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Financial Management: Unit-Iv
Financial Management: Unit-Iv
UNIT-IV
MULTIPLE CHOICE QUESTIONS
1. The management of current assets is known as
a.
b.
c.
d.
3.
4.
Current Assets
Current liabilities
Short term assets
Both a & c
Cash in hand
Cash at bank
Debtors
Creditors
Block of cash
Loosing interests
Lack of production
Lack of smooth flow of production
Block of cash
Loosing interests
Lack of production
Lack of smooth flow of production
Sufficient funds
Insufficient funds
Lack of funds
All of the above
a.
b.
c.
d.
Cash
Debtors
Marketable securities
All
Creditors
Outstanding expenses
Provisions for depreciation
All
9. The asset which can be converted into cash when ever required with out loosing its
value is
a.
b.
c.
d.
Current asset
Current liability
Fixed asset
Variable asset
10. The liability which should be paid within a period of one year is known as
a.
b.
c.
d.
Current asset
Current liability
Fixed asset
Variable asset
Ability
Liquidity
Credibility
None
Operating cycle
Working cycle
Current cycle
Fixed cycle
16. The length or time period of the operating cycle of any firm can be defined as
a.
b.
c.
d.
17. The time period required for the conversion of raw materials into finished goods
a.
b.
c.
d.
18. The time period required to convert the credit sales into cash
a.
b.
c.
d.
19. A level of working capital which is required by the firm always is knows as
a.
b.
c.
d.
20. Above permanent working capital which is required by the firm is knows as
a.
b.
c.
d.
a.
b.
c.
d.
Retained earnings
Debentures
Share capital
All of the above
Bank credit
Public deposit
Commercial papers
All of the above
25. The approaches which explains about the working capital mix are
a.
b.
c.
d.
Hedging approach
Conservative approach
Aggressive approach
All of the above.
ANSWERS
1.
2.
3.
4.
5.
6.
7.
8.
9.
10.
11.
12.
13.
14.
15.
16.
17.
18.
19.
C
D
D
D
A
A
D
D
A
B
A
D
B
D
A
A
B
C
B
20.
21.
22.
23.
24.
25.
C
D
D
D
D
D
21. _________________ is an efficiency ratio that measures the average number of days the
company holds its inventory before selling it.
22. ____________ are all assets that can readily convert to cash to pay outstanding debts and
cover liabilities.
23. _____________is the degree to which an asset or security can be bought or sold in the
market without affecting the asset's price.
24. The ability to convert an asset to cash quickly. Also known as _____________.
25. _________________ include most stocks, money market instruments and government
bonds.
ANSWERS
1. operating liquidity
2. operating capital
3. working capital deficiency
4. working capital
5. working capital management
6. short term
7. Return on capital
8. Cash management
9. Inventory management.
10. Debtors management.
11. Short term financing.
12. factoring
13. Cash Conversion Cycle (CCC)
14. Days Sales Outstanding
15. receivables
16. DSO
17. bad debt reserve.
18. (Receivables/Sales)*50 Days.
19. business cycle
20. Days payable outstanding
21. Days in inventory
22. current assets
23. Liquidity
24. "marketability".
25. Liquid assets .
UNIT-V
1. An _______________ also known as a takeover or a buyout.
2. An acquisition may be ___________________.
a. Reverse merger
b. Horizontal merger
c. Vertical merger
d. Conglomerate merger
9. A merger of a two or more companies which are competitors
a. Reverse merger
b. Horizontal merger
c. Vertical merger
d. Conglomerate merger
10. A merger of a two or more companies which are in the same industry but in different
production levels
a. Reverse merger
b. Horizontal merger
c. Vertical merger
d. Conglomerate merger
11. A merger of two or more companies which are Unrelated
a. Reverse merger
b. Horizontal merger
c. Vertical merger
d. Conglomerate merger
12. The merger which takes place by the negotiations of both the firms known as
a. Negotiated merger
b. Tender offer
c. Hostile takeover bid
d. Arranged merger
13. An offer which is a bid to acquire the target firm is known as
a. Negotiated merger
b. Tender offer
c. Hostile takeover bid
d. Arranged merger
14. The merger which takes place without the willing of the target firm
a. Negotiated merger
b. Tender offer
c. Hostile takeover bid
d. Arranged merger
15. The merger which is arranged by any governing body is
a. Negotiated merger
b. Tender offer
c. Hostile takeover bid
d. Arranged merger
16. The strategy/ strategies which helps a firm to avoid take-over bid
a.
b.
c.
d.
Legal strategy
Tactical strategy
Defensive strategy
All
17. The target firm stops the take-over bid by taking injunction against the offer is
a. Legal strategy
b. Tactical strategy
c. Defensive strategy
d. Offensive strategy
18. Defensive strategy is also known as
a. Poison pill
b. Pacman strategy
c. Legal strategy
d. Tactical strategy
19. Offensive strategy is also known as
a. Poison pill
b. Pacman strategy
c. Legal strategy
d. Tactical strategy
20. The motives behind merger is
a. Operating economies
b. Diversifications
c. Earnings per share
d. All
21. The value increased due to a merger is technically known as
a. Synergy
b. Synchrony
c. Strategy
d. None
22. Value of the merged firm should be more than the value of acquiring firm and
a. Target firm
b. Acquiring firm
c. Merged firm
d. None
23. Share exchange ratio is a ratio between the shares of Target firm and
a. Target firm
b. Acquiring firm
c. Merged firm
d. None
24. Share exchange ratio is calculated on the basis of
a. Market price
b. E.p.s
c. Networth
d. All
25. Eps of merged firm should be more than the eps of acquiring firm and
a. Target firm
b. Acquiring firm
c. Merged firm
d. None
ANSWERS
1.
2.
3.
4.
5.
6.
7.
8.
9.
10.
11.
12.
13.
14.
15.
16.
17.
18.
19.
20.
21.
22.
23.
24.
25.
D
A
C
D
C
D
D
A
B
C
D
A
B
C
D
D
A
A
B
D
A
A
B
D
A