Imt CDL
Finc 521
Assignment – 1 (2019)
- Why depreciation has to be added back in the calculation of cash-flow as it is a ___ ?
- manufacturing expense
- Cash expense
- Non-cash expense
- non-operating expense
- Dividend payment linked to profits left-out after meeting the expansion needs is based on ____ theory/policy?
- Signaling Theory
- Residual payout policy
- Stable Dividend policy
- Constant pay-out policy
- Brexit, Greece Crises, Chinese Crises, Sub-Prime Crises are the examples of which of the following?
- Systematic Risk
- Unsystematic Risk
- Total Risk
- Specific Risk
- The cash flows forecasted at the end of projection period for capital budgeting decisions are known as___?
- Initial Cash Flows
- Operating Cash Flows
- Terminal Cash Flows
- Regular Cash Flows
- The underlying assumption in IRR method is that all the intermittent cashflows are reinvested at.
- Cut-off rate
- required rate of return
- cost of capital
- IRR
- If the credit period is increased for the customers of the company, operating cycle will___
- reduce
- increase
- remain same
- unaffected
- Calculate the expected return with the help of following data: p=.3 r=30%, p=.4 r= 16%, p=.3 r=8%
- Cost of preference share is ___
- Preference Dividend Rate
- Pref Dividend/Pref. share market price
- Both of the above
- None of the above
- The internal rate of return generated by an fixed income investment, if held till maturity is known as
- Current Yield
- YTM
- Yield Curve
- Coupon rate
- Current year dividend of Sun Ltd is Rs 5 per share. Expected growth rate is 8% and market capitalization rate is 10%. Calculate the intrinsic value of stock?
- Market interest rate is 9%. A bond with 10% coupon will sell ____ par value?
- Above
- Below
- at
- None of the above
- Which of the following is the spontaneous source of financing the working capital requirements?
- Commercial Paper
- Accounts Payable
- Bank Finance
- All of the above
- Which of the following is ultimate objective of financial management?
- Profit maximization
- Shareholder's wealth maximization
- Leverage Minimization
- Funding maximization
- Sheela needs Rs 500000 at the end of 5 years. How much amount she should invest right now @ 10%. Present Value of 1 Rs at 10% for 5 years is .6209
- 100000
- 155225
- 310450
- 400000
- In case of capital budgeting decisions, the projects in which choice of one automatically excludes the another are known as ___ ?
- Dependent Projects
- Independent Projects
- Mutually Exclusive Projects
- Mutually Inclusive Projects
- For a firm, weight of equity & debt is 0.6 & 0.4 respectively and cost of equity is 15%, Cost of debt is 9%, tax rate is 30%. Calculate the WACC for the firm?
- Moon Ltd invests Rs 800000 in a paper manufacturing plant This is expected to generate Rs 150000 every year for next seven years. Cost of capital for the project is 10%. PVAF for 7 years at 10% is 5.3349. Calculate the NPV of the project?
- Growth of the company can be expected to be higher when ______ is high?
- pay-out ratio
- distribution ratio
- dividend rate
- retention ratio
- If business risk of a company goes up than price of stock will.____ ?
- decrease
- increase
- remain same
- fluctuate
- Which of the following instrument is riskiest?
- Shares
- Preference Shares
- Debentures
- Fixed Deposit
- As per Bird in hand theory, high dividend pay-out is. _____ to low pay-out?
- Preferred
- not preferred
- irrelevant for investor
- None of the above
- 1/ 10,30 credit term means?
- 1% discount
- 0.1% discount
- 1% discount for payment within 10 days
- 0.1% discount for payment within 30 days
- Which of the following AAA debentures will have highest price if YTM is ___?
- Increased financial leverage gives rise to ____ volatile EPS?
- more
- less
- non
- None of the above
- Calculate the standard deviation with the help of following data: p=.3 r=30%, p=.4 r= l6%, p=.3 r=8%
- Cost of debt is. ____ ?
- Coupon rate
- YTM (I-tax rate)
- YTM
- YTM/Bond Price
- Discounted payback period is considered an improvement over payback period because it considers. ____ ?
- All cash-flows
- Time Value of Money
- Easy to understand
- All of the above
- If credit sales is 100000, credit period is 30 days, calculate the average receivables?
- The risk which can be reduced by diversification is known as ____ ?
- Systematic Risk
- Unsystematic Risk
- Total Risk
- Market Risk
- A stock's average return in last 3 years were 12% and Standard deviation is 8%. Calculate the coefficient of variation?
Assignment – 2
- A company replaces an old machinery with salvage value of Rs I 00000 replaced by a machinery costing Rs 500000. The relevant cash flows for evaluation of this project is ___ ?
- 100000
- 500000
- 400000
- 600000
- In India, dividend is ____ in the hands of investors?
- Taxable
- not-taxable
- Heavily taxable
- None of the above
- Calculate the standard deviation with the help of following data: p=.3 r=30%, p=.4 r= l6%, p=.3 r=8%
- Which of the following evaluation techniques for long-term investment decisions doesn't consider the time value of money?
- NPV
- IRR
- Pay-Back Period
- Profitability Index
- Calculate the expected return with the help of following data: p=.3 r=30%, p=.4 r= 16%, p=.3 r=8%
- As per liquidity premium theory, interest rates on long term bonds will be than short term bonds?
- Lower
- Same
- Higher
- Fluctuating
- Increase in the frequency of compounding results into _______ maturity value.
- Higher
- Lower
- Same
- Fluctuating
- If the cost of capital of a project goes up then NPV will
- decrease
- increase
- remain same
- fluctuate
- Shyam deposits Rs 5000 every year for next 3 years at 6% semiannual compounding . Calculate the future value if investment? Future value annuity factor at 3% for 3years and 6 years is 3.0909 & 6.4684 respectively and at 6% for 3years and 6 years is 3.1836 & 6.9753 respectively.
- 15454.5
- 16171
- 15918
- 17438.25
- Discounted payback period is considered an improvement over payback period because it considers.
- All cash-flows
- Time Value of Money
- Easy to understand
- All of the above
- For a firm, weight of equity & debt is 0.6 & 0.4 respectively and cost of equity is 15%, Cost of debt is 9%, tax rate is 30%. Calculate the WACC for the firm?
- As per :MM proposition without taxes, value of firm is ____ by changing the capital structure?
- affected
- not affected
- increases
- decreases
- Which of the following method is considered the best evaluation techniques for Long-term investment decisions?
- NPV
- IRR
- Pay-Back Period
- Profitability Index
- If proportion of debt is increased in capital structure, overall cost of capital will ____?
- Decrease
- increase
- remain same
- fluctuate
- The risk which can be reduced by diversification is known as_____ ?
- Systematic Risk
- Unsystematic Risk
- Total Risk
- Market Risk
- If business risk of a company goes up than price of stock will.
- decrease
- increase
- remain same
- fluctuate
- Moon Ltd invests Rs 800000 in a paper manufacturing plant This is expected to generate Rs 150000 every year for next seven years. Cost of capital for the project is 10%. PVAF for 7 years at 10% is 5.3349. Calculate the NPV of the project?
- In ABC classification of inventory, maximum attention has to be paid on _____ items?
- A category
- B category
- C category
- All of them
- The internal rate of return generated by an fixed income investment, if held till maturity is known as
- Current Yield
- YTM
- Yield Curve
- Coupon rate
- Dividend declared at 12% means that this % age will be applied on _____ ?
- Issue Price
- Market Price
- Face Value
- Profits
- When interest rates on long term bonds are higher than short term bonds, yield curve will be. ____ ?
- upward slopping
- downward slopping
- flat
- none of the above
- Dividend payment linked to profits left-out after meeting the expansion needs is based on ___ theory/policy?
- Signaling Theory
- Residual payout policy
- Stable Dividend policy
- Constant pay-out policy
- Sheela needs Rs 100000 at the end of each year in the next 5 years. How much amount she should invest now @ 10%. Present Value of annuity factor at 10% for 5 years is 3.7908
- 131898.28
- 500000
- 100000
- 379080
- The cashflows invested in a project at t=O period is known as_________.
- Initial Cash Flows
- Operating Cash Flows
- Terminal Cash Flows
- Regular Cash Flows
- If growth rate of expected earnings goes up than price of stock will_____ .
- decrease
- increase
- remain same
- fluctuate
- In case of share buy-back, number of outstanding share will_____.
- reduce
- increase
- remain same
- unaffected
- A stock's average return in last 3 years were 12% and Standard deviation is 8%. Calculate the coefficient of variation?
- _____ method tells the period in which original investment in a project will be recovered.
- NPV
- IRR
- Pay-Back Period
- Profitability Index
- After the 2 for 1 share split number of shares will_____?
- remain same
- reduce
- be half
- double
- If credit sales is 100000, credit period is 30 days, calculate the average receivables?
TEST -1 ( 2019)
Q1. Inwhich of the following form of business, income is taxed separately from its owners
- Sole Proprietorship
- Partnership
- Corporation
- All of the above
- The Share Capital of a company is Rs I 0 Cr divided in I 0 Lac number of shares. Calculate the face value of share
- Which of the following is an operating item?
- Interest paid
- salary paid
- dividend received
- share capital issued
- Proceeds on the sale of fixed assets will be shown in which part of the cash flow statement, if indirect method is followed.
- Operating Cash Flow
- Financing Cash Flow
- Investing Cash Flow
- None of the above
- 5.wich of the following statement shows the Net Profit/Loss earned by a business entity?
- Income Statement
- Balance Sheet
- Trial Balance
- Cash Flow Statement
- A credit sale of goods to Mohan should be credited to
- Sales accowit
- Mohan accowit
- Goods accowit
- Purchase accowit
- Both assets and owner 's equity would be increased by
- capital brought in
- Purchase of an asset on credit.
- Payment of creditors.
- Proprietors drawings
- There was a fire in M Ltd Godown.It resulted into loss of Rs 5 Cr goods. However, the insurance company accepted the claim of Rs 4.5 Cr only. This will result in in equity by Rs
- Increase, 4.5 Cr
- Decrease, 0.5 Cr
- Increase, 0.5 Cr
- Decrease, 5 Cr
- A business has paid the rent for the period Jan-March 2016 in Jwie'2016, in which year financial statements this rent expenses will be recorded?
- 2015
- 2016
- 2017
- All of the above
- Inwhich of the following firm structure liability of owners is wilimited
- Sole Proprietorship
- Ltd Liability Partnership
- Pvt. Ltd Company
- Public Ltd Company
- While preparing cash flow statements, the repayments of a loan during the year should be included wider the heading of.
- Operating Cash Flow
- Financing Cash Flow
- Investing Cash Flow
- None of the above
- Inwhich of the following books, taransactions are first time recorded?
- Ledger
- Accowiting Equation
- Trial Balance
- Journal
- The balance of cash account indicates _ _
- Net income for the period
- Net loss for the period
- Net cash on hand
- Net worth of the business
- Every accounting transaction must at least affect account?
- On 1st April 2017 P Ltd sells 100000 shares of Dabur India Ltd to Q Ltd at Rs 400 per share (Market price on that day) with an agreement to repurchase the same at Rs 4 12 per share on 31st Dec 2017. How the transaction should be presented in financial statements of P Ltd
- Sale of Investment
- Sale of Shares
- Borrowings
- Investment
- Advance from Customers is an example of ?
- Asset
- Liability
- income
- Expense
- Which of the following self-generated intangible asset can be recorded in books of account
- Goodwill
- Technical Know-How
- Software
- All of the Above
- Inwhich of the following statement, final balances of all the account are prepared in the form of a list
- Ledger
- Accounting Equation
- Trial Balance
- Journal
- Wages paid to workers must be debited to account
- Wages
- Machinery
- Factiry Expenses
- Office Expenses
- Which of the following can be categorized as discretionary Expense
- Purchase
- Salary
- Repair & Maintenance
- R&D Expense
- Higher Debt-Equity ratio indicates
- High Operating Risk
- Low Operating Risk
- High Financial Risk
- Low Financial Risk
- When a Liability is increased, it is recorded on the
- Credit Side
- Debit Side
- Left Hand Side
- Any of the above
23 Ram's account in the accounts payable ledger has a Rs.2000 beginning balance. After a transaction for Rs.500 is posted from the purchases journal, the balance in Ram's account is __
- 1500 Credit
- 1500 Debit
- 2500 Credit
- 2500 Debit
- Which of the following measure will be used for calculation of Inventory Turnover Ratio
- Net Sales
- Credit Sales
- Cost of Goods Sold
- Cos of Sales
- Credit sales for the year is Rs I 00000 and closing debtors are Rs I 0000. Calculate the collection period of the firm?
- 10 days
- 36.5 days
- 27.39 days
- None of the above
- Loss on the sale of Fixed Assets will be shown in which part of the cash flow statement, if indirect method is followed?
- Operating Cash Flow
- Financing Cash Flow
- Investing Cash Flow
- None of the above
- Which of the following can be categorized as Revenue
- Sale of goods
- Sale of Old Furniture
- Dividend Received
- All of the above
- Inwhich of the following firm structure compliance cost is maximum
- Sole Proprietorship
- Ltd Liability Partnership
- Pvt. Ltd Company
- Public Ltd Company
- In order to reflect the efficiency in debtor's management, Debtor turnover ratio should be. ?
- increased
- Decreased
- Kept Constant
- None of the above
- Purchase of machinery against issue of shares will be shown in which part of the cash flow statement?
- Operating Cash Flow
- Financing Cash Flow
- Investing Cash Flow
- None of the above
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