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Transcript of Total Project Finance NEW
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otal SET 16
MATCH
roject organization Finance manager
General category of Project report Location of factory
Cost aspect of the project report Consultancy fees
inancing plan Unsecured loans
rivate investment Power generation
roject Time -bound
rogramme Not necessarily time bound
oreign direct investment Machine tools
Management problems lack of exposure
Management Quality Initiative
Management Perception Aspiration level/ conservative
Organisational Climate Person oriented
4
ource of funds Depreciation
Fixed assets Building
Current assets Debtors
Current liability Trade credit
5
roject appraisal It is the evaluation of project from technical, market,financial, economic and social perspective beforecommitting funds for investment
rogram It is large in scope, is activity oriented and is notnecessarily time bound
roject It is one-shot, time-limited, goal oriented, major undertakingrequiring the commitment of varied skills and resources
re-feasibility study It is a preliminary assessment of the project idea todetermine whether or not the investment opportunity ispromising
ncrease in current liabilities Decreases working capital
ncrease in liabilities Inflow of funds
Decrease in liabilities Outflow of funds
ncrease in current assets Increases working capital
ermanent Working Capital finance Shares
Capital budgeting Acquire fixed
Working capital Invest in current asset
nflationary conditions Working capital requirement high
8
xport market technique of Commercial appraisal Government provides ample encouragement
Demand Technique forecasting of Commercial appraisal Future demand of the product
ast trend method of Commercial appraisal Adopted as a guide depending on the consumption patternof the society as a whole
nd use method of Commercial appraisal A list of industries wherein the product is used is made andquantity and volume is arrived at
Organisation and Management Strikes/lay-offs/lockouts etc.
Material inputs and utilities Stock of raw material
Working capital Sanctioned bank limit
Marketing Pricing policy
0
echnical aspect of detailed project report Detailed
roject EngineeringFinancial aspect of Detailed Projecteport
Profitability
Marketing aspect of Detailed Project report Distribution
Management aspect of detailed project report;Conservativeness
1
conometric method Mathematical representation of economic
relationshiprimary source of data Market survey
econdary source of data Collected in some other context
eading indicators Variables that change faster than others
2
General functional layout Present the general relationship between equipmentbuildings and civil works
ocation Broad area such as city, industrial belt etc.
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ite Specific piece of land where the project would be set up
lant layout Physical layout of the factory
3
Moving into new areas/product lines Diversification Projects
Suppliers' credit Short term finance
Deferred credit Long term finance
Setting up new units New Projects
4
roject Financing Help improving Corporate Return on Equity
inance in international financial markets Issue of Euro
nternational financial institutions World Bank
olicy of Liberalisation, Privatisation and Globalisation Increasing emphasis on the Private initiative
5
nvironmental stability dimension under SPACE Modelnvolves
Demand variability
Company's competitive advantage dimension under PACE Model involves
Product life cycle
Company's financial strength dimension under SPACEModel involves
Leverage liquidity
ndustry strength dimension under SPACE Model involves Profit potential
Match The Following
Question Correct Answer Your Answer
Plant and machinery cost Foundation and erection charges Cost of factory building
Preliminary and capital issue expenses Brokerage and commission Brokerage and commission
and and site development cost Cost of laying roads Cost of laying roads
Building cost Cost of factory building Foundation and erection charges
ET 1Question 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 usesf loans raised by the business , To indicate the financial strength and weakness of the businessYour 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 notevealed by the income statement , Helps to prepare financial statements
Question Inflow of funds may not necessarily result in ________.Correct Answer Inflow of cashYour Answer Inflow of cash
Question Every project involves financial outlay which can be referred to as :-Correct Answer Project finance
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
Question As the plant capacity increase, the investment cost unit capacity ________.Correct Answer DecreasesYour Answer Decreases
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
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 atYour Answer A list of industries wherein the product is used is made and quantity and volume is arrived at
Question The applications of cash are :-Correct Answer Purchase of fixed assets , Payment of long term loansYour Answer Purchase of fixed assets , Payment of long term loans
Question In small scale organisation, requirement of working capital is quite high due to high amount of overheads, high buying costs and high sellingost.Correct Answer TrueYour Answer True
Question Longer the duration of production cycle, higher the requirement of ________.Correct Answer Working capitalYour Answer Working capital
Question Sanctioned bank limits is categorised under :-Correct Answer Working capitalYour Answer Production, Sales and Profitability
Question Cost of fencing comes under the ________ category of the Project report.
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Correct Answer Land and site developmentYour Answer Land and site development
Question Trend projection method is the important technique for forecasting demand.Correct Answer 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 financialspects.Correct Answer True
Question ________ in assets involves outflow of funds.Correct Answer IncreaseYour Answer Increase
Question The basic difference between the feasibility study report and ________ is the level of accuracy and degree of detail.Correct Answer Detailed Project reportYour Answer Detailed Project report
Question Delays in infrastructure Development by State Agencies may lead to :-Correct Answer Cost and time overrunYour Answer Cost and time overrun
Question Location of the factory comes under the ________ category of the Project report.Correct Answer GeneralYour Answer General
Question Financing plans consists of :-Correct Answer Share capital , Term loans , Internal accrualsYour Answer Share capital , Term loans , Internal accruals
Question Infrastructural projects include :-Correct Answer Power Generation and DistributionYour Answer Power Generation and Distribution
Question Market potential should be determined under the Marketing aspect of the Project report.Correct Answer True
Question ________ tries to have what the customer will want- where, when, in what form and at what price.Correct Answer MarketingYour Answer Marketing
Question A project objective which states What "achieving it " would cost is known as :-Correct Answer Finance cost aspectYour Answer Strategic perspective
Question A project objective which states "What' is to be viewed" is termed as :-Correct Answer Strategic perspectiveYour Answer Social aspect
Question Nominal maximum capacity is the capacity that is technically attainable and this corresponds to the supplier's guaranteed capacity.Correct Answer TrueYour Answer True
Question In order to meet the cost of large project, the technique of ________ has been developed so that the financial commitment and risksssociated with a project are shared between the project sponsor and the lending institutions.Correct Answer Limited recourse financingYour Answer Long term financing
Question The basic characteristic of a project is :-Correct Answer That it involves current outlay of funds in expectation of future benefitsYour Answer That it involves current outlay of funds in expectation of future benefits
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 wholeYour Answer Adopted as a guide depending on the consumption pattern of the society as a whole
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 inase of :-Correct Answer Chemical unitYour Answer Chemical unit
Question Short supplies of materials may lead to :-Correct Answer Cost and time overrunYour Answer Cost and time overrun
Question Investors who invest in the debentures of the company are the ________ of the company.Correct Answer CreditorsYour Answer Creditors
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 attractivenessYour Answer Strong Business Strength and high Industry attractiveness , Average Business strength and high Industry attractiveness
Question Management qualities includes :-Correct Answer Honesty , Financial resources , InitiativeYour Answer Honesty , Financial resources , Initiative
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Question The industrial concern earned profits by increasing the sales volume under the :-Correct Answer Sales conceptYour Answer Sales concept
Question The 'BCG Matrix 'analysis various products of the organisation in the terms of Business strength and Industry Attractiveness.Correct Answer False
Question Detailed Project Report is generally prepared from a ________ report with additional information.Correct Answer FeasibilityYour Answer Feasibility
Question Delay in arrival of domestic/foreign machinery and technicians may lead to :-Correct Answer Cost and time overrunYour Answer Cost and time overrun
Question Miscellaneous expenditure is written on the asset side of the Balance sheet.Correct Answer True
Question General category of the Project report consists of :-Correct Answer Name of the Industrial concern , Proposed product , Location of the factoryYour Answer Name of the Industrial concern , Proposed product , Location of the factory
Question A Project is a temporary endeavor to achieve some specific objectives within a :-Correct Answer Predefined timeYour Answer Predefined time
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 factorsYour Answer Proximity to raw materials and markets , Availability of infrastructure , Government policies and other factors
Question The sources of long term and medium term finance are :-Correct Answer Equity shares , Public depositYour Answer Equity shares , Public deposit
Question The cost which change in the same proportion in which the level of production changes is known as :-Correct Answer Variable costYour Answer Variable cost
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 implementationYour Answer Problems faced during the Construction and Project implementation
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 operationYour Answer Problems pertaining to the period when the project is in operation
ET 2
Question ________ is a current liability.Correct Answer Trade creditYour Answer Trade credit
Question Marketing category of the Project report consists of :-Correct Answer Target market , Market potential , Pricing policyYour Answer Target market , Market potential , Pricing policy
Question Under the SPACE Model, Customer loyalty is determined under the ________ dimension.Correct Answer Company's competitive advantageYour Answer Company's competitive advantage
Question Sources of funds include :-Correct Answer Increase in secured borrowing
Your Answer Increase in secured borrowing
Question It is mandatory for each unit to obtain necessary clearance from Pollution Control Authorities before setting up any project.Correct Answer TrueYour Answer False
Question A project objective which states "What' is to be viewed" is termed as :-Correct Answer Strategic perspectiveYour Answer Strategic perspective
Question ________ tries to have what the customer will want- where, when, in what form and at what price.Correct Answer MarketingYour Answer Marketing
Question Debt Service Coverage Ratio is one of the most important ratios calculated by the bankers or financial institutions giving long term finance to therganisation.
Correct Answer True
Question Management qualities includes :-Correct Answer Honesty , Financial resources , InitiativeYour Answer Honesty , Financial resources , Initiative
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 implementationYour Answer Problems faced during the Construction and Project implementation
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Question A project is unique and no two projects are similar.Correct Answer True
Question Land and site development cost includes cost of :-Correct Answer Gates
Question A project objective which states What "achieving it " would cost is known as :-Correct Answer Finance cost aspectYour Answer Finance cost aspect
Question ________ in assets involves outflow of funds.Correct Answer Increase
Question Disposal of fixed assets is categorised under :-Correct Answer MiscellaneousYour Answer Miscellaneous
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
Question Geographic market appraisal answers to :-Correct Answer Where do the customers live?Your Answer Where do the customers live?
Question Every project involves financial outlay which can be referred to as :-Correct Answer Project financeYour Answer Project finance
Question ________ occupies a unique position in the macro economic development which helps in induction of new technology and facilitates, greater
fficiency as well as higher productivity.Correct Answer InvestmentYour Answer Production
Question The basic characteristic of a project is :-Correct Answer That it involves current outlay of funds in expectation of future benefitsYour Answer That it involves current outlay of funds in expectation of future benefits
Question Pre-operative expenses include :-Correct Answer Interest on deferred paymentsYour Answer Interest on deferred payments
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
eliable guide for the future requirement of fundsYour Answer It determines financial consequences of the business operations , It considers non-fund transactions , It enables the firm to plan its financial
esources properly
Question Managerial problems in a project are the most pervasive.Correct Answer TrueYour Answer True
Question In the BCG Matrix "DOGS" indicate products which are generally during the stage of Decline of a Product Life Cycle.Correct Answer True
Question The applications of cash are :-Correct Answer Purchase of fixed assets , Payment of long term loansYour Answer Purchase of fixed assets , Payment of long term loans , Issue of new machinery
Question Debt Equity ratio is a 'Solvency ratio'.Correct Answer True
Question Current assets includes stock-in-process.
Correct Answer True
Question A project objective can be said to have the following dimensions viz.:Correct Answer Strategic perspective , Time span , Finance cost aspectYour Answer Strategic perspective , Time span , Finance cost aspect
Question Liabilities side of Balance sheet includes :-Correct Answer Unsecured loans
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
Question A Project has a ________ represented by growth, maturity and decay.Correct Answer Life cycleYour Answer Life cycle
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 PostureYour Answer Aggressive Posture , Competitive Posture , Defensive Posture
Question ________ is the summary of cash book or Receipts and Payments statement.Correct Answer Cash flow statementYour Answer Cash flow statement
Question The point at which the unit neither earns profit nor incurs loss is known as :-
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Correct Answer Break Even PointYour Answer Break Even Point
Question In the Detailed Project Report, Marketing aspects includes :-Correct Answer Demand forecasting , Promotion , DistributionYour Answer Demand forecasting , Promotion , Distribution
Question The various aspects which need to be considered while assessing Project finance financing are :-Correct Answer Environmental factors , Risk involved , Managerial compensationYour Answer Environmental factors , Risk involved , Managerial compensation
Question Casual methods of Demand forecasting consists of Correct Answer Consumption-level method , Econometric methodYour Answer Consumption-level method , Econometric method
Question Under _______ method, the forecasts are modified in the light of observed errors.Correct Answer Exponential smoothingYour Answer Exponential smoothing
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 profitsYour 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
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 usen future for expansion or other purpose.Correct Answer Dividend
Question Infrastructural projects include :-Correct Answer Power Generation and DistributionYour Answer Power Generation and Distribution
Question The ratio that roughly measures the company's potential reserve of cash is termed as :-Correct Answer Net Working capital to total assetsYour Answer Net Working capital to total assets
Question Name and designation of the chief executive comes under the ________ category.Correct Answer GeneralYour Answer General
Question Miscellaneous fixed assets includes :-Correct Answer CablesYour Answer Cables
Question In the Cash flow statement, the sources of funds includeCorrect Answer Share IssueYour Answer Share Issue
ET 3
Question Land and site development comes under the cost aspect of the Project report.Correct Answer True
Question Location of the factory comes under the :-Correct Answer General categoryYour Answer General category
Question The sources of funding have expanded from banks, insurance companies and multilateral agencies to include the :-Correct Answer Capital marketYour Answer Debt market
Question Cost of overheads include :-Correct Answer Cost of repairs and maintenance
Your Answer Cost of electricity
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 TrueYour Answer True
Question Debt Service means payment of installments and interest against an amount borrowed as per terms of loan.Correct Answer TrueYour Answer True
Question The ratios of one organisation compared with the ratios of the same organisation is termed as inter-firm comparison.Correct Answer False
Question Depreciation is sometimes treated as ________ funds.Correct Answer Source
Question Excessive expenditures on foreign technicians leads to ________.Correct Answer Cost and time overrunYour Answer Management problems
Question The Key terms used in the BCG Product Portfolio matrix are :-Correct Answer Stars , Question marksYour Answer Stars , Question marks , Invest
Question Sensitivity analysis consists of assessing the degree of risk.
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Correct Answer True
Question The data for ratio analysis is obtained from :-Correct Answer Profit and Loss Account , Balance SheetYour Answer Profit and Loss Account , Auditors report , Balance Sheet
Question Trend Projection method of demand forecasting consists of :-Correct Answer Linear Relationship , Exponential Relationship , Polynomial RelationshipYour Answer Linear Relationship , Chain ratio Relationship , Exponential Relationship
Question Delay in arrival of domestic/foreign machinery and technicians may lead to :-Correct Answer Cost and time overrunYour Answer Profit maximisation
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 wholeYour Answer Adopted as a guide depending on the consumption pattern of the society as a whole
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 transactionsYour Answer It does not consider non-fund transactions , It does not help in determining future requirement of funds , It does not provide any new informationut only rearranges the various facts
Question As the plant capacity increase, the investment cost unit capacity ________.Correct Answer DecreasesYour Answer Increases
Question Preoperative expenses includes :-Correct Answer Bank guaranteesYour Answer Brokerage on capital issue
Question Short supplies of materials may lead to :-Correct Answer Cost and time overrunYour Answer Cost and time overrun
Question In order to meet the cost of large project, the technique of ________ has been developed so that the financial commitment and risks associated withproject are shared between the project sponsor and the lending institutions.Correct Answer Limited recourse financingYour Answer Limited recourse financing
Question For computing Interest coverage ratio, Profit after Interest and taxes are taken into account.Correct Answer False
Question The ratio which covers those assets which can be converted into cash immediately is known as :-Correct Answer Quick ratioYour Answer Current ratio
Question Management category of Visit report consists of :-Correct Answer Managing Director , Institutional nominees , Committees of the boardYour Answer Managing Director , Electrical engineers , Institutional nominees
Question General Electric Stop Light Matrix analyses products in terms of :-Correct Answer Business strength and Industrial AttractivenessYour Answer Relative Market share and Industry Growth rate
Question The basic document for facilitating Project financing is the :-Correct Answer Detailed Project reportYour Answer Detailed Project report
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 MonopolisticYour Answer Monopolistic
Question Ratio should be computed on the basis of inter-related figures which have a cause and effect relationship.Correct Answer True
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 productYour Answer Future demand of the product , Export market , Future availability and supply of the product
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 technologyYour Answer Manufacturing process and technology
Question Time Series Projection Methods of Demand forecasting consists of :-Correct Answer Trend Projection method , Moving Averages methodYour Answer Trend Projection method , Moving Averages method
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 capitalYour Answer Working capital
Question Defaults category of the Project report may be in respect of :-Correct Answer Term loans , Principal , InterestYour Answer Term loans , Principal , Interest
Question If the organisation is a trading organisation, the requirement of working capital will be on the lower side.Correct Answer False
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Question Cost of fencing comes under the ________ category of the Project report.Correct Answer Land and site developmentYour Answer Building cost
Question Disposition of funds includes :-Correct Answer Increase in working capital , Preliminary expenses , DividendYour Answer Increase in working capital , Preliminary expenses , Preliminary expenses written off
Question Sources of funds includes :-Correct Answer Depreciation , Preliminary expenses written off , Increase in secured borrowingYour Answer Depreciation , Preliminary expenses written off , Increase in secured borrowing , Preliminary expenses
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 ProjectsYour Answer Backward Integration Projects
Question In the GE's Stop Light Matrix, when ________ situation prevails , Products call for divestment.Correct Answer Average Business Strength and Low Industry attractivenessYour Answer Weak Business strength and high Industry attractiveness
Question Investors who invest in the debentures of the company are the ________ of the company.Correct Answer CreditorsYour Answer Creditors
Question Debt Service coverage ratio may be considered to be one of the most important ratios calculated by the :-Correct Answer Bankers , Financial InstitutionsYour Answer Shareholders , Bankers , Creditors
Question Dissentions among the promoters is a :-
Correct Answer Management problemYour Answer Management perception
Question Goods purchased on credit ________ in flow of funds.Correct Answer Does not resultYour Answer Does not result
Question The secondary data is collected through market survey, specific for the project being appraised.Correct Answer FalseYour Answer False
Question Profit is the result of customer satisfaction, indeed customer delight under the :-Correct Answer Marketing conceptYour Answer Marketing concept
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
ET 4
Question The permanent requirement of working capital should be financed out of :-Correct Answer Debentures , Cash Profits , SharesYour Answer Debentures , Cash Profits , Shares
Question The sources of long term and medium term finance are :-Correct Answer Equity shares , Public depositYour Answer Equity shares , Bridge loan , Public deposit
Question The emphasis of the Banks and Financial institutions particularly in India has shifted from 'Sanctions', 'Disbursements' and 'Security-orientation' toRecovery/Recycling' and :-Correct Answer Activity orientation
Your Answer Activity orientation
Question Technology, design, layout of the plant as well as inputs and infrastructural facilities are to be considered under :-Correct Answer Technical appraisalYour Answer Financial appraisal
Question Detailed Project Report is generally prepared from a ________ report with additional information.Correct Answer FeasibilityYour Answer Feasibility
Question A high debt equity ratio may indicate that the financial stake of the creditors is more than that of the owners.Correct Answer TrueYour Answer True
Question The formula for Break Even Point is :-Correct Answer Fixed cost / ( Sales Price - Variables)
Your Answer (Profit after tax +Depreciation + Interest)/ Interest
Question Receivables is categorised under :-Correct Answer Current assets and liabilitiesYour Answer Material inputs and utilities
Question Ratios relating to working capital are :-Correct Answer Current ratio , Internal measure , Quick ratioYour Answer Current ratio , Debt Equity ratio , Internal measure
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Question Longer the duration of production cycle, higher the requirement of ________.Correct Answer Working capitalYour Answer Fixed assets
Question In the Detailed Project Report, Management aspects includes :-Correct Answer Determination , Organisation Building , Person / system orientedYour Answer Organisation Building , Person / system oriented , Promoter's equity / stake
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
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
Question Inflow of funds may not necessarily result in ________.Correct Answer Inflow of cashYour Answer Decrease in funds
Question Building cost consists of :-Correct Answer Factory building , Auxiliary buildings , Administrative blockYour Answer cost of development , Factory building , Auxiliary buildings
Question Sometimes the term ________ is interpreted as cash equivalent i.e. cash and marketable securities.Correct Answer Fund
Question Name of the finance manager comes under the Project organisation category of the Project report.Correct Answer True
Question Change in the project concept itself may lead to cost and time overrun.Correct Answer True
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. 50akhs whichever is lower.Correct Answer False
Question Trend projection method is the important technique for forecasting demand.Correct Answer True
Question Production and sales aspect of Visit report consists of :-Correct Answer Utilisation of installed capacity , Input availability , Sales trendsYour Answer Utilisation of installed capacity , Input availability
Question The sources of cash are :-Correct Answer Cash from operations , Sale of machinery , Issue of new sharesYour Answer Purchase of fixed assets , Cash from operations , Sale of machinery
Question External sources of cash are as follows :-Correct Answer Issue of new shares , Long term loans , Short term borrowingsYour Answer Issue of new shares , Long term loans , Short term borrowings
Question Production line diagrams show the organisation structure of the project along with information on location, personnel required for variousepartments, and their inter-relationship.Correct Answer False
Question ________ is a current assetCorrect Answer Book debts
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
nvironmentYour Answer High financial strength, high industrial strength, enjoying a competitive advantage and belonging to an attractive industry, operating in a relatively
table environmental conditions
Question Management aspect of detailed project report includesCorrect Answer Organisation structureYour Answer Demand forecasting
Question ________ profitability reduces the strain on working capital.Correct Answer High
Question The following are the sources of funds :-Correct Answer Operating Profit , Non operating IncomeYour Answer Operating Profit , Operating Loss , Non operating Income
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 obtainedYour Answer Internal rate of return is obtained
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
he changes in assets as well as asset sources which are not revealed by the income statementYour 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 thehanges in assets as well as asset sources which are not revealed by the income statement
Question Cost of materials include :-Correct Answer Cost of components and consumable stores
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Question Demographic market appraisal answers toCorrect Answer Who they are?Your Answer Where do the customers live?
Question The applications of cash are :-Correct Answer Purchase of fixed assets , Payment of long term loansYour Answer Purchase of fixed assets , Payment of long term loans
Question In the Cash flow statement, the sources of funds include :-Correct Answer Development rebate reserveYour Answer Development rebate reserve
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 capitalYour Answer Working capital
Question In the Detailed Project Report, Management aspects includes :-Correct Answer Determination , Organisation Building , Person / system orientedYour Answer Determination , Organisation Building , Person / system oriented
Question Short supplies of materials may lead to :-Correct Answer Cost and time overrunYour Answer Cost and time overrun
Question Management qualities includes :-Correct Answer Honesty , Financial resources , InitiativeYour Answer Honesty , Financial resources , Initiative
Question ________ capital represents permanent capital.
Correct Answer EquityYour Answer Preference
Question Ratio analysis is a widely used tool of :-Correct Answer Financial analysisYour Answer Portfolio analysis
Question Production and sales aspect of Visit report consists of :-Correct Answer Utilisation of installed capacity , Input availability , Sales trendsYour Answer Utilisation of installed capacity , Input availability , Sales trends
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 profitsYour Answer Item of current liabilities , Added back to the profit as per profit and loss account to arrive at operating profits
Question In both the extreme situations of trade cycles i.e. Inflation and depression, requirement of working capital may be high.Correct Answer True
Question Export Market is a technique used for forecasting under Commercial appraisal technique.Correct Answer True
Question The various aspects which need to be considered while assessing Project finance financing are :-Correct Answer Environmental factors , Risk involved , Managerial compensation
Question General Electric Stop Light Matrix analyses products in terms of :-Correct Answer Business strength and Industrial Attractiveness
Question Infrastructural projects include :-Correct Answer Power Generation and DistributionYour Answer Power Generation and Distribution
Question Debt Service means payment of installments and interest against an amount borrowed as per terms of loan.Correct Answer True
Question Short term finance is normally for a period upto ________ year.Correct Answer One
Question Name of the finance manager comes under the Project organisation category of the Project report.Correct Answer TrueYour Answer True
Question Details regarding Bridge finance comes under the ________ category of Project report.Correct Answer Financing planYour Answer Cost aspect
Question Every project involves financial outlay which can be referred to as :-Correct Answer Project financeYour Answer Project finance
Question Net Working Capital means :-Correct Answer Current assets less Current liabilitiesYour Answer Capital Budgeting
Question ________ in liabilities involves inflow of funds.Correct Answer IncreaseYour Answer Decrease
Question The basic characteristic of a project is :-
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Correct Answer That it involves current outlay of funds in expectation of future benefitsYour Answer That it involves current outlay of funds in expectation of future benefits
Question Trend Projection method of demand forecasting consists of :-Correct Answer Linear Relationship , Exponential Relationship , Polynomial RelationshipYour Answer Linear Relationship , Exponential Relationship , Polynomial Relationship
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 transactionsYour Answer It does not provide any new information but only rearranges the various facts , It does not consider non-fund transactions
Question Bilateral aid is form of external aid from one government to another government which is usually project specific.Correct Answer True
Question The statement which shows the movement of cash into and out of firm's kittie is known asCorrect Answer Cash flow statementYour Answer Cash flow statement
Question Sources of funds includes :-Correct Answer Depreciation , Preliminary expenses written off , Increase in secured borrowingYour Answer Depreciation , Preliminary expenses written off , Increase in secured borrowing
Question Position regarding requirement and training of operational staff comes under the ________ category of Project report.Correct Answer Project organisationYour Answer Project organisation
Question A smaller unit into which the overall requirement of capital of a company is sub-divided is termed as ________.Correct Answer Share
Question Banks and Financial Institutions, world-wide, are now financing projects with strategies and terms that would have been hard to believe/imagine just
few years back.Correct Answer True
Question A project objective which states "What' is to be viewed" is termed as :-Correct Answer Strategic perspectiveYour Answer Strategic perspective
Question For computing Interest coverage ratio, Profit after Interest and taxes are taken into account.Correct Answer False
Question The data for ratio analysis is obtained from :-Correct Answer Profit and Loss Account , Balance SheetYour Answer Profit and Loss Account , Balance Sheet
ET 6
Question Trend projection method is the important technique for forecasting demand.Correct Answer True
Question The BCG Product Portfolio Matrix :-Correct Answer Is a tool for strategic ( product ) planning and resource allocationYour Answer Is a tool for strategic ( product ) planning and resource allocation
Question A market survey generally is a ________ survey.Correct Answer SampleYour Answer Primary
Question ________ capital represents permanent capital.Correct Answer Equity
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
Question Nominal maximum capacity is the capacity that is technically attainable and this corresponds to the supplier's guaranteed capacity.Correct Answer True
Question Cost of the Project encompasses :-Correct Answer The total of all items of outlay associated with a projectYour Answer The total of all items of outlay associated with a project
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 auccess.Correct Answer TrueYour Answer True
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
Question Every project involves financial outlay which can be referred to as :-Correct Answer Project financeYour Answer Financial arrangement
Question Debt service coverage ratio indicates whether cash earned is sufficient for debt service.Correct Answer TrueYour Answer False
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Question The various aspects which need to be considered while assessing Project finance financing are :-Correct Answer Environmental factors , Risk involved , Managerial compensationYour Answer Environmental factors , Risk involved , Political issues
Question The following are the sources of funds :-Correct Answer Operating Profit , Non operating IncomeYour Answer Operating Profit , Non operating Income
Question ________ occupies a unique position in the macro economic development which helps in induction of new technology and facilitates, greater fficiency as well as higher productivity.Correct Answer InvestmentYour Answer Production
Question In both the extreme situations of trade cycles i.e. Inflation and depression, requirement of working capital may be high.Correct Answer TrueYour Answer True
Question In the Detailed Project Report, Marketing aspects includes :-Correct Answer Demand forecasting , Promotion , DistributionYour Answer Demand forecasting , Promotion , Distribution
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 ProjectsYour Answer Backward Integration Projects
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 productYour Answer Future demand of the product , Proper survey of the product , Export market , Future availability and supply of the product
Question Details regarding Administrative / controlling office comes under the ________ category.Correct Answer GeneralYour Answer Cost aspect
Question Sources of funds includes :-Correct Answer Depreciation , Preliminary expenses written off , Increase in secured borrowingYour 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 aspectYour Answer Finance cost aspect
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 factorsYour Answer Proximity to raw materials and markets , Availability of infrastructure , Government policies and other factors
Question The profit earned from operations of the project during life of the project is known as :-Correct Answer Cash inflowYour Answer Profit after appropriation
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 accountsYour Answer Company's financial year , Impact of Government policies on company operations , Sales trends
Question A Project has a ________ represented by growth, maturity and decay.Correct Answer Life cycle
Question Current assets includes stock-in-process.Correct Answer True
Question A project objective which states "What' is to be viewed" is termed as :-Correct Answer Strategic perspective
Your Answer Strategic perspective
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 TrueYour Answer True
Question Financing plans consists of :-Correct Answer Share capital , Term loans , Internal accrualsYour Answer Share capital , Term loans , Internal accruals
Question Disposition of funds includes :-Correct Answer Interest on term loansYour Answer Increase in secured borrowing
Question Gross Working Capital means :-Correct Answer Current assets
Your Answer Current assets less Current liabilities
Question ________ in assets involves outflow of funds.Correct Answer IncreaseYour Answer Increase
Question The Project Cycle should be in the ________ order Correct Answer Identification of Project - Project Appraisal - Negotiations for loansYour Answer Identification of Project - Project Appraisal - Negotiations for loans
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Your Answer Strategic perspective , Time span , Finance cost aspect
Question A project can be regarded as the sum of the activities directed towards a :-Correct Answer Specific result
Question Details regarding Administrative / controlling office comes under the ________ category.Correct Answer General
Question Retained earnings is a source of ________ finance.Correct Answer Internal
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 productYour Answer Future demand of the product , Proper survey of the product , Future availability and supply of the product
Question The temporary requirement of working capital can be financed out of :-Correct Answer Inter-corporate Deposits , Commercial PapersYour Answer Shares , Debentures , Commercial Papers
Question Distribution channels for the product is categorised under :-Correct Answer Marketing
Question ________ occupies a unique position in the macro economic development which helps in induction of new technology and facilitates, greater fficiency as well as higher productivity.Correct Answer InvestmentYour Answer Marketing
Question Disposition of funds includes :-Correct Answer Increase in working capital , Preliminary expenses , DividendYour Answer Increase in working capital , Dividend , Preliminary expenses written off
Question Delay in recruitment of staff may lead to cost and time overrunCorrect Answer True
Question Cost of overheads include :-Correct Answer Cost of repairs and maintenance
Question The basic characteristic of a project is :-Correct Answer That it involves current outlay of funds in expectation of future benefitsYour Answer That it involves current outlay of funds in expectation of future benefits
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 factorsYour Answer Proximity to raw materials and markets , Availability of infrastructure
Question Financial aspect of Detailed Project report includes :-Correct Answer Fixation of means of financial structure
Question ________ in assets involves outflow of funds.Correct Answer Increase
Question The sources of funding have expanded from banks, insurance companies and multilateral agencies to include the :-Correct Answer Capital market
Question Ratio analysis is a technique of planning and control.Correct Answer False
Question Debt Equity ratio is a 'Solvency ratio'.Correct Answer True
Question Every project involves financial outlay which can be referred to as :-Correct Answer Project finance
Question Interest and Dividend are to be considered while calculating Operating ratio.Correct Answer False
Question Commission outstanding is ________ of funds.Correct Answer ApplicationYour Answer Application
Question Demographic market appraisal answers toCorrect Answer Who they are?
Question For computing Interest coverage ratio, Profit after Interest and taxes are taken into account.Correct Answer False
Question Building cost consists of :-Correct Answer Factory building , Auxiliary buildings , Administrative block
Question Delays in infrastructure Development by State Agencies may lead to :-Correct Answer Cost and time overrun
Question In the Detailed Project Report, Technical aspects includes :-Correct Answer Plant capacity , Quality standards , Raw material requirement
Question Time Series Projection Methods of Demand forecasting consists of :-Correct Answer Trend Projection method , Moving Averages method
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Question Name and designation of the chief executive comes under the ________ category.Correct Answer General
Question Delay in arrival of domestic/foreign machinery and technicians may lead to :-Correct Answer Cost and time overrun
Question The advantage of secondary sources of data is that it is readily and economically available.Correct Answer True
Question Goods purchased on credit ________ in flow of funds.Correct Answer Does not resultYour Answer Decreases
Question Gross Working Capital means :-
Correct Answer Current assetsYour Answer Current assets less Current liabilities
Question Short term finance is normally for a period upto ________ year.Correct Answer One
Question The data for ratio analysis is obtained from :-Correct Answer Profit and Loss Account , Balance SheetYour Answer Balance Sheet
Question In both the extreme situations of trade cycles i.e. Inflation and depression, requirement of working capital may be high.Correct Answer True
ET 8
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
Question Production line diagrams show the organisation structure of the project along with information on location, personnel required for variousepartments, and their inter-relationship.Correct Answer False
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
Question In BCG Matrix "STARS" indicate :-Correct Answer Products which enjoy a high market share as well as a high growth rateYour Answer Products which enjoy a high market share as well as a high growth rate
Question Management category of Visit report consists of :-Correct Answer Managing Director , Institutional nominees , Committees of the board
Question A Project has a ________ represented by growth, maturity and decay.Correct Answer Life cycle
Question Casual methods of Demand forecasting consists of :-Correct Answer Consumption-level method , Econometric method
Question Excessive expenditures on foreign technicians leads to ________.Correct Answer Cost and time overrun
Question A project objective which states What "achieving it " would cost is known as :-Correct Answer Finance cost aspect
Question Marketing aspect of Detailed Project report includes :-Correct Answer Demand forecasting
Question The sources of cash are :-
Correct Answer Sale of machinery , Cash from operations , Issue of new sharesYour Answer Cash from operations , Sale of machinery , Issue of new shares
Question Infrastructural projects include :-Correct Answer Power Generation and Distribution
Question ________ is the summary of cash book or Receipts and Payments statement.Correct Answer Cash flow statementYour Answer Trial balance
Question Receivables is categorised under :-Correct Answer Current assets and liabilities
Question A project is unique and no two projects are similar.Correct Answer True
Question A Project is a temporary endeavor to achieve some specific objectives within a :-Correct Answer Predefined time
Question ________ in liabilities involves inflow of funds.Correct Answer Increase
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 financialspects.
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Correct Answer True
Question Cost of utilities include :-Correct Answer Cost of electricity
Question Marketing category of the Project report consists of :-Correct Answer Target market , Market potential , Pricing policy
Question In BCG Matrix "QUESTION MARKS" indicate :-Correct Answer Products which have high growth potential but low market share
Question Location of the factory comes under the ________ category of the Project report.Correct Answer General
Question It is mandatory for each unit to obtain necessary clearance from Pollution Control Authorities before setting up any project.Correct Answer True
Question Disposition of funds includes :-Correct Answer Interest on term loans
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
Question Depreciation is sometimes treated as ________ funds.Correct Answer SourceYour Answer Application
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 Businesstrength and Low Industry attractiveness
Question The sources of long term and medium term finance are :-Correct Answer Equity shares , Public depositYour Answer Equity shares , Bridge loan , Working capital loan
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 themanufacturing.
Correct Answer True
Question The various aspects which need to be considered while assessing Project finance financing are :-Correct Answer Environmental factors , Risk involved , Managerial compensation
Question Technical aspect of detailed project report includes :-Correct Answer Detailed Project Engineering
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 aeliable guide for the future requirement of fundsYour Answer It determines financial consequences of the business operations , It enables the firm to plan its financial resources properly , It helps as aeliable guide for the future requirement of funds
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 PostureYour Answer Aggressive Posture , Competitive Posture , Defensive Posture
Question Details regarding Internal accruals comes under the ________ category of Project report.Correct Answer Financing planYour Answer General category
Question The 'BCG Matrix 'analysis various products of the organisation in the terms of Business strength and Industry Attractiveness.Correct Answer False
Question The applications of cash are :-Correct Answer Purchase of fixed assets , Payment of long term loansYour Answer Purchase of fixed assets , Payment of long term loans , Issue of new machinery
Question The Project Cycle should be in the ________ order Correct Answer Identification of Project - Project Appraisal - Negotiations for loansYour Answer Identification of Project - Project Appraisal - Negotiations for loans
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
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 theProject a success.
Correct Answer True
Question A project objective which states "What' is to be viewed" is termed as :-Correct Answer Strategic perspective
Question Current assets includes stock-in-process.Correct Answer True
Question External sources of cash are as follows :-Correct Answer Issue of new shares , Long term loans , Short term borrowings
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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 atYour Answer A list of industries wherein the product is used is made and quantity and volume is arrived at
Question The Projects which are undertaken for further enhancing/augmenting the existing capacity is known as :-Correct Answer Expansion Projects
Question Sometimes the term ________ is interpreted as cash equivalent i.e. cash and marketable securities.Correct Answer FundYour Answer Investment
ET 9
Question 1 The advantage of secondary sources of data is that it is readily and economically available.Correct Answer True
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
Question3 Banks and Financial Institutions, world-wide, are now financing projects with strategies and terms that would have been hard to believe/imagine justfew years back.Correct Answer True
Question 4 ________ is a current assetCorrect Answer Book debtsYour Answer Furniture
Question 5 Trend Projection method of demand forecasting consists of :-
Correct Answer Linear Relationship , Exponential Relationship , Polynomial RelationshipYour Answer Linear Relationship , Exponential Relationship , Polynomial Relationship
Question 6 Delays in infrastructure Development by State Agencies may lead to :-Correct Answer Cost and time overrunYour Answer Management problems
Question 7 Technical aspect of detailed project report includes :-Correct Answer Detailed Project EngineeringYour Answer Detailed Project Engineering
Question 8 Sources of funds includes :-Correct Answer Depreciation , Preliminary expenses written off , Increase in secured borrowingYour Answer Preliminary expenses written off , Increase in secured borrowing
Question 9 Delay in arrival of domestic/foreign machinery and technicians may lead to :-Correct Answer Cost and time overrunYour Answer Cost and time overrun
Question 10 A smaller unit into which the overall requirement of capital of a company is sub-divided is termed as ________.Correct Answer Share
Question11 A project objective which states "What' is to be viewed" is termed as :-Correct Answer Strategic perspective
Question 12 Sewerage and drainage cost of the project is categorised under :-Correct Answer Building cost
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
Question14 In the Detailed Project Report, Management aspects includes :-
Correct Answer Determination , Organisation Building , Person / system orientedYour Answer Determination , Organisation Building , Person / system oriented
Question15 Short term finance is normally for a period upto ________ year.Correct Answer One
Question16 Current assets includes stock-in-process.Correct Answer True
Question17 The basic characteristic of a project is :-Correct Answer That it involves current outlay of funds in expectation of future benefitsYour Answer That it involves current outlay of funds in expectation of future benefits
Question18 Time Series Projection Methods of Demand forecasting consists of :-Correct Answer Trend Projection method , Moving Averages methodYour Answer Trend Projection method , Moving Averages method
Question 19 ________ is a current liability.Correct Answer Trade creditYour Answer Trade credit
Question20 Managerial problems in a project are the most pervasive.Correct Answer True
Question21 Longer the duration of production cycle, higher the requirement of ________.
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Correct Answer Working capital
Question22 Retained earnings is a source of ________ finance.Correct Answer InternalYour Answer Short term
Question23 ________ is the summary of cash book or Receipts and Payments statement.Correct Answer Cash flow statementYour Answer Trial balance
Question24 In the BCG Matrix, the key term of Cash Cows require further commitment of funds.Correct Answer False
Question25 Cost and time overrun of the project may lead to loss on account of lost market opportunities.
Correct Answer True
Question26 A project objective which states What "achieving it " would cost is known as :-Correct Answer Finance cost aspect
Question27 Casual methods of Demand forecasting consists of :-Correct Answer Consumption-level method , Econometric methodYour Answer Consumption-level method , Econometric method
Question 28 In BCG Matrix "STARS" indicate :-Correct Answer Products which enjoy a high market share as well as a high growth rateYour Answer Products which enjoy a high market share as well as a high growth rate
Question 29 Psychographic market appraisal answers to :-Correct Answer Why they buy?
Question30 Production line diagrams show the organisation structure of the project along with information on location, personnel required for variousepartments, and their inter-relationship.Correct Answer False
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 factorsYour Answer Proximity to raw materials and markets , Availability of infrastructure , Government policies and other factors
Question32 The cost which change in the same proportion in which the level of production changes is known as :-Correct Answer Variable cost
Question33 Goods purchased on credit ________ in flow of funds.Correct Answer Does not resultYour Answer Decreases
Question34 Ratios relating to working capital are :-Correct Answer Current ratio , Internal measure , Quick ratioYour Answer Current ratio , Debt Equity ratio , Quick ratio
Question35 Appointments made at senior level during the half-year is categorised under :-Correct Answer Organisation and management
Question36 Cost of the Project encompasses :-Correct Answer The total of all items of outlay associated with a projectYour Answer The total of all items of outlay associated with a project
Question37 Production and sales aspect of Visit report consists of :-Correct Answer Utilisation of installed capacity , Input availability , Sales trends
Question39 Every project involves financial outlay which can be referred to as :-Correct Answer Project financeYour Answer Project finance
Question 40 General category of the Project report consists of :-Correct Answer Name of the Industrial concern , Proposed product , Location of the factoryYour Answer Name of the Industrial concern , Proposed product , Location of the factory
Question 41 The data for ratio analysis is obtained from :-Correct Answer Profit and Loss Account , Balance Sheet
Question42 Short supplies of materials may lead to :-Correct Answer Cost and time overrun
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 PostureYour Answer Aggressive Posture , Competitive Posture , Defensive Posture
Question 44 ________ occupies a unique position in the macro economic development which helps in induction of new technology and facilitates, greater fficiency as well as higher productivity.
Correct Answer InvestmentYour Answer Marketing
Question45 Infrastructural projects include :-Correct Answer Power Generation and Distribution
Question46 Name and designation of the chief executive comes under the ________ category.Correct Answer General
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ET 10
Question Details regarding Internal accruals comes under the ________ category of Project report.Correct Answer Financing plan
Question In the Detailed Project Report, Technical aspects includes :-Correct Answer Plant capacity , Quality standards , Raw material requirement
Question A smaller unit into which the overall requirement of capital of a company is sub-divided is termed as ________.Correct Answer Share
Question In order to meet the cost of large project, the technique of ________ has been developed so that the financial commitment and risksssociated with a project are shared between the project sponsor and the lending institutions.
Correct Answer Limited recourse financing
Question ________ is a current liability.Correct Answer Trade credit
Question ________ is a current assetCorrect Answer Book debts
Question Debt Service coverage ratio may be considered to be one of the most important ratios calculated by the :-Correct Answer Bankers , Financial Institutions
Question Ratios relating to working capital are :-Correct Answer Current ratio , Internal measure , Quick ratio
Question Cost of laying roads comes under :-Correct Answer Land and site cost
Question Pre-operative expenses include :-Correct Answer Interest on deferred paymentsYour Answer 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 themanufacturing.
Correct Answer True
Question Retained earnings indicates that whatever profits are earned by the company are not distributed by it by way of ________ but are kept asideor use in future for expansion or other purpose.Correct Answer Dividend
Question In the Detailed Project Report, Management aspects includes :-Correct Answer Determination , Organisation Building , Person / system orientedYour Answer Organisation Building , Person / system oriented , Promoter's equity / stake
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
Question General Electric Stop Light Matrix analyses products in terms of :-Correct Answer Business strength and Industrial AttractivenessYour Answer Company's competitive advantage and Company's financial strength
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 financialspects.Correct Answer True
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
Question The ratios of one organisation compared with the ratios of the same organisation is termed as inter-firm comparison.Correct Answer False
Question Detailed Project Report is generally prepared from a ________ report with additional information.Correct Answer Feasibility
Question Under ________ method, the forecasts are modified in the light of observed errors.Correct Answer Exponential smoothingYour Answer Cobb Douglas Relationship
Question The Detailed Project report must indicate the gestation period of the project.Correct Answer True
Question Delay in recruitment of staff may lead to cost and time overrunCorrect Answer True
Question Delays in infrastructure Development by State Agencies may lead to :-Correct Answer Cost and time overrun
Question Infrastructural projects include :-Correct Answer Power Generation and Distribution
Question The method for evaluating the profitability of industrial projects whose object is to ascertain the period required for recovering the entirenvestment made in a project is known as :-Correct Answer Pay back methodYour Answer Pay back method
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Select The BlankQuestion ________ in assets involves outflow of funds.Correct Answer Increase
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 knowns :-Correct Answer Internal rate of return
Question Cost of fencing comes under the ________ category of the Project report.Correct Answer Land and site development
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
Question The sources of funding have expanded from banks, insurance companies and multilateral agencies to include the :-Correct Answer Capital market
Question Sensitivity analysis consists of assessing the degree of risk.Correct Answer True
Question The permanent requirement of working capital should be financed out of :-Correct Answer Cash Profits , Shares , Debentures
Question Sources of funds include :-Correct Answer Increase in secured borrowing
Question Nominal maximum capacity is the capacity that is technically attainable and this corresponds to the supplier's guaranteed capacity.Correct Answer True
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 factorsYour Answer Proximity to raw materials and markets , Availability of infrastructure , Government policies and other factors
Question Financing plans consists of :-Correct Answer Share capital , Term loans , Internal accruals
Question Ratio should be computed on the basis of inter-related figures which have a cause and effect relationship.Correct Answer True
Question In the BCG Matrix "DOGS" indicate products which are generally during the stage of Decline of a Product Life Cycle.Correct Answer True
Question Trend Projection method of demand forecasting consists of :-Correct Answer Linear Relationship , Exponential Relationship , Polynomial Relationship
Question Technical appraisal is basically concerned with :-Correct Answer Technology , Layout of the plant , Design of the plant
Question Demographic market appraisal answers toCorrect Answer Who they are?Your Answer Where do the customers live?
Question A Project has a ________ represented by growth, maturity and decay.Correct Answer Life cycle
Question A project objective can be said to have the following dimensions viz.:Correct Answer Strategic perspective , Time span , Finance cost aspect
Question Casual methods of Demand forecasting consists of :-Correct Answer Consumption-level method , Econometric methodYour Answer Trend Projection method , Consumption-level method , Moving Averages method
Question The statement which shows the movement of cash into and out of firm's kittie is known as :-Correct Answer Cash flow statement
ET 11
Question The sources of long term and medium term finance are :-Correct Answer Public deposit , Equity sharesYour Answer Equity shares , Bridge loan , Working capital loan
Question Disposition of funds includes :-Correct Answer Increase in working capital , Preliminary expenses , DividendYour Answer Increase in working capital , Dividend , Preliminary expenses written off
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 stablenvironmentYour Answer Limited financial strength, enjoying competitive advantage, belonging to attractive industry and operating in a relatively volatile environment
Question A market survey generally is a ________ survey.Correct Answer Sample
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Question The ratio which covers those assets which can be converted into cash immediately is known as :-Correct Answer Quick ratio
Question Delay in arrival of domestic/foreign machinery and technicians may lead to :-Correct Answer Cost and time overrunYour Answer Cost and time overrun
Question Casual methods of Demand forecasting consists of :-Correct Answer Consumption-level method , Econometric methodYour Answer Consumption-level method , Econometric method
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 technologyYour Answer Manufacturing process and technology
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
he changes in assets as well as asset sources which are not revealed by the income statementYour 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 notevealed by the income statement , Helps to prepare financial statements
Question The data for ratio analysis is obtained from :-Correct Answer Profit and Loss Account , Balance SheetYour Answer Profit and Loss Account , Balance Sheet , Cash flow statement
Question ________ in assets involves outflow of funds.Correct Answer Increase
Question Technology, design, layout of the plant as well as inputs and infrastructural facilities are to be considered under :-Correct Answer Technical appraisal
Question The Detailed Project report must indicate the gestation period of the project.Correct Answer True
Question Interest and Dividend are to be considered while calculating Operating ratio.Correct Answer False
Question Short supplies of materials may lead to :-Correct Answer Cost and time overrunYour Answer Cost and time overrun
Question Ratio should be computed on the basis of inter-related figures which have a cause and effect relationship.Correct Answer True
Question A project objective which states What "achieving it " would cost is known as :-Correct Answer Finance cost aspect
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
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 knowns :-Correct Answer Internal rate of returnYour Answer Net Present value
Question The various aspects which need to be considered while assessing Project finance financing are :-Correct Answer Environmental factors , Risk involved , Managerial compensationYour Answer Environmental factors , Risk involved , Political issues
Question The advantage of secondary sources of data is that it is readily and economically available.Correct Answer True
Question A project objective which states "What' is to be viewed" is termed as :-Correct Answer Strategic perspective
Question A project objective can be said to have the following dimensions viz.:Correct Answer Strategic perspective , Time span , Finance cost aspectYour Answer Strategic perspective , Time span , Finance cost aspect
Question A project is unique and no two projects are similar.Correct Answer True
Question The sources of cash are :-Correct Answer Cash from operations , Sale of machinery , Issue of new sharesYour Answer Cash from operations , Sale of machinery , Issue of new shares
Question Profit is the result of customer satisfaction, indeed customer delight under the :-
Correct Answer Marketing concept
Question Management qualities includes :-Correct Answer Honesty , Financial resources , InitiativeYour Answer Honesty , Financial resources , Initiative
Question The basic characteristic of a project is :-Correct Answer That it involves current outlay of funds in expectation of future benefitsYour Answer That it involves current outlay of funds in expectation of future benefits
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Question ________ is the summary of cash book or Receipts and Payments statement.Correct Answer Cash flow statement
Question Under the SPACE Model, Customer loyalty is determined under the ________ dimension.Correct Answer Company's competitive advantageYour Answer Company's competitive advantage
Question The 'BCG Matrix 'analysis various products of the organisation in the terms of Business strength and Industry Attractiveness.Correct Answer False
Question A smaller unit into which the overall requirement of capital of a company is sub-divided is termed as ________.Correct Answer Share
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 attractivenessYour Answer Average Business Strength and Medium Industry Attractiveness , Average Business strength and high Industry attractiveness , Averageusiness Strength and Low Industry attractiveness
Question The ratio which indicates the ability of the company to meet current obligations is termed as :-Correct Answer Current ratio
Question The General Electric Company incorporated in the USA, is highly respected for the sophistication, maturity and quality in its planningystems.Correct Answer True
Question Inflow of funds may not necessarily result in ________.Correct Answer Inflow of cash
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 theProject a success.Correct Answer True
Question Sometimes the term ________ is interpreted as cash equivalent i.e. cash and marketable securities.Correct Answer FundYour Answer Investment
Question Every project involves financial outlay which can be referred to as :-Correct Answer Project finance
Question In the Detailed Project Report, Management aspects includes :-Correct Answer Determination , Organisation Building , Person / system orientedYour Answer Determination , Organisation Building , Person / system oriented
Question Depreciation is sometimes treated as ________ funds.Correct Answer Source
Question It is mandatory for each unit to obtain necessary clearance from Pollution Control Authorities before setting up any project.Correct Answer True
Question In BCG Matrix "QUESTION MARKS" indicate :-Correct Answer Products which have high growth potential but low market shareYour Answer Products which have high growth potential but low market share
Question Production line diagrams show the organisation structure of the project along with information on location, personnel required for variousepartments, and their inter-relationship.Correct Answer False
et 12
Question Borrower's contribution towards Working capital is known as :-Correct Answer Margin money
Question Building cost consists of :-Correct Answer Factory building , Auxiliary buildings , Administrative blockYour Answer Factory building , Auxiliary buildings , Administrative block
Question In BCG Matrix " CASH COWS" indicate :-Correct Answer Products which have high market share but low growth potentialYour Answer Products which have high market share but low growth potential
Question In the Detailed Project Report, Marketing aspects includes :-Correct Answer Demand forecasting , Promotion , DistributionYour Answer Demand forecasting , Promotion , Distribution
Question Cost of the Project encompasses :-
Correct Answer The total of all items of outlay associated with a project
Question In both the extreme situations of trade cycles i.e. Inflation and depression, requirement of working capital may be high.Correct Answer True
Question Name of the finance manager comes under the Project organisation category of the Project report.Correct Answer True
Question It is mandatory for each unit to obtain necessary clearance from Pollution Control Authorities before setting up any project.
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Correct Answer True
Question A project objective can be said to have the following dimensions viz.:Correct Answer Strategic perspective , Time span , Finance cost aspect
Question Infrastructural projects include :-Correct Answer Power Generation and Distribution
Question BCG Product Portfolio Matrix analyses products on the basis of :-Correct Answer Relative Market share and Industry Growth rate
Question ________ profitability reduces the strain on working capital.Correct Answer High
Question The basic characteristic of a project is :-Correct Answer That it involves current outlay of funds in expectation of future benefits
Question The various aspects which need to be considered while assessing Project finance financing are :-Correct Answer Environmental factors , Risk involved , Managerial compensation
Question "Fly by night" operator mentality is a :-Correct Answer Management quality
Question Every project involves financial outlay which can be referred to as :-Correct Answer Project finance
Question As the plant capacity increase, the investment cost unit capacity ________.Correct Answer Decreases
Question Debt Service coverage ratio may be considered to be one of the most important ratios calculated by the :-
Correct Answer Bankers , Financial InstitutionsYour Answer Shareholders , Bankers , Financial Institutions
Question A project objective which states What "achieving it " would cost is known as :-Correct Answer Finance cost aspect
Question A project is unique and no two projects are similar.Correct Answer True
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 transactionsYour 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 inetermining future requirement of funds
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
Question Receivables is categorised under :-Correct Answer Current assets and liabilities
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
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 unstablenvironment
Question Excessive expenditures on foreign technicians leads to ________.Correct Answer Cost and time overrun
Question The 'BCG Matrix 'analysis various products of the organisation in the terms of Business strength and Industry Attractiveness.Correct Answer False
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
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 accountsYour Answer Company's financial year , Impact of Government policies on company operations , Comments on the last published accounts
Question Sensitivity analysis consists of assessing the degree of risk.Correct Answer True
Question A project objective which states "What' is to be viewed" is termed as :-Correct Answer Strategic perspective
Question The permanent requirement of working capital should be financed out of :-Correct Answer Cash Profits , Shares , Debentures
Question In the BCG Matrix "DOGS" indicate products which are generally during the stage of Decline of a Product Life Cycle.Correct Answer True
Question The construction of National Golden Quadrilateral can be recognised as Project.Correct Answer True
Question Under the SPACE Model, Customer loyalty is determined under the ________ dimension.Correct Answer Company's competitive advantage
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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 themanufacturing.
Correct Answer 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
Question Miscellaneous fixed assets includes :-Correct Answer Cables
Question In the Detailed Project Report, Technical aspects includes :-Correct Answer Plant capacity , Quality standards , Raw material requirementYour Answer Quality standards , Raw material requirement , Power / telecom facilities
Question Trend Projection method of demand forecasting consists of :-Correct Answer Linear Relationship , Exponential Relationship , Polynomial Relationship
Question Market potential should be determined under the Marketing aspect of the Project report.Correct Answer True
Question Ratio analysis is a widely used tool of :-Correct Answer Financial analysis
Question Preoperative expenses includes :-Correct Answer Bank guarantees
Question A Project has a ________ represented by growth, maturity and decay.Correct Answer Life cycle
Question If the organisation is a trading organisation, the requirement of working capital will be on the lower side.
Correct Answer False
ET 13
Question Cost under-estimation at the project preparation and evaluation stage leads to cost and time over run.Correct Answer True
Question Short supplies of materials may lead to :-Correct Answer Cost and time overrun
Question ________ is a current assetCorrect Answer Book debts
Question Disposition of funds includes :-Correct Answer Interest on term loansYour Answer Increase in secured borrowing
Question The permanent requirement of working capital should be financed out of :-Correct Answer Cash Profits , Shares , Debentures
Question Cost and time overrun of the project may lead to loss on account of lost market opportunities.Correct Answer True
Question Commission outstanding is ________ of funds.Correct Answer Application
Question Every project involves financial outlay which can be referred to as :-Correct Answer Project finance
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
he 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 notevealed by the income statement , Helps to prepare financial statements
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
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
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 factorsYour Answer Proximity to raw materials and markets , Plant capacity , Availability of infrastructure
Question Change in the project concept itself may lead to cost and time overrun.Correct Answer True
Question Name and designation of the chief executive comes under the ________ category.Correct Answer GeneralYour Answer Project organisation
Question ________ occupies a unique position in the macro economic development which helps in induction of new technology and facilitates, greater fficiency as well as higher productivity.Correct Answer Investment
Question Internal sources of funds are :-
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Correct Answer Funds from operation , Loss on sale of fixed assets , Goodwill written off Your Answer Funds from operation , Funds from long term loans
Question Financing plans consists of :-Correct Answer Share capital , Term loans , Internal accruals
Question Financial aspect of Detailed Project report includes :-Correct Answer Fixation of means of financial structure
Question ________ is that scarce input which financial resources alone cannot mobilise.Correct Answer Management
Question A project can be regarded as the sum of the activities directed towards a :-Correct Answer Specific result
Question A project objective which states "What' is to be viewed" is termed as :-Correct Answer Strategic perspective
Question Short term finance is normally for a period upto ________ year.Correct Answer One
Question A Project has a ________ represented by growth, maturity and decay.Correct Answer Life cycle
Question The various aspects which need to be considered while assessing Project finance financing are :-Correct Answer Environmental factors , Risk involved , Managerial compensation
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 attractivenessYour Answer Strong Business Strength and high Industry attractiveness , Average Business Strength and Medium Industry Attractiveness , Average Business
trength and high Industry attractiveness
Question Longer the duration of production cycle, higher the requirement of ________.Correct Answer Working capital
Question ________ in assets involves outflow of funds.Correct Answer Increase
Question For computing Interest coverage ratio, Profit after Interest and taxes are taken into account.Correct Answer False
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 obtainedYour Answer Average rate of return is obtained
Question The ratio which indicates the ability of the company to meet current obligations is termed as :-Correct Answer Current ratio
Question Sensitivity analysis consists of assessing the degree of risk.Correct Answer True
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
Question Marketing aspect of Detailed Project report includes :-Correct Answer Demand forecasting
Question The secondary data is collected through market survey, specific for the project being appraised.Correct Answer FalseYour Answer Net Working capital to total assets
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
Question Geographic market appraisal answers to :-Correct Answer Where do the customers live?Your Answer Where do the customers live?
Question Sometimes the term ________ is interpreted as cash equivalent i.e. cash and marketable securities.Correct Answer Fund
Question The temporary requirement of working capital can be financed out of :-Correct Answer Inter-corporate Deposits , Commercial PapersYour Answer Inter-corporate Deposits , Commercial Papers
Question Current assets includes stock-in-process.Correct Answer True
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ET 14
Question The data for ratio analysis is obtained from :-Correct Answer Profit and Loss Account , Balance Sheet
Question Delays in infrastructure Development by State Agencies may lead to :-Correct Answer Cost and time overrun
Question The Project Cycle should be in the ________ order Correct Answer Identification of Project - Project Appraisal - Negotiations for loans
Question Change in the project concept itself may lead to cost and time overrun.Correct Answer True
Question The industrial concern earned profits by increasing the sales volume under the Correct Answer Sales concept
Question Cost and time overrun of the project may lead to loss on account of lost market opportunities.Correct Answer True
Question Management qualities includes :-Correct Answer Honesty , Financial resources , Initiative
Question Trend Projection method of demand forecasting consists of :-Correct Answer Linear Relationship , Exponential Relationship , Polynomial Relationship
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 TrueQuestion 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 understandhe changes in assets as well as asset sources which are not revealed by the income statement
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. 50akhs whichever is lower.Correct Answer False
Question Every project involves financial outlay which can be referred to as :-Correct Answer Project finance
Question A project objective can be said to have the following dimensions viz.:Correct Answer Strategic perspective , Time span , Finance cost aspect
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
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
Question Technical appraisal is basically concerned with :-Correct Answer Technology , Layout of the plant , Design of the plant
Question It is mandatory for each unit to obtain necessary clearance from Pollution Control Authorities before setting up any project.Correct Answer True
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
Question The basic characteristic of a project is :-Correct Answer That it involves current outlay of funds in expectation of future benefits
Question Longer the duration of production cycle, higher the requirement of ________.Correct Answer Working capital
Question Inflow of funds may not necessarily result in ________.
Correct Answer Inflow of cash
Question Infrastructural projects include:-Correct Answer Power Generation and Distribution
Question Details regarding Administrative / controlling office comes under the ________ category.Correct Answer General
Question Ratios relating to working capital are:-Correct Answer Current ratio, internal measure, Quick ratio
Question Depreciation is sometimes treated as ________ funds.Correct Answer Source
Question Miscellaneous fixed assets includes :-Correct Answer Cables
Question In BCG Matrix "STARS" indicate :-Correct Answer Products which enjoy a high market share as well as a high growth rate
Question ________ is a current liability.Correct Answer Trade credit
Question Sources of funds includes :-Correct Answer Depreciation , Preliminary expenses written off , Increase in secured borrowing
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Question The construction of National Golden Quadrilateral can be recognised as Project.Correct Answer True
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 themanufacturing.Correct Answer True
Question Capital Issue expenses include :-Correct Answer Brokerage fees to registrars
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
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
Question Management category of Visit report consists of :-Correct Answer Managing Director , Institutional nominees , Committees of the board
Question Sanctioned bank limits is categorised under :-Correct Answer Working capital
Question General Electric Stop Light Matrix analyses products in terms of :-Correct Answer Business strength and Industrial Attractiveness
Question Production and sales aspect of Visit report consists of :-Correct Answer Utilisation of installed capacity , Input availability , Sales trends
Question Cost of overheads include :-
Correct Answer Cost of repairs and maintenance
Question External sources of cash are as follows :-Correct Answer Issue of new shares , Long term loans , Short term borrowings
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
nvironment
Question Sensitivity analysis consists of assessing the degree of risk.Correct Answer True
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
Question The cost of Plant and Machinery includes :-Correct Answer Cost of stores and spares
Question The basic difference between the feasibility study report and ________ is the level of accuracy and degree of detail.Correct Answer Detailed Project report
et 15
Question In the BCG Matrix, the key term of Cash Cows require further commitment of funds.Correct Answer False
Question In the GE's Stop Light Matrix, when ________ situation prevails , Products call for divestment.Correct Answer Average Business Strength and Low Industry attractiveness
Question The basic characteristic of a project is :-Correct Answer That it involves current outlay of funds in expectation of future benefits
Question ________ tries to have what the customer will want- where, when, in what form and at what price.
Correct Answer Marketing
Question Financial aspect of Detailed Project report includes :-Correct Answer Fixation of means of financial structure
Question A project can be regarded as the sum of the activities directed towards a :-Correct Answer Specific result
Question Sewerage and drainage cost of the project is categorised under :-Correct Answer Building cost
Question The BCG Product Portfolio Matrix :-Correct Answer Is a tool for strategic ( product ) planning and resource allocation
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
Question ________ capital represents permanent capital.Correct Answer Equity
Question Trend Projection method of demand forecasting consists of :-Correct Answer Linear Relationship , Exponential Relationship , Polynomial Relationship
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
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Question Management category of Visit report consists of :-Correct Answer Managing Director , Institutional nominees , Committees of the board
Question Nominal maximum capacity is the capacity that is technically attainable and this corresponds to the supplier's guaranteed capacity.Correct Answer True
Question The ratio that roughly measures the company's potential reserve of cash is termed as :-Correct Answer Net Working capital to total assets
Question The following are the sources of funds :-Correct Answer Operating Profit , Non operating Income
Question Change in the project concept itself may lead to cost and time overrun.
Correct Answer True
et 16
Question ________ is a current assetCorrect Answer Book debts
Question The temporary requirement of working capital can be financed out of :-Correct Answer Inter-corporate Deposits , Commercial Papers
Question Current assets includes stock-in-process.Correct Answer True
Question A project objective which states What "achieving it " would cost is known as :-Correct Answer Finance cost aspect
Question Management qualities includes :-Correct Answer Honesty , Financial resources , Initiative
Question A Project has a ________ represented by growth, maturity and decay.Correct Answer Life cycle
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
Question The basic characteristic of a project is :-Correct Answer That it involves current outlay of funds in expectation of future benefits
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
Question Location of the factory comes under the ________ category of the Project report.Correct Answer General
Question The basic difference between the feasibility study report and ________ is the level of accuracy and degree of detail.Correct Answer Detailed Project report
Question ________ is the summary of cash book or Receipts and Payments statement.Correct Answer Cash flow statement
Question The BCG Product Portfolio Matrix :-Correct Answer Is a tool for strategic ( product ) planning and resource allocation
Question Land and site development comes under the cost aspect of the Project report.Correct Answer True
Question The sources of cash are :-Correct Answer Cash from operations , Sale of machinery , Issue of new shares
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
Organisation and Management Strikes/lay-offs/lockouts etc. ReceivablesMaterial inputs and utili ties Stock of raw mater ial Finished goodsWorking capital Sanctioned bank limit Stock of raw materialMarketingPricing policy Pricing policy
Question In the Detailed Project Report, Marketing aspects includes :-Correct Answer Demand forecasting , Promotion , Distribution
Question Time Series Projection Methods of Demand forecasting consists of :-Correct Answer Trend Projection method , Moving Averages method
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
Question Sensitivity analysis consists of assessing the degree of risk.Correct Answer True
Question The 'BCG Matrix 'analysis various products of the organisation in the terms of Business strength and Industry Attractiveness.Correct Answer False
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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 themanufacturing.
Correct Answer True
nvironmental stability dimension under SPACE Model involves Demand variability Demand variabilityCompany's competitive advantage dimension under SPACE Model involves Product life cycle Product life cycleCompany's financial strength dimension under SPACE Model involves Leverage liquidity Leverage liquidityndustry strength dimension under SPACE Model involves Profit potential Profit potential
Question The various aspects which need to be considered while assessing Project finance financing are :-Correct Answer Environmental factors , Risk involved , Managerial compensation
Question A project objective can be said to have the following dimensions viz.:Correct Answer Strategic perspective , Time span , Finance cost aspect
Question The Key terms used in the BCG Product Portfolio matrix are :-Correct Answer Stars , Question marks
Question Details regarding Bridge finance comes under the ________ category of Project report.Correct Answer Financing plan
Question Internal sources of funds are :-Correct Answer Funds from operation , Loss on sale of fixed assets , Goodwill written off
Question ________ capital represents permanent capital.Correct Answer Equity
Question If the organisation is a trading organisation, the requirement of working capital will be on the lower side.Correct Answer False
Question In the Detailed Project Report, Technical aspects includes :-Correct Answer Plant capacity , Quality standards , Raw material requirement
Question Debt Service means payment of installments and interest against an amount borrowed as per terms of loan.Correct Answer True
Question Cost of overheads include :-Correct Answer Cost of repairs and maintenance
Question ________ profitability reduces the strain on working capital.Correct Answer High
Question The profit earned from operations of the project during life of the project is known as :-Correct Answer Cash inflow
Question The Cash Flow statement is also referred to as :-Correct Answer Cash flow budget
Question Disposition of funds includes :-Correct Answer Interest on term loans
Question Profit is the result of customer satisfaction, indeed customer delight under the :-Correct Answer Marketing concept
Question Financing plans consists of :-Correct Answer Share capital , Term loans , Internal accruals
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
Question Name and designation of the chief executive comes under the ________ category.Correct Answer General
Question Infrastructural projects include :-Correct Answer Power Generation and Distribution
Question Goods purchased on credit ________ in flow of funds.Correct Answer Does not result
Question Every project involves financial outlay which can be referred to as :-Correct Answer Project finance
Question A project is unique and no two projects are similar.Correct Answer True
Question Demographic market appraisal answers to
Correct Answer Who they are?
Question Stock in the beginning results in :-
Correct Answer Application of funds
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Question A business enterprise which has adopted the marketing concept as an essential ingredient of its corporate policy, is basically :-
Correct Answer Customer market-oriented
LIST OF ATTEMPTED QUESTIONS AND ANSWERS
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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 BlankQuestion 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 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
Match The Following
Question Correct Answer Your Answer
Moving into new areas/product lines Diversification Projects Diversification Projects
Suppliers' credit Short term finance Short term finance
Deferred credit Long term finance Long term finance
Setting up new units New Projects New Projects
Multiple Choice Single Answer Question Dissentions among the promoters is a :-
Correct Answer Management problem
Your Answer Management problem
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 Location of the factory comes under the :-
Correct Answer General category
Your Answer General category
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 BlankQuestion Excessive expenditures on foreign technicians leads to ________.
Correct Answer Cost and time overrun
Your Answer Cost and time overrun
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