MCQ Bank

TYBBA ( Sem – V)
SFM
Unit 4 - 1 to 10
Unit 3 – 11 to 20
No Questions Ans.
.
1. Company has cash flows after tax for three years i.e. 166 millions, 45 million and C
60 million respectively. Cost of Capital is 20% and PV factors for three years i.e.
0.8333, 0.694, 0.579 respectively. What is Present Value of Cash flows for three
years?
A. 402.25
B. 224.25
C. 204. 25
D. 214.25

2. Shareholder’s value is 3404.40 million. The company has outstanding shares 15.15 B
million. If the company received a takeover bid of INR 190 per share. Should it be
accepted?
A. Yes
B. No
C. Can’t Say
D. May be
3. If Shareholder’s value is 3404.40 million and total number outstanding shares are D
15.15 million, what will be value of per share?
A. 242.17
B. 442.17
C. 242.71
D. 224.71

4. ‘Big Boss’ is considering acquisition of ‘Splits villa’ which has 1.5 crores shares A
outstanding and issued. The market price is INR 400 at present. What is Valuation
of Company based on Market Price?
A. 600 crores
B. 800 crores
C. 266.67 crores
D. 60 crores
5. Colors Ltd has estimated perpetual cashflow to be INR 968 million at the end of 5th A
year. It is assumed that cash flow will perpetuate at a constant growth rate of 7%
p.a. Cost of Capital is 20% and PV Factor for fifth year is 0.402. What is Present
value of Perpetual Cash flow for the Colors Ltd.?
A. Approx 3203 million
B. Approx 2303 million
C. Approx 3230 million
D. Approx 2330 million
6. Determine Shareholder Value if total value of company is 5600 million, outstanding B
 debt is 362 million and cash/bank balance of 271 million.
A. 5590 million
B. 5509 million
C. 5519 million
D. 5591 million
7. Project Manager has estimated PV of Cash flows for the years 1 to 5 is 610.92 D
Lakhs and PV of Perpetual Cash flows beyond 5th year is 6789.60 lakhs. What is the
valuation of Company?
A. 7400.25 lakhs
B. 7425.00 lakhs
C. 7405.20 lakhs
D. 7400.52 lakhs
8. Analyst has determined value per share as per Discounted cashflow method and bid B
value for takeover is 402 per share. Is this a good Bid Offer?
A. No
B. Yes
C. Can’t Say
D. May be
9. Estimated cash flows for five years are 352 lakhs, 96 lakhs, 128 lakhs , 172 lakhs C
and 234 lakhs respectively. The cost of capital is 20%. (PVIF 20%, 5) = 0.833,
0.694, 0.579, 0.482, 0.402. What is PV of Cash Flows?
A. 6109.24 lakhs
B. 601.924 lakhs
C. 610.924 lakhs
D. 61.0924 lakhs
10. GSM Ltd has estimated perpetual cash flow to be INR 25 million at the end of 3rd B
year. It is assumed that cash flow will perpetuate at a constant growth rate of 5%
p.a. Cost of Capital is 12% and PV Factor for third year is 0.712. What is Present
value of Perpetual Cash flow for the GSM Ltd.?
A. Approx 296 million
B. Approx 269 million
C. Approx 629 million
D. Approx 692 million
11. What is co-efficient of variance? If Standard deviation is Rs. 2111.87 and expected C
cash flow is Rs. 10200.
A. 0.0270
B. 0.2700
C. 0.2070
D. 0.02070
12. Big Boss Ltd has expected NPV of INR 2, 00,000 and Standard Deviation is INR C
1, 20,000. What is Coefficient of Variation?
A. 0.5
B. 0.4
C. 0.6
D. none of the given options
13. Friends and Group Ltd. Requires an initial investment of INR 50 lakhs and expected C
 CFAT for three years are 20 lakhs, 26 lakhs and 34 lakhs. Discounting rate is 5% on
this type of project. Consider PVIF 5% 3 = 0.952, 0.907, 0.864. What is Expected
NPV of the Project?
A. Approx 24 lakhs
B. Approx 23 lakhs
C. Approx 22 lakhs
D. Approx 21 lakhs
14. GSM Ltd. has estimated different probabilities for a project’s NPV like, 0.2 C
probability for 15 lakhs NPV, 0.3 probability for 12 lakhs NPV, 0.3 probability for
6 lakh NPV and 0.2 probability for 3 lakh NPV. What Expected NPV for the Project
of GSM Ltd.?
A. 7 lakhs
B. 9 lakhs
C. 11 lakhs
D. None of the given options
15. MG Poonawala has variance of NPV of Project as 19.80lakhs. What is Standard A
Deviation of Project?
A. 4.450
B. 44.50
C. 4.0450
D. 4.4
16. The project has expected 2 years of economic life, there is 0.4 and 0.6 probability D
for year 1’s CFAT. Probabilities for year 2’s CFAT when year 1’s probability is 0.4
are 0.3, 0.2 and 0.5. Probabilities for year 2’s CFAT when year 1’s probability is 0.6
are 0.4, 0.5 and 0.1. What is total possible Path for Joint Probability of year 1 and 2
for CFAT?
A. 3
B. 4
C. 5
D. 6
17. The project has expected 2 years of economic life, there is 0.4 and 0.6 probability C
for year 1’s CFAT. Probabilities for year 2’s CFAT when year 1’s probability is 0.4
are 0.3, 0.2 and 0.5. Probabilities for year 2’s CFAT when year 1’s probability is 0.6
are 0.4, 0.5 and 0.1. Which of the following is NOT joint probability for year 1 and
2?
A. 0.08
B. 0.12
C. 0.05
D. 0.06
18. The company has a project with outflow of 80,000 and PV of different six possible B
Paths of CFAT is 65274, 71882, 81794, 87580, 95840 and 104100. What is Worst
Outcome out of Six Path based on NPV for this project?
A. NPV of -1794
B. NPV of -14,726
C. NPV of -24,726
D. NPV of -8,118
19. Standard Deviation of the project is 10.247, what is variance of the project? C
A. 106
B. 100
C. 105
D. None of the given options
20. Project has expected NPV of 21.998 lakhs and Co-efficient of Variance is 0.684. A
What is standard deviation of the project?
A. Approx 15.05
B. Approx 15.50
C. Approx 15.005
D. Approx 15.550