Strategic Finance 6

Strategic Finance

6.

The FEA Tools encompass a vast array of information & policy into :-

Many evaluations One evaluation One procedure Many procedures 7.

optimum cash balance under certainty i.e. Baumul`s model allows the cash flow to fluctuate.

True False LIST OF ATTEMPTED QUESTIONS AND ANSWERS (strategic finance-6)

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Strategic Finance

Match The Following Question AS 4

AS 21 Select The Blank Question

Your Answer

Contingencies & events occurring after Contingencies & events occurring after the balance sheet date the balance sheet date Accounting for investments Accounting for investments

AS 13 AS 23

Correct Answer

Accounting for investments in associates in Accounting for investments in associates consolidated financial statements in consolidated financial statements Consolidated financial statements Consolidated financial statements

Correct Answer

There is a ________ relationship between the number of employees & the use of operating supplies. Natural

True/False Question

Planning helps an acquiring firm to identify the units it should drop & it should add.

Correct Answer

True

Select The Blank Question

Non value added activities helps ________.

Correct Answer

To analyse the activities more carefully

Your Answer

To take a better decision

True/False Question

Usually only a single method is used for valuation of shares.

Correct

False

Select The Blank Question Correct Answer

In the reproduction value method of valuation, the value of assets is taken to be on the basis of ________ Replacement cost

Multiple Choice Multiple Answer Question The major conditions to be fulfilled for buyback of shares as per the legal provisions include :Correct Answer Articles of association should authorize buyback of shares , The shares which are sought to be bought back should be fully paid up , After the buy back the ratio of debt to total capital and free reserves should not be more than 2 : 1 Multiple Choice Single Answer Question The Public announcement of share buy back has to be made at least :Correct Answer

7 Days prior to the commencement of buy back

Select The Blank Question

Combination of 2 or more companies into existing company is called ________.

Correct Answer

Absorption

Select The Blank Question

________ is not a example of segment liability.

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Strategic Finance

Correct Answer

Goodwill

Your Answer

Accrued liabilities

17.

According to Merton Miller & Franco Modigliani, the only important determinant of a company's market value is :-

Decision regarding firm's payout of dividend Retention of dividend for internal financing Its investment policy 24.

Investment opportunities available Fixed price tender offers are accompanied by an abnormal announcement period return of :2-3% 6-8% 8 - 10 % 10 - 15 %

30.

Opportunity costs and real costs decrease the market value of a firm.

True False 43.

HLL is

% of subsidiary of Unilever PLC.

.75,0.5,0.25,0.516 47.

The statute governing an enterprise may provide the basis for computation of the depreciation. TRUE / FALSE

1. Line of credit

1. The cash flow ability of the borrower to pay the loan is usually of paramount importance

2. Revolving credit agreements

2. Does not constitute any legal commitments on the part of the bank

3. Transaction loan

3. The clean up period is more than 6 months

4. Unsecured loans

4. While the commitment is in force the bank must extend credit whenever the borrower wishes to borrow 5. Form of debt not backed by the pledge of specific assets 6. Borrower does not have to pay a commitment fees

51.

A single organisation model serves to keep all individual initiatives to be targeted into a coordinated plan.

True False LIST OF ATTEMPTED QUESTIONS AND ANSWERS

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Strategic Finance

Match The Following Question AS 21

Correct Answer Consolidated financial statements

AS 4

Your Answer Consolidated financial statements

Contingencies & events occurring Contingencies & events occurring after the balance sheet date after the balance sheet date Accounting for investments Accounting for investments

AS 13 AS 23

Accounting for investments in associates in consolidated financial statements

Accounting for investments in associates in consolidated financial statements

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

Natural

Multiple Choice Multiple Answer Question The main characteristics of CAPM are :Correct Answer It is an equilibrium Model , It describes the pricing of assets as well as derivatives , Expected security return = Riskless return + beta x (expected market risk premium) Multiple Choice Multiple Answer Question A firm using a conservative policy for determining the requirements of current assets :Correct Answer Has fewer production stoppages , Ensures quick deliveries to customers , Stimulates sales Multiple Choice Single Answer Question As per Pecking order theory, which is the costliest means of funding :Correct Answer Equity Shares Multiple Choice Single Answer Question Free Reserves is a component of :Correct Answer Equity Select The Blank Question ________ are those operating assets that are employed by a segment in its operating activities. Correct Answer Segment assets Multiple Choice Multiple Answer Question The overhead expenses include :Correct Answer Utilities , Maintenance , Security Multiple Choice Multiple Answer Question Examples of accrued expenses are :Correct Answer Wages , Income tax , Property tax 9212302.doc 4

Strategic Finance

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Strategic Finance

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