1.

In case of capital budgeting decision, the project in which choice of one automatically
exclude the other are known as _____?

Mutually Exclusive Projects

2. Which of the following are the two components of holding period return?

Capital Appreciation & periodic return

3. If the credit period is increased for the customer of the company, operating cycle
will______?

reduce

4. Which of the following will result in shareholders wealth maximisation?

​Maximum utilisation of resources

5. Stream of Equal cash flow at regular intervals starting at the beginning of the period is
known as?

Annuity Due

6. Cost of preference share is?

7. The rate beyond which the preference between two independent project reverses is
known as?

​Reversal Rate

8. 1/10,30 credit term means?

1% discount for payment within 10 days

9. Market interest rate is 9%. A bond with 10% coupon will sell _______ par value?

Above

10. The relationship between security return and market return is shown by______?

Beta

11. Preference share is a ______ instrument?

 None of the above

12. Which of the following is not the method for calculation of cost of equity?
13. As per liquidity premium theory, interest rates on long term bonds will be _____ than
short term bonds?

Higher

14. Current year dividend of Sun Ltd is Rs. 5 per share. Expected growth rate is 8% and
market capitalisation rate is 10%. Calculate the intrinsic value of stock?

270

15. For a firm, weight of equity and debt is 0.6 and 0.4 respectively and cost of equity is 5%.
Cost of debt is 9%, tax rate is 30%. Calculate the WACC for the firm?

0.126

16. A stock's average return in last 3 years were 12% and standard deviation is 8%.
Calculate the coefficient of variation?

0.67

17. A liberal working capital policy will lead to_______?

High Inventory
18. For A ltd annual demand is 10000 units, carrying cost is 2 Rs.per unit and order cost is
Rs. 50. Calculate the EOQ?

28

19. Sheela needs Rs. 500000 at the end of 5 years. How much amount she should invest
right now @10%. Present value of 1 Rs at 10% for 5 years is 0.6209?

310450

20. If the annual rent expense goes up, the operating leverage will ______ and will give rise
to more than proportionate change in _______?

Increase, EBIT
21. What will be the price of bond with face value Rs. 1000 carrying a coupon of 10%
maturing in 3 years at 10% premium on par value? Present value factor and PVAF at
10% for 3 years is 0.7513 and 2.4869 respectively.

1075.12

22. As per matching approach, permanent working capital requirements should be funded
by ______?

Long term funds

23. For project with different scales, which of the evaluation techniques should be used?

​IRR

24. Cost of equity is always Equal to or ______ than WACC.

Lower

25. Which of the following AAA debentures will have highest price if YTM is_____?

0.07

26. If business risk of a company goes up than price of stock will________?

Decrease

27. The underlying assumption in IRR method is that all the intermittent cash flows are
reinvested at________.

IRR

28. Days inventory+days sales outstanding is known as______?

​Cash conversion cycle

29. Which of the following is an example of unsystematic risk?

Increased steel prices

30. Stream of equal cash flows at regular interval starting at the beginning of the period is
known as?
31. The difference between present value of cash inflows and outflows is known as______?

NPV

32. Calculate the standard deviation with the help of following data: p=.03,r=30%, p=.4,
r=16%, p=0.3 r=8%

4.21

33. Cost of preference share is________?

34. Moon ltd invests Rs. 800000 is a proper manufacturing plant. This is expected to
generate Rs. 150000 every year for next seven years. Cost of capital of the project is
10%. PVAF for 7 years at 10% is 5.3349. Calculate the NPV of the project?

235

35. If the credit period is increased for the customers of the company, operating cycle
will______?
36. Increased financial leverage givers rise to _________ volatile EPS?

More

37. Shyam deposits Rs. 5000 every year for next 3 years at 6% semiannual compounding.
Calculate the future value if investment? Future value annuity factor at 3% for 3 years is
3.0909 & 6.4684 respectively and at 6% for 3 years and 6 years is 3.1836 & 6.9753
respectively.

15918

38. If the coupon rate of a debenture is increased then its YTM will _____?

​Increase

39. Arun buys an stock at Rs. 20 & sells at Rs. 25 after 10 months. During this period, he
receives a dividend of Rs. 5 on his investments. Calculate the holding period return?

0.5

40. Sales proceeds from the asset sold at the end of project forecasting period is treated as
_____?
 ​Terminal cash flow

41. For dairy ltd. beta is 0.8. Nifty returns= 15% and T-bill rate is 8% what is the cost of
equity?

0.15

42. Increase in the frequency of compounding results into ______ maturity value.

Higher

43. A tight working capital policy will lead to ________?

All of the above​ “Low inventory, low debtors and low inventory carrying cost”

44. ________ method tells the period in which original investment in a project will be
recovered.

Pay Back Period

45. Which of the following is combined measure of risk and return?

Coefficient of variation

46. For accepting the project IRR has to be compared with _______ ?
47. A company replaces an old machinery with salvage value of Rs. 100000 replaced by a
machinery costing Rs. 500000. The relevant cash flows for evaluation for this project is
______?

600000

48. Why depreciation has to be added back in the calculation of cash flow as it is a _____?
49. If the credit period is increased by the suppliers of the company, cash conversion cycle
will?

Reduce

50. If the cost of capital of a project goes up then NPV will ______?

​Increase
51. Sales of zing ltd. for 2016 was Rs. 10000, COGS Rs. 6000, depreciation Rs. 1000
interest Rs 800, Tax Rate 30%. Calculate the operating cashflows of zing ltd. for 2016?

Rs. 2540

52.