Duration of online examination will be of 1 Hour 20 minutes (80 minutes).

Transcription

1 Program Name: PGDBA Subject: Financial Management Assessment Name: FM - Exam Weightage: 70 Total Marks: 70 Duration: 80 mins Online Examination: Online examination is a Computer based examination. Online examination comprises of Total 29 Questions - Out of 70 marks. Duration of online examination will be of 1 Hour 20 minutes (80 minutes). Section - I Instructions: - It is compulsory and has total 3 Subjective Questions. - Students are required to solve any 2 Subjective Type Questions. Each question is of 5 marks. - Section I is out of 10 Marks. Please refer following instructions regarding Subjective examination: - While attempting subjective examination Text formatting facility will be disabled such as use of bullets, making the text bold, underlining the text etc. Only normal character on the key board will be available. - Special characters available on the keyboard will be allowed. - Students can not attempt more than 2 questions out of given 3. - A blank (space typed) or any entry in the space provided will be considered as question is answered. - Hand written answers are not allowed. Subjective test can be answered by using key board. - No brail support shall be provided, but writer assistance shall be allowed. The student has to intimate it to SCDL well in advance by completing applicable formalities. - Answers for both the questions should not exceed more than 110 words. The maximum word limit per answer is 55 words (for Subjective part). 1 of 7

2 1) Why are capital budgeting decisions crucial for a business? (5) The reasons are as follows: As these decisions deal with purchase of fixed assets they have long term implications on the operations of the business. Such decisions usually involve outlay of a large amount of the funds. These decisions are irreversible as it is difficult to find a market for capital goods in case they have been mistakenly purchased. Such decisions carry much risk as the payback period is several years. 2) What are the objectives of cash management? (5) The main objective of cash management is to reduce the operating cash need to the minimum possible extent without affecting routine transactions. To enable this, the finance manager has to: Increase the speed of cash collections Negotiate delayed cash payments Maintain optimum cash balance Profitably invest excess cash available in short and long term securities 3) How does age-wise analysis of debtors help in speeding up collections? (5) Age-wise analysis of debtors is a practical tool to analyze debtors. In this analysis, every month say the debtors are classified into three or four categories based on the time period for which the debt exists, such as less than 30 days, more than 60 days, more than 90 days, etc. Those more than 90 days will be followed up more intensively for collection. Section 1 is complete. Please click on "Next" button to proceed. Section - II Instructions: - It comprises of Objective Questions Only. - Total 60 marks are allotted for objective type questions. - The objective questions are of following type and carries marks as given under. Multiple Choice Multiple Response : 4 Questions - 16 Marks (Each 4 marks) Multiple Choice Single Response : 9 Questions - 18 Marks (Each 2 marks) True or False : 5 Questions - 5 Marks (Each 1 mark) Select a Blank : 5 Questions - 5 Marks (Each 1 mark) Match the Column : 4 Questions - 16 Marks (Each 4 marks) Total Questions : 27 2 of 7

3 Total Marks : 60 1) The value created by the use of resources is more than the total of the input resources is referred to as 1] Income 2] Profit 3] Interest 4] Dividend 2) Accounts Receivable is an example of current assets. 3) The working Partner is a Partner who 1] Takes only crucial decisions 2] Participates in day-to-day affairs of the firm 3] Does not participate in day to day affairs, only takes remuneration 4] Appoints representative to carry on the activities of the firm 4) Premium paid on the life policy of the proprietor is debited to the Profit and Loss Account. 5) Credit period is 1] The time allowed by the company to the customers to pay their dues 2] Time required by the company to process the received cheques and deposit the same in the bank 3] Time taken for the delivery of the goods 4] Administrative delay for raising the invoices or bills in favour of the customer 6) Match the Following 1] Without recourses factoring 2] With recourses factoring 3] Role of factor 4] Role of client 1] Risk of non-payment assumed by factor 2] Risk of non-payment assumed by selling company 3] Follows up with debtors 4] Sends the invoice copy to factor 5] Places the order 6] Bills discounting 7) Wealth maximisation theory considers time value of money. 8) Identify the fixed assets. 3 of 7

4 1] Debtors 2] Computers 3] Plant & Machinery 4] Stock 9) Gross Profit Indicates the relation between production cost and Purchases. 10) Capital turnover ratio is calculated as 1] Sales/Debt Capital 2] Sales/Fixed Assets 3] Sales/Capital 4] Sales/Current Assets 11) Price earning ratio indicates the price currently being paid in the stock market for every one rupee of Earning per share. 12) The Ratio that discloses the financial position or solvency of the firm is :BLANK 1] Debt Equity ratio 2] Current Ratio 3] Liquid Ratio 4] Net Profit Ratio 13) Match the Following 1] Bank overdraft taken 2] Interest received on debentures purchased 3] Increase in current assets 4] Decrease in current liabilities 14) Undercapitalisation means 1] Shortage of Capital 2] excess capital as compared to the level of activity 3] excess of real worth of assets over the aggregate capital 4] Less Cash on Hand 1] Financing cash flow activity 2] Investing cash flow activity 3] Increases working capital 4] Cash equivalent 5] Results in insolvency 15) The economical use of the asset is permitted by the Lessor on the payment of 1] Lease Rent 2] Instalment 4 of 7

5 3] Hiring Charges 4] Interest 16) Types of preference shares are 1] Convertible 2] Non transferable 3] Cumulative 4] Non convertible 17) Advantages of Debentures from investor's point of view are 1] Debentures are unsecured 2] Debentures are secured 3] Debentures carry fixed rate of interest 4] Debentures carry voting rights 18) Selling the securities in the primary market to the existing shareholders is called as 1] Bonus Issue 2] ESOP 3] Rights Issue 4] Book Building 19) Match the Following 1] Pay back period 2] Accounting rate of return 3] Net Present value 4] Discounted Pay back period 1] indicates the period within which the cost of the project will be completely recovered 2] computes average annual yield on the net investment in the project 3] method by subtracting present value of cash outflows from the present value of cash inflows 4] indicates that period within which the discounted cash inflows equal to the discounted cash outflows 5] Indicates the Profitability Index 6] Computes the No Profit No Loss Level 20) If neither the ownership nor the possession of the goods is transferred to the lender, the mode of creating charge is called as 1] Mortgage 2] Pledge 3] Assignment 4] Hypothecation 21) Marathe committee was appointed to review the 1] Working Capital Finance by Banks 2] Cash Credit scheme 3] Credit authorization scheme 4] Documentation for Bank Finance 5 of 7

6 22) :BLANK was appointed to review the credit authorization scheme 1] Tandon Committee 2] Nayak Committee 3] Chhore Committee 4] Marathe 23) Advantages of factoring are 1] Immediate availability of Cash 2] Expertise of the Factor 3] Relief from administrative responsibilities 4] Cost less than interest cost 24) To speed up the credit collection :BLANK is offered to the debtors. 1] Factoring 2] Cash discount 3] Credit limit 4] Interest 25) Match the Following 1] Credit Analysis 2] Source of information for deciding credit worthiness 3] Management attitude conservative 4] Discount Policy 1] Deciding the creditworthiness 2] Bank reference 3] Restrict the credit period 4] Cost benefit analysis 5] Risk Management 6] Rating Agency 26) The symptom of low capacity utilisation will be shown by:blank. 1] Creditors Turnover Ratio 2] Debtors Turnover Ratiio 3] High Inventory Turnover Ratio 4] Low inventory turnover ratio 27) A company has to pay interest at :BLANK during the period for which default in payment of dividend continues. 1] 18.00% 2] 12.00% 3] 15.00% 4] 10.00% Section 2 is complete. 6 of 7

7 Please click on "Next" button to proceed. 7 of 7