Project Finance - 2

scdllatestassignment.blogspot.com/2011/07/project-finance-2.html

LIST OF ATTEMPTED QUESTIONS AND ANSWERS

Multiple Choice Multiple Answer

Question
Financing plans consists of :-
Correct Answer
Internal accruals , Share capital , Term loans
Your Answer
Internal accruals , Share capital , Term loans

Multiple Choice Multiple Answer

Question
Ratios relating to working capital are :-
Correct Answer
Current ratio , Internal measure , Quick ratio
Your Answer
Current ratio , Internal measure , Quick ratio

True/False
Question
Export Market is a technique used for forecasting under Commercial appraisal
technique.
Correct Answer
True
Your Answer
True

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
Past trend method of Commercial appraisal technique is :-
Correct Answer

1/19
Adopted as a guide depending on the consumption pattern of the society as a whole
Your Answer
Adopted as a guide depending on the consumption pattern of the society as a whole

Select The Blank

Question
________ is a current asset
Correct Answer
Book debts
Your Answer
Book debts

Select The Blank

Question
In the GE's Stop Light Matrix, when ________ situation prevails , Products call for
divestment.
Correct Answer
Average Business Strength and Low Industry attractiveness
Your Answer
Average Business Strength and Low Industry attractiveness

Select The Blank

Question
Detailed Project Report is generally prepared from a ________ report with additional
information.
Correct Answer
Feasibility
Your Answer
Feasibility

Multiple Choice Single Answer

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
Your Answer
Problems pertaining to the period when the project is in operation

Multiple Choice Single Answer

Question
The acronym for 'LPG' is :-
Correct Answer
Liberalisation, Privatisation and Globalisation
Your Answer
Liberalisation, Privatisation and Globalisation
2/19
True/False
Question
Miscellaneous expenditure is written on the asset side of the Balance sheet.
Correct Answer
True
Your Answer
True

Multiple Choice Multiple Answer

Question
Defaults category of the Project report may be in respect of :-
Correct Answer
Term loans , Principal , Interest
Your Answer
Term loans , Principal , Interest

Multiple Choice Multiple Answer

Question
The Key terms used in the BCG Product Portfolio matrix are :-
Correct Answer
Stars , Question marks
Your Answer
Stars , Question marks

Select The Blank

Question
________ tries to have what the customer will want- where, when, in what form and
at what price.
Correct Answer
Marketing
Your Answer
Marketing

Multiple Choice Single Answer

Question
Cost of the Project encompasses :-
Correct Answer
The total of all items of outlay associated with a project
Your Answer
The total of all items of outlay associated with a project

Select The Blank

Question
Cost of fencing comes under the ________ category of the Project report.
Correct Answer

3/19
Land and site development
Your Answer
Land and site development

Multiple Choice Multiple Answer

Question
Trend Projection method of demand forecasting consists of :-
Correct Answer
Linear Relationship , Exponential Relationship , Polynomial Relationship
Your Answer
Linear Relationship , Exponential Relationship , Polynomial Relationship

Select The Blank

Question
Inflow of funds may not necessarily result in ________.
Correct Answer
Inflow of cash
Your Answer
Inflow of cash

True/False
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
Your Answer
True

Multiple Choice Single Answer

Question
Sources of funds include :-
Correct Answer
Increase in secured borrowing
Your Answer
Increase in secured borrowing

Select The Blank

Question
In the GE's Stop Light Matrix, when ________ situation prevails, Products call for
Hold.
Correct Answer
Average Business Strength and Medium Industry Attractiveness
Your Answer
Average Business Strength and Medium Industry Attractiveness

4/19
Multiple Choice Multiple Answer
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

True/False
Question
Ratios are based only on the information which has been recorded in the financial
statements.
Correct Answer
True
Your Answer
True

True/False
Question
Trend projection method is the important technique for forecasting demand.
Correct Answer
True
Your Answer
True

Multiple Choice Single Answer

Question
"Fly by night" operator mentality is a :-
Correct Answer
Management quality
Your Answer
Management quality

Multiple Choice Multiple Answer

Question
The applications of cash are :-
Correct Answer
Purchase of fixed assets , Payment of long term loans
Your Answer
Purchase of fixed assets , Payment of long term loans

5/19
Multiple Choice Single Answer
Question
A Project is a temporary endeavor to achieve some specific objectives within a :-
Correct Answer
Predefined time
Your Answer
Predefined time

Multiple Choice Single Answer

Question
Delays in infrastructure Development by State Agencies may lead to :-
Correct Answer
Cost and time overrun
Your Answer
Cost and time overrun

True/False
Question
Ratio analysis is a technique of planning and control.
Correct Answer
False
Your Answer
False

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

Multiple Choice Multiple Answer

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
Your Answer
Aggressive Posture , Competitive Posture , Defensive Posture

True/False
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
6/19
True
Your Answer
True

Multiple Choice Single Answer

Question
BCG Product Portfolio Matrix analyses products on the basis of :-
Correct Answer
Relative Market share and Industry Growth rate
Your Answer
Relative Market share and Industry Growth rate

True/False
Question
Change in the project concept itself may lead to cost and time overrun.
Correct Answer
True
Your Answer
True

Select The Blank

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 environment
Your Answer
Lacks both competitive advantage as well as financial strength and belongs to a not so
attractive industry, operating in an unstable environment

Select The Blank

Question
Details regarding Internal accruals comes under the ________ category of Project
report.
Correct Answer
Financing plan
Your Answer
Financing plan

Match The Following

Question
Correct Answer
Your Answer
Increase in current liabilities
Decreases working capital
7/19
Decreases working capital
Increase in liabilities
Inflow of funds
Inflow of funds
Decrease in liabilities
Outflow of funds
Outflow of funds
Increase in current assets
Increases working capital
Increases working capital

Multiple Choice Multiple Answer

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 profits
Your Answer
Item of current liabilities , Added back to the profit as per profit and loss account to
arrive at operating profits

Multiple Choice Multiple Answer

Question
The data for ratio analysis is obtained from :-
Correct Answer
Profit and Loss Account , Balance Sheet
Your Answer
Profit and Loss Account , Balance Sheet

Multiple Choice Single Answer

Question
The industrial concern earned profits by increasing the sales volume under the :-
Correct Answer
Sales concept
Your Answer
Sales concept

Multiple Choice Single Answer

Question
The entire life of the project is taken into account under :-
Correct Answer
Average rate of return method
Your Answer
Average rate of return method

8/19
Match The Following
Question
Correct Answer
Your Answer
General functional layout
Present the general relationship between equipment buildings and civil works
Present the general relationship between equipment buildings and civil works
Location
Broad area such as city, industrial belt etc.
Broad area such as city, industrial belt etc.
Site
Specific piece of land where the project would be set up
Specific piece of land where the project would be set up
Plant layout
Physical layout of the factory
Physical layout of the factory

Multiple Choice Single Answer

Question
Geographic market appraisal answers to :-
Correct Answer
Where do the customers live?
Your Answer
Where do the customers live?

True/False
Question
In the BCG Matrix, the key term of Cash Cows require further commitment of funds.
Correct Answer
False
Your Answer
False

True/False
Question
For computing Interest coverage ratio, Profit after Interest and taxes are taken into
account.
Correct Answer
False
Your Answer
False

Select The Blank

Question
A smaller unit into which the overall requirement of capital of a company is sub-divided

9/19
is termed as ________.
Correct Answer
Share
Your Answer
Share

Select The Blank

Question
Commission outstanding is ________ of funds.
Correct Answer
Application
Your Answer
Application
at 4:59 AM 0 comments Links to this post
Labels: Project Finance

Project Finance - 1

LIST OF ATTEMPTED QUESTIONS AND ANSWERS

Select The Blank

Question
The basic difference between the feasibility study report and ________ is the level of
accuracy and degree of detail.
Correct Answer
Detailed Project report
Your Answer
Audit report

True/False
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 the manufacturing.
Correct Answer
True
Your Answer
True

Select The Blank

Question
________ is a current asset
Correct Answer
Book debts
Your Answer
Trade credit

10/19
Multiple Choice Single Answer
Question
The formula for Break Even Point is :-
Correct Answer
Fixed cost / ( Sales Price - Variables)
Your Answer
Fixed cost / ( Sales Price - Variables)

True/False
Question
Banks and Financial Institutions, world-wide, are now financing projects with strategies
and terms that would have been hard to believe/imagine just a few years back.
Correct Answer
True
Your Answer
True

Multiple Choice Single Answer

Question
Liabilities side of Balance sheet includes :-
Correct Answer
Unsecured loans
Your Answer
Unsecured loans

Multiple Choice Single Answer

Question
Net Working Capital means :-
Correct Answer
Current assets less Current liabilities
Your Answer
Current assets less Current liabilities

Multiple Choice Multiple Answer

Question
Trend Projection method of demand forecasting consists of :-
Correct Answer
Linear Relationship , Exponential Relationship , Polynomial Relationship
Your Answer
Linear Relationship , Exponential Relationship , Polynomial Relationship

True/False
Question
It is mandatory for each unit to obtain necessary clearance from Pollution Control
Authorities before setting up any project.
Correct Answer
11/19
True
Your Answer
True

True/False
Question
Debt Service Coverage Ratio is one of the most important ratios calculated by the
bankers or financial institutions giving long term finance to the organisation.
Correct Answer
True
Your Answer
True

Select The Blank

Question
Sometimes the term ________ is interpreted as cash equivalent i.e. cash and
marketable securities.
Correct Answer
Fund
Your Answer
Investment

Multiple Choice Multiple Answer

Question
The applications of cash are :-
Correct Answer
Purchase of fixed assets , Payment of long term loans
Your Answer
Purchase of fixed assets , Payment of long term loans , Issue of new machinery

Select The Blank

Question
________ tries to have what the customer will want- where, when, in what form and
at what price.
Correct Answer
Marketing
Your Answer
Marketing

Multiple Choice Multiple Answer

Question
Time Series Projection Methods of Demand forecasting consists of :-
Correct Answer
Trend Projection method , Moving Averages method
Your Answer
Trend Projection method , Consumption-level method , Moving Averages method
12/19
Multiple Choice Single Answer
Question
Disposal of fixed assets is categorised under :-
Correct Answer
Miscellaneous
Your Answer
Land and site cost

Multiple Choice Multiple Answer

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 accounts
Your Answer
Company's financial year , Impact of Government policies on company operations ,
Comments on the last published accounts

Match The Following

Question
Correct Answer
Your Answer
Project organisation
Finance manager
Finance manager
General category of Project report
Location of factory
Consultancy fees
Cost aspect of the project report
Consultancy fees
Location of factory
Financing plan
Unsecured loans
Unsecured loans

Multiple Choice Multiple Answer

Question
In the Detailed Project Report, Marketing aspects includes :-
Correct Answer
Demand forecasting , Promotion , Distribution
Your Answer
Demand forecasting , Promotion , Distribution

Multiple Choice Multiple Answer

Question

13/19
Marketing category of the Project report consists of :-
Correct Answer
Pricing policy , Target market , Market potential
Your Answer
Target market , Market potential , Pricing policy

Multiple Choice Multiple Answer

Question
Sources of funds includes :-
Correct Answer
Depreciation , Preliminary expenses written off , Increase in secured borrowing
Your Answer
Depreciation , Preliminary expenses written off , Increase in secured borrowing

Match The Following

Question
Correct Answer
Your Answer
Moving into new areas/product lines
Diversification Projects
Modernisation 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
BCG Product Portfolio Matrix analyses products on the basis of :-
Correct Answer
Relative Market share and Industry Growth rate
Your Answer
Relative Market share and Industry Growth rate

Multiple Choice Single Answer

Question
Sewerage and drainage cost of the project is categorised under :-
Correct Answer
Building cost
Your Answer
Building cost
14/19
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
Proposed product , Location of the factory , Land cost

True/False
Question
The ratios of one organisation compared with the ratios of the same organisation is
termed as inter-firm comparison.
Correct Answer
False
Your Answer
False

Select The Blank

Question
In the GE's Stop Light Matrix, when ________ situation prevails , Products call for
divestment.
Correct Answer
Average Business Strength and Low Industry attractiveness
Your Answer
Weak Business strength and high Industry attractiveness

Multiple Choice Multiple Answer

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 profits
Your 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

Multiple Choice Single Answer

Question
The cost of Plant and Machinery may be adjusted for a possible increase known as :-
Correct Answer
Escalation
Your Answer
Escalation

Multiple Choice Single Answer

15/19
Question
Ratio analysis is a widely used tool of :-
Correct Answer
Financial analysis
Your Answer
Financial analysis

True/False
Question
The advantage of secondary sources of data is that it is readily and economically
available.
Correct Answer
True
Your Answer
True

True/False
Question
Debt Equity ratio is a 'Solvency ratio'.
Correct Answer
True
Your Answer
True

Select The Blank

Question
Excessive expenditures on foreign technicians leads to ________.
Correct Answer
Cost and time overrun
Your Answer
Cost and time overrun

Multiple Choice Multiple Answer

Question
Financing plans consists of :-
Correct Answer
Share capital , Term loans , Internal accruals
Your Answer
Share capital , Term loans , Salaries

Select The Blank

Question
Retained earnings is a source of ________ finance.
Correct Answer

16/19
Internal
Your Answer
Internal

Select The Blank

Question
In order to meet the cost of large project, the technique of ________ has been
developed so that the financial commitment and risks associated with a project are
shared between the project sponsor and the lending institutions.
Correct Answer
Limited recourse financing
Your Answer
Unlimited recourse financing

True/False
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
Your Answer
True

Multiple Choice Single Answer

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
Your Answer
Problems pertaining to the period when the project is in operation

Select The Blank

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
Your Answer
Working capital

True/False
Question
Ratio analysis is a technique of planning and control.
Correct Answer

17/19
False
Your Answer
True

True/False
Question
Cost and time overrun of the project may lead to loss on account of lost market
opportunities.
Correct Answer
True
Your Answer
True

Multiple Choice Multiple Answer

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
Your Answer
Proximity to raw materials and markets , Availability of infrastructure , Government
policies and other factors

Multiple Choice Single Answer

Question
In the Cash flow statement, the sources of funds include :-
Correct Answer
Development rebate reserve
Your Answer
Development rebate reserve

Select The Blank

Question
Name and designation of the chief executive comes under the ________ category.
Correct Answer
General
Your Answer
Project organisation

Multiple Choice Multiple Answer

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
18/19
Your Answer
Strong Business Strength and high Industry attractiveness , Average Business strength
and high Industry attractiveness

Multiple Choice Single Answer

Question
The BCG product Portfolio Matrix, General Electric Stop Light Matrix and Strategic
Position and Action Evaluation Model are considered to be highly relevant as :-
Correct Answer
Portfolio Planning Tools
Your Answer
Portfolio Planning Tools

Select The Blank

Question
Position regarding requirement and training of operational staff comes under the
________ category of Project report.
Correct Answer
Project organisation
Your Answer
General category

Multiple Choice Single Answer

Question
The emphasis of the Banks and Financial institutions particularly in India has shifted
from 'Sanctions', 'Disbursements' and 'Security-orientation' to 'Recovery/Recycling' and
:-
Correct Answer
Activity orientation
Your Answer
Activity orientation

19/19