Sunday, 2 October 2016

Chief General Manager Exam 27-01-2015 Category Code: 297/2011 - Part 10

91.       The financing need is equal to
(A) fixed assets – current assets + current liabilities
(B) fixed assets – current assets – current liabilities
(C) fixed asset + current assets + current liabilities
(D) fixed asset + current assets – current liabilities
Answer: D
92.       Which of the following statement is not true?
(A) The partnership agreement cannot override the 1890 Partnership Act
(B) capital contributions do not have to be equal from each partner
(C) interest on capital is a reward for the different amounts of work partners may perform
(D) Not all partners can have limited liability in a limited partnership
Answer: C
93.       All of the following influence capital budgeting cash flow exept
(A) accelerated depreciation
(B) salvage value
(C) tax rate changes
(D) method of project financing used
Answer: D
94.       When capital must be rationed, the firm should rank project according to their:
(A) profitability index               (B) net present value
(C) internal rate of return       (D) none of these
Answer: Question Cancelled
95.       Which of the following does not make the firm more vulnerable to financial distress?
(A) High sensitivity of the company's revenues to the general level of economic activity
(B) High proportion of fixed to variable costs
(C) physical capital assets which are relatively illiquid and difficult-to-market
(D) the tax shield
Answer: D

96.       Which of the following is the main objective of cash management?
(A) Maximization of cash balance
(B) Minimization of cash balance
(C) Optimization of cash balance
(D) Zero cash balance
Answer: C
97.       Which of the following is true for Net Income Approach?
(A) Higher Equity is better      (B) Higher Debt is better
(C) Debt Ratio is irrelevant    (D) None of the above
Answer: B
98.       Financial Leverage is calculated as:
(A) EBIT ÷ Contribution          (B) EBIT ÷ PBT
(C) EBIT ÷ Sales                      (D) EBIT ÷ Variable Cost
Answer: B
99.       Which of the following items is not an appropriation of profit for a limited company?
(A) Debenture interest payable
(B) transfer to reserve
(C) preference dividend payable
(D) Ordinary dividend payable
Answer: A
100.    Which of the following would not appear in the trial balance as debit balance
(A) returns outwards   (B) carriage outwards
(C) returns inwards     (D) carriage outwards
Answer: A


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