer Question It is said that a second rate project in the hands of first rate management is better than a first rate project in the hands of :Correct Answer Second rate management Your Answer Second rate management Select The Blank Question The company having ________, is appropriate for the strategic posture of Defensive under the SPACE approach. Correct Answer Lacks both competitive advantage as well as financial strength and belongs to a not so attractive industry, operating in an unstable environment Your Answer Lacks both competitive advantage as well as financial strength and belongs to a not so attractive industry, operating in an unstable environment Select The Blank Question Excessive expenditures on foreign technicians leads to ________. Correct Answer Cost and time overrun Your Answer Profit maximisation True/False Question The 'BCG Matrix 'analysis various products of the organisation in the terms of Business strength and Industry Attractiveness. Correct Answer False Your Answer False Select The Blank Question Having decided on the location and product, the promoter takes into account the ________ that is to be adopted for producing the product. Correct Answer Manufacturing process and technology Your Answer Manufacturing process and technology

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Project Finance _17

Multiple Choice Multiple Answer Question Financial and economic aspect of the Visit report consists of :Correct Answer Company's financial year , Impact of Government policies on company operations , Comments on the last published accounts Your Answer Company's financial year , Impact of Government policies on company operations , Comments on the last published accounts True/False Question Sensitivity analysis consists of assessing the degree of risk. Correct Answer True Your Answer True Multiple Choice Single Answer Question A project objective which states "What' is to be viewed" is termed as :Correct Answer Strategic perspective Your Answer Strategic perspective Multiple Choice Multiple Answer Question The permanent requirement of working capital should be financed out of :Correct Answer Cash Profits , Shares , Debentures Your Answer Cash Profits , Shares , Debentures True/False Question In the BCG Matrix "DOGS" indicate products which are generally during the stage of Decline of a Product Life Cycle. Correct Answer True Your Answer True True/False Question The construction of National Golden Quadrilateral can be recognised as Project. Correct Answer True Your Answer True Select The Blank Question Under the SPACE Model, Customer loyalty is determined under the ________ dimension. Correct Answer Company's competitive advantage Your Answer Company's competitive advantage True/False Question The cost factors of the product mixed is also taken into account to arrive at cost at various levels of production and its cost impact of the manufacturing. Correct Answer True Your Answer True True/False Question The emphasis of a finance manager should be on taking a synergistic view of the project rather than looking at it only from the financial aspects. Correct Answer True Your Answer True Multiple Choice Single Answer Question Miscellaneous fixed assets includes :Correct Answer Cables Your Answer Cables Multiple Choice Multiple Answer

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Project Finance _17

Question In the Detailed Project Report, Technical aspects includes :Correct Answer Plant capacity , Quality standards , Raw material requirement Your Answer Quality standards , Raw material requirement , Power / telecom facilities Multiple Choice Multiple Answer Question Trend Projection method of demand forecasting consists of :Correct Answer Linear Relationship , Exponential Relationship , Polynomial Relationship Your Answer Linear Relationship , Exponential Relationship , Polynomial Relationship True/False Question Market potential should be determined under the Marketing aspect of the Project report. Correct Answer True Your Answer True Multiple Choice Single Answer Question Ratio analysis is a widely used tool of :Correct Answer Financial analysis Your Answer Financial analysis Multiple Choice Single Answer Question Preoperative expenses includes :Correct Answer Bank guarantees Your Answer Bank guarantees Select The Blank Question A Project has a ________ represented by growth, maturity and decay. Correct Answer Life cycle Your Answer Life cycle True/False Question If the organisation is a trading organisation, the requirement of working capital will be on the lower side. Correct Answer False Your Answer True

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Project Finance _18

LIST OF ATTEMPTED QUESTIONS AND ANSWERS Multiple Choice Multiple Answer Question The sources of long term and medium term finance are :Correct Answer Public deposit , Equity shares Your Answer

Equity shares , Bridge loan , Working capital loan

Multiple Choice Multiple Answer Question Disposition of funds includes :Correct Answer Increase in working capital , Preliminary expenses , Dividend Your Answer

Increase in working capital , Dividend , Preliminary expenses written off

Select The Blank Question The company having ________, is appropriate for the strategic posture of Conservative under the SPACE approach. Correct Answer Limited competitive advantage, belonging to a not so attractive industry but enjoying financial strength and operating in a relatively stable environment Your Answer Limited financial strength, enjoying competitive advantage, belonging to attractive industry and operating in a relatively volatile environment Select The Blank Question A market survey generally is a ________ survey. Correct Answer Sample Your Answer

Sample

Multiple Choice Single Answer Question The ratio which covers those assets which can be converted into cash immediately is known as :Correct Answer Quick ratio Your Answer

Quick ratio

Multiple Choice Single Answer Question Delay in arrival of domestic/foreign machinery and technicians may lead to :Correct Answer Cost and time overrun Your Answer

Cost and time overrun

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Project Finance _18

Multiple Choice Multiple Answer Question Casual methods of Demand forecasting consists of :Correct Answer Consumption-level method , Econometric method Your Answer

Consumption-level method , Econometric method

Select The Blank Question Having decided on the location and product, the promoter takes into account the ________ that is to be adopted for producing the product. Correct Answer Manufacturing process and technology Your Answer

Manufacturing process and technology

Multiple Choice Multiple Answer Question The objectives of the funds flow statement is as follows :Correct Answer To find out the uses of loans raised by the business , To indicate the financial strength and weakness of the business , To help to understand the changes in assets as well as asset sources which are not revealed by the income statement Your Answer To find out the uses of loans raised by the business , To help to understand the changes in assets as well as asset sources which are not revealed by the income statement , Helps to prepare financial statements Multiple Choice Multiple Answer Question The data for ratio analysis is obtained from :Correct Answer Profit and Loss Account , Balance Sheet Your Answer

Profit and Loss Account , Balance Sheet , Cash flow statement

Select The Blank Question ________ in assets involves outflow of funds. Correct Answer Increase Your Answer

Increase

Multiple Choice Single Answer Question Technology, design, layout of the plant as well as inputs and infrastructural facilities are to be considered under :Correct Answer Technical appraisal Your Answer

Technical appraisal

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Project Finance _18

True/False Question

The Detailed Project report must indicate the gestation period of the project. Correct Answer True Your Answer

False

True/False Question

Interest and Dividend are to be considered while calculating Operating ratio. Correct Answer False Your Answer

False

Multiple Choice Single Answer Question Short supplies of materials may lead to :Correct Answer Cost and time overrun Your Answer

Cost and time overrun

True/False Question

Ratio should be computed on the basis of inter-related figures which have a cause and effect relationship. Correct Answer True Your Answer

True

Multiple Choice Single Answer Question A project objective which states What "achieving it " would cost is known as :Correct Answer Finance cost aspect Your Answer

Finance cost aspect

Select The Blank Question More accurate the estimation of the level of current assets and current liabilities, more accurate will be estimation of the requirement of ________. Correct Answer Working capital Your Answer

Working capital

Multiple Choice Single Answer Question The rate of discount which would equate the present value of investments to the present value of benefits over the life of the

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Project Finance _18 project is known as :Correct Answer Internal rate of return Your Answer

Net Present value

Multiple Choice Multiple Answ er Question The various aspects which need to be considered while assessing Project finance financing are :Correct Answer Environmental factors , Risk involved , Managerial compensation Your Answer

Environmental factors , Risk involved , Political issues

Match The Following Question

Correct Answer

Your Answer

Private investment

Power generation

Nearness to market

Project

Time -bound

Time -bound

Programme

Not necessarily time bound

Not necessarily time bound

Foreign direct investment Machine tools

Power generation

True/False Question

The advantage of secondary sources of data is that it is readily and economically available. Correct Answer True Your Answer

False

Multiple Choice Single Answer Question A project objective which states "What' is to be viewed" is termed as :Correct Answer Strategic perspective Your Answer

Strategic perspective

Multiple Choice Multiple Answer Question A project objective can be said to have the following dimensions viz.: Correct Answer Strategic perspective , Time span , Finance cost aspect Your Answer

Strategic perspective , Time span , Finance cost aspect

True/False

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Project Finance _18 Question

A project is unique and no two projects are similar.

Correct Answer True Your Answer

True

Multiple Choice Multiple Answer Question The sources of cash are :Correct Answer Cash from operations , Sale of machinery , Issue of new shares Your Answer

Cash from operations , Sale of machinery , Issue of new shares

Multiple Choice Single Answer Question Profit is the result of customer satisfaction, indeed customer delight under the :Correct Answer Marketing concept Your Answer

Marketing concept

Multiple Choice Multiple Answer Question Management qualities includes :Correct Answer Honesty , Financial resources , Initiative Your Answer

Honesty , Financial resources , Initiative

Multiple Choice Single Answer Question The basic characteristic of a project is :Correct Answer That it involves current outlay of funds in expectation of future benefits Your Answer That it involves current outlay of funds in expectation of future benefits Select The Blank Question ________ is the summary of cash book or Receipts and Payments statement. Correct Answer Cash flow statement Your Answer

Cash flow statement

Select The Blank Question Under the SPACE Model, Customer loyalty is determined under the ________ dimension. Correct Answer Company's competitive advantage Your Answer

Company's competitive advantage

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Project Finance _18

True/False Question

The 'BCG Matrix 'analysis various products of the organisation in the terms of Business strength and Industry Attractiveness. Correct Answer False Your Answer

False

Select The Blank Question A smaller unit into which the overall requirement of capital of a company is sub-divided is termed as ________. Correct Answer Share Your Answer

Share

Multiple Choice Multiple Answer Question As per the GE's Stop Light Matrix, Products may justify substantial commitment of funds where there is :Correct Answer Strong Business Strength and high Industry attractiveness , Average Business strength and high Industry attractiveness Your Answer Average Business Strength and Medium Industry Attractiveness , Average Business strength and high Industry attractiveness , Average Business Strength and Low Industry attractiveness Multiple Choice Single Answer Question The ratio which indicates the ability of the company to meet current obligations is termed as :Correct Answer Current ratio Your Answer

Current ratio

True/False Question

The General Electric Company incorporated in the USA, is highly respected for the sophistication, maturity and quality in its planning systems. Correct Answer True Your Answer

False

Select The Blank Question Inflow of funds may not necessarily result in ________. Correct Answer Inflow of cash Your Answer

Outflow of cash

Match The Following

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Project Finance _18 Question

Correct Answer

Your Answer

Current ratio

Liquidity ratio

Current liability

Debt-Equity ratio

Solvency ratio

Debt

External liabilities

Debt

Relationship between Net Profit after taxes and total shareholders funds

Shareholders funds

Equity

Equity

True/False Question

There is a need for studying Project finance both for the lenders as well as the borrowers as both of them have equal stake in making the Project a success. Correct Answer True Your Answer

True

Select The Blank Question Sometimes the term ________ is interpreted as cash equivalent i.e. cash and marketable securities. Correct Answer Fund Your Answer

Investment

Multiple Choice Single Answer Question Every project involves financial outlay which can be referred to as :Correct Answer Project finance Your Answer

Balance Sheet

Multiple Choice Multiple Answer Question In the Detailed Project Report, Management aspects includes :Correct Answer Determination , Organisation Building , Person / system oriented Your Answer

Determination , Organisation Building , Person / system oriented

Select The Blank Question Depreciation is sometimes treated as ________ funds. Correct Answer Source Your Answer

Source

-7 -

Project Finance _18

True/False Question

It is mandatory for each unit to obtain necessary clearance from Pollution Control Authorities before setting up any project. Correct Answer True Your Answer

True

Multiple Choice Single Answer Question In BCG Matrix "QUESTION MARKS" indicate :Correct Answer Products which have high growth potential but low market share Your Answer

Products which have high growth potential but low market share

True/False Question

Production line diagrams show the organisation structure of the project along with information on location, personnel required for various departments, and their inter-relationship. Correct Answer False Your Answer

True

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Project Finance _19 LIST OF ATTEMPTED QUESTIONS AND ANSWERS Select The Blank Question ________ is a current liability. Correct Answer Trade credit Your Answer Trade credit Multiple Choice Multiple Answer Question Marketing category of the Project report consists of :Correct Answer Target market , Market potential , Pricing policy Your Answer Target market , Market potential , Pricing policy Select The Blank Question Under the SPACE Model, Customer loyalty is determined under the ________ dimension. Correct Answer Company's competitive advantage Your Answer Company's competitive advantage Multiple Choice Single Answer Question Sources of funds include :Correct Answer Increase in secured borrowing Your Answer Increase in secured borrowing True/False Question It is mandatory for each unit to obtain necessary clearance from Pollution Control Authorities before setting up any project. Correct Answer True Your Answer False Multiple Choice Single Answer Question A project objective which states "What' is to be viewed" is termed as :Correct Answer Strategic perspective Your Answer Strategic perspective Select The Blank Question ________ tries to have what the customer will want- where, when, in what form and at what price. Correct Answer Marketing Your Answer Marketing True/False Question Debt Service Coverage Ratio is one of the most important ratios calculated by the bankers or financial institutions giving long term finance to the organisation. Correct Answer True Your Answer True Multiple Choice Multiple Answer Question Management qualities includes :Correct Answer Honesty , Financial resources , Initiative Your Answer Honesty , Financial resources , Initiative Multiple Choice Single Answer Question The second phase of the technical appraisal which focuses upon appraising the likely technical gaps consists of :Correct Answer Problems faced during the Construction and Project implementation Your Answer Problems faced during the Construction and Project implementation

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Project Finance _19

True/False Question A project is unique and no two projects are similar. Correct Answer True Your Answer True Multiple Choice Single Answer Question Land and site development cost includes cost of :Correct Answer Gates Your Answer Gates Multiple Choice Single Answer Question A project objective which states What "achieving it " would cost is known as :Correct Answer Finance cost aspect Your Answer Finance cost aspect Select The Blank Question ________ in assets involves outflow of funds. Correct Answer Increase Your Answer Increase Match The Following Question Correct Answer Your Answer Management problems Lack of exposure Lack of exposure Management Quality Initiative Initiative Management Perception Aspiration level/ conservative Aspiration level/ conservative Organisational Climate Person oriented Person oriented Match The Following Question Correct Answer Your Answer Source of funds Depreciation Equity capital Fixed assets Building Building Current assets Debtors Debtors Current liability Trade credit Trade credit Multiple Choice Single Answer Question Disposal of fixed assets is categorised under :Correct Answer Miscellaneous Your Answer Miscellaneous True/False Question The emphasis of a finance manager should be on taking a synergistic view of the project rather than looking at it only from the financial aspects. Correct Answer True Your Answer True

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Project Finance _19 Multiple Choice Single Answer Question Geographic market appraisal answers to :Correct Answer Where do the customers live? Your Answer Where do the customers live? Multiple Choice Single Answer Question Every project involves financial outlay which can be referred to as :Correct Answer Project finance Your Answer Project finance Select The Blank Question ________ occupies a unique position in the macro economic development which helps in induction of new technology and facilitates, greater efficiency as well as higher productivity. Correct Answer Investment Your Answer Production Multiple Choice Single Answer Question The basic characteristic of a project is :Correct Answer That it involves current outlay of funds in expectation of future benefits Your Answer That it involves current outlay of funds in expectation of future benefits Multiple Choice Single Answer Question Pre-operative expenses include :Correct Answer Interest on deferred payments Your Answer Interest on deferred payments Multiple Choice Multiple Answer Question Advantages of fund flow statement are :Correct Answer It determines financial consequences of the business operations , It enables the firm to plan its financial resources properly , It helps as a reliable guide for the future requirement of funds Your Answer It determines financial consequences of the business operations , It considers non-fund transactions , It enables the firm to plan its financial resources properly True/False Question Managerial problems in a project are the most pervasive. Correct Answer True Your Answer True True/False Question In the BCG Matrix "DOGS" indicate products which are generally during the stage of Decline of a Product Life Cycle. Correct Answer True Your Answer True Multiple Choice Multiple Answer Question The applications of cash are :Correct Answer Purchase of fixed assets , Payment of long term loans Your Answer Purchase of fixed assets , Payment of long term loans , Issue of new machinery True/False Question Debt Equity ratio is a 'Solvency ratio'. Correct Answer True Your Answer True

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Project Finance _19 True/False Question Current assets includes stock-in-process. Correct Answer True Your Answer True Multiple Choice Multiple Answer Question A project objective can be said to have the following dimensions viz.: Correct Answer Strategic perspective , Time span , Finance cost aspect Your Answer Strategic perspective , Time span , Finance cost aspect Multiple Choice Single Answer Question Liabilities side of Balance sheet includes :Correct Answer Unsecured loans Your Answer Unsecured loans Multiple Choice Single Answer Question The rate of discount which would equate the present value of investments to the present value of benefits over the life of the project is known as :Correct Answer Internal rate of return Your Answer Internal rate of return Select The Blank Question A Project has a ________ represented by growth, maturity and decay. Correct Answer Life cycle Your Answer Life cycle Multiple Choice Multiple Answer Question After the SPACE chart is constructed, we would normally get any one of the following basic strategic postures :Correct Answer Aggressive Posture , Competitive Posture , Defensive Posture Your Answer Aggressive Posture , Competitive Posture , Defensive Posture Select The Blank Question ________ is the summary of cash book or Receipts and Payments statement. Correct Answer Cash flow statement Your Answer Cash flow statement Multiple Choice Single Answer Question The point at which the unit neither earns profit nor incurs loss is known as :Correct Answer Break Even Point Your Answer Break Even Point Multiple Choice Multiple Answer Question In the Detailed Project Report, Marketing aspects includes :Correct Answer Demand forecasting , Promotion , Distribution Your Answer Demand forecasting , Promotion , Distribution Multiple Choice Multiple Answer Question The various aspects which need to be considered while assessing Project finance financing are :Correct Answer Environmental factors , Risk involved , Managerial compensation Your Answer Environmental factors , Risk involved , Managerial compensation Multiple Choice Multiple Answer Question Casual methods of Demand forecasting consists of :Correct Answer Consumption-level method , Econometric method

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Project Finance _19 Your Answer Consumption-level method , Econometric method Select The Blank Question Under ________ method, the forecasts are modified in the light of observed errors. Correct Answer Exponential smoothing Your Answer Exponential smoothing Multiple Choice Multiple Answer Question Provision for tax can be treated as :Correct Answer Item of current liabilities , Added back to the profit as per profit and loss account to arrive at operating profits Your Answer Added back to the profit as per profit and loss account to arrive at operating profits , Item of current assets , Item of working capital Select The Blank Question Retained earnings indicates that whatever profits are earned by the company are not distributed by it by way of ________ but are kept aside for use in future for expansion or other purpose. Correct Answer Dividend Your Answer Dividend Multiple Choice Single Answer Question Infrastructural projects include :Correct Answer Power Generation and Distribution Your Answer Power Generation and Distribution Multiple Choice Single Answer Question The ratio that roughly measures the company's potential reserve of cash is termed as :Correct Answer Net Working capital to total assets Your Answer Net Working capital to total assets Select The Blank Question Name and designation of the chief executive comes under the ________ category. Correct Answer General Your Answer General Multiple Choice Single Answer Question Miscellaneous fixed assets includes :Correct Answer Cables Your Answer Cables Multiple Choice Single Answer Question In the Cash flow statement, the sources of funds include Correct Answer Share Issue Your Answer Share Issue

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Project Finance _20 LIST OF ATTEMPTED QUESTIONS AND ANSWERS True/False Question Land and site development comes under the cost aspect of the Project report. Correct Answer True Your Answer True Multiple Choice Single Answer Question Location of the factory comes under the :Correct Answer General category Your Answer General category Match The Following Question Correct Answer Your Answer Project appraisal It is the evaluation of project from technical, market, financial, economic and social perspective before committing funds for investment It is a preliminary assessment of the project idea to determine whether or not the investment opportunity is promising Program It is large in scope, is activity oriented and is not necessarily time bound It is large in scope, is activity oriented and is not necessarily time bound Project It is one-shot, time-limited, goal oriented, major undertaking requiring the commitment of varied skills and resources It deals with the impact of the investment project on people and their lives Pre-feasibility study It is a preliminary assessment of the project idea to determine whether or not the investment opportunity is promising It is one-shot, time-limited, goal oriented, major undertaking requiring the commitment of varied skills and resources Multiple Choice Single Answer Question The sources of funding have expanded from banks, insurance companies and multilateral agencies to include the :Correct Answer Capital market Your Answer Debt market Multiple Choice Single Answer Question Cost of overheads include :Correct Answer Cost of repairs and maintenance Your Answer Cost of electricity True/False Question The Detailed Project report spells out the modus operandi for the implementation of the Project and the realization of the Project objectives. Correct Answer True Your Answer True True/False Question Debt Service means payment of installments and interest against an amount borrowed as per terms of loan. Correct Answer True Your Answer True True/False

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Project Finance _20 Question The ratios of one organisation compared with the ratios of the same organisation is termed as inter-firm comparison. Correct Answer False Your Answer False Select The Blank Question Depreciation is sometimes treated as ________ funds. Correct Answer Source Your Answer Application Select The Blank Question Excessive expenditures on foreign technicians leads to ________. Correct Answer Cost and time overrun Your Answer Management problems Multiple Choice Multiple Answer Question The Key terms used in the BCG Product Portfolio matrix are :Correct Answer Stars , Question marks Your Answer Stars , Question marks , Invest True/False Question Sensitivity analysis consists of assessing the degree of risk. Correct Answer True Your Answer True Multiple Choice Multiple Answer Question The data for ratio analysis is obtained from :Correct Answer Profit and Loss Account , Balance Sheet Your Answer Profit and Loss Account , Auditors report , Balance Sheet Multiple Choice Multiple Answer Question Trend Projection method of demand forecasting consists of :Correct Answer Linear Relationship , Exponential Relationship , Polynomial Relationship Your Answer Linear Relationship , Chain ratio Relationship , Exponential Relationship Multiple Choice Single Answer Question Delay in arrival of domestic/foreign machinery and technicians may lead to :Correct Answer Cost and time overrun Your Answer Profit maximisation Multiple Choice Single Answer Question Past trend method of Commercial appraisal technique is :Correct Answer Adopted as a guide depending on the consumption pattern of the society as a whole Your Answer Adopted as a guide depending on the consumption pattern of the society as a whole Multiple Choice Multiple Answer Question Limitations of fund flow statement are :Correct Answer It does not provide any new information but only rearranges the various facts , It does not consider non-fund transactions Your Answer It does not consider non-fund transactions , It does not help in determining future requirement of funds , It does not provide any new information but only rearranges the various facts Select The Blank

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Project Finance _20 Question As the plant capacity increase, the investment cost unit capacity ________. Correct Answer Decreases Your Answer Increases Multiple Choice Single Answer Question Preoperative expenses includes :Correct Answer Bank guarantees Your Answer Brokerage on capital issue Multiple Choice Single Answer Question Short supplies of materials may lead to :Correct Answer Cost and time overrun Your Answer Cost and time overrun Select The Blank Question In order to meet the cost of large project, the technique of ________ has been developed so that the financial commitment and risks associated with a project are shared between the project sponsor and the lending institutions. Correct Answer Limited recourse financing Your Answer Limited recourse financing True/False Question For computing Interest coverage ratio, Profit after Interest and taxes are taken into account. Correct Answer False Your Answer True Multiple Choice Single Answer Question The ratio which covers those assets which can be converted into cash immediately is known as :Correct Answer Quick ratio Your Answer Current ratio Multiple Choice Multiple Answer Question Management category of Visit report consists of :Correct Answer Managing Director , Institutional nominees , Committees of the board Your Answer Managing Director , Electrical engineers , Institutional nominees Multiple Choice Single Answer Question General Electric Stop Light Matrix analyses products in terms of :Correct Answer Business strength and Industrial Attractiveness Your Answer Relative Market share and Industry Growth rate Multiple Choice Single Answer Question The basic document for facilitating Project financing is the :Correct Answer Detailed Project report Your Answer Detailed Project report Select The Blank Question The ________ market is longer the order of the day since this is an era of professionalization and specialised services are available at cost. Correct Answer Monopolistic Your Answer Monopolistic True/False

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Project Finance _20 Question Ratio should be computed on the basis of inter-related figures which have a cause and effect relationship. Correct Answer True Your Answer True Multiple Choice Multiple Answer Question Demand technique forecasting of Commercial appraisal includes :Correct Answer Future demand of the product , Proper survey of the product , Future availability and supply of the product Your Answer Future demand of the product , Export market , Future availability and supply of the product Select The Blank Question Having decided on the location and product, the promoter takes into account the ________ that is to be adopted for producing the product. Correct Answer Manufacturing process and technology Your Answer Manufacturing process and technology Multiple Choice Multiple Answer Question Time Series Projection Methods of Demand forecasting consists of :Correct Answer Trend Projection method , Moving Averages method Your Answer Trend Projection method , Moving Averages method Select The Blank Question More accurate the estimation of the level of current assets and current liabilities, more accurate will be estimation of the requirement of ________. Correct Answer Working capital Your Answer Working capital Multiple Choice Multiple Answer Question Defaults category of the Project report may be in respect of :Correct Answer Term loans , Principal , Interest Your Answer Term loans , Principal , Interest Match The Following Question Correct Answer Your Answer General functional layout Present the general relationship between equipment buildings and civil works The plan of work concerning installation as well as initial operation Location Broad area such as city, industrial belt etc. The diagrams indicating the flow of materials, utilities, final product, by-products and emission Site Specific piece of land where the project would be set up Broad area such as city, industrial belt etc. Plant layout Physical layout of the factory Specific piece of land where the project would be set up True/False Question If the organisation is a trading organisation, the requirement of working capital will be on the lower side. Correct Answer False Your Answer True Select The Blank

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Project Finance _20 Question Cost of fencing comes under the ________ category of the Project report. Correct Answer Land and site development Your Answer Building cost Multiple Choice Multiple Answer Question Disposition of funds includes :Correct Answer Increase in working capital , Preliminary expenses , Dividend Your Answer Increase in working capital , Preliminary expenses , Preliminary expenses written off Multiple Choice Multiple Answer Question Sources of funds includes :Correct Answer Depreciation , Preliminary expenses written off , Increase in secured borrowing Your Answer Depreciation , Preliminary expenses written off , Increase in secured borrowing , Preliminary expenses Multiple Choice Single Answer Question The Projects which are undertaken to manufacture certain products which are being used as raw material by the existing units is known as :Correct Answer Backward Integration Projects Your Answer Backward Integration Projects Select The Blank Question In the GE's Stop Light Matrix, when ________ situation prevails , Products call for divestment. Correct Answer Average Business Strength and Low Industry attractiveness Your Answer Weak Business strength and high Industry attractiveness Select The Blank Question Investors who invest in the debentures of the company are the ________ of the company. Correct Answer Creditors Your Answer Creditors Multiple Choice Multiple Answer Question Debt Service coverage ratio may be considered to be one of the most important ratios calculated by the :Correct Answer Bankers , Financial Institutions Your Answer Shareholders , Bankers , Creditors Multiple Choice Single Answer Question Dissentions among the promoters is a :Correct Answer Management problem Your Answer Management perception Select The Blank Question Goods purchased on credit ________ in flow of funds. Correct Answer Does not result Your Answer Does not result True/False Question The secondary data is collected through market survey, specific for the project being appraised. Correct Answer False Your Answer False

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Project Finance _20 Multiple Choice Single Answer Question Profit is the result of customer satisfaction, indeed customer delight under the :Correct Answer Marketing concept Your Answer Marketing concept Multiple Choice Multiple Answer Question Internal sources of funds are :Correct Answer Funds from operation , Loss on sale of fixed assets , Goodwill written off Your Answer Funds from operation , Goodwill written off , Funds from long term loans

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Project Finance _21 LIST OF ATTEMPTED QUESTIONS AND ANSWERS Multiple Choice Multiple Answer Question The permanent requirement of working capital should be financed out of :Correct Answer Debentures , Cash Profits , Shares Your Answer Debentures , Cash Profits , Shares Multiple Choice Multiple Answer Question The sources of long term and medium term finance are :Correct Answer Equity shares , Public deposit Your Answer Equity shares , Bridge loan , Public deposit Multiple Choice Single Answer Question The emphasis of the Banks and Financial institutions particularly in India has shifted from 'Sanctions', 'Disbursements' and 'Security-orientation' to 'Recovery/Recycling' and :Correct Answer Activity orientation Your Answer Activity orientation Multiple Choice Single Answer Question Technology, design, layout of the plant as well as inputs and infrastructural facilities are to be considered under :Correct Answer Technical appraisal Your Answer Financial appraisal Select The Blank Question Detailed Project Report is generally prepared from a ________ report with additional information. Correct Answer Feasibility Your Answer Feasibility True/False Question A high debt equity ratio may indicate that the financial stake of the creditors is more than that of the owners. Correct Answer True Your Answer True Multiple Choice Single Answer Question The formula for Break Even Point is :Correct Answer Fixed cost / ( Sales Price - Variables) Your Answer (Profit after tax +Depreciation + Interest)/ Interest Multiple Choice Single Answer Question Receivables is categorised under :Correct Answer Current assets and liabilities Your Answer Material inputs and utilities Multiple Choice Multiple Answer Question Ratios relating to working capital are :Correct Answer Current ratio , Internal measure , Quick ratio Your Answer Current ratio , Debt Equity ratio , Internal measure Select The Blank Question Longer the duration of production cycle, higher the requirement of ________. Correct Answer Working capital Your Answer Fixed assets

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Project Finance _21 Multiple Choice Multiple Answer Question In the Detailed Project Report, Management aspects includes :Correct Answer Determination , Organisation Building , Person / system oriented Your Answer Organisation Building , Person / system oriented , Promoter's equity / stake True/False Question Financial analysis based on accounting ratios will give mis-leading results if the effects of changes in price level are not taken into account. Correct Answer True Your Answer True Multiple Choice Multiple Answer Question In the Detailed Project Report, Technical aspects includes :Correct Answer Plant capacity , Quality standards , Raw material requirement Your Answer Plant capacity , Quality standards , Raw material requirement Select The Blank Question Inflow of funds may not necessarily result in ________. Correct Answer Inflow of cash Your Answer Decrease in funds Multiple Choice Multiple Answer Question Building cost consists of :Correct Answer Factory building , Auxiliary buildings , Administrative block Your Answer cost of development , Factory building , Auxiliary buildings Match The Following Question Correct Answer Your Answer Increase in current liabilities Decreases working capital Stability of funds Increase in liabilities Inflow of funds Inflow of funds Decrease in liabilities Outflow of funds Increases working capital Increase in current assets Increases working capital Outflow of funds Select The Blank Question Sometimes the term ________ is interpreted as cash equivalent i.e. cash and marketable securities. Correct Answer Fund Your Answer Fund True/False Question Name of the finance manager comes under the Project organisation category of the Project report. Correct Answer True Your Answer False True/False Question Change in the project concept itself may lead to cost and time overrun. Correct Answer True Your Answer True True/False

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Project Finance _21 Question The maximum Seed Capital assistance provided by IDBI under the project will be restricted to 50% of the required promoter's contribution or Rs. 50 lakhs whichever is lower. Correct Answer False Your Answer True Match The Following Question Correct Answer Your Answer Project organisation Finance manager Completion date of the project General category of Project report Location of factory Reasons for cost escalations Cost aspect of the project report Consultancy fees Finance manager Financing plan Unsecured loans Location of factory True/False Question Trend projection method is the important technique for forecasting demand. Correct Answer True Your Answer True Multiple Choice Multiple Answer Question Production and sales aspect of Visit report consists of :Correct Answer Utilisation of installed capacity , Input availability , Sales trends Your Answer Utilisation of installed capacity , Input availability Multiple Choice Multiple Answer Question The sources of cash are :Correct Answer Cash from operations , Sale of machinery , Issue of new shares Your Answer Purchase of fixed assets , Cash from operations , Sale of machinery Multiple Choice Multiple Answer Question External sources of cash are as follows :Correct Answer Issue of new shares , Long term loans , Short term borrowings Your Answer Issue of new shares , Long term loans , Short term borrowings True/False Question Production line diagrams show the organisation structure of the project along with information on location, personnel required for various departments, and their inter-relationship. Correct Answer False Your Answer True Select The Blank Question ________ is a current asset Correct Answer Book debts Your Answer Book debts Select The Blank Question The company having ________, is appropriate for the strategic posture of Defensive under the SPACE approach. Correct Answer Lacks both competitive advantage as well as financial strength and belongs to a not so attractive industry, operating in an unstable environment Your Answer High financial strength, high industrial strength, enjoying a competitive advantage and belonging to an attractive industry, operating in a relatively stable environmental conditions

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Project Finance _21 Multiple Choice Single Answer Question Management aspect of detailed project report includes Correct Answer Organisation structure Your Answer Demand forecasting Select The Blank Question ________ profitability reduces the strain on working capital. Correct Answer High Your Answer High Multiple Choice Multiple Answer Question The following are the sources of funds :Correct Answer Operating Profit , Non operating Income Your Answer Operating Profit , Operating Loss , Non operating Income Multiple Choice Single Answer Question The cash flow of all the years during the expected life of the project are discounted at a pre-determined cut off rate and :Correct Answer Net Present value is obtained Your Answer Internal rate of return is obtained Multiple Choice Multiple Answer Question The objectives of the funds flow statement is as follows :Correct Answer To find out the uses of loans raised by the business , To indicate the financial strength and weakness of the business , To help to understand the changes in assets as well as asset sources which are not revealed by the income statement Your Answer To find out the uses of loans raised by the business , To indicate the financial strength and weakness of the business , To help to understand the changes in assets as well as asset sources which are not revealed by the income statement Multiple Choice Single Answer Question Cost of materials include :Correct Answer Cost of components and consumable stores Your Answer Cost of electricity True/False Question The Detailed Project report must indicate the gestation period of the project. Correct Answer True Your Answer True Multiple Choice Single Answer Question Strategic Position and Action Evaluation Model :Correct Answer Is an approach to hammer out an appropriate strategic posture for a firm and its individual business Your Answer Which is highly respected for the sophistication, maturity and quality in its planning systems Select The Blank Question Location of the factory comes under the ________ category of the Project report. Correct Answer General Your Answer General Select The Blank Question Retained earnings is a source of ________ finance. Correct Answer Internal Your Answer Internal

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Project Finance _21

Multiple Choice Multiple Answer Question General category of the Project report consists of :Correct Answer Name of the Industrial concern , Proposed product , Location of the factory Your Answer Name of the Industrial concern , Proposed product , Location of the factory Select The Blank Question Short term finance is normally for a period upto ________ year. Correct Answer One Your Answer Two Multiple Choice Single Answer Question Appointments made at senior level during the half-year is categorised under :Correct Answer Organisation and management Your Answer Current assets and liabilities Select The Blank Question Commission outstanding is ________ of funds. Correct Answer Application Your Answer Application Multiple Choice Single Answer Question The statement which shows the movement of cash into and out of firm's kittie is known as :Correct Answer Cash flow statement Your Answer Profit and Loss statement Multiple Choice Single Answer Question Cost of utilities include :Correct Answer Cost of electricity Your Answer Cost of components and consumable stores Multiple Choice Single Answer Question Marketing aspect of Detailed Project report includes :Correct Answer Demand forecasting Your Answer Detailed Project Engineering True/False Question In both the extreme situations of trade cycles i.e. Inflation and depression, requirement of working capital may be high. Correct Answer True Your Answer False Multiple Choice Multiple Answer Question While choosing the location for a project, the following factors should be considered :Correct Answer Proximity to raw materials and markets , Availability of infrastructure , Government policies and other factors Your Answer Proximity to raw materials and markets , Plant capacity , Availability of infrastructure

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LIST OF ATTEMPTED QUESTIONS AND ANSWERS True/False Question

For computing Interest coverage ratio, Profit after Interest and taxes are taken into account. Correct Answer False Your Answer

True

Multiple Choice Multiple Answer Question The sources of long term and medium term finance are :Correct Answer Equity shares , Public deposit Your Answer

Working capital loan , Equity shares

Multiple Choice Single Answer Question Infrastructural projects include :Correct Answer Power Generation and Distribution Your Answer

Power Generation and Distribution

True/False Question

Debt Service means payment of installments and interest against an amount borrowed as per terms of loan. Correct Answer True Your Answer

True

Multiple Choice Single Answer Question Sewerage and drainage cost of the project is categorised under :Correct Answer Building cost Your Answer

Land and site cost

Multiple Choice Single Answer Question A project objective which states "What' is to be viewed" is termed as :Correct Answer Strategic perspective Your Answer

Strategic perspective

Multiple Choice Single Answer Question End use method of Commercial appraisal technique is :-

Correct Answer A list of industries wherein the product is used is made and quantity and volume is arrived at Your Answer A method based on the assumption that the behavior of the variables would continue in similar/same direction and magnitude, as in the past Select The Blank Question Longer the duration of production cycle, higher the requirement of ________. Correct Answer Working capital Your Answer

Equity financing

True/False Question

There is a need for studying Project finance both for the lenders as well as the borrowers as both of them have equal stake in making the Project a success. Correct Answer True Your Answer

True

Select The Blank Question Details regarding Bridge finance comes under the ________ category of Project report. Correct Answer Financing plan Your Answer

Cost aspect

Multiple Choice Single Answer Question Cost of utilities include :Correct Answer Cost of electricity Your Answer

Cost of insurance

Select The Blank Question A market survey generally is a ________ survey. Correct Answer Sample Your Answer

Census

Multiple Choice Multiple Answer Question The applications of cash are :Correct Answer Purchase of fixed assets , Payment of long term loans

Your Answer

Purchase of fixed assets , Payment of long term loans

Multiple Choice Single Answer Question Delays in infrastructure Development by State Agencies may lead to :Correct Answer Cost and time overrun Your Answer

Cost and time overrun

Select The Blank Question Position regarding requirement and training of operational staff comes under the ________ category of Project report. Correct Answer Project organisation Your Answer

General category

Select The Blank Question ________ is the summary of cash book or Receipts and Payments statement. Correct Answer Cash flow statement Your Answer

Fund flow statement

Multiple Choice Multiple Answer Question A project objective can be said to have the following dimensions viz.: Correct Answer Strategic perspective , Time span , Finance cost aspect Your Answer

Strategic perspective , Finance cost aspect

Multiple Choice Single Answer Question The basic characteristic of a project is :Correct Answer That it involves current outlay of funds in expectation of future benefits Your Answer That it is for an indefinite period of time True/False Question

It is mandatory for each unit to obtain necessary clearance from Pollution Control Authorities before setting up any project. Correct Answer True Your Answer

True

Multiple Choice Multiple Answer

Question

Time Series Projection Methods of Demand forecasting consists of :Correct Answer Trend Projection method , Moving Averages method Your Answer

Consumption-level method , Econometric method

Multiple Choice Single Answer Question Delay in arrival of domestic/foreign machinery and technicians may lead to :Correct Answer Cost and time overrun Your Answer

Profit maximisation

True/False Question

Debt Equity ratio is a 'Solvency ratio'.

Correct Answer True Your Answer

True

Select The Blank Question Having decided on the location and product, the promoter takes into account the ________ that is to be adopted for producing the product. Correct Answer Manufacturing process and technology Your Answer

Size of the plant

Select The Blank Question ________ in assets involves outflow of funds. Correct Answer Increase Your Answer

Increase

Multiple Choice Multiple Answer Question In the Detailed Project Report, Marketing aspects includes :Correct Answer Demand forecasting , Promotion , Distribution Your Answer

Cost / Time overruns , Promotion

Match The Following Question Increase in current liabilities

Correct Answer

Your Answer

Decreases working capital Decreases working capital

Increase in liabilities

Inflow of funds

Cash flow analysis

Decrease in liabilities

Outflow of funds

Increases working capital

Increase in current assets Increases working capital Outflow of funds

Select The Blank Question In order to meet the cost of large project, the technique of ________ has been developed so that the financial commitment and risks associated with a project are shared between the project sponsor and the lending institutions. Correct Answer Limited recourse financing Your Answer

Limited recourse financing

Select The Blank Question Short term finance is normally for a period upto ________ year. Correct Answer One Your Answer

One

Select The Blank Question ________ tries to have what the customer will want- where, when, in what form and at what price. Correct Answer Marketing Your Answer

Selling

True/False Question

Nominal maximum capacity is the capacity that is technically attainable and this corresponds to the supplier's guaranteed capacity. Correct Answer True Your Answer

True

Select The Blank Question Commission outstanding is ________ of funds. Correct Answer Application Your Answer

Application

Multiple Choice Single Answer Question Profit is the result of customer satisfaction, indeed customer

delight under the :Correct Answer Marketing concept Your Answer

Profitability concept

True/False Question

The secondary data is collected through market survey, specific for the project being appraised. Correct Answer False Your Answer

False

Multiple Choice Single Answer Question The method for evaluating the profitability of industrial projects whose object is to ascertain the period required for recovering the entire investment made in a project is known as :Correct Answer Pay back method Your Answer

Pay back method

Multiple Choice Single Answer Question Technical aspect of detailed project report includes :Correct Answer Detailed Project Engineering Your Answer

Fixation of means of financial structure

Multiple Choice Single Answer Question Every project involves financial outlay which can be referred to as :Correct Answer Project finance Your Answer

Project finance

Multiple Choice Multiple Answer Question Provision for tax can be treated as :Correct Answer Item of current liabilities , Added back to the profit as per profit and loss account to arrive at operating profits Your Answer Item of current liabilities , Added back to the profit as per profit and loss account to arrive at operating profits True/False Question

Trend projection method is the important technique for forecasting demand. Correct Answer True

Your Answer

True

Match The Following Question

Correct Answer

Your Answer

Organisation and Management

Strikes/lay-offs/lockouts etc.

Sanctioned bank limit

Material inputs and utilities Stock of raw material

Stock of raw material

Working capital

Sanctioned bank limit

Finished goods

Marketing

Pricing policy

Receivables

True/False Question

Cost under-estimation at the project preparation and evaluation stage leads to cost and time over run. Correct Answer True Your Answer

True

True/False Question

In small scale organisation, requirement of working capital is quite high due to high amount of overheads, high buying costs and high selling cost. Correct Answer True Your Answer

True

Multiple Choice Multiple Answer Question Financial and economic aspect of the Visit report consists of :Correct Answer Company's financial year , Impact of Government policies on company operations , Comments on the last published accounts Your Answer Company's financial year Multiple Choice Single Answer Question The formula for Break Even Point is :Correct Answer Fixed cost / ( Sales Price - Variables) Your Answer

Fixed cost / ( Sales Price - Variables)

Multiple Choice Single Answer Question Sanctioned bank limits is categorised under :-

Correct Answer Working capital Your Answer

Production, Sales and Profitability

Select The Blank Question Goods purchased on credit ________ in flow of funds. Correct Answer Does not result Your Answer

Does not result

Multiple Choice Single Answer Question The assets held by a business which can be converted in the form of cash or used during the course of normal operations is termed as :Correct Answer Current assets Your Answer

Current assets

True/False Question

The Detailed Project report spells out the modus operandi for the implementation of the Project and the realization of the Project objectives. Correct Answer True Your Answer

True

Project Finance _2

LIST OF ATTEMPTED QUESTIONS AND ANSWERS Multiple Choice Single Answer Question Short supplies of materials may lead to :Correct Answer Cost and time overrun Your Answer

Sales rise

Multiple Choice Single Answer Question The basic characteristic of a project is :Correct Answer That it involves current outlay of funds in expectation of future benefits Your Answer That it involves current outlay of funds in expectation of future benefits Multiple Choice Multiple Answer Question The Key terms used in the BCG Product Portfolio matrix are :Correct Answer Stars , Question marks Your Answer

Stars , Question marks

Multiple Choice Multiple Answer Question The data for ratio analysis is obtained from :Correct Answer Profit and Loss Account , Balance Sheet Your Answer

Profit and Loss Account , Auditors report

Match The Following Question

Correct Answer

Your Answer

Technical aspect of detailed project report

Detailed Project Engineering

Transport

Financial aspect of Detailed Project report

Profitability

Detailed Project Engineering

Marketing aspect of Detailed Project report

Distribution

Conservativeness

Management aspect of detailed project report

Conservativeness

Distribution

True/False Question

Nominal maximum capacity is the capacity that is technically attainable and this corresponds to the supplier's guaranteed capacity.

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Project Finance _2 Correct Answer True Your Answer

True

Multiple Choice Single Answer Question Marketing aspect of Detailed Project report includes :Correct Answer Demand forecasting Your Answer

Demand forecasting

True/False Question

In the BCG Matrix, the key term of Cash Cows require further commitment of funds. Correct Answer False Your Answer

True

Multiple Choice Multiple Answer Question Disposition of funds includes :Correct Answer Increase in working capital , Preliminary expenses , Dividend Your Answer

Increase in working capital , Preliminary expenses

Match The Following Question

Correct Answer

Your Answer

Project appraisal

It is the evaluation of project from technical, market, financial, economic and social perspective before committing funds for investment

It is a preliminary assessment of the project idea to determine whether or not the investment opportunity is promising

Program

It is large in scope, is It deals with the impact of activity oriented and is not the investment project on necessarily time bound people and their lives

Project

It is one-shot, time-limited, It involves the allocation of goal oriented, major resources among undertaking requiring the competing projects commitment of varied skills and resources

Pre-feasibility study

It is a preliminary It is large in scope, is assessment of the project activity oriented and is not idea to determine whether necessarily time bound or not the investment opportunity is promising

-2 -

Project Finance _2

True/False Question

Change in the project concept itself may lead to cost and time overrun. Correct Answer True Your Answer

True

True/False Question

Land and site development comes under the cost aspect of the Project report. Correct Answer True Your Answer

True

Multiple Choice Single Answer Question It is said that a second rate project in the hands of first rate management is better than a first rate project in the hands of :Correct Answer Second rate management Your Answer

Second rate management

Select The Blank Question Location of the factory comes under the ________ category of the Project report. Correct Answer General Your Answer

Cost aspect

True/False Question

Production line diagrams show the organisation structure of the project along with information on location, personnel required for various departments, and their inter-relationship. Correct Answer False Your Answer

True

Select The Blank Question The Project Cycle should be in the ________ order Correct Answer Identification of Project - Project Appraisal - Negotiations for loans Your Answer Procurement of Goods/services - Project Appraisal - Monitoring of operations on completion Multiple Choice Single Answer Question Cost of materials include :-

-3 -

Project Finance _2 Correct Answer Cost of components and consumable stores Your Answer

Cost of components and consumable stores

Multiple Choice Multiple Answer Question Financing plans consists of :Correct Answer Share capital , Term loans , Internal accruals Your Answer

Share capital , Term loans

True/False Question

The Detailed Project report must indicate the gestation period of the project. Correct Answer True Your Answer

True

Select The Blank Question Having decided on the location and product, the promoter takes into account the ________ that is to be adopted for producing the product. Correct Answer Manufacturing process and technology Your Answer

Size of the plant

Multiple Choice Single Answer Question The cost of Plant and Machinery may be adjusted for a possible increase known as :Correct Answer Escalation Your Answer

Escalation

Select The Blank Question Depreciation is sometimes treated as ________ funds. Correct Answer Source Your Answer

No flow

Select The Blank Question ________ is that scarce input which financial resources alone cannot mobilise. Correct Answer Management Your Answer

Sales

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Project Finance _2

Multiple Choice Single Answer Question The third phase of the technical appraisal which focuses upon appraising the likely technical gaps consists of :Correct Answer Problems pertaining to the period when the project is in operation Your Answer Problems pertaining to the period when the project is in operation Select The Blank Question Retained earnings is a source of ________ finance. Correct Answer Internal Your Answer

Short term

Multiple Choice Single Answer Question In BCG Matrix "QUESTION MARKS" indicate :Correct Answer Products which have high growth potential but low market share Your Answer

Products which enjoy a high market share as well as a high growth rate

Select The Blank Question ________ capital represents permanent capital. Correct Answer Equity Your Answer

Equity

Multiple Choice Single Answer Question Demographic market appraisal answers to Correct Answer Who they are? Your Answer

When they buy?

Select The Blank Question ________ is a current liability. Correct Answer Trade credit Your Answer True/False Question

Trade credit

The construction of National Golden Quadrilateral can be recognised as Project.

-5 -

Project Finance _2 Correct Answer True Your Answer

True

Select The Blank Question Cost of fencing comes under the ________ category of the Project report. Correct Answer Land and site development Your Answer

Building cost

Multiple Choice Multiple Answer Question While choosing the location for a project, the following factors should be considered :Correct Answer Proximity to raw materials and markets , Availability of infrastructure , Government policies and other factors Your Answer Proximity to raw materials and markets , Availability of infrastructure , Government policies and other factors Multiple Choice Single Answer Question The norms for providing open areas have to be strictly followed for safety of labour and allow sufficient space for outflow of effluents safely in case of :Correct Answer Chemical unit Your Answer

Chemical unit

True/False Question

Name of the finance manager comes under the Project organisation category of the Project report. Correct Answer True Your Answer

True

True/False Question

Delay in recruitment of staff may lead to cost and time overrun

Correct Answer True Your Answer

True

Multiple Choice Single Answer Question Miscellaneous fixed assets includes :Correct Answer Cables Your Answer

Plant and machinery

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Project Finance _2

Select The Blank Question Name and designation of the chief executive comes under the ________ category. Correct Answer General Your Answer

Project organisation

Multiple Choice Multiple Answer Question The various aspects which need to be considered while assessing Project finance financing are :Correct Answer Environmental factors , Risk involved , Managerial compensation Your Answer

Environmental factors , Risk involved , Managerial compensation

Multiple Choice Multiple Answer Question Sources of funds includes :Correct Answer Depreciation , Preliminary expenses written off , Increase in secured borrowing Your Answer Preliminary expenses written off , Increase in secured borrowing Multiple Choice Multiple Answer Question Technical appraisal is basically concerned with :Correct Answer Technology , Layout of the plant , Design of the plant Your Answer

Technology , Layout of the plant , Production costs

Multiple Choice Multiple Answer Question Production and sales aspect of Visit report consists of :Correct Answer Utilisation of installed capacity , Input availability , Sales trends Your Answer

Utilisation of installed capacity , Input availability

Select The Blank Question ________ is a current asset Correct Answer Book debts Your Answer

Book debts

Multiple Choice Single Answer Question The second phase of the technical appraisal which focuses upon appraising the likely technical gaps consists of :-

-7 -

Project Finance _2 Correct Answer Problems faced during the Construction and Project implementation Your Answer Problems faced during the Construction and Project implementation Multiple Choice Multiple Answer Question The following are the sources of funds :Correct Answer Operating Profit , Non operating Income Your Answer

Operating Profit , Non operating Income , Dividends

True/False Question

A high debt equity ratio may indicate that the financial stake of the creditors is more than that of the owners. Correct Answer True Your Answer

True

Multiple Choice Multiple Answer Question Management qualities includes :Correct Answer Honesty , Financial resources , Initiative Your Answer

Honesty , Financial resources , Initiative

Multiple Choice Multiple Answer Question The permanent requirement of working capital should be financed out of :Correct Answer Cash Profits , Shares , Debentures Your Answer

Cash Profits , Shares

-8 -

LIST OF ATTEMPTED QUESTIONS AND ANSWERS Multiple Choice Single Answer Question Short supplies of materials may lead to :Correct Answer Cost and time overrun Your Answer

Sales rise

Multiple Choice Single Answer Question The basic characteristic of a project is :Correct Answer That it involves current outlay of funds in expectation of future benefits Your Answer That it involves current outlay of funds in expectation of future benefits Multiple Choice Multiple Answer Question The Key terms used in the BCG Product Portfolio matrix are :Correct Answer Stars , Question marks Your Answer

Stars , Question marks

Multiple Choice Multiple Answer Question The data for ratio analysis is obtained from :Correct Answer Profit and Loss Account , Balance Sheet Your Answer

Profit and Loss Account , Auditors report

Match The Following Question

Correct Answer

Your Answer

Technical aspect of detailed project report

Detailed Project Engineering

Transport

Financial aspect of Detailed Project report

Profitability

Detailed Project Engineering

Marketing aspect of Detailed Project report

Distribution

Conservativeness

Management aspect of detailed project report

Conservativeness

Distribution

True/False Question

Nominal maximum capacity is the capacity that is technically attainable and this corresponds to the supplier's guaranteed capacity.

Correct Answer True Your Answer

True

Multiple Choice Single Answer Question Marketing aspect of Detailed Project report includes :Correct Answer Demand forecasting Your Answer

Demand forecasting

True/False Question

In the BCG Matrix, the key term of Cash Cows require further commitment of funds. Correct Answer False Your Answer

True

Multiple Choice Multiple Answer Question Disposition of funds includes :Correct Answer Increase in working capital , Preliminary expenses , Dividend Your Answer

Increase in working capital , Preliminary expenses

Match The Following Question

Correct Answer

Your Answer

Project appraisal

It is the evaluation of project from technical, market, financial, economic and social perspective before committing funds for investment

It is a preliminary assessment of the project idea to determine whether or not the investment opportunity is promising

Program

It is large in scope, is It deals with the impact of activity oriented and is not the investment project on necessarily time bound people and their lives

Project

It is one-shot, time-limited, It involves the allocation of goal oriented, major resources among undertaking requiring the competing projects commitment of varied skills and resources

Pre-feasibility study

It is a preliminary It is large in scope, is assessment of the project activity oriented and is not idea to determine whether necessarily time bound or not the investment opportunity is promising

True/False Question

Change in the project concept itself may lead to cost and time overrun. Correct Answer True Your Answer

True

True/False Question

Land and site development comes under the cost aspect of the Project report. Correct Answer True Your Answer

True

Multiple Choice Single Answer Question It is said that a second rate project in the hands of first rate management is better than a first rate project in the hands of :Correct Answer Second rate management Your Answer

Second rate management

Select The Blank Question Location of the factory comes under the ________ category of the Project report. Correct Answer General Your Answer

Cost aspect

True/False Question

Production line diagrams show the organisation structure of the project along with information on location, personnel required for various departments, and their inter-relationship. Correct Answer False Your Answer

True

Select The Blank Question The Project Cycle should be in the ________ order Correct Answer Identification of Project - Project Appraisal - Negotiations for loans Your Answer Procurement of Goods/services - Project Appraisal - Monitoring of operations on completion Multiple Choice Single Answer Question Cost of materials include :-

Correct Answer Cost of components and consumable stores Your Answer

Cost of components and consumable stores

Multiple Choice Multiple Answer Question Financing plans consists of :Correct Answer Share capital , Term loans , Internal accruals Your Answer

Share capital , Term loans

True/False Question

The Detailed Project report must indicate the gestation period of the project. Correct Answer True Your Answer

True

Select The Blank Question Having decided on the location and product, the promoter takes into account the ________ that is to be adopted for producing the product. Correct Answer Manufacturing process and technology Your Answer

Size of the plant

Multiple Choice Single Answer Question The cost of Plant and Machinery may be adjusted for a possible increase known as :Correct Answer Escalation Your Answer

Escalation

Select The Blank Question Depreciation is sometimes treated as ________ funds. Correct Answer Source Your Answer

No flow

Select The Blank Question ________ is that scarce input which financial resources alone cannot mobilise. Correct Answer Management Your Answer

Sales

Multiple Choice Single Answer Question The third phase of the technical appraisal which focuses upon appraising the likely technical gaps consists of :Correct Answer Problems pertaining to the period when the project is in operation Your Answer Problems pertaining to the period when the project is in operation Select The Blank Question Retained earnings is a source of ________ finance. Correct Answer Internal Your Answer

Short term

Multiple Choice Single Answer Question In BCG Matrix "QUESTION MARKS" indicate :Correct Answer Products which have high growth potential but low market share Your Answer

Products which enjoy a high market share as well as a high growth rate

Select The Blank Question ________ capital represents permanent capital. Correct Answer Equity Your Answer

Equity

Multiple Choice Single Answer Question Demographic market appraisal answers to Correct Answer Who they are? Your Answer

When they buy?

Select The Blank Question ________ is a current liability. Correct Answer Trade credit Your Answer True/False Question

Trade credit

The construction of National Golden Quadrilateral can be recognised as Project.

Correct Answer True Your Answer

True

Select The Blank Question Cost of fencing comes under the ________ category of the Project report. Correct Answer Land and site development Your Answer

Building cost

Multiple Choice Multiple Answer Question While choosing the location for a project, the following factors should be considered :Correct Answer Proximity to raw materials and markets , Availability of infrastructure , Government policies and other factors Your Answer Proximity to raw materials and markets , Availability of infrastructure , Government policies and other factors Multiple Choice Single Answer Question The norms for providing open areas have to be strictly followed for safety of labour and allow sufficient space for outflow of effluents safely in case of :Correct Answer Chemical unit Your Answer

Chemical unit

True/False Question

Name of the finance manager comes under the Project organisation category of the Project report. Correct Answer True Your Answer

True

True/False Question

Delay in recruitment of staff may lead to cost and time overrun

Correct Answer True Your Answer

True

Multiple Choice Single Answer Question Miscellaneous fixed assets includes :Correct Answer Cables Your Answer

Plant and machinery

Select The Blank Question Name and designation of the chief executive comes under the ________ category. Correct Answer General Your Answer

Project organisation

Multiple Choice Multiple Answer Question The various aspects which need to be considered while assessing Project finance financing are :Correct Answer Environmental factors , Risk involved , Managerial compensation Your Answer

Environmental factors , Risk involved , Managerial compensation

Multiple Choice Multiple Answer Question Sources of funds includes :Correct Answer Depreciation , Preliminary expenses written off , Increase in secured borrowing Your Answer Preliminary expenses written off , Increase in secured borrowing Multiple Choice Multiple Answer Question Technical appraisal is basically concerned with :Correct Answer Technology , Layout of the plant , Design of the plant Your Answer

Technology , Layout of the plant , Production costs

Multiple Choice Multiple Answer Question Production and sales aspect of Visit report consists of :Correct Answer Utilisation of installed capacity , Input availability , Sales trends Your Answer

Utilisation of installed capacity , Input availability

Select The Blank Question ________ is a current asset Correct Answer Book debts Your Answer

Book debts

Multiple Choice Single Answer Question The second phase of the technical appraisal which focuses upon appraising the likely technical gaps consists of :-

Correct Answer Problems faced during the Construction and Project implementation Your Answer Problems faced during the Construction and Project implementation Multiple Choice Multiple Answer Question The following are the sources of funds :Correct Answer Operating Profit , Non operating Income Your Answer

Operating Profit , Non operating Income , Dividends

True/False Question

A high debt equity ratio may indicate that the financial stake of the creditors is more than that of the owners. Correct Answer True Your Answer

True

Multiple Choice Multiple Answer Question Management qualities includes :Correct Answer Honesty , Financial resources , Initiative Your Answer

Honesty , Financial resources , Initiative

Multiple Choice Multiple Answer Question The permanent requirement of working capital should be financed out of :Correct Answer Cash Profits , Shares , Debentures Your Answer

Cash Profits , Shares

Multiple Choice Multiple Answer Question The objectives of the funds flow statement is as follows :Correct Answer To help to understand the changes in assets as well as asset sources which are not revealed by the income statement , To find out the uses of loans raised by the business , To indicate the financial strength and weakness of the business Your Answer To find out the uses of loans raised by the business , To help to understand the changes in assets as well as asset sources which are not revealed by the income statement , Helps to prepare financial statements Select The Blank Question Inflow of funds may not necessarily result in ________. Correct Answer Inflow of cash Your Answer

Inflow of cash

Multiple Choice Single Answer Question Every project involves financial outlay which can be referred to as :Correct Answer Project finance Your Answer

Project finance

True/False Question

The Detailed Project report spells out the modus operandi for the implementation of the Project and the realization of the Project objectives. Correct Answer True Your Answer

True

Select The Blank Question As the plant capacity increase, the investment cost unit capacity ________. Correct Answer Decreases Your Answer

Decreases

Multiple Choice Multiple Answer Question Internal sources of funds are :Correct Answer Funds from operation , Loss on sale of fixed assets , Goodwill written off Your Answer

Funds from operation , Loss on sale of fixed assets

Multiple Choice Single Answer

Question

End use method of Commercial appraisal technique is :-

Correct Answer A list of industries wherein the product is used is made and quantity and volume is arrived at Your Answer A list of industries wherein the product is used is made and quantity and volume is arrived at Multiple Choice Multiple Answer Question The applications of cash are :Correct Answer Purchase of fixed assets , Payment of long term loans Your Answer

Purchase of fixed assets , Payment of long term loans

True/False Question

In small scale organisation, requirement of working capital is quite high due to high amount of overheads, high buying costs and high selling cost. Correct Answer True Your Answer

True

Match The Following Question

Correct Answer

Your Answer

Project organisation

Finance manager

Finance manager

General category of Project report

Location of factory

Location of factory

Cost aspect of the project report

Consultancy fees

Consultancy fees

Financing plan

Unsecured loans

Unsecured loans

Select The Blank Question Longer the duration of production cycle, higher the requirement of ________. Correct Answer Working capital Your Answer

Working capital

Multiple Choice Single Answer Question Sanctioned bank limits is categorised under :Correct Answer Working capital Your Answer Select The Blank

Production, Sales and Profitability

Question

Cost of fencing comes under the ________ category of the Project report.

Correct Answer Land and site development Your Answer

Land and site development

True/False Question

Trend projection method is the important technique for forecasting demand. Correct Answer True Your Answer

True

True/False Question

The emphasis of a finance manager should be on taking a synergistic view of the project rather than looking at it only from the financial aspects. Correct Answer True Your Answer

True

Select The Blank Question ________ in assets involves outflow of funds. Correct Answer Increase Your Answer

Increase

Select The Blank Question The basic difference between the feasibility study report and ________ is the level of accuracy and degree of detail. Correct Answer Detailed Project report Your Answer

Detailed Project report

Multiple Choice Single Answer Question Delays in infrastructure Development by State Agencies may lead to :Correct Answer Cost and time overrun Your Answer

Cost and time overrun

Select The Blank Question Location of the factory comes under the ________ category of the Project report. Correct Answer General Your Answer

General

Multiple Choice Multiple Answer Question Financing plans consists of :Correct Answer Share capital , Term loans , Internal accruals Your Answer

Share capital , Term loans , Internal accruals

Multiple Choice Single Answer Question Infrastructural projects include :Correct Answer Power Generation and Distribution Your Answer

Power Generation and Distribution

True/False Question

Market potential should be determined under the Marketing aspect of the Project report. Correct Answer True Your Answer

True

Select The Blank Question ________ tries to have what the customer will want- where, when, in what form and at what price. Correct Answer Marketing Your Answer

Marketing

Multiple Choice Single Answer Question A project objective which states What "achieving it " would cost is known as :Correct Answer Finance cost aspect Your Answer

Strategic perspective

Multiple Choice Single Answer Question A project objective which states "What' is to be viewed" is termed as :Correct Answer Strategic perspective Your Answer True/False Question

Social aspect

Nominal maximum capacity is the capacity that is technically attainable and this corresponds to the supplier's guaranteed capacity. Correct Answer True

Your Answer

True

Select The Blank Question In order to meet the cost of large project, the technique of ________ has been developed so that the financial commitment and risks associated with a project are shared between the project sponsor and the lending institutions. Correct Answer Limited recourse financing Your Answer

Long term financing

Multiple Choice Single Answer Question The basic characteristic of a project is :Correct Answer That it involves current outlay of funds in expectation of future benefits Your Answer

That it involves current outlay of funds in expectation of future benefits

Multiple Choice Single Answer Question Past trend method of Commercial appraisal technique is :Correct Answer Adopted as a guide depending on the consumption pattern of the society as a whole Your Answer Adopted as a guide depending on the consumption pattern of the society as a whole Multiple Choice Single Answer Question The norms for providing open areas have to be strictly followed for safety of labour and allow sufficient space for outflow of effluents safely in case of :Correct Answer Chemical unit Your Answer

Chemical unit

Multiple Choice Single Answer Question Short supplies of materials may lead to :Correct Answer Cost and time overrun Your Answer

Cost and time overrun

Select The Blank Question Investors who invest in the debentures of the company are the ________ of the company. Correct Answer Creditors Your Answer

Creditors

Match The Following Question

Correct Answer

Your Answer

Private investment

Power generation

Power generation

Project

Time -bound

Time -bound

Programme

Not necessarily time bound

Not necessarily time bound

Foreign direct investment

Machine tools

Machine tools

Multiple Choice Multiple Answer Question As per the GE's Stop Light Matrix, Products may justify substantial commitment of funds where there is :Correct Answer Strong Business Strength and high Industry attractiveness , Average Business strength and high Industry attractiveness Your Answer Strong Business Strength and high Industry attractiveness , Average Business strength and high Industry attractiveness Multiple Choice Multiple Answer Question Management qualities includes :Correct Answer Honesty , Financial resources , Initiative Your Answer

Honesty , Financial resources , Initiative

Multiple Choice Single Answer Question The industrial concern earned profits by increasing the sales volume under the :Correct Answer Sales concept Your Answer

Sales concept

True/False Question

The 'BCG Matrix 'analysis various products of the organisation in the terms of Business strength and Industry Attractiveness. Correct Answer False Your Answer

False

Select The Blank Question Detailed Project Report is generally prepared from a ________ report with additional information. Correct Answer Feasibility Your Answer

Feasibility

Multiple Choice Single Answer Question Delay in arrival of domestic/foreign machinery and technicians may lead to :Correct Answer Cost and time overrun Your Answer

Cost and time overrun

True/False Question

Miscellaneous expenditure is written on the asset side of the Balance sheet. Correct Answer True Your Answer

True

Multiple Choice Multiple Answer Question General category of the Project report consists of :Correct Answer Name of the Industrial concern , Proposed product , Location of the factory Your Answer

Name of the Industrial concern , Proposed product , Location of the factory

Multiple Choice Single Answer Question A Project is a temporary endeavor to achieve some specific objectives within a :Correct Answer Predefined time Your Answer

Predefined time

Multiple Choice Multiple Answer Question While choosing the location for a project, the following factors should be considered :Correct Answer Proximity to raw materials and markets , Availability of infrastructure , Government policies and other factors Your Answer Proximity to raw materials and markets , Availability of infrastructure , Government policies and other factors Multiple Choice Multiple Answer Question The sources of long term and medium term finance are :Correct Answer Equity shares , Public deposit Your Answer

Equity shares , Public deposit

Multiple Choice Single Answer Question The cost which change in the same proportion in which the level of production changes is known as :-

Correct Answer Variable cost Your Answer

Variable cost

Multiple Choice Single Answer Question The second phase of the technical appraisal which focuses upon appraising the likely technical gaps consists of :Correct Answer Problems faced during the Construction and Project implementation Your Answer

Problems faced during the Construction and Project implementation

Multiple Choice Single Answer Question The third phase of the technical appraisal which focuses upon appraising the likely technical gaps consists of :Correct Answer Problems pertaining to the period when the project is in operation Your Answer

Problems pertaining to the period when the project is in operation

LIST OF ATTEMPTED QUESTIONS AND ANSWERS LIST OF ATTEMPTED QUESTIONS AND ANSWERS True/False Question 1 The advantage of secondary sources of data is that it is readily and economically available. Correct Answer True Your Answer True True/False Question2 In small scale organisation, requirement of working capital is quite high due to high amount of overheads, high buying costs and high selling cost. Correct Answer True Your Answer True True/False Question3 Banks and Financial Institutions, world-wide, are now financing projects with strategies and terms that would have been hard to believe/imagine just a few years back. Correct Answer True Your Answer True Select The Blank Question 4 ________ is a current asset Correct Answer Book debts Your Answer Furniture Multiple Choice Multiple Answer Question 5 Trend Projection method of demand forecasting consists of :Correct Answer Linear Relationship , Exponential Relationship , Polynomial Relationship Your Answer Linear Relationship , Exponential Relationship , Polynomial Relationship Multiple Choice Single Answer Question 6 Delays in infrastructure Development by State Agencies may lead to :Correct Answer Cost and time overrun Your Answer Management problems

Multiple Choice Single Answer Question 7 Technical aspect of detailed project report includes : Correct Answer Detailed Project Engineering Your Answer Detailed Project Engineering Multiple Choice Multiple Answer Question 8 Sources of funds includes :Correct Answer Depreciation , Preliminary expenses written off , Increase in secured borrowing Your Answer Preliminary expenses written off , Increase in secured borrowing Multiple Choice Single Answer Question 9 Delay in arrival of domestic/foreign machinery and technicians may lead to :Correct Answer Cost and time overrun Your Answer Cost and time overrun Select The Blank Question 10 A smaller unit into which the overall requirement of capital of a company is subdivided is termed as ________. Correct Answer Share Your Answer Share Multiple Choice Single Answer Question11 A project objective which states "What' is to be viewed" is termed as :Correct Answer Strategic perspective Your Answer Strategic perspective Multiple Choice Single Answer Question 12 Sewerage and drainage cost of the project is categorised under :Correct Answer Building cost Your Answer Building cost Multiple Choice Multiple Answer Question13 Internal sources of funds are :Correct Answer Funds from operation , Loss on sale of fixed assets , Goodwill written off Your Answer Funds from operation , Goodwill written off Multiple Choice Multiple Answer Question14 In the Detailed Project Report, Management aspects includes :Correct Answer Determination , Organisation Building , Person / system oriented Your Answer Determination , Organisation Building , Person / system oriented Select The Blank Question15 Short term finance is normally for a period upto ________ year. Correct Answer One Your Answer One True/False Question16 Current assets includes stock-in-process. Correct Answer True Your Answer True Multiple Choice Single Answer Question17 The basic characteristic of a project is :Correct Answer That it involves current outlay of funds in expectation of future benefits Your Answer That it involves current outlay of funds in expectation of future benefits

Multiple Choice Multiple Answer Question18 Time Series Projection Methods of Demand forecasting consists of :Correct Answer Trend Projection method , Moving Averages method Your Answer Trend Projection method , Moving Averages method Select The Blank Question 19 ________ is a current liability. Correct Answer Trade credit Your Answer Trade credit True/False Question20 Managerial problems in a project are the most pervasive. Correct Answer True Your Answer True Select The Blank Question21 Longer the duration of production cycle, higher the requirement of ________. Correct Answer Working capital Your Answer Working capital Select The Blank Question22 Retained earnings is a source of ________ finance. Correct Answer Internal Your Answer Short term Select The Blank Question23 ________ is the summary of cash book or Receipts and Payments statement. Correct Answer Cash flow statement Your Answer Trial balance True/False Question24 In the BCG Matrix, the key term of Cash Cows require further commitment of funds. Correct Answer False Your Answer True True/False Question25 Cost and time overrun of the project may lead to loss on account of lost market opportunities. Correct Answer True Your Answer True Multiple Choice Single Answer Question26 A project objective which states What "achieving it " would cost is known as :Correct Answer Finance cost aspect Your Answer Finance cost aspect Multiple Choice Multiple Answer Question27 Casual methods of Demand forecasting consists of :Correct Answer Consumption-level method , Econometric method Your Answer Consumption-level method , Econometric method Multiple Choice Single Answer Question 28 In BCG Matrix "STARS" indicate :Correct Answer Products which enjoy a high market share as well as a high growth rate

Your Answer Products which enjoy a high market share as well as a high growth rate Multiple Choice Single Answer Question 29 Psychographic market appraisal answers to :Correct Answer Why they buy? Your Answer Why they buy? True/False Question30 Production line diagrams show the organisation structure of the project along with information on location, personnel required for various departments, and their inter-relationship. Correct Answer False Your Answer False Multiple Choice Multiple Answer Question31 While choosing the location for a project, the following factors should be considered :Correct Answer Proximity to raw materials and markets , Availability of infrastructure , Government policies and other factors Your Answer Proximity to raw materials and markets , Availability of infrastructure , Government policies and other factors Multiple Choice Single Answer Question32 The cost which change in the same proportion in which the level of production changes is known as :Correct Answer Variable cost Your Answer Variable cost Select The Blank Question33 Goods purchased on credit ________ in flow of funds. Correct Answer Does not result Your Answer Decreases Multiple Choice Multiple Answer Question34 Ratios relating to working capital are :Correct Answer Current ratio , Internal measure , Quick ratio Your Answer Current ratio , Debt Equity ratio , Quick ratio Multiple Choice Single Answer Question35 Appointments made at senior level during the half-year is categorised under :Correct Answer Organisation and management Your Answer Organisation and management Multiple Choice Single Answer Question36 Cost of the Project encompasses :Correct Answer The total of all items of outlay associated with a project Your Answer The total of all items of outlay associated with a project Multiple Choice Multiple Answer Question37 Production and sales aspect of Visit report consists of :Correct Answer Utilisation of installed capacity , Input availability , Sales trends Your Answer Utilisation of installed capacity , Input availability , Sales trends Match The Following Question38 Correct Answer Your Answer Source of funds Depreciation Equity capital

Fixed assets Building Building Current assets Debtors Debtors Current liability Trade credit Trade credit Multiple Choice Single Answer Question39 Every project involves financial outlay which can be referred to as :Correct Answer Project finance Your Answer Project finance Multiple Choice Multiple Answer Question 40 General category of the Project report consists of :Correct Answer Name of the Industrial concern , Proposed product , Location of the factory Your Answer Name of the Industrial concern , Proposed product , Location of the factory Multiple Choice Multiple Answer Question 41 The data for ratio analysis is obtained from :Correct Answer Profit and Loss Account , Balance Sheet Your Answer Profit and Loss Account , Balance Sheet Multiple Choice Single Answer Question42 Short supplies of materials may lead to :Correct Answer Cost and time overrun Your Answer Cost and time overrun Multiple Choice Multiple Answer Question43 After the SPACE chart is constructed, we would normally get any one of the following basic strategic postures :Correct Answer Aggressive Posture , Competitive Posture , Defensive Posture Your Answer Aggressive Posture , Competitive Posture , Defensive Posture Select The Blank Question 44 ________ occupies a unique position in the macro economic development which helps in induction of new technology and facilitates, greater efficiency as well as higher productivity. Correct Answer Investment Your Answer Marketing Multiple Choice Single Answer Question45 Infrastructural projects include :Correct Answer Power Generation and Distribution Your Answer Power Generation and Distribution Select The Blank Question46 Name and designation of the chief executive comes under the ________ category. Correct Answer General Your Answer General Match The Following Question47 Correct Answer Your Answer Private investment Power generation Machine tools

Project Time -bound Time -bound Programme Not necessarily time bound Not necessarily time bound Foreign direct investment Machine tools Power generation

LIST OF ATTEMPTED QUESTIONS AND ANSWERS Match The Following Question

Correct Answer

Your Answer

Econometric method

Mathematical representation of economic relationship

Mathematical representation of economic relationship

Primary source of data

Market survey

Market survey

Secondary source of data Collected in some other context

Collected in some other context

Leading indicators

Variables that change faster than others

Variables that change faster than others

Select The Blank Question Details regarding Internal accruals comes under the ________ category of Project report. Correct Answer Financing plan Your Answer

Financing plan

Multiple Choice Multiple Answer Question In the Detailed Project Report, Technical aspects includes :Correct Answer Plant capacity , Quality standards , Raw material requirement Your Answer

Plant capacity , Quality standards , Raw material requirement

Select The Blank Question A smaller unit into which the overall requirement of capital of a company is sub-divided is termed as ________. Correct Answer Share Your Answer

Share

Select The Blank Question In order to meet the cost of large project, the technique of ________ has been developed so that the financial commitment and risks associated with a project are shared between the project sponsor and the lending institutions.

Correct Answer Limited recourse financing Your Answer

Limited recourse financing

Select The Blank Question ________ is a current liability. Correct Answer Trade credit Your Answer

Trade credit

Select The Blank Question ________ is a current asset Correct Answer Book debts Your Answer

Book debts

Multiple Choice Multiple Answer Question Debt Service coverage ratio may be considered to be one of the most important ratios calculated by the :Correct Answer Bankers , Financial Institutions Your Answer

Bankers , Creditors , Financial Institutions

Multiple Choice Multiple Answer Question Ratios relating to working capital are :Correct Answer Current ratio , Internal measure , Quick ratio Your Answer

Current ratio , Internal measure , Quick ratio

Multiple Choice Single Answer Question Cost of laying roads comes under :Correct Answer Land and site cost Your Answer

Preoperative cost

Multiple Choice Single Answer Question Pre-operative expenses include :Correct Answer Interest on deferred payments Your Answer True/False

Market research expenses

Question

The cost factors of the product mixed is also taken into account to arrive at cost at various levels of production and its cost impact of the manufacturing. Correct Answer True Your Answer

True

Select The Blank Question Retained earnings indicates that whatever profits are earned by the company are not distributed by it by way of ________ but are kept aside for use in future for expansion or other purpose. Correct Answer Dividend Your Answer

Dividend

Multiple Choice Multiple Answer Question In the Detailed Project Report, Management aspects includes :Correct Answer Determination , Organisation Building , Person / system oriented Your Answer Organisation Building , Person / system oriented , Promoter's equity / stake True/False Question

The Detailed Project report spells out the modus operandi for the implementation of the Project and the realization of the Project objectives. Correct Answer True Your Answer

True

Multiple Choice Single Answer Question General Electric Stop Light Matrix analyses products in terms of :Correct Answer Business strength and Industrial Attractiveness Your Answer

Company's competitive advantage and Company's financial strength

True/False Question

The emphasis of a finance manager should be on taking a synergistic view of the project rather than looking at it only from the financial aspects. Correct Answer True Your Answer

True

Multiple Choice Multiple Answer

Question

After the SPACE chart is constructed, we would normally get any one of the following basic strategic postures :Correct Answer Aggressive Posture , Competitive Posture , Defensive Posture Your Answer

Aggressive Posture , Competitive Posture , Defensive Posture

True/False Question

The ratios of one organisation compared with the ratios of the same organisation is termed as inter-firm comparison. Correct Answer False Your Answer

False

Select The Blank Question Detailed Project Report is generally prepared from a ________ report with additional information. Correct Answer Feasibility Your Answer

Feasibility

Select The Blank Question Under ________ method, the forecasts are modified in the light of observed errors. Correct Answer Exponential smoothing Your Answer

Cobb Douglas Relationship

Match The Following Question

Correct Answer

Your Answer

Source of funds

Depreciation

Investment

Fixed assets

Building

Building

Current assets

Debtors

Debtors

Current liability

Trade credit

Trade credit

True/False Question

The Detailed Project report must indicate the gestation period of the project. Correct Answer True Your Answer

True/False

True

Question

Delay in recruitment of staff may lead to cost and time overrun

Correct Answer True Your Answer

True

Multiple Choice Single Answer Question Delays in infrastructure Development by State Agencies may lead to :Correct Answer Cost and time overrun Your Answer

Cost and time overrun

Multiple Choice Single Answer Question Infrastructural projects include :Correct Answer Power Generation and Distribution Your Answer

Power Generation and Distribution

Multiple Choice Single Answer Question The method for evaluating the profitability of industrial projects whose object is to ascertain the period required for recovering the entire investment made in a project is known as :Correct Answer Pay back method Your Answer

Pay back method

Select The Blank Question ________ in assets involves outflow of funds. Correct Answer Increase Your Answer

Increase

Multiple Choice Single Answer Question The rate of discount which would equate the present value of investments to the present value of benefits over the life of the project is known as :Correct Answer Internal rate of return Your Answer

Internal rate of return

Select The Blank Question Cost of fencing comes under the ________ category of the Project report. Correct Answer Land and site development

Your Answer

Land and site development

Multiple Choice Single Answer Question The ratio that roughly measures the company's potential reserve of cash is termed as :Correct Answer Net Working capital to total assets Your Answer

Quick ratio

Multiple Choice Single Answer Question The sources of funding have expanded from banks, insurance companies and multilateral agencies to include the :Correct Answer Capital market Your Answer

Capital market

True/False Question

Sensitivity analysis consists of assessing the degree of risk.

Correct Answer True Your Answer

True

Multiple Choice Multiple Answer Question The permanent requirement of working capital should be financed out of :Correct Answer Cash Profits , Shares , Debentures Your Answer

Cash Profits , Shares

Multiple Choice Single Answer Question Sources of funds include :Correct Answer Increase in secured borrowing Your Answer

Increase in secured borrowing

True/False Question

Nominal maximum capacity is the capacity that is technically attainable and this corresponds to the supplier's guaranteed capacity. Correct Answer True Your Answer

True

Multiple Choice Multiple Answer

Question

While choosing the location for a project, the following factors should be considered :Correct Answer Proximity to raw materials and markets , Availability of infrastructure , Government policies and other factors Your Answer Proximity to raw materials and markets , Availability of infrastructure , Government policies and other factors Multiple Choice Multiple Answer Question Financing plans consists of :Correct Answer Share capital , Term loans , Internal accruals Your Answer

Share capital , Term loans , Internal accruals

True/False Question

Ratio should be computed on the basis of inter-related figures which have a cause and effect relationship. Correct Answer True Your Answer

True

True/False Question

In the BCG Matrix "DOGS" indicate products which are generally during the stage of Decline of a Product Life Cycle. Correct Answer True Your Answer

True

Multiple Choice Multiple Answer Question Trend Projection method of demand forecasting consists of :Correct Answer Linear Relationship , Exponential Relationship , Polynomial Relationship Your Answer Linear Relationship , Chain ratio Relationship , Exponential Relationship Multiple Choice Multiple Answer Question Technical appraisal is basically concerned with :Correct Answer Technology , Layout of the plant , Design of the plant Your Answer

Technology , Layout of the plant , Design of the plant

Multiple Choice Single Answer Question Demographic market appraisal answers to Correct Answer Who they are?

Your Answer

Where do the customers live?

Select The Blank Question A Project has a ________ represented by growth, maturity and decay. Correct Answer Life cycle Your Answer

Life cycle

Multiple Choice Multiple Answer Question A project objective can be said to have the following dimensions viz.: Correct Answer Strategic perspective , Time span , Finance cost aspect Your Answer

Strategic perspective , Time span , Social aspect

Multiple Choice Multiple Answer Question Casual methods of Demand forecasting consists of :Correct Answer Consumption-level method , Econometric method Your Answer

Trend Projection method , Consumption-level method , Moving Averages method

Multiple Choice Single Answer Question The statement which shows the movement of cash into and out of firm's kittie is known as :Correct Answer Cash flow statement Your Answer

Cash flow statement

Multiple Choice Multiple Answer Question The objectives of the funds flow statement is as follows :Correct Answer To help to understand the changes in assets as well as asset sources which are not revealed by the income statement , To find out the uses of loans raised by the business , To indicate the financial strength and weakness of the business Your Answer To find out the uses of loans raised by the business , To help to understand the changes in assets as well as asset sources which are not revealed by the income statement , Helps to prepare financial statements Select The Blank Question Inflow of funds may not necessarily result in ________. Correct Answer Inflow of cash Your Answer

Inflow of cash

Multiple Choice Single Answer Question Every project involves financial outlay which can be referred to as :Correct Answer Project finance Your Answer

Project finance

True/False Question

The Detailed Project report spells out the modus operandi for the implementation of the Project and the realization of the Project objectives. Correct Answer True Your Answer

True

Select The Blank Question As the plant capacity increase, the investment cost unit capacity ________. Correct Answer Decreases Your Answer

Decreases

Multiple Choice Multiple Answer Question Internal sources of funds are :Correct Answer Funds from operation , Loss on sale of fixed assets , Goodwill written off Your Answer Funds from operation , Loss on sale of fixed assets Multiple Choice Single Answer Question End use method of Commercial appraisal technique is :Correct Answer A list of industries wherein the product is used is made and quantity and volume is arrived at Your Answer A list of industries wherein the product is used is made and quantity and volume is arrived at Multiple Choice Multiple Answer Question The applications of cash are :Correct Answer Purchase of fixed assets , Payment of long term loans Your Answer True/False Question

Purchase of fixed assets , Payment of long term loans

In small scale organisation, requirement of working capital is quite high due to high amount of overheads, high buying costs

and high selling cost. Correct Answer True Your Answer

True

Match The Following Question

Correct Answer

Your Answer

Project organisation

Finance manager

Finance manager

General category of Project report

Location of factory

Location of factory

Cost aspect of the project Consultancy fees report

Consultancy fees

Financing plan

Unsecured loans

Unsecured loans

Select The Blank Question Longer the duration of production cycle, higher the requirement of ________. Correct Answer Working capital Your Answer

Working capital

Multiple Choice Single Answer Question Sanctioned bank limits is categorised under :Correct Answer Working capital Your Answer

Production, Sales and Profitability

Select The Blank Question Cost of fencing comes under the ________ category of the Project report. Correct Answer Land and site development Your Answer

Land and site development

True/False Question

Trend projection method is the important technique for forecasting demand. Correct Answer True Your Answer

True/False

True

Question

The emphasis of a finance manager should be on taking a synergistic view of the project rather than looking at it only from the financial aspects. Correct Answer True Your Answer

True

Select The Blank Question ________ in assets involves outflow of funds. Correct Answer Increase Your Answer

Increase

Select The Blank Question The basic difference between the feasibility study report and ________ is the level of accuracy and degree of detail. Correct Answer Detailed Project report Your Answer

Detailed Project report

Multiple Choice Single Answer Question Delays in infrastructure Development by State Agencies may lead to :Correct Answer Cost and time overrun Your Answer

Cost and time overrun

Select The Blank Question Location of the factory comes under the ________ category of the Project report. Correct Answer General Your Answer

General

Multiple Choice Multiple Answer Question Financing plans consists of :Correct Answer Share capital , Term loans , Internal accruals Your Answer

Share capital , Term loans , Internal accruals

Multiple Choice Single Answer Question Infrastructural projects include :Correct Answer Power Generation and Distribution

Your Answer

Power Generation and Distribution

True/False Question

Market potential should be determined under the Marketing aspect of the Project report. Correct Answer True Your Answer

True

Select The Blank Question ________ tries to have what the customer will want- where, when, in what form and at what price. Correct Answer Marketing Your Answer

Marketing

Multiple Choice Single Answer Question A project objective which states What "achieving it " would cost is known as :Correct Answer Finance cost aspect Your Answer

Strategic perspective

Multiple Choice Single Answer Question A project objective which states "What' is to be viewed" is termed as :Correct Answer Strategic perspective Your Answer

Social aspect

True/False Question

Nominal maximum capacity is the capacity that is technically attainable and this corresponds to the supplier's guaranteed capacity. Correct Answer True Your Answer

True

Select The Blank Question In order to meet the cost of large project, the technique of ________ has been developed so that the financial commitment and risks associated with a project are shared between the project sponsor and the lending institutions. Correct Answer Limited recourse financing Your Answer

Long term financing

Multiple Choice Single Answer Question The basic characteristic of a project is :Correct Answer That it involves current outlay of funds in expectation of future benefits Your Answer That it involves current outlay of funds in expectation of future benefits Multiple Choice Single Answer Question Past trend method of Commercial appraisal technique is :Correct Answer Adopted as a guide depending on the consumption pattern of the society as a whole Your Answer Adopted as a guide depending on the consumption pattern of the society as a whole Multiple Choice Single Answer Question The norms for providing open areas have to be strictly followed for safety of labour and allow sufficient space for outflow of effluents safely in case of :Correct Answer Chemical unit Your Answer

Chemical unit

Multiple Choice Single Answer Question Short supplies of materials may lead to :Correct Answer Cost and time overrun Your Answer

Cost and time overrun

Select The Blank Question Investors who invest in the debentures of the company are the ________ of the company. Correct Answer Creditors Your Answer

Creditors

Match The Following Question

Correct Answer

Your Answer

Private investment

Power generation

Power generation

Project

Time -bound

Time -bound

Programme

Not necessarily time bound

Not necessarily time bound

Foreign direct investment Machine tools

Machine tools

Multiple Choice Multiple Answer Question As per the GE's Stop Light Matrix, Products may justify substantial commitment of funds where there is :Correct Answer Strong Business Strength and high Industry attractiveness , Average Business strength and high Industry attractiveness Your Answer Strong Business Strength and high Industry attractiveness , Average Business strength and high Industry attractiveness Multiple Choice Multiple Answer Question Management qualities includes :Correct Answer Honesty , Financial resources , Initiative Your Answer

Honesty , Financial resources , Initiative

Multiple Choice Single Answer Question The industrial concern earned profits by increasing the sales volume under the :Correct Answer Sales concept Your Answer

Sales concept

True/False Question

The 'BCG Matrix 'analysis various products of the organisation in the terms of Business strength and Industry Attractiveness. Correct Answer False Your Answer

False

Select The Blank Question Detailed Project Report is generally prepared from a ________ report with additional information. Correct Answer Feasibility Your Answer

Feasibility

Multiple Choice Single Answer Question Delay in arrival of domestic/foreign machinery and technicians may lead to :Correct Answer Cost and time overrun Your Answer True/False

Cost and time overrun

Question

Miscellaneous expenditure is written on the asset side of the Balance sheet. Correct Answer True Your Answer

True

Multiple Choice Multiple Answer Question General category of the Project report consists of :Correct Answer Name of the Industrial concern , Proposed product , Location of the factory Your Answer Name of the Industrial concern , Proposed product , Location of the factory Multiple Choice Single Answer Question A Project is a temporary endeavor to achieve some specific objectives within a :Correct Answer Predefined time Your Answer

Predefined time

Multiple Choice Multiple Answer Question While choosing the location for a project, the following factors should be considered :Correct Answer Proximity to raw materials and markets , Availability of infrastructure , Government policies and other factors Your Answer Proximity to raw materials and markets , Availability of infrastructure , Government policies and other factors Multiple Choice Multiple Answer Question The sources of long term and medium term finance are :Correct Answer Equity shares , Public deposit Your Answer

Equity shares , Public deposit

Multiple Choice Single Answer Question The cost which change in the same proportion in which the level of production changes is known as :Correct Answer Variable cost Your Answer

Variable cost

Multiple Choice Single Answer Question The second phase of the technical appraisal which focuses upon appraising the likely technical gaps consists of :Correct Answer Problems faced during the Construction and Project implementation

Your Answer

Problems faced during the Construction and Project implementation

Multiple Choice Single Answer Question The third phase of the technical appraisal which focuses upon appraising the likely technical gaps consists of :Correct Answer Problems pertaining to the period when the project is in operation Your Answer Problems pertaining to the period when the project is in operation

Topic industrial policy after independence project investment decisions and resource identification foreign direct investment location of project environmental aspects - a matter of public interest object of environmental clearance project objective project financing - a strategic prespective and models BCG product portfolio matrix seynive tiles SPACE relative market share STARS QUESTION MARKS CASH COWS DOGS GE's stop light matrix business strength industry attractiveness the SPACE model dimesion and factor evaluated company's competitive advantage company's financial strength industry strength environmental stability SPACE modus operandi SPACE chart THE OUTCOME strategic posture postures

Pg Number 1 2 2 2 3 3 4 4 7 7 7 7 8 8 8 8 8 9 10 10 10 11 11 11 11 11 11 13 13 13

aggressive posture competetive posture conservative posture defensive posture SPACE CHART generic strategies and key options project finance what / why is the need for project financing project project cycle types of project new projects expansion project diversification project backward integration projects forward integration projects modernisation projects rehabiliation projects short term finance long term finance bridge loan seed money seed capital technical appraisal phase I , II , III process / production technology project engineering competitiveness indicators manufacturing process / technology technical arrangements size of the plant product mix selection of the plant and machinery procurement of plant and machinery plant layout appraisal - financial capital cost of the project sources of funds financial projections ratio analysis break even point cost of the project land and site development buildings and civil construction / works plant and machinery technical know-how and related feeds / charges expenses on foregin technicians misc fixed assets

14 14 14 14 15 15 17 19 21 23 25 25 25 25 25 25 25 25 26 26 26 27 27 29 29 30 30 30 31 31 32 32 32 32 33 35 35 36 36 36 36 36 37 37 38 38 38 38

preliminary expenses capital issue expenses pre-operative expenses provision of contingencies margin money for working capital initial cash loses sources of funds sales / production forecast cost of production discounted cash flow techniques pay back method average rate of return method time value of money - discounting technique net present value method internal rate of return information required for calculation of net present value and IRR life of the project cash outflow cash inflow residual or terminal value of the project cost of the capital cost of convertibe debentures cost of working capital break even point analysis fixed costs variable cost BEP significance / utility of BEP for financial appraisal projected cash flow sources of funds deployment of funds cash flows cash inflow projected balance sheets liablities assets financial indicators debt serice coverage ratio interest cover ratio appraisal - commercial demand technique forecasting past trend method end use method export market supply depth of competition marketing aspects appraisal market market appraisal

39 39 39 40 40 40 40 45 46 47 47 50 50 50 51 51 51 52 52 52 52 53 53 53 54 54 54 55 55 56 56 57 58 58 58 58 59 59 59 61 61 61 61 61 62 62 66 66

demand analysis qualitative methods time series projection methods casual methods quantitative methods jury or executive opninion method delphi method time series projection methods trend projection method exponential smoothing method casual methods chain ratio method consumption level method end use method appraisal management management perception management qualities organisational climate organisational structure form management problems appraisal environmental working capital requirement / fianancing working capital margin money for working capital ratio analysis net working capital to total assets current ratio quick (acid test) ratio internal measure projected working results profitablity projections or estimates of working results project implementation financing plan comments project organization project scheduling additional comments capital expenditure and financing production sales and profitability current assets and liabilities material inputs and utilities working capital commercial bank borrowing organization and management visit report production and sales financial and economic financial projections key steps in market and demand analysis and their relationships

67 67 68 68 68 68 68 69 69 69 69 69 69 69 73 74 74 74 74 74 77 79 79 80 82 82 82 82 82 84 84 87 92 92 92 93 93 94 94 95 95 95 95 96 98 99 100 101

project report norms of regulatory authority and Fis key business considerations detailed project report financial aspects marketing aspects management aspects technical aspects government policies infrastructure social cost benefit sensitivity analysis vegprotein LTS basic assumptions underlying financial projections depreciation schedule

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LIST OF ATTEMPTED QUESTIONS AND ANSWERS LIST OF ATTEMPTED QUESTIONS AND ANSWERS True/False Question 1 The advantage of secondary sources of data is that it is readily and economically available. Correct Answer True Your Answer True True/False Question2 In small scale organisation, requirement of working capital is quite high due to high amount of overheads, high buying costs and high selling cost. Correct Answer True Your Answer True True/False Question3 Banks and Financial Institutions, world-wide, are now financing projects with strategies and terms that would have been hard to believe/imagine just a few years back. Correct Answer True Your Answer True Select The Blank Question 4 ________ is a current asset Correct Answer Book debts Your Answer Furniture Multiple Choice Multiple Answer Question 5 Trend Projection method of demand forecasting consists of :Correct Answer Linear Relationship , Exponential Relationship , Polynomial Relationship

Your Answer Linear Relationship , Exponential Relationship , Polynomial Relationship Multiple Choice Single Answer Question 6 Delays in infrastructure Development by State Agencies may lead to :Correct Answer Cost and time overrun Your Answer Management problems Multiple Choice Single Answer Question 7 Technical aspect of detailed project report includes :Correct Answer Detailed Project Engineering Your Answer Detailed Project Engineering Multiple Choice Multiple Answer Question 8 Sources of funds includes :Correct Answer Depreciation , Preliminary expenses written off , Increase in secured borrowing Your Answer Preliminary expenses written off , Increase in secured borrowing Multiple Choice Single Answer Question 9 Delay in arrival of domestic/foreign machinery and technicians may lead to :Correct Answer Cost and time overrun Your Answer Cost and time overrun Select The Blank Question 10 A smaller unit into which the overall requirement of capital of a company is sub-divided is termed as ________. Correct Answer Share Your Answer Share Multiple Choice Single Answer Question11 A project objective which states "What' is to be viewed" is termed as :Correct Answer Strategic perspective Your Answer Strategic perspective Multiple Choice Single Answer Question 12 Sewerage and drainage cost of the project is categorised under :Correct Answer Building cost Your Answer Building cost Multiple Choice Multiple Answer Question13 Internal sources of funds are :Correct Answer Funds from operation , Loss on sale of fixed assets , Goodwill written off

Your Answer Funds from operation , Goodwill written off Multiple Choice Multiple Answer Question14 In the Detailed Project Report, Management aspects includes :Correct Answer Determination , Organisation Building , Person / system oriented Your Answer Determination , Organisation Building , Person / system oriented Select The Blank Question15 Short term finance is normally for a period upto ________ year. Correct Answer One Your Answer One True/False Question16 Current assets includes stock-in-process. Correct Answer True Your Answer True Multiple Choice Single Answer Question17 The basic characteristic of a project is :Correct Answer That it involves current outlay of funds in expectation of future benefits Your Answer That it involves current outlay of funds in expectation of future benefits Multiple Choice Multiple Answer Question18 Time Series Projection Methods of Demand forecasting consists of :Correct Answer Trend Projection method , Moving Averages method Your Answer Trend Projection method , Moving Averages method Select The Blank Question 19 ________ is a current liability. Correct Answer Trade credit Your Answer Trade credit True/False Question20 Managerial problems in a project are the most pervasive. Correct Answer True Your Answer True Select The Blank Question21 Longer the duration of production cycle, higher the requirement of ________. Correct Answer Working capital Your Answer Working capital Select The Blank

Question22 Retained earnings is a source of ________ finance. Correct Answer Internal Your Answer Short term Select The Blank Question23 ________ is the summary of cash book or Receipts and Payments statement. Correct Answer Cash flow statement Your Answer Trial balance True/False Question24 In the BCG Matrix, the key term of Cash Cows require further commitment of funds. Correct Answer False Your Answer True True/False Question25 Cost and time overrun of the project may lead to loss on account of lost market opportunities. Correct Answer True Your Answer True Multiple Choice Single Answer Question26 A project objective which states What "achieving it " would cost is known as :Correct Answer Finance cost aspect Your Answer Finance cost aspect Multiple Choice Multiple Answer Question27 Casual methods of Demand forecasting consists of :Correct Answer Consumption-level method , Econometric method Your Answer Consumption-level method , Econometric method Multiple Choice Single Answer Question 28 In BCG Matrix "STARS" indicate :Correct Answer Products which enjoy a high market share as well as a high growth rate Your Answer Products which enjoy a high market share as well as a high growth rate Multiple Choice Single Answer Question 29 Psychographic market appraisal answers to :Correct Answer Why they buy? Your Answer Why they buy? True/False

Question30 Production line diagrams show the organisation structure of the project along with information on location, personnel required for various departments, and their inter-relationship. Correct Answer False Your Answer False Multiple Choice Multiple Answer Question31 While choosing the location for a project, the following factors should be considered :Correct Answer Proximity to raw materials and markets , Availability of infrastructure , Government policies and other factors Your Answer Proximity to raw materials and markets , Availability of infrastructure , Government policies and other factors Multiple Choice Single Answer Question32 The cost which change in the same proportion in which the level of production changes is known as :Correct Answer Variable cost Your Answer Variable cost Select The Blank Question33 Goods purchased on credit ________ in flow of funds. Correct Answer Does not result Your Answer Decreases Multiple Choice Multiple Answer Question34 Ratios relating to working capital are :Correct Answer Current ratio , Internal measure , Quick ratio Your Answer Current ratio , Debt Equity ratio , Quick ratio Multiple Choice Single Answer Question35 Appointments made at senior level during the half-year is categorised under :Correct Answer Organisation and management Your Answer Organisation and management Multiple Choice Single Answer Question36 Cost of the Project encompasses :Correct Answer The total of all items of outlay associated with a project Your Answer The total of all items of outlay associated with a project Multiple Choice Multiple Answer Question37 Production and sales aspect of Visit report consists of :Correct Answer Utilisation of installed capacity , Input availability , Sales trends Your Answer Utilisation of installed capacity , Input availability , Sales trends

Match The Following Question38 Correct Answer Your Answer Source of funds Depreciation Equity capital Fixed assets Building Building Current assets Debtors Debtors Current liability Trade credit Trade credit Multiple Choice Single Answer Question39 Every project involves financial outlay which can be referred to as :Correct Answer Project finance Your Answer Project finance Multiple Choice Multiple Answer Question 40 General category of the Project report consists of :Correct Answer Name of the Industrial concern , Proposed product , Location of the factory Your Answer Name of the Industrial concern , Proposed product , Location of the factory Multiple Choice Multiple Answer Question 41 The data for ratio analysis is obtained from :Correct Answer Profit and Loss Account , Balance Sheet Your Answer Profit and Loss Account , Balance Sheet Multiple Choice Single Answer Question42 Short supplies of materials may lead to :Correct Answer Cost and time overrun Your Answer Cost and time overrun Multiple Choice Multiple Answer Question43 After the SPACE chart is constructed, we would normally get any one of the following basic strategic postures :Correct Answer Aggressive Posture , Competitive Posture , Defensive Posture Your Answer Aggressive Posture , Competitive Posture , Defensive Posture Select The Blank Question 44 ________ occupies a unique position in the macro economic development which helps in induction of new technology and facilitates, greater efficiency as well as higher productivity. Correct Answer Investment Your Answer Marketing

Multiple Choice Single Answer Question45 Infrastructural projects include :Correct Answer Power Generation and Distribution Your Answer Power Generation and Distribution Select The Blank Question46 Name and designation of the chief executive comes under the ________ category. Correct Answer General Your Answer General Match The Following Question47 Correct Answer Your Answer Private investment Power generation Machine tools Project Time -bound Time -bound Programme Not necessarily time bound Not necessarily time bound Foreign direct investment Machine tools Power generation LIST OF ATTEMPTED QUESTIONS AND ANSWERS True/False Question In the BCG Matrix, the key term of Cash Cows require further commitment of funds. Correct Answer False Your Answer False Select The Blank Question In the GE's Stop Light Matrix, when ________ situation prevails , Products call for divestment. Correct Answer Average Business Strength and Low Industry attractiveness Your Answer Average Business Strength and Low Industry attractiveness Multiple Choice Single Answer Question The basic characteristic of a project is :Correct Answer That it involves current outlay of funds in expectation of future benefits Your Answer That it involves current outlay of funds in expectation of future benefits Select The Blank

Question ________ tries to have what the customer will want- where, when, in what form and at what price. Correct Answer Marketing Your Answer Finance Multiple Choice Single Answer Question Financial aspect of Detailed Project report includes :Correct Answer Fixation of means of financial structure Your Answer Fixation of means of financial structure Multiple Choice Single Answer Question A project can be regarded as the sum of the activities directed towards a :Correct Answer Specific result Your Answer Specific result Multiple Choice Single Answer Question Sewerage and drainage cost of the project is categorised under :Correct Answer Building cost Your Answer Building cost Multiple Choice Single Answer Question The BCG Product Portfolio Matrix :Correct Answer Is a tool for strategic ( product ) planning and resource allocation Your Answer Is a tool for strategic ( product ) planning and resource allocation Multiple Choice Single Answer Question End use method of Commercial appraisal technique is :Correct Answer A list of industries wherein the product is used is made and quantity and volume is arrived at Your Answer A list of industries wherein the product is used is made and quantity and volume is arrived at Select The Blank Question ________ capital represents permanent capital. Correct Answer Equity Your Answer Debentures Match The Following Question Correct Answer Your Answer Export market technique of Commercial appraisal Government provides ample encouragement Government provides ample encouragement Demand Technique forecasting of Commercial appraisal Future demand of the product Future demand of the product

Past trend method of Commercial appraisal Adopted as a guide depending on the consumption pattern of the society as a whole Adopted as a guide depending on the consumption pattern of the society as a whole End use method of Commercial appraisal A list of industries wherein the product is used is made and quantity and volume is arrived at A list of industries wherein the product is used is made and quantity and volume is arrived at Multiple Choice Multiple Answer Question Trend Projection method of demand forecasting consists of :Correct Answer Linear Relationship , Exponential Relationship , Polynomial Relationship Your Answer Linear Relationship , Exponential Relationship , Polynomial Relationship Multiple Choice Multiple Answer Question After the SPACE chart is constructed, we would normally get any one of the following basic strategic postures :Correct Answer Aggressive Posture , Competitive Posture , Defensive Posture Your Answer Aggressive Posture , Competitive Posture , Defensive Posture Select The Blank Question ________ in liabilities involves inflow of funds. Correct Answer Increase Your Answer Cash Select The Blank Question ________ occupies a unique position in the macro economic development which helps in induction of new technology and facilitates, greater efficiency as well as higher productivity. Correct Answer Investment Your Answer Investment Multiple Choice Single Answer Question Every project involves financial outlay which can be referred to as :Correct Answer Project finance Your Answer Project finance True/False Question Financial analysis based on accounting ratios will give mis-leading results if the effects of changes in price level are not taken into account. Correct Answer True Your Answer True

Select The Blank Question Excessive expenditures on foreign technicians leads to ________. Correct Answer Cost and time overrun Your Answer Management problems Multiple Choice Single Answer Question Appointments made at senior level during the half-year is categorised under :Correct Answer Organisation and management Your Answer Organisation and management Multiple Choice Single Answer Question Infrastructural projects include :Correct Answer Power Generation and Distribution Your Answer Power Generation and Distribution Multiple Choice Single Answer Question Delays in infrastructure Development by State Agencies may lead to :Correct Answer Cost and time overrun Your Answer Cost and time overrun Multiple Choice Multiple Answer Question As per the GE's Stop Light Matrix, Products may justify substantial commitment of funds where there is :Correct Answer Strong Business Strength and high Industry attractiveness , Average Business strength and high Industry attractiveness Your Answer Strong Business Strength and high Industry attractiveness , Average Business strength and high Industry attractiveness Match The Following Question Correct Answer Your Answer Source of funds Depreciation Equity capital Fixed assets Building Building Current assets Debtors Investment Current liability Trade credit Debtors Multiple Choice Single Answer Question The cost of Plant and Machinery may be adjusted for a possible increase known as :Correct Answer Escalation Your Answer Inflation

Multiple Choice Multiple Answer Question Demand technique forecasting of Commercial appraisal includes :Correct Answer Future demand of the product , Proper survey of the product , Future availability and supply of the product Your Answer Future demand of the product , Proper survey of the product , Future availability and supply of the product Multiple Choice Single Answer Question The BCG product Portfolio Matrix, General Electric Stop Light Matrix and Strategic Position and Action Evaluation Model are considered to be highly relevant as :Correct Answer Portfolio Planning Tools Your Answer Portfolio Planning Tools Select The Blank Question As the plant capacity increase, the investment cost unit capacity ________. Correct Answer Decreases Your Answer Decreases Multiple Choice Multiple Answer Question The applications of cash are :Correct Answer Purchase of fixed assets , Payment of long term loans Your Answer Purchase of fixed assets , Issue of new machinery True/False Question A high debt equity ratio may indicate that the financial stake of the creditors is more than that of the owners. Correct Answer True Your Answer True Multiple Choice Multiple Answer Question The permanent requirement of working capital should be financed out of :Correct Answer Cash Profits , Shares , Debentures Your Answer Cash Profits , Shares , Debentures True/False Question Ratio analysis is a technique of planning and control. Correct Answer False Your Answer False True/False Question Miscellaneous expenditure is written on the asset side of the Balance sheet.

Correct Answer True Your Answer False Select The Blank Question Cost of fencing comes under the ________ category of the Project report. Correct Answer Land and site development Your Answer Land and site development Multiple Choice Single Answer Question The ratio which covers those assets which can be converted into cash immediately is known as :Correct Answer Quick ratio Your Answer Quick ratio Multiple Choice Single Answer Question The Projects which are undertaken to manufacture certain products which are being used as raw material by the existing units is known as :Correct Answer Backward Integration Projects Your Answer Backward Integration Projects Select The Blank Question Retained earnings indicates that whatever profits are earned by the company are not distributed by it by way of ________ but are kept aside for use in future for expansion or other purpose. Correct Answer Dividend Your Answer Dividend Multiple Choice Multiple Answer Question Time Series Projection Methods of Demand forecasting consists of :Correct Answer Trend Projection method , Moving Averages method Your Answer Trend Projection method , Moving Averages method True/False Question Unlike financial projections, there cannot be any fixed, well-recognised or structure formula/steps for management evaluation/appraisal. Correct Answer True Your Answer True True/False Question Production line diagrams show the organisation structure of the project along with information on location, personnel required for various departments, and their inter-relationship. Correct Answer False Your Answer False

Select The Blank Question ________ is a current asset Correct Answer Book debts Your Answer Trade credit True/False Question For computing Interest coverage ratio, Profit after Interest and taxes are taken into account. Correct Answer False Your Answer True Select The Blank Question Details regarding Internal accruals comes under the ________ category of Project report. Correct Answer Financing plan Your Answer Cost aspect Multiple Choice Multiple Answer Question Management category of Visit report consists of :Correct Answer Managing Director , Institutional nominees , Committees of the board Your Answer Managing Director , Institutional nominees , Committees of the board True/False Question Nominal maximum capacity is the capacity that is technically attainable and this corresponds to the supplier's guaranteed capacity. Correct Answer True Your Answer False Multiple Choice Single Answer Question The ratio that roughly measures the company's potential reserve of cash is termed as :Correct Answer Net Working capital to total assets Your Answer Net Working capital to total assets Multiple Choice Multiple Answer Question The following are the sources of funds :Correct Answer Operating Profit , Non operating Income Your Answer Operating Profit , Dividends True/False Question Change in the project concept itself may lead to cost and time overrun. Correct Answer True Your Answer True

LIST OF ATTEMPTED QUESTIONS AND ANSWERS LIST OF ATTEMPTED QUESTIONS AND ANSWERS True/False Question 1 The advantage of secondary sources of data is that it is readily and economically available. Correct Answer True Your Answer True True/False Question2 In small scale organisation, requirement of working capital is quite high due to high amount of overheads, high buying costs and high selling cost. Correct Answer True Your Answer True True/False Question3 Banks and Financial Institutions, world-wide, are now financing projects with strategies and terms that would have been hard to believe/imagine just a few years back. Correct Answer True Your Answer True Select The Blank Question 4 ________ is a current asset Correct Answer Book debts Your Answer Furniture Multiple Choice Multiple Answer Question 5 Trend Projection method of demand forecasting consists of :Correct Answer Linear Relationship , Exponential Relationship , Polynomial Relationship Your Answer Linear Relationship , Exponential Relationship , Polynomial Relationship Multiple Choice Single Answer Question 6 Delays in infrastructure Development by State Agencies may lead to :Correct Answer Cost and time overrun Your Answer Management problems Multiple Choice Single Answer Question 7 Technical aspect of detailed project report includes :Correct Answer Detailed Project Engineering Your Answer Detailed Project Engineering Multiple Choice Multiple Answer Question 8 Sources of funds includes :-

Correct Answer Depreciation , Preliminary expenses written off , Increase in secured borrowing Your Answer Preliminary expenses written off , Increase in secured borrowing Multiple Choice Single Answer Question 9 Delay in arrival of domestic/foreign machinery and technicians may lead to :Correct Answer Cost and time overrun Your Answer Cost and time overrun Select The Blank Question 10 A smaller unit into which the overall requirement of capital of a company is sub-divided is termed as ________. Correct Answer Share Your Answer Share Multiple Choice Single Answer Question11 A project objective which states "What' is to be viewed" is termed as :Correct Answer Strategic perspective Your Answer Strategic perspective Multiple Choice Single Answer Question 12 Sewerage and drainage cost of the project is categorised under :Correct Answer Building cost Your Answer Building cost Multiple Choice Multiple Answer Question13 Internal sources of funds are :Correct Answer Funds from operation , Loss on sale of fixed assets , Goodwill written off Your Answer Funds from operation , Goodwill written off Multiple Choice Multiple Answer Question14 In the Detailed Project Report, Management aspects includes :Correct Answer Determination , Organisation Building , Person / system oriented Your Answer Determination , Organisation Building , Person / system oriented Select The Blank Question15 Short term finance is normally for a period upto ________ year. Correct Answer One Your Answer One True/False Question16 Current assets includes stock-in-process. Correct Answer True

Your Answer True Multiple Choice Single Answer Question17 The basic characteristic of a project is :Correct Answer That it involves current outlay of funds in expectation of future benefits Your Answer That it involves current outlay of funds in expectation of future benefits Multiple Choice Multiple Answer Question18 Time Series Projection Methods of Demand forecasting consists of :Correct Answer Trend Projection method , Moving Averages method Your Answer Trend Projection method , Moving Averages method Select The Blank Question 19 ________ is a current liability. Correct Answer Trade credit Your Answer Trade credit True/False Question20 Managerial problems in a project are the most pervasive. Correct Answer True Your Answer True Select The Blank Question21 Longer the duration of production cycle, higher the requirement of ________. Correct Answer Working capital Your Answer Working capital Select The Blank Question22 Retained earnings is a source of ________ finance. Correct Answer Internal Your Answer Short term Select The Blank Question23 ________ is the summary of cash book or Receipts and Payments statement. Correct Answer Cash flow statement Your Answer Trial balance True/False Question24 In the BCG Matrix, the key term of Cash Cows require further commitment of funds. Correct Answer False Your Answer True

True/False Question25 Cost and time overrun of the project may lead to loss on account of lost market opportunities. Correct Answer True Your Answer True Multiple Choice Single Answer Question26 A project objective which states What "achieving it " would cost is known as :Correct Answer Finance cost aspect Your Answer Finance cost aspect Multiple Choice Multiple Answer Question27 Casual methods of Demand forecasting consists of :Correct Answer Consumption-level method , Econometric method Your Answer Consumption-level method , Econometric method Multiple Choice Single Answer Question 28 In BCG Matrix "STARS" indicate :Correct Answer Products which enjoy a high market share as well as a high growth rate Your Answer Products which enjoy a high market share as well as a high growth rate Multiple Choice Single Answer Question 29 Psychographic market appraisal answers to :Correct Answer Why they buy? Your Answer Why they buy? True/False Question30 Production line diagrams show the organisation structure of the project along with information on location, personnel required for various departments, and their inter-relationship. Correct Answer False Your Answer False Multiple Choice Multiple Answer Question31 While choosing the location for a project, the following factors should be considered :Correct Answer Proximity to raw materials and markets , Availability of infrastructure , Government policies and other factors Your Answer Proximity to raw materials and markets , Availability of infrastructure , Government policies and other factors Multiple Choice Single Answer

Question32 The cost which change in the same proportion in which the level of production changes is known as :Correct Answer Variable cost Your Answer Variable cost Select The Blank Question33 Goods purchased on credit ________ in flow of funds. Correct Answer Does not result Your Answer Decreases Multiple Choice Multiple Answer Question34 Ratios relating to working capital are :Correct Answer Current ratio , Internal measure , Quick ratio Your Answer Current ratio , Debt Equity ratio , Quick ratio Multiple Choice Single Answer Question35 Appointments made at senior level during the half-year is categorised under :Correct Answer Organisation and management Your Answer Organisation and management Multiple Choice Single Answer Question36 Cost of the Project encompasses :Correct Answer The total of all items of outlay associated with a project Your Answer The total of all items of outlay associated with a project Multiple Choice Multiple Answer Question37 Production and sales aspect of Visit report consists of :Correct Answer Utilisation of installed capacity , Input availability , Sales trends Your Answer Utilisation of installed capacity , Input availability , Sales trends Match The Following Question38 Correct Answer Your Answer Source of funds Depreciation Equity capital Fixed assets Building Building Current assets Debtors Debtors Current liability Trade credit Trade credit Multiple Choice Single Answer Question39 Every project involves financial outlay which can be referred to as :Correct Answer Project finance

Your Answer Project finance Multiple Choice Multiple Answer Question 40 General category of the Project report consists of :Correct Answer Name of the Industrial concern , Proposed product , Location of the factory Your Answer Name of the Industrial concern , Proposed product , Location of the factory Multiple Choice Multiple Answer Question 41 The data for ratio analysis is obtained from :Correct Answer Profit and Loss Account , Balance Sheet Your Answer Profit and Loss Account , Balance Sheet Multiple Choice Single Answer Question42 Short supplies of materials may lead to :Correct Answer Cost and time overrun Your Answer Cost and time overrun Multiple Choice Multiple Answer Question43 After the SPACE chart is constructed, we would normally get any one of the following basic strategic postures :Correct Answer Aggressive Posture , Competitive Posture , Defensive Posture Your Answer Aggressive Posture , Competitive Posture , Defensive Posture Select The Blank Question 44 ________ occupies a unique position in the macro economic development which helps in induction of new technology and facilitates, greater efficiency as well as higher productivity. Correct Answer Investment Your Answer Marketing Multiple Choice Single Answer Question45 Infrastructural projects include :Correct Answer Power Generation and Distribution Your Answer Power Generation and Distribution Select The Blank Question46 Name and designation of the chief executive comes under the ________ category. Correct Answer General Your Answer General Match The Following Question47 Correct Answer Your Answer

Private investment Power generation Machine tools Project Time -bound Time -bound Programme Not necessarily time bound Not necessarily time bound Foreign direct investment Machine tools Power generation LIST OF ATTEMPTED QUESTIONS AND ANSWERS Multiple Choice Single Answer Question Borrower's contribution towards Working capital is known as :Correct Answer Margin money Your Answer Margin money Multiple Choice Multiple Answer Question Building cost consists of :Correct Answer Factory building , Auxiliary buildings , Administrative block Your Answer Factory building , Auxiliary buildings , Administrative block Multiple Choice Single Answer Question In BCG Matrix " CASH COWS" indicate :Correct Answer Products which have high market share but low growth potential Your Answer Products which have high market share but low growth potential Multiple Choice Multiple Answer Question In the Detailed Project Report, Marketing aspects includes :Correct Answer Demand forecasting , Promotion , Distribution Your Answer Demand forecasting , Promotion , Distribution Multiple Choice Single Answer Question Cost of the Project encompasses :Correct Answer The total of all items of outlay associated with a project Your Answer The total of all items of outlay associated with a project True/False Question In both the extreme situations of trade cycles i.e. Inflation and depression, requirement of working capital may be high. Correct Answer True Your Answer True True/False Question Name of the finance manager comes under the Project organisation category of the Project report. Correct Answer True

Your Answer True True/False Question It is mandatory for each unit to obtain necessary clearance from Pollution Control Authorities before setting up any project. Correct Answer True Your Answer True Multiple Choice Multiple Answer Question A project objective can be said to have the following dimensions viz.: Correct Answer Strategic perspective , Time span , Finance cost aspect Your Answer Strategic perspective , Time span , Finance cost aspect Match The Following Question Correct Answer Your Answer Management problems Lack of exposure Lack of exposure Management Quality Initiative Initiative Management Perception Aspiration level/ conservative Aspiration level/ conservative Organisational Climate Person oriented Person oriented Multiple Choice Single Answer Question Infrastructural projects include :Correct Answer Power Generation and Distribution Your Answer Power Generation and Distribution Multiple Choice Single Answer Question BCG Product Portfolio Matrix analyses products on the basis of :Correct Answer Relative Market share and Industry Growth rate Your Answer Relative Market share and Industry Growth rate Select The Blank Question ________ profitability reduces the strain on working capital. Correct Answer High Your Answer Stable Multiple Choice Single Answer Question The basic characteristic of a project is :Correct Answer That it involves current outlay of funds in expectation of future benefits Your Answer That it involves current outlay of funds in expectation of future benefits

Multiple Choice Multiple Answer Question The various aspects which need to be considered while assessing Project finance financing are :Correct Answer Environmental factors , Risk involved , Managerial compensation Your Answer Environmental factors , Risk involved , Managerial compensation Multiple Choice Single Answer Question "Fly by night" operator mentality is a :Correct Answer Management quality Your Answer Management quality Multiple Choice Single Answer Question Every project involves financial outlay which can be referred to as :Correct Answer Project finance Your Answer Project finance Select The Blank Question As the plant capacity increase, the investment cost unit capacity ________. Correct Answer Decreases Your Answer Increases Multiple Choice Multiple Answer Question Debt Service coverage ratio may be considered to be one of the most important ratios calculated by the :Correct Answer Bankers , Financial Institutions Your Answer Shareholders , Bankers , Financial Institutions Multiple Choice Single Answer Question A project objective which states What "achieving it " would cost is known as :Correct Answer Finance cost aspect Your Answer Finance cost aspect True/False Question A project is unique and no two projects are similar. Correct Answer True Your Answer True Multiple Choice Multiple Answer Question Limitations of fund flow statement are :Correct Answer It does not provide any new information but only rearranges the various facts , It does not consider non-fund transactions Your Answer It does not provide any new information but only rearranges the various facts , It does not consider non-fund transactions , It does not help in determining future requirement of funds

Multiple Choice Single Answer Question The third phase of the technical appraisal which focuses upon appraising the likely technical gaps consists of :Correct Answer Problems pertaining to the period when the project is in operation Your Answer Problems pertaining to the period when the project is in operation Multiple Choice Single Answer Question Receivables is categorised under :Correct Answer Current assets and liabilities Your Answer Current assets and liabilities Multiple Choice Single Answer Question It is said that a second rate project in the hands of first rate management is better than a first rate project in the hands of :Correct Answer Second rate management Your Answer Second rate management Select The Blank Question The company having ________, is appropriate for the strategic posture of Defensive under the SPACE approach. Correct Answer Lacks both competitive advantage as well as financial strength and belongs to a not so attractive industry, operating in an unstable environment Your Answer Lacks both competitive advantage as well as financial strength and belongs to a not so attractive industry, operating in an unstable environment Select The Blank Question Excessive expenditures on foreign technicians leads to ________. Correct Answer Cost and time overrun Your Answer Profit maximisation True/False Question The 'BCG Matrix 'analysis various products of the organisation in the terms of Business strength and Industry Attractiveness. Correct Answer False Your Answer False Select The Blank Question Having decided on the location and product, the promoter takes into account the ________ that is to be adopted for producing the product. Correct Answer Manufacturing process and technology Your Answer Manufacturing process and technology Multiple Choice Multiple Answer Question Financial and economic aspect of the Visit report consists of :Correct Answer Company's financial year , Impact of Government policies on company operations , Comments on the last published accounts

Your Answer Company's financial year , Impact of Government policies on company operations , Comments on the last published accounts True/False Question Sensitivity analysis consists of assessing the degree of risk. Correct Answer True Your Answer True Multiple Choice Single Answer Question A project objective which states "What' is to be viewed" is termed as :Correct Answer Strategic perspective Your Answer Strategic perspective Multiple Choice Multiple Answer Question The permanent requirement of working capital should be financed out of :Correct Answer Cash Profits , Shares , Debentures Your Answer Cash Profits , Shares , Debentures True/False Question In the BCG Matrix "DOGS" indicate products which are generally during the stage of Decline of a Product Life Cycle. Correct Answer True Your Answer True True/False Question The construction of National Golden Quadrilateral can be recognised as Project. Correct Answer True Your Answer True Select The Blank Question Under the SPACE Model, Customer loyalty is determined under the ________ dimension. Correct Answer Company's competitive advantage Your Answer Company's competitive advantage True/False Question The cost factors of the product mixed is also taken into account to arrive at cost at various levels of production and its cost impact of the manufacturing. Correct Answer True Your Answer True True/False Question The emphasis of a finance manager should be on taking a synergistic view of the project rather than looking at it only from the financial aspects. Correct Answer True

Your Answer True Multiple Choice Single Answer Question Miscellaneous fixed assets includes :Correct Answer Cables Your Answer Cables Multiple Choice Multiple Answer Question In the Detailed Project Report, Technical aspects includes :Correct Answer Plant capacity , Quality standards , Raw material requirement Your Answer Quality standards , Raw material requirement , Power / telecom facilities Multiple Choice Multiple Answer Question Trend Projection method of demand forecasting consists of :Correct Answer Linear Relationship , Exponential Relationship , Polynomial Relationship Your Answer Linear Relationship , Exponential Relationship , Polynomial Relationship True/False Question Market potential should be determined under the Marketing aspect of the Project report. Correct Answer True Your Answer True Multiple Choice Single Answer Question Ratio analysis is a widely used tool of :Correct Answer Financial analysis Your Answer Financial analysis Multiple Choice Single Answer Question Preoperative expenses includes :Correct Answer Bank guarantees Your Answer Bank guarantees Select The Blank Question A Project has a ________ represented by growth, maturity and decay. Correct Answer Life cycle Your Answer Life cycle True/False Question If the organisation is a trading organisation, the requirement of working capital will be on the lower side. Correct Answer False Your Answer True

LIST OF ATTEMPTED QUESTIONS AND ANSWERS Select The Blank Question ________ is a current liability. Correct Answer Trade credit Your Answer Trade credit Multiple Choice Multiple Answer Question Marketing category of the Project report consists of :Correct Answer Target market , Market potential , Pricing policy Your Answer Target market , Market potential , Pricing policy Select The Blank Question Under the SPACE Model, Customer loyalty is determined under the ________ dimension. Correct Answer Company's competitive advantage Your Answer Company's competitive advantage Multiple Choice Single Answer Question Sources of funds include :Correct Answer Increase in secured borrowing Your Answer Increase in secured borrowing True/False Question It is mandatory for each unit to obtain necessary clearance from Pollution Control Authorities before setting up any project. Correct Answer True Your Answer False Multiple Choice Single Answer Question A project objective which states "What' is to be viewed" is termed as :Correct Answer Strategic perspective Your Answer Strategic perspective Select The Blank Question ________ tries to have what the customer will want- where, when, in what form and at what price. Correct Answer Marketing Your Answer Marketing True/False Question Debt Service Coverage Ratio is one of the most important ratios calculated by the bankers or financial institutions giving long term finance to the organisation.

Correct Answer True Your Answer True Multiple Choice Multiple Answer Question Management qualities includes :Correct Answer Honesty , Financial resources , Initiative Your Answer Honesty , Financial resources , Initiative Multiple Choice Single Answer Question The second phase of the technical appraisal which focuses upon appraising the likely technical gaps consists of :Correct Answer Problems faced during the Construction and Project implementation Your Answer Problems faced during the Construction and Project implementation True/False Question A project is unique and no two projects are similar. Correct Answer True Your Answer True Multiple Choice Single Answer Question Land and site development cost includes cost of :Correct Answer Gates Your Answer Gates Multiple Choice Single Answer Question A project objective which states What "achieving it " would cost is known as :Correct Answer Finance cost aspect Your Answer Finance cost aspect Select The Blank Question ________ in assets involves outflow of funds. Correct Answer Increase Your Answer Increase Match The Following Question Correct Answer Your Answer Management problems Lack of exposure Lack of exposure Management Quality Initiative Initiative Management Perception Aspiration level/ conservative Aspiration level/ conservative

Organisational Climate Person oriented Person oriented Match The Following Question Correct Answer Your Answer Source of funds Depreciation Equity capital Fixed assets Building Building Current assets Debtors Debtors Current liability Trade credit Trade credit Multiple Choice Single Answer Question Disposal of fixed assets is categorised under :Correct Answer Miscellaneous Your Answer Miscellaneous True/False Question The emphasis of a finance manager should be on taking a synergistic view of the project rather than looking at it only from the financial aspects. Correct Answer True Your Answer True Multiple Choice Single Answer Question Geographic market appraisal answers to :Correct Answer Where do the customers live? Your Answer Where do the customers live? Multiple Choice Single Answer Question Every project involves financial outlay which can be referred to as :Correct Answer Project finance Your Answer Project finance Select The Blank Question ________ occupies a unique position in the macro economic development which helps in induction of new technology and facilitates, greater efficiency as well as higher productivity. Correct Answer Investment Your Answer Production Multiple Choice Single Answer

Question The basic characteristic of a project is :Correct Answer That it involves current outlay of funds in expectation of future benefits Your Answer That it involves current outlay of funds in expectation of future benefits Multiple Choice Single Answer Question Pre-operative expenses include :Correct Answer Interest on deferred payments Your Answer Interest on deferred payments Multiple Choice Multiple Answer Question Advantages of fund flow statement are :Correct Answer It determines financial consequences of the business operations , It enables the firm to plan its financial resources properly , It helps as a reliable guide for the future requirement of funds Your Answer It determines financial consequences of the business operations , It considers non-fund transactions , It enables the firm to plan its financial resources properly True/False Question Managerial problems in a project are the most pervasive. Correct Answer True Your Answer True True/False Question In the BCG Matrix "DOGS" indicate products which are generally during the stage of Decline of a Product Life Cycle. Correct Answer True Your Answer True Multiple Choice Multiple Answer Question The applications of cash are :Correct Answer Purchase of fixed assets , Payment of long term loans Your Answer Purchase of fixed assets , Payment of long term loans , Issue of new machinery True/False Question Debt Equity ratio is a 'Solvency ratio'. Correct Answer True Your Answer True True/False Question Current assets includes stock-in-process. Correct Answer True Your Answer True

Multiple Choice Multiple Answer Question A project objective can be said to have the following dimensions viz.: Correct Answer Strategic perspective , Time span , Finance cost aspect Your Answer Strategic perspective , Time span , Finance cost aspect Multiple Choice Single Answer Question Liabilities side of Balance sheet includes :Correct Answer Unsecured loans Your Answer Unsecured loans Multiple Choice Single Answer Question The rate of discount which would equate the present value of investments to the present value of benefits over the life of the project is known as :Correct Answer Internal rate of return Your Answer Internal rate of return Select The Blank Question A Project has a ________ represented by growth, maturity and decay. Correct Answer Life cycle Your Answer Life cycle Multiple Choice Multiple Answer Question After the SPACE chart is constructed, we would normally get any one of the following basic strategic postures :Correct Answer Aggressive Posture , Competitive Posture , Defensive Posture Your Answer Aggressive Posture , Competitive Posture , Defensive Posture Select The Blank Question ________ is the summary of cash book or Receipts and Payments statement. Correct Answer Cash flow statement Your Answer Cash flow statement Multiple Choice Single Answer Question The point at which the unit neither earns profit nor incurs loss is known as :Correct Answer Break Even Point Your Answer Break Even Point Multiple Choice Multiple Answer Question In the Detailed Project Report, Marketing aspects includes :Correct Answer Demand forecasting , Promotion , Distribution Your Answer Demand forecasting , Promotion , Distribution

Multiple Choice Multiple Answer Question The various aspects which need to be considered while assessing Project finance financing are :Correct Answer Environmental factors , Risk involved , Managerial compensation Your Answer Environmental factors , Risk involved , Managerial compensation Multiple Choice Multiple Answer Question Casual methods of Demand forecasting consists of :Correct Answer Consumption-level method , Econometric method Your Answer Consumption-level method , Econometric method Select The Blank Question Under ________ method, the forecasts are modified in the light of observed errors. Correct Answer Exponential smoothing Your Answer Exponential smoothing Multiple Choice Multiple Answer Question Provision for tax can be treated as :Correct Answer Item of current liabilities , Added back to the profit as per profit and loss account to arrive at operating profits Your Answer Added back to the profit as per profit and loss account to arrive at operating profits , Item of current assets , Item of working capital Select The Blank Question Retained earnings indicates that whatever profits are earned by the company are not distributed by it by way of ________ but are kept aside for use in future for expansion or other purpose. Correct Answer Dividend Your Answer Dividend Multiple Choice Single Answer Question Infrastructural projects include :Correct Answer Power Generation and Distribution Your Answer Power Generation and Distribution Multiple Choice Single Answer Question The ratio that roughly measures the company's potential reserve of cash is termed as :Correct Answer Net Working capital to total assets Your Answer Net Working capital to total assets Select The Blank

Question Name and designation of the chief executive comes under the ________ category. Correct Answer General Your Answer General Multiple Choice Single Answer Question Miscellaneous fixed assets includes :Correct Answer Cables Your Answer Cables Multiple Choice Single Answer Question In the Cash flow statement, the sources of funds include Correct Answer Share Issue Your Answer Share Issue LIST OF ATTEMPTED QUESTIONS AND ANSWERS Select The Blank Question ________ is a current liability. Correct Answer Trade credit Your Answer Trade credit Multiple Choice Multiple Answer Question Marketing category of the Project report consists of :Correct Answer Target market , Market potential , Pricing policy Your Answer Target market , Market potential , Pricing policy Select The Blank Question Under the SPACE Model, Customer loyalty is determined under the ________ dimension. Correct Answer Company's competitive advantage Your Answer Company's competitive advantage Multiple Choice Single Answer Question Sources of funds include :Correct Answer Increase in secured borrowing Your Answer Increase in secured borrowing True/False Question It is mandatory for each unit to obtain necessary clearance from Pollution Control Authorities before setting up any project. Correct Answer True Your Answer False Multiple Choice Single Answer

Question A project objective which states "What' is to be viewed" is termed as :-

Correct Answer Strategic perspective Your Answer Strategic perspective

Select The Blank Question ________ tries to have what the customer will want- where, when, in what form and at what price. Correct Answer Marketing Your Answer Marketing True/False Question Debt Service Coverage Ratio is one of the most important ratios calculated by the bankers or financial institutions giving long term finance to the organisation. Correct Answer True Your Answer True Multiple Choice Multiple Answer Question Management qualities includes :Correct Answer Honesty , Financial resources , Initiative Your Answer Honesty , Financial resources , Initiative Multiple Choice Single Answer Question The second phase of the technical appraisal which focuses upon appraising the likely technical gaps consists of :Correct Answer Problems faced during the Construction and Project implementation Your Answer Problems faced during the Construction and Project implementation True/False Question A project is unique and no two projects are similar. Correct Answer True Your Answer True Multiple Choice Single Answer Question Land and site development cost includes cost of :Correct Answer Gates Your Answer Gates Multiple Choice Single Answer Question A project objective which states What "achieving it " would cost is known as :Correct Answer Finance cost aspect Your Answer Finance cost aspect

Select The Blank Question ________ in assets involves outflow of funds. Correct Answer Increase Your Answer Increase Match The Following Question Correct Answer Your Answer Management problems Lack of exposure Lack of exposure Management Quality Initiative Initiative Management Perception Aspiration level/ conservative Aspiration level/ conservative Organisational Climate Person oriented Person oriented Match The Following Question Correct Answer Your Answer Source of funds Depreciation Equity capital Fixed assets Building Building Current assets Debtors Debtors Current liability Trade credit Trade credit Multiple Choice Single Answer Question Disposal of fixed assets is categorised under :Correct Answer Miscellaneous Your Answer Miscellaneous True/False Question The emphasis of a finance manager should be on taking a synergistic view of the project rather than looking at it only from the financial aspects. Correct Answer True Your Answer True Multiple Choice Single Answer Question Geographic market appraisal answers to :Correct Answer Where do the customers live?

Your Answer Where do the customers live? Multiple Choice Single Answer Question Every project involves financial outlay which can be referred to as :Correct Answer Project finance Your Answer Project finance Select The Blank Question ________ occupies a unique position in the macro economic development which helps in induction of new technology and facilitates, greater efficiency as well as higher productivity. Correct Answer Investment Your Answer Production Multiple Choice Single Answer Question The basic characteristic of a project is :Correct Answer That it involves current outlay of funds in expectation of future benefits Your Answer That it involves current outlay of funds in expectation of future benefits Multiple Choice Single Answer Question Pre-operative expenses include :Correct Answer Interest on deferred payments Your Answer Interest on deferred payments Multiple Choice Multiple Answer Question Advantages of fund flow statement are :Correct Answer It determines financial consequences of the business operations , It enables the firm to plan its financial resources properly , It helps as a reliable guide for the future requirement of funds Your Answer It determines financial consequences of the business operations , It considers non-fund transactions , It enables the firm to plan its financial resources properly True/False Question Managerial problems in a project are the most pervasive. Correct Answer True Your Answer True True/False Question In the BCG Matrix "DOGS" indicate products which are generally during the stage of Decline of a Product Life Cycle. Correct Answer True Your Answer True

Multiple Choice Multiple Answer Question The applications of cash are :Correct Answer Purchase of fixed assets , Payment of long term loans Your Answer Purchase of fixed assets , Payment of long term loans , Issue of new machinery True/False Question Debt Equity ratio is a 'Solvency ratio'. Correct Answer True Your Answer True True/False Question Current assets includes stock-in-process. Correct Answer True Your Answer True Multiple Choice Multiple Answer Question A project objective can be said to have the following dimensions viz.: Correct Answer Strategic perspective , Time span , Finance cost aspect Your Answer Strategic perspective , Time span , Finance cost aspect Multiple Choice Single Answer Question Liabilities side of Balance sheet includes :Correct Answer Unsecured loans Your Answer Unsecured loans Multiple Choice Single Answer Question The rate of discount which would equate the present value of investments to the present value of benefits over the life of the project is known as :Correct Answer Internal rate of return Your Answer Internal rate of return Select The Blank Question A Project has a ________ represented by growth, maturity and decay. Correct Answer Life cycle Your Answer Life cycle Multiple Choice Multiple Answer Question After the SPACE chart is constructed, we would normally get any one of the following basic strategic postures :Correct Answer Aggressive Posture , Competitive Posture , Defensive Posture Your Answer Aggressive Posture , Competitive Posture , Defensive Posture Select The Blank

Question ________ is the summary of cash book or Receipts and Payments statement. Correct Answer Cash flow statement Your Answer Cash flow statement Multiple Choice Single Answer Question The point at which the unit neither earns profit nor incurs loss is known as :Correct Answer Break Even Point Your Answer Break Even Point Multiple Choice Multiple Answer Question In the Detailed Project Report, Marketing aspects includes :Correct Answer Demand forecasting , Promotion , Distribution Your Answer Demand forecasting , Promotion , Distribution Multiple Choice Multiple Answer Question The various aspects which need to be considered while assessing Project finance financing are :Correct Answer Environmental factors , Risk involved , Managerial compensation Your Answer Environmental factors , Risk involved , Managerial compensation Multiple Choice Multiple Answer Question Casual methods of Demand forecasting consists of :Correct Answer Consumption-level method , Econometric method Your Answer Consumption-level method , Econometric method Select The Blank Question Under ________ method, the forecasts are modified in the light of observed errors. Correct Answer Exponential smoothing Your Answer Exponential smoothing Multiple Choice Multiple Answer Question Provision for tax can be treated as :Correct Answer Item of current liabilities , Added back to the profit as per profit and loss account to arrive at operating profits Your Answer Added back to the profit as per profit and loss account to arrive at operating profits , Item of current assets , Item of working capital Select The Blank Question Retained earnings indicates that whatever profits are earned by the company are not distributed by it by way of ________ but are kept aside for use in future for expansion or other purpose. Correct Answer Dividend

Your Answer Dividend Multiple Choice Single Answer Question Infrastructural projects include :Correct Answer Power Generation and Distribution Your Answer Power Generation and Distribution Multiple Choice Single Answer Question The ratio that roughly measures the company's potential reserve of cash is termed as :Correct Answer Net Working capital to total assets Your Answer Net Working capital to total assets Select The Blank Question Name and designation of the chief executive comes under the ________ category. Correct Answer General Your Answer General Multiple Choice Single Answer Question Miscellaneous fixed assets includes :Correct Answer Cables Your Answer Cables Multiple Choice Single Answer Question In the Cash flow statement, the sources of funds include Correct Answer Share Issue Your Answer Share Issue LIST OF ATTEMPTED QUESTIONS AND ANSWERS True/False Question Land and site development comes under the cost aspect of the Project report. Correct Answer True Your Answer True Multiple Choice Single Answer Question Location of the factory comes under the :Correct Answer General category Your Answer General category Match The Following Question Correct Answer Your Answer

Project appraisal It is the evaluation of project from technical, market, financial, economic and social perspective before committing funds for investment It is a preliminary assessment of the project idea to determine whether or not the investment opportunity is promising Program It is large in scope, is activity oriented and is not necessarily time bound It is large in scope, is activity oriented and is not necessarily time bound Project It is one-shot, time-limited, goal oriented, major undertaking requiring the commitment of varied skills and resources It deals with the impact of the investment project on people and their lives Pre-feasibility study It is a preliminary assessment of the project idea to determine whether or not the investment opportunity is promising It is one-shot, time-limited, goal oriented, major undertaking requiring the commitment of varied skills and resources Multiple Choice Single Answer Question The sources of funding have expanded from banks, insurance companies and multilateral agencies to include the :Correct Answer Capital market Your Answer Debt market Multiple Choice Single Answer Question Cost of overheads include :Correct Answer Cost of repairs and maintenance Your Answer Cost of electricity True/False Question The Detailed Project report spells out the modus operandi for the implementation of the Project and the realization of the Project objectives. Correct Answer True Your Answer True True/False Question Debt Service means payment of installments and interest against an amount borrowed as per terms of loan. Correct Answer True Your Answer True True/False Question The ratios of one organisation compared with the ratios of the same organisation is termed as inter-firm comparison. Correct Answer False Your Answer False

Select The Blank Question Depreciation is sometimes treated as ________ funds. Correct Answer Source Your Answer Application Select The Blank Question Excessive expenditures on foreign technicians leads to ________. Correct Answer Cost and time overrun Your Answer Management problems Multiple Choice Multiple Answer Question The Key terms used in the BCG Product Portfolio matrix are :Correct Answer Stars , Question marks Your Answer Stars , Question marks , Invest True/False Question Sensitivity analysis consists of assessing the degree of risk. Correct Answer True Your Answer True Multiple Choice Multiple Answer Question The data for ratio analysis is obtained from :Correct Answer Profit and Loss Account , Balance Sheet Your Answer Profit and Loss Account , Auditors report , Balance Sheet Multiple Choice Multiple Answer Question Trend Projection method of demand forecasting consists of :Correct Answer Linear Relationship , Exponential Relationship , Polynomial Relationship Your Answer Linear Relationship , Chain ratio Relationship , Exponential Relationship Multiple Choice Single Answer Question Delay in arrival of domestic/foreign machinery and technicians may lead to :Correct Answer Cost and time overrun Your Answer Profit maximisation Multiple Choice Single Answer Question Past trend method of Commercial appraisal technique is :Correct Answer Adopted as a guide depending on the consumption pattern of the society as a whole Your Answer Adopted as a guide depending on the consumption pattern of the society as a whole

Multiple Choice Multiple Answer Question Limitations of fund flow statement are :Correct Answer It does not provide any new information but only rearranges the various facts , It does not consider non-fund transactions Your Answer It does not consider non-fund transactions , It does not help in determining future requirement of funds , It does not provide any new information but only rearranges the various facts Select The Blank Question As the plant capacity increase, the investment cost unit capacity ________. Correct Answer Decreases Your Answer Increases Multiple Choice Single Answer Question Preoperative expenses includes :Correct Answer Bank guarantees Your Answer Brokerage on capital issue Multiple Choice Single Answer Question Short supplies of materials may lead to :Correct Answer Cost and time overrun Your Answer Cost and time overrun Select The Blank Question In order to meet the cost of large project, the technique of ________ has been developed so that the financial commitment and risks associated with a project are shared between the project sponsor and the lending institutions. Correct Answer Limited recourse financing Your Answer Limited recourse financing True/False Question For computing Interest coverage ratio, Profit after Interest and taxes are taken into account. Correct Answer False Your Answer True Multiple Choice Single Answer Question The ratio which covers those assets which can be converted into cash immediately is known as :Correct Answer Quick ratio Your Answer Current ratio Multiple Choice Multiple Answer Question Management category of Visit report consists of :-

Correct Answer Managing Director , Institutional nominees , Committees of the board Your Answer Managing Director , Electrical engineers , Institutional nominees Multiple Choice Single Answer Question General Electric Stop Light Matrix analyses products in terms of :Correct Answer Business strength and Industrial Attractiveness Your Answer Relative Market share and Industry Growth rate Multiple Choice Single Answer Question The basic document for facilitating Project financing is the :Correct Answer Detailed Project report Your Answer Detailed Project report Select The Blank Question The ________ market is longer the order of the day since this is an era of professionalization and specialised services are available at cost. Correct Answer Monopolistic Your Answer Monopolistic True/False Question Ratio should be computed on the basis of inter-related figures which have a cause and effect relationship. Correct Answer True Your Answer True Multiple Choice Multiple Answer Question Demand technique forecasting of Commercial appraisal includes :Correct Answer Future demand of the product , Proper survey of the product , Future availability and supply of the product Your Answer Future demand of the product , Export market , Future availability and supply of the product Select The Blank Question Having decided on the location and product, the promoter takes into account the ________ that is to be adopted for producing the product. Correct Answer Manufacturing process and technology Your Answer Manufacturing process and technology Multiple Choice Multiple Answer Question Time Series Projection Methods of Demand forecasting consists of :Correct Answer Trend Projection method , Moving Averages method Your Answer Trend Projection method , Moving Averages method Select The Blank

Question More accurate the estimation of the level of current assets and current liabilities, more accurate will be estimation of the requirement of ________. Correct Answer Working capital Your Answer Working capital Multiple Choice Multiple Answer Question Defaults category of the Project report may be in respect of :Correct Answer Term loans , Principal , Interest Your Answer Term loans , Principal , Interest Match The Following Question Correct Answer Your Answer General functional layout Present the general relationship between equipment buildings and civil works The plan of work concerning installation as well as initial operation Location Broad area such as city, industrial belt etc. The diagrams indicating the flow of materials, utilities, final product, by-products and emission Site Specific piece of land where the project would be set up Broad area such as city, industrial belt etc. Plant layout Physical layout of the factory Specific piece of land where the project would be set up True/False Question If the organisation is a trading organisation, the requirement of working capital will be on the lower side. Correct Answer False Your Answer True Select The Blank Question Cost of fencing comes under the ________ category of the Project report. Correct Answer Land and site development Your Answer Building cost Multiple Choice Multiple Answer Question Disposition of funds includes :Correct Answer Increase in working capital , Preliminary expenses , Dividend Your Answer Increase in working capital , Preliminary expenses , Preliminary expenses written off

Multiple Choice Multiple Answer Question Sources of funds includes :Correct Answer Depreciation , Preliminary expenses written off , Increase in secured borrowing Your Answer Depreciation , Preliminary expenses written off , Increase in secured borrowing , Preliminary expenses Multiple Choice Single Answer Question The Projects which are undertaken to manufacture certain products which are being used as raw material by the existing units is known as :Correct Answer Backward Integration Projects Your Answer Backward Integration Projects Select The Blank Question In the GE's Stop Light Matrix, when ________ situation prevails , Products call for divestment. Correct Answer Average Business Strength and Low Industry attractiveness Your Answer Weak Business strength and high Industry attractiveness Select The Blank Question Investors who invest in the debentures of the company are the ________ of the company. Correct Answer Creditors Your Answer Creditors Multiple Choice Multiple Answer Question Debt Service coverage ratio may be considered to be one of the most important ratios calculated by the :Correct Answer Bankers , Financial Institutions Your Answer Shareholders , Bankers , Creditors Multiple Choice Single Answer Question Dissentions among the promoters is a :Correct Answer Management problem Your Answer Management perception Select The Blank Question Goods purchased on credit ________ in flow of funds. Correct Answer Does not result Your Answer Does not result True/False Question The secondary data is collected through market survey, specific for the project being appraised. Correct Answer False Your Answer False

Multiple Choice Single Answer Question Profit is the result of customer satisfaction, indeed customer delight under the :Correct Answer Marketing concept Your Answer Marketing concept Multiple Choice Multiple Answer Question Internal sources of funds are :Correct Answer Funds from operation , Loss on sale of fixed assets , Goodwill written off Your Answer Funds from operation , Goodwill written off , Funds from long term loans LIST OF ATTEMPTED QUESTIONS AND ANSWERS Multiple Choice Multiple Answer Question The permanent requirement of working capital should be financed out of :Correct Answer Debentures , Cash Profits , Shares Your Answer Debentures , Cash Profits , Shares Multiple Choice Multiple Answer Question The sources of long term and medium term finance are :Correct Answer Equity shares , Public deposit Your Answer Equity shares , Bridge loan , Public deposit Multiple Choice Single Answer Question The emphasis of the Banks and Financial institutions particularly in India has shifted from 'Sanctions', 'Disbursements' and 'Security-orientation' to 'Recovery/Recycling' and :Correct Answer Activity orientation Your Answer Activity orientation Multiple Choice Single Answer Question Technology, design, layout of the plant as well as inputs and infrastructural facilities are to be considered under :Correct Answer Technical appraisal Your Answer Financial appraisal Select The Blank Question Detailed Project Report is generally prepared from a ________ report with additional information. Correct Answer Feasibility Your Answer Feasibility

True/False Question A high debt equity ratio may indicate that the financial stake of the creditors is more than that of the owners. Correct Answer True Your Answer True Multiple Choice Single Answer Question The formula for Break Even Point is :Correct Answer Fixed cost / ( Sales Price - Variables) Your Answer (Profit after tax +Depreciation + Interest)/ Interest Multiple Choice Single Answer Question Receivables is categorised under :Correct Answer Current assets and liabilities Your Answer Material inputs and utilities Multiple Choice Multiple Answer Question Ratios relating to working capital are :Correct Answer Current ratio , Internal measure , Quick ratio Your Answer Current ratio , Debt Equity ratio , Internal measure Select The Blank Question Longer the duration of production cycle, higher the requirement of ________. Correct Answer Working capital Your Answer Fixed assets Multiple Choice Multiple Answer Question In the Detailed Project Report, Management aspects includes :Correct Answer Determination , Organisation Building , Person / system oriented Your Answer Organisation Building , Person / system oriented , Promoter's equity / stake True/False Question Financial analysis based on accounting ratios will give mis-leading results if the effects of changes in price level are not taken into account. Correct Answer True Your Answer True Multiple Choice Multiple Answer Question In the Detailed Project Report, Technical aspects includes :Correct Answer Plant capacity , Quality standards , Raw material requirement Your Answer Plant capacity , Quality standards , Raw material requirement Select The Blank

Question Inflow of funds may not necessarily result in ________. Correct Answer Inflow of cash Your Answer Decrease in funds Multiple Choice Multiple Answer Question Building cost consists of :Correct Answer Factory building , Auxiliary buildings , Administrative block Your Answer cost of development , Factory building , Auxiliary buildings Match The Following Question Correct Answer Your Answer Increase in current liabilities Decreases working capital Stability of funds Increase in liabilities Inflow of funds Inflow of funds Decrease in liabilities Outflow of funds Increases working capital Increase in current assets Increases working capital Outflow of funds Select The Blank Question Sometimes the term ________ is interpreted as cash equivalent i.e. cash and marketable securities. Correct Answer Fund Your Answer Fund True/False Question Name of the finance manager comes under the Project organisation category of the Project report. Correct Answer True Your Answer False True/False Question Change in the project concept itself may lead to cost and time overrun. Correct Answer True Your Answer True True/False Question The maximum Seed Capital assistance provided by IDBI under the project will be restricted to 50% of the required promoter's contribution or Rs. 50 lakhs whichever is lower. Correct Answer False Your Answer True

Match The Following Question Correct Answer Your Answer Project organisation Finance manager Completion date of the project General category of Project report Location of factory Reasons for cost escalations Cost aspect of the project report Consultancy fees Finance manager Financing plan Unsecured loans Location of factory True/False Question Trend projection method is the important technique for forecasting demand. Correct Answer True Your Answer True Multiple Choice Multiple Answer Question Production and sales aspect of Visit report consists of :Correct Answer Utilisation of installed capacity , Input availability , Sales trends Your Answer Utilisation of installed capacity , Input availability Multiple Choice Multiple Answer Question The sources of cash are :Correct Answer Cash from operations , Sale of machinery , Issue of new shares Your Answer Purchase of fixed assets , Cash from operations , Sale of machinery Multiple Choice Multiple Answer Question External sources of cash are as follows :Correct Answer Issue of new shares , Long term loans , Short term borrowings Your Answer Issue of new shares , Long term loans , Short term borrowings True/False Question Production line diagrams show the organisation structure of the project along with information on location, personnel required for various departments, and their inter-relationship. Correct Answer False Your Answer True Select The Blank Question ________ is a current asset Correct Answer Book debts

Your Answer Book debts Select The Blank Question The company having ________, is appropriate for the strategic posture of Defensive under the SPACE approach. Correct Answer Lacks both competitive advantage as well as financial strength and belongs to a not so attractive industry, operating in an unstable environment Your Answer High financial strength, high industrial strength, enjoying a competitive advantage and belonging to an attractive industry, operating in a relatively stable environmental conditions Multiple Choice Single Answer Question Management aspect of detailed project report includes Correct Answer Organisation structure Your Answer Demand forecasting Select The Blank Question ________ profitability reduces the strain on working capital. Correct Answer High Your Answer High Multiple Choice Multiple Answer Question The following are the sources of funds :Correct Answer Operating Profit , Non operating Income Your Answer Operating Profit , Operating Loss , Non operating Income Multiple Choice Single Answer Question The cash flow of all the years during the expected life of the project are discounted at a pre-determined cut off rate and :Correct Answer Net Present value is obtained Your Answer Internal rate of return is obtained Multiple Choice Multiple Answer Question The objectives of the funds flow statement is as follows :Correct Answer To find out the uses of loans raised by the business , To indicate the financial strength and weakness of the business , To help to understand the changes in assets as well as asset sources which are not revealed by the income statement Your Answer To find out the uses of loans raised by the business , To indicate the financial strength and weakness of the business , To help to understand the changes in assets as well as asset sources which are not revealed by the income statement Multiple Choice Single Answer Question Cost of materials include :Correct Answer Cost of components and consumable stores

Your Answer Cost of electricity True/False Question The Detailed Project report must indicate the gestation period of the project. Correct Answer True Your Answer True Multiple Choice Single Answer Question Strategic Position and Action Evaluation Model :Correct Answer Is an approach to hammer out an appropriate strategic posture for a firm and its individual business Your Answer Which is highly respected for the sophistication, maturity and quality in its planning systems Select The Blank Question Location of the factory comes under the ________ category of the Project report. Correct Answer General Your Answer General Select The Blank Question Retained earnings is a source of ________ finance. Correct Answer Internal Your Answer Internal Multiple Choice Multiple Answer Question General category of the Project report consists of :Correct Answer Name of the Industrial concern , Proposed product , Location of the factory Your Answer Name of the Industrial concern , Proposed product , Location of the factory Select The Blank Question Short term finance is normally for a period upto ________ year. Correct Answer One Your Answer Two Multiple Choice Single Answer Question Appointments made at senior level during the half-year is categorised under :Correct Answer Organisation and management Your Answer Current assets and liabilities Select The Blank Question Commission outstanding is ________ of funds.

Correct Answer Application Your Answer Application Multiple Choice Single Answer Question The statement which shows the movement of cash into and out of firm's kittie is known as :Correct Answer Cash flow statement Your Answer Profit and Loss statement Multiple Choice Single Answer Question Cost of utilities include :Correct Answer Cost of electricity Your Answer Cost of components and consumable stores Multiple Choice Single Answer Question Marketing aspect of Detailed Project report includes :Correct Answer Demand forecasting Your Answer Detailed Project Engineering True/False Question In both the extreme situations of trade cycles i.e. Inflation and depression, requirement of working capital may be high. Correct Answer True Your Answer False Multiple Choice Multiple Answer Question While choosing the location for a project, the following factors should be considered :Correct Answer Proximity to raw materials and markets , Availability of infrastructure , Government policies and other factors Your Answer Proximity to raw materials and markets , Plant capacity , Availability of infrastructure Project Finance assgn :01: Sushant

True/False Question Trend projection method is the important technique for forecasting demand. Correct Answer True Your Answer True Multiple Choice Single Answer Question The BCG Product Portfolio Matrix :Correct Answer Is a tool for strategic ( product ) planning and resource allocation

Your Answer allocation

Is a tool for strategic ( product ) planning and resource

Select The Blank Question A market survey generally is a ________ survey. Correct Answer Sample Your Answer Primary Select The Blank Question ________ capital represents permanent capital. Correct Answer Equity Your Answer Equity Multiple Choice Single Answer Question The basic characteristic of a project is :Correct Answer That it involves current outlay of funds in expectation of future benefits Your Answer That it involves current outlay of funds in expectation of future benefits True/False Question Nominal maximum capacity is the capacity that is technically attainable and this corresponds to the supplier's guaranteed capacity. Correct Answer True Your Answer True Multiple Choice Single Answer Question Cost of the Project encompasses :Correct Answer The total of all items of outlay associated with a project Your Answer The total of all items of outlay associated with a project True/False Question There is a need for studying Project finance both for the lenders as well as the borrowers as both of them have equal stake in making the Project a success. Correct Answer True Your Answer True Multiple Choice Multiple Answer Question Management category of Visit report consists of :-

Correct Answer Managing Director , Institutional nominees , Committees of the board Your Answer Managing Director , Institutional nominees , Committees of the board Multiple Choice Single Answer Question Every project involves financial outlay which can be referred to as :Correct Answer Project finance Your Answer Financial arrangement True/False Question Debt service coverage ratio indicates whether cash earned is sufficient for debt service. Correct Answer True Your Answer False Multiple Choice Multiple Answer Question The various aspects which need to be considered while assessing Project finance financing are :Correct Answer Environmental factors , Risk involved , Managerial compensation Your Answer Environmental factors , Risk involved , Political issues Multiple Choice Multiple Answer Question The following are the sources of funds :Correct Answer Operating Profit , Non operating Income Your Answer Operating Profit , Non operating Income Select The Blank Question ________ occupies a unique position in the macro economic development which helps in induction of new technology and facilitates, greater efficiency as well as higher productivity. Correct Answer Investment Your Answer Production True/False Question In both the extreme situations of trade cycles i.e. Inflation and depression, requirement of working capital may be high. Correct Answer True Your Answer True Multiple Choice Multiple Answer

Question In the Detailed Project Report, Marketing aspects includes :Correct Answer Demand forecasting , Promotion , Distribution Your Answer Demand forecasting , Promotion , Distribution Multiple Choice Single Answer Question The Projects which are undertaken to manufacture certain products which require the products of existing units as raw material is known as :Correct Answer Forward Integration Projects Your Answer Backward Integration Projects Match The Following Question Correct Answer Your Answer Management problems Lack of exposure Lack of exposure Management Quality Initiative Person oriented Management Perception Aspiration level/ conservative Corporate Organisational Climate Person oriented Aspiration level/ conservative Multiple Choice Multiple Answer Question Demand technique forecasting of Commercial appraisal includes :Correct Answer Future demand of the product , Proper survey of the product , Future availability and supply of the product Your Answer Future demand of the product , Proper survey of the product , Export market , Future availability and supply of the product Select The Blank Question Details regarding Administrative / controlling office comes under the ________ category. Correct Answer General Your Answer Cost aspect Multiple Choice Multiple Answer Question Sources of funds includes :Correct Answer Depreciation , Preliminary expenses written off , Increase in secured borrowing Your Answer Preliminary expenses written off , Increase in secured borrowing Multiple Choice Single Answer Question A project objective which states What "achieving it " would cost is known as :-

Correct Answer Finance cost aspect Your Answer Finance cost aspect Multiple Choice Multiple Answer Question While choosing the location for a project, the following factors should be considered :Correct Answer Proximity to raw materials and markets , Availability of infrastructure , Government policies and other factors Your Answer Proximity to raw materials and markets , Availability of infrastructure , Government policies and other factors Multiple Choice Single Answer Question The profit earned from operations of the project during life of the project is known as :Correct Answer Cash inflow Your Answer Profit after appropriation Multiple Choice Multiple Answer Question Financial and economic aspect of the Visit report consists of :Correct Answer Company's financial year , Impact of Government policies on company operations , Comments on the last published accounts Your Answer Company's financial year , Impact of Government policies on company operations , Sales trends Select The Blank Question A Project has a ________ represented by growth, maturity and decay. Correct Answer Life cycle Your Answer Life cycle True/False Question Current assets includes stock-in-process. Correct Answer True Your Answer True Match The Following Question Correct Answer Your Answer Export market technique of Commercial appraisal Government provides ample encouragement Government provides ample encouragement

Demand Technique forecasting of Commercial appraisal Future demand of the product A method based on the assumption that the behaviour of the variables would continue in similar/same direction and magnitude, as in the past Past trend method of Commercial appraisal Adopted as a guide depending on the consumption pattern of the society as a whole Adopted as a guide depending on the consumption pattern of the society as a whole End use method of Commercial appraisal A list of industries wherein the product is used is made and quantity and volume is arrived at A list of industries wherein the product is used is made and quantity and volume is arrived at Multiple Choice Single Answer Question A project objective which states "What' is to be viewed" is termed as :Correct Answer Strategic perspective Your Answer Strategic perspective True/False Question The emphasis of a finance manager should be on taking a synergistic view of the project rather than looking at it only from the financial aspects. Correct Answer True Your Answer True Multiple Choice Multiple Answer Question Financing plans consists of :Correct Answer Share capital , Term loans , Internal accruals Your Answer Share capital , Term loans , Internal accruals Multiple Choice Single Answer Question Disposition of funds includes :Correct Answer Interest on term loans Your Answer Increase in secured borrowing Multiple Choice Single Answer Question Gross Working Capital means :Correct Answer Current assets Your Answer Current assets less Current liabilities

Select The Blank Question ________ in assets involves outflow of funds. Correct Answer Increase Your Answer Increase Select The Blank Question The Project Cycle should be in the ________ order Correct Answer Identification of Project - Project Appraisal Negotiations for loans Your Answer Identification of Project - Project Appraisal Negotiations for loans True/False Question Debt Equity ratio is a 'Solvency ratio'. Correct Answer True Your Answer True Select The Blank Question Investors who invest in the debentures of the company are the ________ of the company. Correct Answer Creditors Your Answer Creditors Select The Blank Question Longer the duration of production cycle, higher the requirement of ________. Correct Answer Working capital Your Answer Working capital True/False Question Cost and time overrun of the project may lead to loss on account of lost market opportunities. Correct Answer True Your Answer True Multiple Choice Single Answer Question The ratio which indicates the ability of the company to meet current obligations is termed as :Correct Answer Current ratio Your Answer Current ratio Multiple Choice Single Answer Question The third phase of the technical appraisal which focuses upon appraising the likely technical gaps consists of :-

Correct Answer Problems pertaining to the period when the project is in operation Your Answer Problems pertaining to the period when the project is in operation Multiple Choice Multiple Answer Question Technical appraisal is basically concerned with :Correct Answer Technology , Layout of the plant , Design of the plant Your Answer Technology , Layout of the plant , Design of the plant True/False Question Market potential should be determined under the Marketing aspect of the Project report. Correct Answer True Your Answer True Select The Blank Question Having decided on the location and product, the promoter takes into account the ________ that is to be adopted for producing the product. Correct Answer Manufacturing process and technology Your Answer Manufacturing process and technology Multiple Choice Single Answer Question Infrastructural projects include :Correct Answer Power Generation and Distribution Your Answer Power Generation and Distribution Multiple Choice Single Answer Question BCG Product Portfolio Matrix analyses products on the basis of :Correct Answer Relative Market share and Industry Growth rate Your Answer Relative Market share and Industry Growth rate Multiple Choice Single Answer Question Preliminary expenses include :Correct Answer Drafting of Memorandum expenses Your Answer Drafting of Memorandum expenses

LIST OF ATTEMPTED QUESTIONS AND ANSWERS True/False Question Cost under-estimation at the project preparation and evaluation stage leads to cost and time over run. Correct Answer True Your Answer True Multiple Choice Single Answer Question Short supplies of materials may lead to :Correct Answer Cost and time overrun Your Answer Cost and time overrun Match The Following Question Correct Answer Your Answer Project organisation Finance manager Completion date of the project General category of Project report Location of factory Location of factory Cost aspect of the project report Consultancy fees Reasons for cost escalations Financing plan Unsecured loans Finance manager Select The Blank Question ________ is a current asset Correct Answer Book debts Your Answer Furniture Multiple Choice Single Answer Question Disposition of funds includes :Correct Answer Interest on term loans Your Answer Increase in secured borrowing Multiple Choice Multiple Answer Question The permanent requirement of working capital should be financed out of :Correct Answer Cash Profits , Shares , Debentures Your Answer Cash Profits , Commercial Papers True/False Question Cost and time overrun of the project may lead to loss on account of lost market opportunities. Correct Answer True Your Answer True

Select The Blank Question Commission outstanding is ________ of funds. Correct Answer Application Your Answer No flow Multiple Choice Single Answer Question Every project involves financial outlay which can be referred to as :Correct Answer Project finance Your Answer Project finance Multiple Choice Multiple Answer Question The objectives of the funds flow statement is as follows :Correct Answer To find out the uses of loans raised by the business , To indicate the financial strength and weakness of the business , To help to understand the changes in assets as well as asset sources which are not revealed by the income statement Your Answer To find out the uses of loans raised by the business , To help to understand the changes in assets as well as asset sources which are not revealed by the income statement , Helps to prepare financial statements Multiple Choice Single Answer Question The second phase of the technical appraisal which focuses upon appraising the likely technical gaps consists of :Correct Answer Problems faced during the Construction and Project implementation Your Answer Problems faced during the Construction and Project implementation True/False Question The Detailed Project report spells out the modus operandi for the implementation of the Project and the realization of the Project objectives. Correct Answer True Your Answer True Multiple Choice Multiple Answer Question While choosing the location for a project, the following factors should be considered :Correct Answer Proximity to raw materials and markets , Availability of infrastructure , Government policies and other factors Your Answer Proximity to raw materials and markets , Plant capacity , Availability of infrastructure True/False Question Change in the project concept itself may lead to cost and time overrun. Correct Answer True Your Answer True Select The Blank

Question Name and designation of the chief executive comes under the ________ category. Correct Answer General Your Answer Project organisation Select The Blank Question ________ occupies a unique position in the macro economic development which helps in induction of new technology and facilitates, greater efficiency as well as higher productivity. Correct Answer Investment Your Answer Production Multiple Choice Multiple Answer Question Internal sources of funds are :Correct Answer Funds from operation , Loss on sale of fixed assets , Goodwill written off Your Answer Funds from operation , Funds from long term loans Multiple Choice Multiple Answer Question Financing plans consists of :Correct Answer Share capital , Term loans , Internal accruals Your Answer Share capital , Term loans , Internal accruals Multiple Choice Single Answer Question Financial aspect of Detailed Project report includes :Correct Answer Fixation of means of financial structure Your Answer Fixation of means of financial structure Select The Blank Question ________ is that scarce input which financial resources alone cannot mobilise. Correct Answer Management Your Answer Management Multiple Choice Single Answer Question A project can be regarded as the sum of the activities directed towards a :Correct Answer Specific result Your Answer Specific result Multiple Choice Single Answer Question A project objective which states "What' is to be viewed" is termed as :Correct Answer Strategic perspective Your Answer Strategic perspective Select The Blank Question Short term finance is normally for a period upto ________ year.

Correct Answer One Your Answer One Select The Blank Question A Project has a ________ represented by growth, maturity and decay. Correct Answer Life cycle Your Answer Life cycle Multiple Choice Multiple Answer Question The various aspects which need to be considered while assessing Project finance financing are :Correct Answer Environmental factors , Risk involved , Managerial compensation Your Answer Environmental factors , Risk involved , Managerial compensation Multiple Choice Multiple Answer Question As per the GE's Stop Light Matrix, Products may justify substantial commitment of funds where there is :Correct Answer Strong Business Strength and high Industry attractiveness , Average Business strength and high Industry attractiveness Your Answer Strong Business Strength and high Industry attractiveness , Average Business Strength and Medium Industry Attractiveness , Average Business strength and high Industry attractiveness Select The Blank Question Longer the duration of production cycle, higher the requirement of ________. Correct Answer Working capital Your Answer Working capital Select The Blank Question ________ in assets involves outflow of funds. Correct Answer Increase Your Answer Increase True/False Question For computing Interest coverage ratio, Profit after Interest and taxes are taken into account. Correct Answer False Your Answer True Multiple Choice Single Answer Question The cash flow of all the years during the expected life of the project are discounted at a pre-determined cut off rate and :Correct Answer Net Present value is obtained Your Answer Average rate of return is obtained

Multiple Choice Single Answer Question The ratio which indicates the ability of the company to meet current obligations is termed as :Correct Answer Current ratio Your Answer Current ratio True/False Question Sensitivity analysis consists of assessing the degree of risk. Correct Answer True Your Answer True True/False Question In small scale organisation, requirement of working capital is quite high due to high amount of overheads, high buying costs and high selling cost. Correct Answer True Your Answer True Multiple Choice Single Answer Question Marketing aspect of Detailed Project report includes :Correct Answer Demand forecasting Your Answer Demand forecasting True/False Question The secondary data is collected through market survey, specific for the project being appraised. Correct Answer False Your Answer True True/False Question Debt service coverage ratio indicates whether cash earned is sufficient for debt service. Correct Answer True Your Answer True Select The Blank Question Position regarding requirement and training of operational staff comes under the ________ category of Project report. Correct Answer Project organisation Your Answer Project organisation Match The Following Question Correct Answer Your Answer Moving into new areas/product lines Diversification Projects Rehabilitation Projects Suppliers' credit Short term finance Short term finance

Deferred credit Long term finance Long term finance Setting up new units New Projects Diversification Projects Select The Blank Question Retained earnings indicates that whatever profits are earned by the company are not distributed by it by way of ________ but are kept aside for use in future for expansion or other purpose. Correct Answer Dividend Your Answer Dividend Multiple Choice Single Answer Question The basic document for facilitating Project financing is the :Correct Answer Detailed Project report Your Answer Articles of Association Multiple Choice Multiple Answer Question In the Detailed Project Report, Technical aspects includes :Correct Answer Plant capacity , Quality standards , Raw material requirement Your Answer Plant capacity , Quality standards , Power / telecom facilities Multiple Choice Single Answer Question The ratio that roughly measures the company's potential reserve of cash is termed as :Correct Answer Net Working capital to total assets Your Answer Net Working capital to total assets Multiple Choice Single Answer Question General Electric Stop Light Matrix :Correct Answer Which is highly respected for the sophistication, maturity and quality in its planning systems Your Answer Which is highly respected for the sophistication, maturity and quality in its planning systems Multiple Choice Single Answer Question Geographic market appraisal answers to :Correct Answer Where do the customers live? Your Answer Where do the customers live? Select The Blank Question Sometimes the term ________ is interpreted as cash equivalent i.e. cash and marketable securities. Correct Answer Fund Your Answer Fund

Multiple Choice Multiple Answer Question The temporary requirement of working capital can be financed out of :Correct Answer Inter-corporate Deposits , Commercial Papers Your Answer Inter-corporate Deposits , Commercial Papers True/False Question Current assets includes stock-in-process. Correct Answer True Your Answer True

LIST OF ATTEMPTED QUESTIONS AND ANSWERS Match The Following Question Correct Answer Your Answer Project Financing Help improving Corporate Return on Equity Industrial Finance Corporation of India Finance in international financial markets Issue of Euro bonds Issue of Euro bonds International financial institutions World Bank Increasing emphasis on the Private initiative Policy of Liberalisation, Privatisation and Globalisation Increasing emphasis on the Private initiative Help improving Corporate Return on Equity Multiple Choice Multiple Answer Question The data for ratio analysis is obtained from :Correct Answer Profit and Loss Account , Balance Sheet Your Answer Profit and Loss Account , Auditors report , Balance Sheet Multiple Choice Single Answer Question Delays in infrastructure Development by State Agencies may lead to :Correct Answer Cost and time overrun Your Answer Management problems Select The Blank Question The Project Cycle should be in the ________ order Correct Answer Identification of Project - Project Appraisal - Negotiations for loans Your Answer Identification of Project - Project Appraisal - Negotiations for loans True/False Question Change in the project concept itself may lead to cost and time overrun. Correct Answer True Your Answer True Multiple Choice Single Answer Question The industrial concern earned profits by increasing the sales volume under the :Correct Answer Sales concept Your Answer Marketing concept True/False Question Cost and time overrun of the project may lead to loss on account of lost market opportunities.

Correct Answer True Your Answer True Multiple Choice Multiple Answer Question Management qualities includes :Correct Answer Honesty , Financial resources , Initiative Your Answer Honesty , Initiative , Too ambitious promoters Multiple Choice Multiple Answer Question Trend Projection method of demand forecasting consists of :Correct Answer Linear Relationship , Exponential Relationship , Polynomial Relationship Your Answer Linear Relationship , Chain ratio Relationship , Exponential Relationship True/False Question Financial analysis based on accounting ratios will give mis-leading results if the effects of changes in price level are not taken into account. Correct Answer True Your Answer True Multiple Choice Multiple Answer Question The objectives of the funds flow statement is as follows :Correct Answer To find out the uses of loans raised by the business , To indicate the financial strength and weakness of the business , To help to understand the changes in assets as well as asset sources which are not revealed by the income statement Your Answer To indicate the financial strength and weakness of the business , To help to understand the changes in assets as well as asset sources which are not revealed by the income statement , Helps to prepare financial statements True/False Question The maximum Seed Capital assistance provided by IDBI under the project will be restricted to 50% of the required promoter's contribution or Rs. 50 lakhs whichever is lower. Correct Answer False Your Answer True Multiple Choice Single Answer Question Every project involves financial outlay which can be referred to as :Correct Answer Project finance Your Answer Project finance Multiple Choice Multiple Answer Question A project objective can be said to have the following dimensions viz.: Correct Answer Strategic perspective , Time span , Finance cost aspect Your Answer Strategic perspective , Time span , Finance cost aspect , Social aspect

Multiple Choice Single Answer Question Strategic Position and Action Evaluation Model :Correct Answer Is an approach to hammer out an appropriate strategic posture for a firm and its individual business Your Answer Which is highly respected for the sophistication, maturity and quality in its planning systems Multiple Choice Single Answer Question The Projects which are undertaken to manufacture certain products which are being used as raw material by the existing units is known as :Correct Answer Backward Integration Projects Your Answer Backward Integration Projects Multiple Choice Multiple Answer Question Technical appraisal is basically concerned with :Correct Answer Technology , Layout of the plant , Design of the plant Your Answer Technology , Layout of the plant , Design of the plant True/False Question It is mandatory for each unit to obtain necessary clearance from Pollution Control Authorities before setting up any project. Correct Answer True Your Answer True Multiple Choice Multiple Answer Question While choosing the location for a project, the following factors should be considered :Correct Answer Proximity to raw materials and markets , Availability of infrastructure , Government policies and other factors Your Answer Proximity to raw materials and markets , Availability of infrastructure , Government policies and other factors Multiple Choice Single Answer Question The basic characteristic of a project is :Correct Answer That it involves current outlay of funds in expectation of future benefits Your Answer That it involves current outlay of funds in expectation of future benefits Select The Blank Question Longer the duration of production cycle, higher the requirement of ________. Correct Answer Working capital Your Answer Working capital Select The Blank Question Inflow of funds may not necessarily result in ________.

Correct Answer Inflow of cash Your Answer Inflow of cash Multiple Choice Single Answer Question Infrastructural projects include :Correct Answer Power Generation and Distribution Your Answer Power Generation and Distribution Select The Blank Question Details regarding Administrative / controlling office comes under the ________ category. Correct Answer General Your Answer Project organisation Multiple Choice Multiple Answer Question Ratios relating to working capital are :Correct Answer Current ratio , Internal measure , Quick ratio Your Answer Current ratio , Debt Equity ratio , Quick ratio Select The Blank Question Depreciation is sometimes treated as ________ funds. Correct Answer Source Your Answer Source Multiple Choice Single Answer Question Miscellaneous fixed assets includes :Correct Answer Cables Your Answer Cables Multiple Choice Single Answer Question In BCG Matrix "STARS" indicate :Correct Answer Products which enjoy a high market share as well as a high growth rate Your Answer Products which enjoy a high market share as well as a high growth rate Select The Blank Question ________ is a current liability. Correct Answer Trade credit Your Answer Unsecured loans Match The Following Question Correct Answer Your Answer Econometric method Mathematical representation of economic relationship Suitable for forecasting the demand for intermediate products

Primary source of data Market survey Market survey Secondary source of data Collected in some other context Collected in some other context Leading indicators Variables that change faster than others Mathematical representation of economic relationship Multiple Choice Multiple Answer Question Sources of funds includes :Correct Answer Depreciation , Preliminary expenses written off , Increase in secured borrowing Your Answer Depreciation , Increase in secured borrowing True/False Question The construction of National Golden Quadrilateral can be recognised as Project. Correct Answer True Your Answer True True/False Question The cost factors of the product mixed is also taken into account to arrive at cost at various levels of production and its cost impact of the manufacturing. Correct Answer True Your Answer True Multiple Choice Single Answer Question Capital Issue expenses include :Correct Answer Brokerage fees to registrars Your Answer Market research expenses Select The Blank Question Having decided on the location and product, the promoter takes into account the ________ that is to be adopted for producing the product. Correct Answer Manufacturing process and technology Your Answer Manufacturing process and technology Multiple Choice Single Answer Question Past trend method of Commercial appraisal technique is :Correct Answer Adopted as a guide depending on the consumption pattern of the society as a whole Your Answer A list of industries wherein the product is used is made and quantity and volume is arrived at Multiple Choice Multiple Answer

Question Management category of Visit report consists of :Correct Answer Managing Director , Institutional nominees , Committees of the board Your Answer Managing Director , Electrical engineers , Committees of the board Multiple Choice Single Answer Question Sanctioned bank limits is categorised under :Correct Answer Working capital Your Answer Production, Sales and Profitability Multiple Choice Single Answer Question General Electric Stop Light Matrix analyses products in terms of :Correct Answer Business strength and Industrial Attractiveness Your Answer Business strength and Industrial Attractiveness Multiple Choice Multiple Answer Question Production and sales aspect of Visit report consists of :Correct Answer Utilisation of installed capacity , Input availability , Sales trends Your Answer Utilisation of installed capacity , Input availability , Sales trends Multiple Choice Single Answer Question Cost of overheads include :Correct Answer Cost of repairs and maintenance Your Answer Cost of repairs and maintenance Multiple Choice Multiple Answer Question External sources of cash are as follows :Correct Answer Issue of new shares , Long term loans , Short term borrowings Your Answer Issue of new shares , Long term loans , Short term borrowings Select The Blank Question The company having ________, is appropriate for the strategic posture of Conservative under the SPACE approach. Correct Answer Limited competitive advantage, belonging to a not so attractive industry but enjoying financial strength and operating in a relatively stable environment Your Answer High financial strength, high industrial strength, enjoying a competitive advantage and belonging to an attractive industry, operating in a relatively stable environmental conditions True/False Question Sensitivity analysis consists of assessing the degree of risk. Correct Answer True Your Answer True True/False Question A high debt equity ratio may indicate that the financial stake of the creditors is more than that of the owners.

Correct Answer True Your Answer True Multiple Choice Single Answer Question The cost of Plant and Machinery includes :Correct Answer Cost of stores and spares Your Answer Building and civil construction Select The Blank Question The basic difference between the feasibility study report and ________ is the level of accuracy and degree of detail. Correct Answer Detailed Project report Your Answer Audit report

True/False Question Correct Answer

The Detailed Project report spells out the modus operandi for the implementation of the Project and the realization of the Project objectives. True

Your Answer

True

True/False Question Correct Answer

Production line diagrams show the organisation structure of the project along with information on location, personnel required for various departments, and their inter-relationship. False

Your Answer

False

Multiple Choice Single Answer Question The second phase of the technical appraisal which focuses upon appraising the likely technical gaps consists of :Correct Answer Problems faced during the Construction and Project implementation Your Answer

Problems faced during the Construction and Project implementation

Multiple Choice Single Answer Question In BCG Matrix "STARS" indicate :Correct Answer

Products which enjoy a high market share as well as a high growth rate

Your Answer

Products which enjoy a high market share as well as a high growth rate

Multiple Choice Multiple Answer Question Management category of Visit report consists of :Correct Answer

Managing Director , Institutional nominees , Committees of the board

Your Answer

Managing Director , Institutional nominees , Committees of the board

Select The Blank Question

A Project has a ________ represented by growth, maturity and decay.

Correct Answer

Life cycle

Your Answer

Set of objectives

Multiple Choice Multiple Answer Question Casual methods of Demand forecasting consists of :Correct Answer

Consumption-level method , Econometric method

Your Answer

Consumption-level method

Select The Blank

1

Question

Excessive expenditures on foreign technicians leads to ________.

Correct Answer

Cost and time overrun

Your Answer

Cost and time overrun

Multiple Choice Single Answer Question A project objective which states What "achieving it " would cost is known as :Correct Answer

Finance cost aspect

Your Answer

Time span

Multiple Choice Single Answer Question Marketing aspect of Detailed Project report includes :Correct Answer

Demand forecasting

Your Answer

Demand forecasting

Multiple Choice Multiple Answer Question The sources of cash are :Correct Answer

Sale of machinery , Cash from operations , Issue of new shares

Your Answer

Cash from operations , Sale of machinery , Issue of new shares

Multiple Choice Single Answer Question Infrastructural projects include :Correct Answer

Power Generation and Distribution

Your Answer

Industrial machinery

Select The Blank Question

________ is the summary of cash book or Receipts and Payments statement.

Correct Answer

Cash flow statement

Your Answer

Trial balance

Multiple Choice Single Answer Question Receivables is categorised under :Correct Answer

Current assets and liabilities

Your Answer

Current assets and liabilities

True/False Question

A project is unique and no two projects are similar.

Correct Answer

True

2

Your Answer

True

Match The Following Question

Correct Answer

Your Answer

End use method of Commercial appraisal

A list of industries wherein the product A list of industries wherein the product is is used is made and quantity and used is made and quantity and volume volume is arrived at is arrived at

Export market technique of Commercial appraisal

Government provides ample encouragement

Government provides ample encouragement

Demand Technique forecasting of Commercial appraisal

Future demand of the product

Future demand of the product

Past trend method of Commercial appraisal

Adopted as a guide depending on the Adopted as a guide depending on the consumption pattern of the society as consumption pattern of the society as a a whole whole

Multiple Choice Single Answer Question A Project is a temporary endeavor to achieve some specific objectives within a :Correct Answer

Predefined time

Your Answer

Predefined time

Select The Blank Question

________ in liabilities involves inflow of funds.

Correct Answer

Increase

Your Answer

Increase

True/False Question Correct Answer

The emphasis of a finance manager should be on taking a synergistic view of the project rather than looking at it only from the financial aspects. True

Your Answer

True

Multiple Choice Single Answer Question Cost of utilities include :Correct Answer

Cost of electricity

Your Answer

Cost of electricity

Multiple Choice Multiple Answer Question Marketing category of the Project report consists of :Correct Answer

Target market , Market potential , Pricing policy

Your Answer

Target market , Market potential , Pricing policy

Multiple Choice Single Answer

3

Question

In BCG Matrix "QUESTION MARKS" indicate :-

Correct Answer

Products which have high growth potential but low market share

Your Answer

Products which have high growth potential but low market share

Select The Blank Question

Location of the factory comes under the ________ category of the Project report.

Correct Answer

General

Your Answer

General

True/False Question Correct Answer

It is mandatory for each unit to obtain necessary clearance from Pollution Control Authorities before setting up any project. True

Your Answer

False

Multiple Choice Single Answer Question Disposition of funds includes :Correct Answer

Interest on term loans

Your Answer

Interest on term loans

Multiple Choice Multiple Answer Question Internal sources of funds are :Correct Answer

Funds from operation , Loss on sale of fixed assets , Goodwill written off

Your Answer

Funds from operation

Select The Blank Question

Depreciation is sometimes treated as ________ funds.

Correct Answer

Source

Your Answer

Application

Multiple Choice Multiple Answer Question As per the GE's Stop Light Matrix, Products may justify substantial commitment of funds where there is :Correct Answer Strong Business Strength and high Industry attractiveness , Average Business strength and high Industry attractiveness Your Answer Strong Business Strength and high Industry attractiveness , Average Business strength and high Industry attractiveness , Average Business Strength and Low Industry attractiveness Multiple Choice Multiple Answer Question The sources of long term and medium term finance are :Correct Answer

Equity shares , Public deposit

4

Your Answer True/False Question

Equity shares , Bridge loan , Working capital loan

Correct Answer

The cost factors of the product mixed is also taken into account to arrive at cost at various levels of production and its cost impact of the manufacturing. True

Your Answer

True

Multiple Choice Multiple Answer Question The various aspects which need to be considered while assessing Project finance financing are :Correct Answer

Environmental factors , Risk involved , Managerial compensation

Your Answer

Environmental factors , Risk involved , Managerial compensation

Multiple Choice Single Answer Question Technical aspect of detailed project report includes :Correct Answer

Detailed Project Engineering

Your Answer

Detailed Project Engineering

Match The Following Question

Correct Answer

Your Answer

Technical aspect of detailed project report

Detailed Project Engineering

Detailed Project Engineering

Financial aspect of Detailed Project report

Profitability

Profitability

Marketing aspect of Detailed Project report

Distribution

Distribution

Management aspect of detailed project Conservativeness report

Conservativeness

Multiple Choice Multiple Answer Question Advantages of fund flow statement are :Correct Answer Your Answer

It determines financial consequences of the business operations , It enables the firm to plan its financial resources properly , It helps as a reliable guide for the future requirement of funds It determines financial consequences of the business operations , It enables the firm to plan its financial resources properly , It helps as a reliable guide for the future requirement of funds

Multiple Choice Multiple Answer Question After the SPACE chart is constructed, we would normally get any one of the following basic strategic postures :Correct Answer Aggressive Posture , Competitive Posture , Defensive Posture Your Answer

Aggressive Posture , Competitive Posture , Defensive Posture

Select The Blank

5

Question

Details regarding Internal accruals comes under the ________ category of Project report.

Correct Answer

Financing plan

Your Answer

General category

True/False Question Correct Answer

The 'BCG Matrix 'analysis various products of the organisation in the terms of Business strength and Industry Attractiveness. False

Your Answer

False

Multiple Choice Multiple Answer Question The applications of cash are :Correct Answer

Purchase of fixed assets , Payment of long term loans

Your Answer

Purchase of fixed assets , Payment of long term loans , Issue of new machinery

Select The Blank Question

The Project Cycle should be in the ________ order

Correct Answer

Identification of Project - Project Appraisal - Negotiations for loans

Your Answer

Identification of Project - Project Appraisal - Negotiations for loans

True/False Question Correct Answer

Financial analysis based on accounting ratios will give mis-leading results if the effects of changes in price level are not taken into account. True

Your Answer

True

True/False Question Correct Answer

There is a need for studying Project finance both for the lenders as well as the borrowers as both of them have equal stake in making the Project a success. True

Your Answer

True

Multiple Choice Single Answer Question A project objective which states "What' is to be viewed" is termed as :Correct Answer

Strategic perspective

Your Answer

Strategic perspective

True/False Question

Current assets includes stock-in-process.

Correct Answer

True

6

Your Answer

False

Multiple Choice Multiple Answer Question External sources of cash are as follows :Correct Answer

Issue of new shares , Long term loans , Short term borrowings

Your Answer

Issue of new shares , Depreciation

Multiple Choice Single Answer Question End use method of Commercial appraisal technique is :Correct Answer

A list of industries wherein the product is used is made and quantity and volume is arrived at

Your Answer

A list of industries wherein the product is used is made and quantity and volume is arrived at

Multiple Choice Single Answer Question The Projects which are undertaken for further enhancing/augmenting the existing capacity is known as :Correct Answer Expansion Projects Your Answer Select The Blank Question

Expansion Projects

Correct Answer

Sometimes the term ________ is interpreted as cash equivalent i.e. cash and marketable securities. Fund

Your Answer

Investment

7

True/False Question 1 The advantage of secondary sources of data is that it is readily and economically available. Correct Answer True Your Answer True True/False Question2 In small scale organisation, requirement of working capita l is quite high due to high amount of overheads, high buying costs and high selling cost. Correct Answer True Your Answer True True/False Question3 Banks and Financial Institutions, world-wide, are now financing projects with strategies and terms that would have been hard to believe/imagine just a few years back. Correct Answer True Your Answer True Select The Blank Question 4 ________ is a current asset Correct Answer Book debts Your Answer Furniture Multiple Choice Multiple Answer Question 5 Trend Projection method of demand forecasting consists of :Correct Answer Linear Relationship , Exponential Relationship , Polynomial Relationship Your Answer Linear Relationship , Exponential Relationship , Polynomial Relationship Multiple Choice Single Answer Question 6 Delays in infrastructure Development by State Agencies may lead to :Correct Answer Cost and time overrun Your Answer Management problems Multiple Choice Single Answer Question 7 Technical aspect of detailed project report includes :Correct Answer Detailed Project Engineering Your Answer Detailed Project Engineering Multiple Choice Multiple Answer Question 8 Sources of funds includes :Correct Answer Depreciation , Preliminary expenses written off , Increase in secured borrowing Your Answer Preliminary expenses written off , Increase in secured borrowing Multiple Choice Single Answer Question 9 Delay in arrival of domestic/foreign machinery and technicians may lead to :Correct Answer Cost and time overrun Your Answer Cost and time overrun Select The Blank Question 10 A smaller unit into which the overall requirement of capital of a company is sub-divided is termed as ________. Correct Answer Share Your Answer Share Multiple Choice Single Answer Question11 A project objective which states "What' is to be viewed" is termed as :Correct Answer Strategic perspective Your Answer Strategic perspective Multiple Choice Single Answer

1

Question 12 Sewerage and drainage cost of the project is categorised under :Correct Answer Building cost Your Answer Building cost Multiple Choice Multiple Answer Question13 Internal sources of funds are :Correct Answer Funds from operation , Loss on sale of fixed assets , Goodwill written off Your Answer Funds from operation , Goodwill written off Multiple Choice Multiple Answer Question14 In the Detailed Project Report, Management aspects includes :Correct Answer Determination , Organisation Building , Person / system oriented Your Answer Determination , Organisation Building , Person / system oriented Select The Blank Question15 Short term finance is normally for a period upto ________ year. Correct Answer One Your Answer One True/False Question16 Current assets includes stock-in-process. Correct Answer True Your Answer True Multiple Choice Single Answer Question17 The basic characteristic of a project is :Correct Answer That it involves current outlay of funds in expectation of future benefits Your Answer That it involves current outlay of funds in expectation of future benefits Multiple Choice Multiple Answer Question18 Time Series Projection Methods of Demand forecasting consists of :Correct Answer Trend Projection method , Moving Averages method Your Answer Trend Projection method , Moving Averages method Select The Blank Question 19 ________ is a current liability. Correct Answer Trade credit Your Answer Trade credit True/False Question20 Managerial problems in a project are the most pervasive. Correct Answer True Your Answer True Select The Blank Question21 Longer the duration of production cycle, higher the requirement of ________. Correct Answer Working capital Your Answer Working capital Select The Blank Question22 Retained earnings is a source of ________ finance. Correct Answer Internal Your Answer Short term Select The Blank Question23 ________ is the summary of cash book or Receipts and Payments statement. Correct Answer Cash flow statement Your Answer Trial balance

2

True/False Question24 In the BCG Matrix, the key term of Cash Cows require further commitment of funds. Correct Answer False Your Answer True True/False Question25 Cost and time overrun of the project may lead to loss on account of lost market opportunities. Correct Answer True Your Answer True Multiple Choice Single Answer Question26 A project objective which states What "achieving it " would cost is known as :Correct Answer Finance cost aspect Your Answer Finance cost aspect Multiple Choice Multiple Answer Question27 Casual methods of Demand forecasting consists of : Correct Answer Consumption-level method , Econometric method Your Answer Consumption-level method , Econometric method Multiple Choice Single Answer Question 28 In BCG Matrix "STARS" indicate :Correct Answer Products which enjoy a high market share as well as a high growth rate Your Answer Products which enjoy a high market share as well as a high growth rate Multiple Choice Single Answer Question 29 Psychographic market appraisal answers to :Correct Answer Why they buy? Your Answer Why they buy? True/False Question30 Production line diagrams show the organisation structure of the project along with information on location, personnel required for various departments, and their inter-relationship. Correct Answer False Your Answer False Multiple Choice Multiple Answer Question31 While choosing the location for a project, the following factors should be considered :Correct Answer Proximity to raw materials and markets , Availability of infrastructure , Government policies and other factors Your Answer Proximity to raw materials and markets , Availability of infrastructure , Government policies and other factors Multiple Choice Single Answer Question32 The cost which change in the same proportion in which the level of production changes is known as :Correct Answer Variable cost Your Answer Variable cost Select The Blank Question33 Goods purchased on credit ________ in flow of funds. Correct Answer Does not result Your Answer Decreases Multiple Choice Multiple Answer Question34 Ratios relating to working capital are :Correct Answer Current ratio , Internal measure , Quick ratio Your Answer Current ratio , Debt Equity ratio , Quick ratio

3

Multiple Choice Single Answer Question35 Appointments made at senior level during the half-year is categorised under :Correct Answer Organisation and management Your Answer Organisation and management Multiple Choice Single Answer Question36 Cost of the Project encompasses :Correct Answer The total of all items of outlay associated with a project Your Answer The total of all items of outlay associated with a project Multiple Choice Multiple Answer Question37 Production and sales aspect of Visit report consists of :Correct Answer Utilisation of installed capacity , Input availability , Sales trends Your Answer Utilisation of installed capacity , Input availability , Sales trends Match The Following Question38 Correct Answer Your Answer Source of funds Depreciation Equity capital Fixed assets Building Building Current assets Debtors Debtors Current liability Trade credit Trade credit Multiple Choice Single Answer Question39 Every project involves financial outlay which can be referred to as :Correct Answer Project finance Your Answer Project finance Multiple Choice Multiple Answer Question 40 General category of the Project report consists of : Correct Answer Name of the Industrial concern , Proposed product , Location of the factory Your Answer Name of the Industrial concern , Proposed product , Location of the factory Multiple Choice Multiple Answer Question 41 The data for ratio analysis is obtained from :Correct Answer Profit and Loss Account , Balance Sheet Your Answer Profit and Loss Account , Balance Sheet Multiple Choice Single Answer Question42 Short supplies of materials may lead to :Correct Answer Cost and time overrun Your Answer Cost and time overrun Multiple Choice Multiple Answer Question43 After the SPACE chart is constructed, we would normally get any one of the following basic strategic postures :Correct Answer Aggressive Posture , Competitive Posture , Defensive Posture Your Answer Aggressive Posture , Competitive Posture , Defensive Posture Select The Blank Question 44 ________ occupies a unique position in the macro economic development which helps in induction of new technology and facilitates, greater efficiency as well as higher productivity. Correct Answer Investment Your Answer Marketing

4

Multiple Choice Single Answer Question45 Infrastructural projects include : Correct Answer Power Generation and Distribution Your Answer Power Generation and Distribution Select The Blank Question46 Name and designation of the chief executive comes under the ________ category. Correct Answer General Your Answer General Match The Following Question47 Correct Answer Your Answer Private investment Power generation Machine tools Project Time -bound Time -bound Programme Not necessarily time bound Not necessarily time bound Foreign direct investment Machine tools Power generation

LIST OF ATTEMPTED QUESTIONS AND ANSWERS Match The Following Question

Correct Answer

Your Answer

Econometric method

Mathematical representation of economic relationship

Mathematical representation of economic relationship

Primary source of data

Market survey

Market survey

Secondary source of data

Collected in some other context

Collected in some other context

Leading indicators

Variables that change faster than others

Variables that change faster than others

Select The Blank Question Details regarding Internal accruals comes under the ________ category of Project report. Correct Answer Financing plan Your Answer

Financing plan

Multiple Choice Multiple Answer Question In the Detailed Project Report, Technical aspects includes :Correct Answer

Plant capacity , Quality standards , Raw material requirement

Your Answer

Plant capacity , Quality standards , Raw material requirement

Select The Blank Question A smaller unit into which the overall requirement of capital of a company is subdivided is termed as ________. Correct Answer Share

5

Your Answer

Share

Select The Blank Question In order to meet the cost of large project, the technique of ________ has been developed so that the financial commitment and risks associated with a project are shared between the project sponsor and the lending institutions. Correct Answer Limited recourse financing Your Answer

Limited recourse financing

Select The Blank Question ________ is a current liability. Correct Answer

Trade credit

Your Answer

Trade credit

Select The Blank Question ________ is a current asset Correct Answer

Book debts

Your Answer

Book debts

Multiple Choice Multiple Answer Question Debt Service coverage ratio may be considered to be one of the most important ratios calculated by the :Correct Answer Bankers , Financial Institutions Your Answer

Bankers , Creditors , Financial Institutions

Multiple Choice Multiple Answer Question Ratios relating to working capital are :Correct Answer

Current ratio , Internal measure , Quick ratio

Your Answer

Current ratio , Internal measure , Quick ratio

Multiple Choice Single Answer Question Cost of laying roads comes under :Correct Answer

Land and site cost

Your Answer

Preoperative cost

Multiple Choice Single Answer Question Pre-operative expenses include :Correct Answer

Interest on deferred payments

Your Answer

Market research expenses

6

True/False Question Correct Answer

The cost factors of the product mixed is also taken into account to arrive at cost at various levels of production and its cost impact of the manufacturing. True

Your Answer

True

Select The Blank Question Retained earnings indicates that whatever profits are earned by the company are not distributed by it by way of ________ but are kept aside for use in future for expansion or other purpose. Correct Answer Dividend Your Answer

Dividend

Multiple Choice Multiple Answer Question In the Detailed Project Report, Management aspects includes :Correct Answer

Determination , Organisation Building , Person / system oriented

Your Answer

Organisation Building , Person / system oriented , Promoter's equity / stake

True/False Question Correct Answer

The Detailed Project report spells out the modus operandi for the implementation of the Project and the realization of the Project objectives. True

Your Answer

True

Multiple Choice Single Answer Question General Electric Stop Light Matrix analyses products in terms of :Correct Answer

Business strength and Industrial Attractiveness

Your Answer

Company's competitive advantage and Company's financial strength

True/False Question Correct Answer

The emphasis of a finance manager should be on taking a synergistic view of the project rather than looking at it only from the financial aspects. True

Your Answer

True

Multiple Choice Multiple Answer Question After the SPACE chart is constructed, we would normally get any one of the following basic strategic postures :Correct Answer Aggressive Posture , Competitive Posture , Defensive Posture Your Answer

Aggressive Posture , Competitive Posture , Defensive Posture

True/False

7

Question Correct Answer

The ratios of one organisation compared with the ratios of the same organisation is termed as inter-firm comparison. False

Your Answer

False

Select The Blank Question Detailed Project Report is generally prepared from a ________ report with additional information. Correct Answer Feasibility Your Answer

Feasibility

Select The Blank Question Under ________ method, the forecasts are modified in the light of observed errors. Correct Answer

Exponential smoothing

Your Answer

Cobb Douglas Relationship

Match The Following Question

Correct Answer

Your Answer

Source of funds

Depreciation

Investment

Fixed assets

Building

Building

Current assets

Debtors

Debtors

Current liability

Trade credit

Trade credit

True/False Question

The Detailed Project report must indicate the gestation period of the project.

Correct Answer

True

Your Answer

True

True/False Question

Delay in recruitment of staff may lead to cost and time overrun

Correct Answer

True

Your Answer

True

Multiple Choice Single Answer Question Delays in infrastructure Development by State Agencies may lead to :Correct Answer

Cost and time overrun

Your Answer

Cost and time overrun

8

Multiple Choice Single Answer Question Infrastructural projects include :Correct Answer

Power Generation and Distribution

Your Answer

Power Generation and Distribution

Multiple Choice Single Answer Question The method for evaluating the profitability of industrial projects whose object is to ascertain the period required for recovering the entire investment made in a project is known as :Correct Answer Pay back method Your Answer

Pay back method

Select The Blank Question ________ in assets involves outflow of funds. Correct Answer

Increase

Your Answer

Increase

Multiple Choice Single Answer Question The rate of discount which would equate the present value of investments to the present value of benefits over the life of the project is known as :Correct Answer Internal rate of return Your Answer

Internal rate of return

Select The Blank Question Cost of fencing comes under the ________ category of the Project report. Correct Answer

Land and site development

Your Answer

Land and site development

Multiple Choice Single Answer Question The ratio that roughly measures the company's potential reserve of cash is termed as :Correct Answer Net Working capital to total assets Your Answer

Quick ratio

Multiple Choice Single Answer Question The sources of funding have expanded from banks, insurance companies and multilateral agencies to include the :Correct Answer Capital market Your Answer

Capital market

True/False

9

Question

Sensitivity analysis consists of assessing the degree of risk.

Correct Answer

True

Your Answer

True

Multiple Choice Multiple Answer Question The permanent requirement of working capital should be financed out of :Correct Answer

Cash Profits , Shares , Debentures

Your Answer

Cash Profits , Shares

Multiple Choice Single Answer Question Sources of funds include :Correct Answer

Increase in secured borrowing

Your Answer

Increase in secured borrowing

True/False Question Correct Answer

Nominal maximum capacity is the capacity that is technically attainable and this corresponds to the supplier's guaranteed capacity. True

Your Answer

True

Multiple Choice Multiple Answer Question While choosing the location for a project, the following factors should be considered :Correct Answer Your Answer

Proximity to raw materials and markets , Availability of infrastructure , Government policies and other factors Proximity to raw materials and markets , Availability of infrastructure , Government policies and other factors

Multiple Choice Multiple Answer Question Financing plans consists of :Correct Answer

Share capital , Term loans , Internal accruals

Your Answer

Share capital , Term loans , Internal accruals

True/False Question Correct Answer

Ratio should be computed on the basis of inter-related figures which have a cause and effect relationship. True

Your Answer

True

True/False Question Correct Answer

In the BCG Matrix "DOGS" indicate products which are generally during the stage of Decline of a Product Life Cycle. True

10

Your Answer

True

Multiple Choice Multiple Answer Question Trend Projection method of demand forecasting consists of :Correct Answer

Linear Relationship , Exponential Relationship , Polynomial Relationship

Your Answer

Linear Relationship , Chain ratio Relationship , Exponential Relationship

Multiple Choice Multiple Answer Question Technical appraisal is basically concerned with :Correct Answer

Technology , Layout of the plant , Design of the plant

Your Answer

Technology , Layout of the plant , Design of the plant

Multiple Choice Single Answer Question Demographic market appraisal answers to Correct Answer

Who they are?

Your Answer

Where do the customers live?

Select The Blank Question A Project has a ________ represented by growth, maturity and decay. Correct Answer

Life cycle

Your Answer

Life cycle

Multiple Choice Multiple Answer Question A project objective can be said to have the following dimensions viz.: Correct Answer

Strategic perspective , Time span , Finance cost aspect

Your Answer

Strategic perspective , Time span , Social aspect

Multiple Choice Multiple Answer Question Casual methods of Demand forecasting consists of :Correct Answer

Consumption-level method , Econometric method

Your Answer

Trend Projection method , Consumption-level method , Moving Averages method

Multiple Choice Single Answer Question The statement which shows the movement of cash into and out of firm's kittie is known as :Correct Answer Cash flow statement Your Answer

Cash flow statement

11

LIST OF ATTEMPTED QUESTIONS AND ANSWERS Multiple Choice Multiple Answer Question The objectives of the funds flow statement is as follows :Correct Answer

Your Answer

To help to understand the changes in assets as well as asset sources which are not revealed by the income statement , To find out the uses of loans raised by the business , To indicate the financial strength and weakness of the business To find out the uses of loans raised by the business , To help to understand the changes in assets as well as asset sources which are not revealed by the income statement , Helps to prepare financial statements

Select The Blank Question Inflow of funds may not necessarily result in ________. Correct Answer

Inflow of cash

Your Answer

Inflow of cash

Multiple Choice Single Answer Question Every project involves financial outlay which can be referred to as :Correct Answer

Project finance

Your Answer

Project finance

True/False Question Correct Answer

The Detailed Project report spells out the modus operandi for the implementation of the Project and the realization of the Project objectives. True

Your Answer

True

Select The Blank Question As the plant capacity increase, the investment cost unit capacity ________. Correct Answer

Decreases

Your Answer

Decreases

Multiple Choice Multiple Answer Question Internal sources of funds are :Correct Answer

Funds from operation , Loss on sale of fixed assets , Goodwill written off

Your Answer

Funds from operation , Loss on sale of fixed assets

Multiple Choice Single Answer Question End use method of Commercial appraisal technique is :Correct Answer Your Answer

A list of industries wherein the product is used is made and quantity and volume is arrived at A list of industries wherein the product is used is made and quantity and volume is arrived at

12

Multiple Choice Multiple Answer Question The applications of cash are :Correct Answer

Purchase of fixed assets , Payment of long term loans

Your Answer

Purchase of fixed assets , Payment of long term loans

True/False Question Correct Answer

In small scale organisation, requirement of working capital is quite high due to high amount of overheads, high buying costs and high selling cost. True

Your Answer

True

Match The Following Question

Correct Answer

Your Answer

Project organisation

Finance manager

Finance manager

General category of Project report Location of factory

Location of factory

Cost aspect of the project report

Consultancy fees

Consultancy fees

Financing plan

Unsecured loans

Unsecured loans

Select The Blank Question Longer the duration of production cycle, higher the requirement of ________. Correct Answer

Working capital

Your Answer

Working capital

Multiple Choice Single Answer Question Sanctioned bank limits is categorised under :Correct Answer

Working capital

Your Answer

Production, Sales and Profitability

Select The Blank Question Cost of fencing comes under the ________ category of the Project report. Correct Answer

Land and site development

Your Answer

Land and site development

True/False Question Correct Answer

Trend projection method is the important technique for forecasting demand. True

13

Your Answer

True/False Question

True

Correct Answer

The emphasis of a finance manager should be on taking a synergistic view of the project rather than looking at it only from the financial aspects. True

Your Answer

True

Select The Blank Question ________ in assets involves outflow of funds. Correct Answer

Increase

Your Answer

Increase

Select The Blank Question The basic difference between the feasibility study report and ________ is the level of accuracy and degree of detail. Correct Answer Detailed Project report Your Answer

Detailed Project report

Multiple Choice Single Answer Question Delays in infrastructure Development by State Agencies may lead to :Correct Answer

Cost and time overrun

Your Answer

Cost and time overrun

Select The Blank Question Location of the factory comes under the ________ category of the Project report. Correct Answer

General

Your Answer

General

Multiple Choice Multiple Answer Question Financing plans consists of :Correct Answer

Share capital , Term loans , Internal accruals

Your Answer

Share capital , Term loans , Internal accruals

Multiple Choice Single Answer Question Infrastructural projects include :Correct Answer

Power Generation and Distribution

Your Answer

Power Generation and Distribution

True/False

14

Question

Market potential should be determined under the Marketing aspect of the Project report.

Correct Answer

True

Your Answer

True

Select The Blank Question ________ tries to have what the customer will want- where, when, in what form and at what price. Correct Answer Marketing Your Answer

Marketing

Multiple Choice Single Answer Question A project objective which states What "achieving it " would cost is known as :Correct Answer

Finance cost aspect

Your Answer

Strategic perspective

Multiple Choice Single Answer Question A project objective which states "What' is to be viewed" is termed as :Correct Answer

Strategic perspective

Your Answer

Social aspect

True/False Question Correct Answer

Nominal maximum capacity is the capacity that is technically attainable and this corresponds to the supplier's guaranteed capacity. True

Your Answer

True

Select The Blank Question In order to meet the cost of large project, the technique of ________ has been developed so that the financial commitment and risks associated with a project are shared between the project sponsor and the lending institutions. Correct Answer Limited recourse financing Your Answer

Long term financing

Multiple Choice Single Answer Question The basic characteristic of a project is :Correct Answer

That it involves current outlay of funds in expectation of future benefits

Your Answer

That it involves current outlay of funds in expectation of future benefits

Multiple Choice Single Answer Question Past trend method of Commercial appraisal technique is :-

15

Correct Answer

Adopted as a guide depending on the consumption pattern of the society as a whole

Your Answer

Adopted as a guide depending on the consumption pattern of the society as a whole

Multiple Choice Single Answer Question The norms for providing open areas have to be strictly followed for safety of labour and allow sufficient space for outflow of effluents safely in case of :Correct Answer Chemical unit Your Answer

Chemical unit

Multiple Choice Single Answer Question Short supplies of materials may lead to :Correct Answer

Cost and time overrun

Your Answer

Cost and time overrun

Select The Blank Question Investors who invest in the debentures of the company are the ________ of the company. Correct Answer Creditors Your Answer

Creditors

Match The Following Question

Correct Answer

Your Answer

Private investment

Power generation

Power generation

Project

Time -bound

Time -bound

Programme

Not necessarily time bound

Not necessarily time bound

Foreign direct investment

Machine tools

Machine tools

Multiple Choice Multiple Answer Question As per the GE's Stop Light Matrix, Products may justify substantial commitment of funds where there is :Correct Answer Strong Business Strength and high Industry attractiveness , Average Business strength and high Industry attractiveness Your Answer Strong Business Strength and high Industry attractiveness , Average Business strength and high Industry attractiveness Multiple Choice Multiple Answer Question Management qualities includes :Correct Answer

Honesty , Financial resources , Initiative

Your Answer

Honesty , Financial resources , Initiative

Multiple Choice Single Answer

16

Question

The industrial concern earned profits by increasing the sales volume under the :-

Correct Answer

Sales concept

Your Answer

Sales concept

True/False Question Correct Answer

The 'BCG Matrix 'analysis various products of the organisation in the terms of Business strength and Industry Attractiveness. False

Your Answer

False

Select The Blank Question Detailed Project Report is generally prepared from a ________ report with additional information. Correct Answer Feasibility Your Answer

Feasibility

Multiple Choice Single Answer Question Delay in arrival of domestic/foreign machinery and technicians may lead to :Correct Answer

Cost and time overrun

Your Answer

Cost and time overrun

True/False Question

Miscellaneous expenditure is written on the asset side of the Balance sheet.

Correct Answer

True

Your Answer

True

Multiple Choice Multiple Answer Question General category of the Project report consists of :Correct Answer

Name of the Industrial concern , Proposed product , Location of the factory

Your Answer

Name of the Industrial concern , Proposed product , Location of the factory

Multiple Choice Single Answer Question A Project is a temporary endeavor to achieve some specific objectives within a :Correct Answer

Predefined time

Your Answer

Predefined time

Multiple Choice Multiple Answer Question While choosing the location for a project, the following factors should be considered :Correct Answer

Proximity to raw materials and markets , Availability of infrastructure , Government policies and other factors

17

Your Answer

Proximity to raw materials and markets , Availability of infrastructure , Government policies and other factors

Multiple Choice Multiple Answer Question The sources of long term and medium term finance are :Correct Answer

Equity shares , Public deposit

Your Answer

Equity shares , Public deposit

Multiple Choice Single Answer Question The cost which change in the same proportion in which the level of production changes is known as :Correct Answer Variable cost Your Answer

Variable cost

Multiple Choice Single Answer Question The second phase of the technical appraisal which focuses upon appraising the likely technical gaps consists of :Correct Answer Problems faced during the Construction and Project implementation Your Answer

Problems faced during the Construction and Project implementation

Multiple Choice Single Answer Question The third phase of the technical appraisal which focuses upon appraising the likely technical gaps consists of :Correct Answer Problems pertaining to the period when the project is in operation Your Answer

Problems pertaining to the period when the project is in operation

18

LIST OF ATTEMPTED QUESTIONS AND ANSWERS Multiple Choice Single Answer Question Borrower's contribution towards Working capital is known as :Correct Answer Margin money Your Answer Margin money Multiple Choice Multiple Answer Question Building cost consists of :Correct Answer Factory building , Auxiliary buildings , Administrative block Your Answer Factory building , Auxiliary buildings , Administrative block Multiple Choice Single Answer Question In BCG Matrix " CASH COWS" indicate :Correct Answer Products which have high market share but low growth potential Your Answer Products which have high market share but low growth potential Multiple Choice Multiple Answer Question In the Detailed Project Report, Marketing aspects includes :Correct Answer Demand forecasting , Promotion , Distribution Your Answer Demand forecasting , Promotion , Distribution Multiple Choice Single Answer Question Cost of the Project encompasses :Correct Answer The total of all items of outlay associated with a project Your Answer The total of all items of outlay associated with a project

True/False Question In both the extreme situations of trade cycles i.e. Inflation and depression, requirement of working capital may be high. Correct Answer True Your Answer True True/False Question Name of the finance manager comes under the Project organisation category of the Project report. Correct Answer True Your Answer True True/False Question It is mandatory for each unit to obtain necessary clearance from Pollution Control Authorities before setting up any project. Correct Answer True Your Answer True Multiple Choice Multiple Answer Question A project objective can be said to have the following dimensions viz.: Correct Answer Strategic perspective , Time span , Finance cost aspect Your Answer Strategic perspective , Time span , Finance cost aspect Match The Following Question Correct Answer Your Answer Management problems Lack of exposure Lack of exposure Management Quality Initiative Initiative

Management Perception Aspiration level/ conservative Aspiration level/ conservative Organisational Climate Person oriented Person oriented Multiple Choice Single Answer Question Infrastructural projects include :Correct Answer Power Generation and Distribution Your Answer Power Generation and Distribution Multiple Choice Single Answer Question BCG Product Portfolio Matrix analyses products on the basis of :Correct Answer Relative Market share and Industry Growth rate Your Answer Relative Market share and Industry Growth rate Select The Blank Question ________ profitability reduces the strain on working capital. Correct Answer High Your Answer Stable Multiple Choice Single Answer Question The basic characteristic of a project is :Correct Answer That it involves current outlay of funds in expectation of future benefits Your Answer That it involves current outlay of funds in expectation of future benefits Multiple Choice Multiple Answer Question The various aspects which need to be considered while assessing Project finance financing are :Correct Answer Environmental factors , Risk involved , Managerial compensation

Your Answer Environmental factors , Risk involved , Managerial compensation Multiple Choice Single Answer Question "Fly by night" operator mentality is a :Correct Answer Management quality Your Answer Management quality Multiple Choice Single Answer Question Every project involves financial outlay which can be referred to as :Correct Answer Project finance Your Answer Project finance Select The Blank Question As the plant capacity increase, the investment cost unit capacity ________. Correct Answer Decreases Your Answer Increases Multiple Choice Multiple Answer Question Debt Service coverage ratio may be considered to be one of the most important ratios calculated by the :Correct Answer Bankers , Financial Institutions Your Answer Shareholders , Bankers , Financial Institutions Multiple Choice Single Answer Question A project objective which states What "achieving it " would cost is known as :Correct Answer Finance cost aspect Your Answer Finance cost aspect True/False Question A project is unique and no two projects are similar. Correct Answer True

Your Answer True Multiple Choice Multiple Answer Question Limitations of fund flow statement are :Correct Answer It does not provide any new information but only rearranges the various facts , It does not consider non-fund transactions Your Answer It does not provide any new information but only rearranges the various facts , It does not consider non-fund transactions , It does not help in determining future requirement of funds Multiple Choice Single Answer Question The third phase of the technical appraisal which focuses upon appraising the likely technical gaps consists of :Correct Answer Problems pertaining to the period when the project is in operation Your Answer Problems pertaining to the period when the project is in operation Multiple Choice Single Answer Question Receivables is categorised under :Correct Answer Current assets and liabilities Your Answer Current assets and liabilities Multiple Choice Single Answer Question It is said that a second rate project in the hands of first rate management is better than a first rate project in the hands of :Correct Answer Second rate management Your Answer Second rate management Select The Blank Question The company having ________, is appropriate for the strategic posture of Defensive under the SPACE approach.

Correct Answer Lacks both competitive advantage as well as financial strength and belongs to a not so attractive industry, operating in an unstable environment Your Answer Lacks both competitive advantage as well as financial strength and belongs to a not so attractive industry, operating in an unstable environment Select The Blank Question Excessive expenditures on foreign technicians leads to ________. Correct Answer Cost and time overrun Your Answer Profit maximisation True/False Question The 'BCG Matrix 'analysis various products of the organisation in the terms of Business strength and Industry Attractiveness. Correct Answer False Your Answer False Select The Blank Question Having decided on the location and product, the promoter takes into account the ________ that is to be adopted for producing the product. Correct Answer Manufacturing process and technology Your Answer Manufacturing process and technology Multiple Choice Multiple Answer Question Financial and economic aspect of the Visit report consists of :Correct Answer Company's financial year , Impact of Government policies on company operations , Comments on the last published accounts

Your Answer Company's financial year , Impact of Government policies on company operations , Comments on the last published accounts True/False Question Sensitivity analysis consists of assessing the degree of risk. Correct Answer True Your Answer True Multiple Choice Single Answer Question A project objective which states "What' is to be viewed" is termed as :Correct Answer Strategic perspective Your Answer Strategic perspective Multiple Choice Multiple Answer Question The permanent requirement of working capital should be financed out of :Correct Answer Cash Profits , Shares , Debentures Your Answer Cash Profits , Shares , Debentures True/False Question In the BCG Matrix "DOGS" indicate products which are generally during the stage of Decline of a Product Life Cycle. Correct Answer True Your Answer True True/False Question The construction of National Golden Quadrilateral can be recognised as Project. Correct Answer True Your Answer True Select The Blank

Question Under the SPACE Model, Customer loyalty is determined under the ________ dimension. Correct Answer Company's competitive advantage Your Answer Company's competitive advantage True/False Question The cost factors of the product mixed is also taken into account to arrive at cost at various levels of production and its cost impact of the manufacturing. Correct Answer True Your Answer True True/False Question The emphasis of a finance manager should be on taking a synergistic view of the project rather than looking at it only from the financial aspects. Correct Answer True Your Answer True Multiple Choice Single Answer Question Miscellaneous fixed assets includes :Correct Answer Cables Your Answer Cables Multiple Choice Multiple Answer Question In the Detailed Project Report, Technical aspects includes :Correct Answer Plant capacity , Quality standards , Raw material requirement Your Answer Quality standards , Raw material requirement , Power / telecom facilities Multiple Choice Multiple Answer Question Trend Projection method of demand forecasting consists of :-

Correct Answer Linear Relationship , Exponential Relationship , Polynomial Relationship Your Answer Linear Relationship , Exponential Relationship , Polynomial Relationship True/False Question Market potential should be determined under the Marketing aspect of the Project report. Correct Answer True Your Answer True Multiple Choice Single Answer Question Ratio analysis is a widely used tool of :Correct Answer Financial analysis Your Answer Financial analysis Multiple Choice Single Answer Question Preoperative expenses includes :Correct Answer Bank guarantees Your Answer Bank guarantees Select The Blank Question A Project has a ________ represented by growth, maturity and decay. Correct Answer Life cycle Your Answer Life cycle True/False Question If the organisation is a trading organisation, the requirement of working capital will be on the lower side. Correct Answer False Your Answer True

LIST OF ATTEMPTED QUESTIONS AND ANSWERS True/False Question Cost under-estimation at the project preparation and evaluation stage leads to cost and time over run. Correct Answer True Your Answer True Multiple Choice Single Answer Question Short supplies of materials may lead to :Correct Answer Cost and time overrun Your Answer Cost and time overrun Match The Following Question Correct Answer Your Answer Project organisation Finance manager Completion date of the project General category of Project report Location of factory Location of factory Cost aspect of the project report Consultancy fees Reasons for cost escalations Financing plan Unsecured loans Finance manager Select The Blank Question ________ is a current asset Correct Answer Book debts Your Answer Furniture Multiple Choice Single Answer Question Disposition of funds includes :Correct Answer Interest on term loans Your Answer Increase in secured borrowing Multiple Choice Multiple Answer Question The permanent requirement of working capital should be financed out of :Correct Answer Cash Profits , Shares , Debentures Your Answer Cash Profits , Commercial Papers True/False Question Cost and time overrun of the project may lead to loss on account of lost market opportunities. Correct Answer True Your Answer True

Select The Blank Question Commission outstanding is ________ of funds. Correct Answer Application Your Answer No flow Multiple Choice Single Answer Question Every project involves financial outlay which can be referred to as :Correct Answer Project finance Your Answer Project finance Multiple Choice Multiple Answer Question The objectives of the funds flow statement is as follows :Correct Answer To find out the uses of loans raised by the business , To indicate the financial strength and weakness of the business , To help to understand the changes in assets as well as asset sources which are not revealed by the income statement Your Answer To find out the uses of loans raised by the business , To help to understand the changes in assets as well as asset sources which are not revealed by the income statement , Helps to prepare financial statements Multiple Choice Single Answer Question The second phase of the technical appraisal which focuses upon appraising the likely technical gaps consists of :Correct Answer Problems faced during the Construction and Project implementation Your Answer Problems faced during the Construction and Project implementation True/False Question The Detailed Project report spells out the modus operandi for the implementation of the Project and the realization of the Project objectives. Correct Answer True Your Answer True Multiple Choice Multiple Answer Question While choosing the location for a project, the following factors should be considered :Correct Answer Proximity to raw materials and markets , Availability of infrastructure , Government policies and other factors Your Answer Proximity to raw materials and markets , Plant capacity , Availability of infrastructure True/False Question Change in the project concept itself may lead to cost and time overrun. Correct Answer True Your Answer True Select The Blank

Question Name and designation of the chief executive comes under the ________ category. Correct Answer General Your Answer Project organisation Select The Blank Question ________ occupies a unique position in the macro economic development which helps in induction of new technology and facilitates, greater efficiency as well as higher productivity. Correct Answer Investment Your Answer Production Multiple Choice Multiple Answer Question Internal sources of funds are :Correct Answer Funds from operation , Loss on sale of fixed assets , Goodwill written off Your Answer Funds from operation , Funds from long term loans Multiple Choice Multiple Answer Question Financing plans consists of :Correct Answer Share capital , Term loans , Internal accruals Your Answer Share capital , Term loans , Internal accruals Multiple Choice Single Answer Question Financial aspect of Detailed Project report includes :Correct Answer Fixation of means of financial structure Your Answer Fixation of means of financial structure Select The Blank Question ________ is that scarce input which financial resources alone cannot mobilise. Correct Answer Management Your Answer Management Multiple Choice Single Answer Question A project can be regarded as the sum of the activities directed towards a :Correct Answer Specific result Your Answer Specific result Multiple Choice Single Answer Question A project objective which states "What' is to be viewed" is termed as :Correct Answer Strategic perspective Your Answer Strategic perspective Select The Blank Question Short term finance is normally for a period upto ________ year.

Correct Answer One Your Answer One Select The Blank Question A Project has a ________ represented by growth, maturity and decay. Correct Answer Life cycle Your Answer Life cycle Multiple Choice Multiple Answer Question The various aspects which need to be considered while assessing Project finance financing are :Correct Answer Environmental factors , Risk involved , Managerial compensation Your Answer Environmental factors , Risk involved , Managerial compensation Multiple Choice Multiple Answer Question As per the GE's Stop Light Matrix, Products may justify substantial commitment of funds where there is :Correct Answer Strong Business Strength and high Industry attractiveness , Average Business strength and high Industry attractiveness Your Answer Strong Business Strength and high Industry attractiveness , Average Business Strength and Medium Industry Attractiveness , Average Business strength and high Industry attractiveness Select The Blank Question Longer the duration of production cycle, higher the requirement of ________. Correct Answer Working capital Your Answer Working capital Select The Blank Question ________ in assets involves outflow of funds. Correct Answer Increase Your Answer Increase True/False Question For computing Interest coverage ratio, Profit after Interest and taxes are taken into account. Correct Answer False Your Answer True Multiple Choice Single Answer Question The cash flow of all the years during the expected life of the project are discounted at a pre-determined cut off rate and :Correct Answer Net Present value is obtained Your Answer Average rate of return is obtained

Multiple Choice Single Answer Question The ratio which indicates the ability of the company to meet current obligations is termed as :Correct Answer Current ratio Your Answer Current ratio True/False Question Sensitivity analysis consists of assessing the degree of risk. Correct Answer True Your Answer True True/False Question In small scale organisation, requirement of working capital is quite high due to high amount of overheads, high buying costs and high selling cost. Correct Answer True Your Answer True Multiple Choice Single Answer Question Marketing aspect of Detailed Project report includes :Correct Answer Demand forecasting Your Answer Demand forecasting True/False Question The secondary data is collected through market survey, specific for the project being appraised. Correct Answer False Your Answer True True/False Question Debt service coverage ratio indicates whether cash earned is sufficient for debt service. Correct Answer True Your Answer True Select The Blank Question Position regarding requirement and training of operational staff comes under the ________ category of Project report. Correct Answer Project organisation Your Answer Project organisation Match The Following Question Correct Answer Your Answer Moving into new areas/product lines Diversification Projects Rehabilitation Projects Suppliers' credit Short term finance Short term finance

Deferred credit Long term finance Long term finance Setting up new units New Projects Diversification Projects Select The Blank Question Retained earnings indicates that whatever profits are earned by the company are not distributed by it by way of ________ but are kept aside for use in future for expansion or other purpose. Correct Answer Dividend Your Answer Dividend Multiple Choice Single Answer Question The basic document for facilitating Project financing is the :Correct Answer Detailed Project report Your Answer Articles of Association Multiple Choice Multiple Answer Question In the Detailed Project Report, Technical aspects includes :Correct Answer Plant capacity , Quality standards , Raw material requirement Your Answer Plant capacity , Quality standards , Power / telecom facilities Multiple Choice Single Answer Question The ratio that roughly measures the company's potential reserve of cash is termed as :Correct Answer Net Working capital to total assets Your Answer Net Working capital to total assets Multiple Choice Single Answer Question General Electric Stop Light Matrix :Correct Answer Which is highly respected for the sophistication, maturity and quality in its planning systems Your Answer Which is highly respected for the sophistication, maturity and quality in its planning systems Multiple Choice Single Answer Question Geographic market appraisal answers to :Correct Answer Where do the customers live? Your Answer Where do the customers live? Select The Blank Question Sometimes the term ________ is interpreted as cash equivalent i.e. cash and marketable securities. Correct Answer Fund Your Answer Fund

Multiple Choice Multiple Answer Question The temporary requirement of working capital can be financed out of :Correct Answer Inter-corporate Deposits , Commercial Papers Your Answer Inter-corporate Deposits , Commercial Papers True/False Question Current assets includes stock-in-process. Correct Answer True Your Answer True