Project Finance Combined

LIST OF ATTEMPTED QUESTIONS AND ANSWERS
Match The Following

Question Correct Answer Your Answer
Project Financing Help improving Corporate Return on Equity Industrial Finance

Corporation of India
Finance in international financial markets Issue of Euro bonds Issue of Euro bonds
International financial institutions World Bank Increasing emphasis on the Private

initiative
Policy of Liberalisation, Privatisation and Globalisation Increasing emphasis on the

Private initiative Help improving Corporate Return on Equity
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 , Auditors report , Balance Sheet
Multiple Choice Single Answer

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

Question The Project Cycle should be in the ________ order
Correct Answer Identification of Project - Project Appraisal - Negotiations for loans
Your Answer Identification of Project - Project Appraisal - Negotiations for loans
True/False
Question Change in the project concept itself may lead to cost and time overrun.
Correct Answer True
Your Answer True

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

Question Management qualities includes :-
Correct Answer Honesty , Financial resources , Initiative
Your Answer Honesty , Initiative , Too ambitious promoters

Question Trend Projection method of demand forecasting consists of :-
Correct Answer Linear Relationship , Exponential Relationship , Polynomial
Relationship
Your Answer Linear Relationship , Chain ratio Relationship , Exponential Relationship
True/False
Question Financial analysis based on accounting ratios will give mis-leading results if
the effects of changes in price level are not taken into account.
Correct Answer True
Your Answer True

Question The objectives of the funds flow statement is as follows :-
Correct Answer To find out the uses of loans raised by the business , To indicate the
financial strength and weakness of the business , To help to understand the changes in
assets as well as asset sources which are not revealed by the income statement
Your Answer To indicate the financial strength and weakness of the business , To help
to understand the changes in assets as well as asset sources which are not revealed by the
income statement , Helps to prepare financial statements
True/False
Question The maximum Seed Capital assistance provided by IDBI under the project
will be restricted to 50% of the required promoter's contribution or Rs. 50 lakhs
whichever is lower.
Correct Answer False
Your Answer True

Question Every project involves financial outlay which can be referred to as :-
Correct Answer Project finance
Your Answer Project finance

Question A project objective can be said to have the following dimensions viz.:
Correct Answer Strategic perspective , Time span , Finance cost aspect
Your Answer Strategic perspective , Time span , Finance cost aspect , Social aspect
Question Strategic Position and Action Evaluation Model :-
Correct Answer Is an approach to hammer out an appropriate strategic posture for a
firm and its individual business
Your Answer Which is highly respected for the sophistication, maturity and quality in
its planning systems

Question The Projects which are undertaken to manufacture certain products which are
being used as raw material by the existing units is known as :-
Correct Answer Backward Integration Projects
Your Answer Backward Integration Projects

Question Technical appraisal is basically concerned with :-
Correct Answer Technology , Layout of the plant , Design of the plant
Your Answer Technology , Layout of the plant , Design of the plant
True/False
Question It is mandatory for each unit to obtain necessary clearance from Pollution
Control Authorities before setting up any project.
Correct Answer True
Your Answer True

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

Question The basic characteristic of a project is :-
Correct Answer That it involves current outlay of funds in expectation of future
benefits
Your Answer That it involves current outlay of funds in expectation of future benefits
Select The Blank

Question Longer the duration of production cycle, higher the requirement of
________.
Correct Answer Working capital
Your Answer Working capital
Select The Blank

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

Question Infrastructural projects include :-
Correct Answer Power Generation and Distribution
Your Answer Power Generation and Distribution
Select The Blank

Question Details regarding Administrative / controlling office comes under the
________ category.
Correct Answer General
Your Answer Project organisation

Question Ratios relating to working capital are :-
Correct Answer Current ratio , Internal measure , Quick ratio
Your Answer Current ratio , Debt Equity ratio , Quick ratio
Select The Blank

Question Depreciation is sometimes treated as ________ funds.
Correct Answer Source
Your Answer Source

Question Miscellaneous fixed assets includes :-
Correct Answer Cables
Your Answer Cables

Question In BCG Matrix "STARS" indicate :-
Correct Answer Products which enjoy a high market share as well as a high growth
rate
Your Answer Products which enjoy a high market share as well as a high growth rate
Select The Blank

Question ________ is a current liability.
Correct Answer Trade credit
Your Answer Unsecured loans
Match The Following

Econometric method Mathematical representation of economic relationship Suitable for

forecasting the demand for intermediate products
Primary source of data Market survey Market survey
Secondary source of data Collected in some other context Collected in some other
context
Leading indicators Variables that change faster than others Mathematical representation
of economic relationship

Question Sources of funds includes :-
Correct Answer Depreciation , Preliminary expenses written off , Increase in secured
borrowing
Your Answer Depreciation , Increase in secured borrowing
True/False
Question The construction of National Golden Quadrilateral can be recognised as
Project.
Correct Answer True
Your Answer True
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

Question Capital Issue expenses include :-
Correct Answer Brokerage fees to registrars
Your Answer Market research expenses
Select The Blank

Question Having decided on the location and product, the promoter takes into account
the ________ that is to be adopted for producing the product.
Correct Answer Manufacturing process and technology
Your Answer Manufacturing process and technology

Question Past trend method of Commercial appraisal technique is :-
Correct Answer Adopted as a guide depending on the consumption pattern of the
society as a whole
Your Answer A list of industries wherein the product is used is made and quantity and
volume is arrived at

Question Management category of Visit report consists of :-
Correct Answer Managing Director , Institutional nominees , Committees of the board
Your Answer Managing Director , Electrical engineers , Committees of the board

Question Sanctioned bank limits is categorised under :-
Your Answer Production, Sales and Profitability

Question General Electric Stop Light Matrix analyses products in terms of :-
Correct Answer Business strength and Industrial Attractiveness
Your Answer Business strength and Industrial Attractiveness

Question Production and sales aspect of Visit report consists of :-
Correct Answer Utilisation of installed capacity , Input availability , Sales trends
Your Answer Utilisation of installed capacity , Input availability , Sales trends

Question Cost of overheads include :-
Correct Answer Cost of repairs and maintenance
Your Answer Cost of repairs and maintenance

Question External sources of cash are as follows :-
Correct Answer Issue of new shares , Long term loans , Short term borrowings
Your Answer Issue of new shares , Long term loans , Short term borrowings
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 High financial strength, high industrial strength, enjoying a competitive
advantage and belonging to an attractive industry, operating in a relatively stable
environmental conditions
True/False
Question Sensitivity analysis consists of assessing the degree of risk.
Correct Answer True
Your Answer True
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

Question The cost of Plant and Machinery includes :-
Correct Answer Cost of stores and spares
Your Answer Building and civil construction
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

Question The sources of long term and medium term finance are :-
Correct Answer Public deposit , Equity shares
Your Answer Equity shares , Bridge loan , Working capital loan

Question Disposition of funds includes :-
Correct Answer Increase in working capital , Preliminary expenses , Dividend
Your Answer Increase in working capital , Dividend , Preliminary expenses

written off
Select The Blank

Question The company having ________, is appropriate for the strategic
posture of Conservative under the SPACE approach.
industry but enjoying financial strength and operating in a
relatively stable environment
Your Answer Limited financial strength, enjoying competitive advantage,
belonging to attractive industry and operating in a relatively
volatile environment
Select The Blank

Question A market survey generally is a ________ survey.
Correct Answer Sample
Your Answer Sample

Question The ratio which covers those assets which can be converted into
cash immediately is known as :-
Correct Answer Quick ratio
Your Answer Quick ratio

Question Delay in arrival of domestic/foreign machinery and technicians
may lead to :-
Your Answer Cost and time overrun

Question Casual methods of Demand forecasting consists of :-
Correct Answer Consumption-level method , Econometric method
Your Answer Consumption-level method , Econometric method
Select The Blank

Question Having decided on the location and product, the promoter takes
into account the ________ that is to be adopted for producing
the product.

Correct Answer To find out the uses of loans raised by the business , To indicate
the financial strength and weakness of the business , To help to
understand the changes in assets as well as asset sources
which are not revealed by the income statement
Your Answer To find out the uses of loans raised by the business , To help to
which are not revealed by the income statement , Helps to
prepare financial statements

Your Answer Profit and Loss Account , Balance Sheet , Cash flow statement
Select The Blank

Question ________ in assets involves outflow of funds.
Correct Answer Increase
Your Answer Increase

Question Technology, design, layout of the plant as well as inputs and
infrastructural facilities are to be considered under :-
Correct Answer Technical appraisal
Your Answer Technical appraisal

True/False
Question The Detailed Project report must indicate the gestation period of
the project.
Correct Answer True
Your Answer False
True/False
Question Interest and Dividend are to be considered while calculating
Operating ratio.
Your Answer False

Question Short supplies of materials may lead to :-
True/False
Question Ratio should be computed on the basis of inter-related figures
which have a cause and effect relationship.
Correct Answer True
Your Answer True

Question A project objective which states What "achieving it " would cost
is known as :-
Correct Answer Finance cost aspect
Your Answer Finance cost aspect
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 ________.

Question The rate of discount which would equate the present value of
investments to the present value of benefits over the life of the
project is known as :-
Correct Answer Internal rate of return
Your Answer Net Present value
Multiple Choice Multiple Answ er

Question The various aspects which need to be considered while
assessing Project finance financing are :-
Correct Answer Environmental factors , Risk involved , Managerial compensation
Your Answer Environmental factors , Risk involved , Political issues
Match The Following

Private investment Power generation Nearness to market
Project Time -bound Time -bound
Programme Not necessarily time Not necessarily time bound

bound
Foreign direct investment Machine tools Power generation
True/False
Question The advantage of secondary sources of data is that it is readily
and economically available.
Correct Answer True
Your Answer False

Question A project objective which states "What' is to be viewed" is termed
as :-
Correct Answer Strategic perspective
Your Answer Strategic perspective

Question A project objective can be said to have the following dimensions
viz.:
Your Answer Strategic perspective , Time span , Finance cost aspect
True/False
Question A project is unique and no two projects are similar.
Correct Answer True
Your Answer True

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

Question Profit is the result of customer satisfaction, indeed customer
delight under the :-
Correct Answer Marketing concept

Your Answer Honesty , Financial resources , Initiative


benefits
Your Answer That it involves current outlay of funds in expectation of future
benefits
Select The Blank

Question ________ is the summary of cash book or Receipts and
Payments statement.
Correct Answer Cash flow statement
Your Answer Cash flow statement
Select The Blank

Question Under the SPACE Model, Customer loyalty is determined under
the ________ dimension.
Correct Answer Company's competitive advantage
Your Answer Company's competitive advantage

True/False
Question The 'BCG Matrix 'analysis various products of the organisation in
the terms of Business strength and Industry Attractiveness.
Your Answer False
Select The Blank

Question A smaller unit into which the overall requirement of capital of a
company is sub-divided is termed as ________.
Correct Answer Share
Your Answer Share

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 Average Business Strength and Medium Industry Attractiveness
, Average Business strength and high Industry attractiveness ,
Average Business Strength and Low Industry attractiveness

Question The ratio which indicates the ability of the company to meet
current obligations is termed as :-
Correct Answer Current ratio
Your Answer Current ratio
True/False
Question The General Electric Company incorporated in the USA, is highly
respected for the sophistication, maturity and quality in its
planning systems.
Correct Answer True
Your Answer False
Select The Blank

Your Answer Outflow of cash
Match The Following

Current ratio Liquidity ratio Current liability
Debt-Equity ratio Solvency ratio Debt
External liabilities Debt Relationship between Net

Profit after taxes and total
shareholders funds
Shareholders funds Equity Equity
True/False
Question There is a need for studying Project finance both for the lenders
as well as the borrowers as both of them have equal stake in
making the Project a success.
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

Question Every project involves financial outlay which can be referred to
as :-
Your Answer Balance Sheet

Question In the Detailed Project Report, Management aspects includes :-
Correct Answer Determination , Organisation Building , Person / system oriented
Your Answer Determination , Organisation Building , Person / system oriented
Select The Blank

Your Answer Source

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

Question In BCG Matrix "QUESTION MARKS" indicate :-
Correct Answer Products which have high growth potential but low market share
Your Answer Products which have high growth potential but low market share
True/False
Question Production line diagrams show the organisation structure of the
project along with information on location, personnel required for
various departments, and their inter-relationship.
Your Answer True
PROJECT FINANCE
Correct Answer To help to understand the changes in assets as well as asset sources
which are not revealed by the income statement , To find out the uses of loans raised by
the business , To indicate the financial strength and weakness of the business
understand the changes in assets as well as asset sources which are not revealed by
the income statement , Helps to prepare financial statements
Select The Blank


True/False
Question The Detailed Project report spells out the modus operandi for the
implementation of the Project and the realization of the Project objectives.
Correct Answer True

Your Answer True
Select The Blank
Question As the plant capacity increase, the investment cost unit capacity ________.
Correct Answer Decreases

Your Answer Decreases
Question Internal sources of funds are :-
Correct Answer Funds from operation , Loss on sale of fixed assets , Goodwill written
off
Your Answer Funds from operation , Loss on sale of fixed assets
Question End use method of Commercial appraisal technique is :-
Correct Answer A list of industries wherein the product is used is made and quantity
and volume is arrived at
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
True/False
Question In small scale organisation, requirement of working capital is quite high due
to high amount of overheads, high buying costs and high selling cost.
Correct Answer True

Your Answer True
Qnt. Correct Your Ans

Project Manager Finance Manager Finance Manager
General category of Project Location of factory Location of factory
report
Cost aspect of the project Consultancy fees Consultancy fees
Financing plan Unsecured Unsecured
Select The Blank
Question Longer the duration of production cycle, higher the requirement of ________.


Select The Blank
Question Cost of fencing comes under the ________ category of the Project report.
Correct Answer Land and site development

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

Your Answer True
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 True

Your Answer True
Select The Blank

Select The Blank

Your Answer Detailed Project report

Select The Blank
Question Location of the factory comes under the ________ category of the Project
report.

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

Your Answer Share capital , Term loans , Internal accruals

True/False
Question Market potential should be determined under the Marketing aspect of the
Project report.
Correct Answer True

Your Answer True
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
Question A project objective which states What "achieving it " would cost is known as
:-

Question A project objective which states "What' is to be viewed" is termed as :-

Your Answer Social aspect
True/False
Question Nominal maximum capacity is the capacity that is technically attainable and
this corresponds to the supplier's guaranteed capacity.
Correct Answer True

Your Answer True
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 Long term financing
Correct Answer That it involves current outlay of funds in expectation of future benefits

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

Question The norms for providing open areas have to be strictly followed for safety of
labour and allow sufficient space for outflow of effluents safely in case of :-
Correct Answer Chemical unit

Your Answer Chemical unit

Select The Blank
Question Investors who invest in the debentures of the company are the ________ of
the company.
Correct Answer Creditors

Your Answer Creditors
Match The Following
QuestionCorrect Answer
Your Answer
Private investment Power generation

Project Time-bound
Programme Not necessarily time bound
Foreign direct Machine tools
investment
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

the :-

Your Answer Sales concept
True/False
Question The 'BCG Matrix 'analysis various products of the organisation in the terms
of Business strength and Industry Attractiveness.

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

Your Answer Feasibility
Question Delay in arrival of domestic/foreign machinery and technicians may lead to :-

True/False
Question Miscellaneous expenditure is written on the asset side of the Balance sheet.
Correct Answer True

Your Answer True
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
Question A Project is a temporary endeavor to achieve some specific objectives within

a :-
Correct Answer Predefined time

Your Answer Predefined time
considered :-
Correct Answer Proximity to raw materials and markets , Availability of infrastructure ,

Correct Answer Equity shares , Public deposit

Your Answer Equity shares , Public deposit
Question The cost which change in the same proportion in which the level of
production changes is known as :-
Correct Answer Variable cost
Your Answer Variable cost
Question The second phase of the technical appraisal which focuses upon appraising
the likely technical gaps consists of :-
Correct Answer Problems faced during the Construction and Project implementation
Your Answer Problems faced during the Construction and Project implementation
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
True/False
Question In the BCG Matrix, the key term of Cash Cows require further commitment
of funds.

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 Average Business Strength and Low Industry attractiveness


benefits
Select The Blank

Your Answer Finance

Question Financial aspect of Detailed Project report includes :-
Correct Answer Fixation of means of financial structure
Your Answer Fixation of means of financial structure

Question A project can be regarded as the sum of the activities directed towards a :-
Correct Answer Specific result

Your Answer Specific result

Question Sewerage and drainage cost of the project is categorised under :-
Correct Answer Building cost

Your Answer Building cost

Question The BCG Product Portfolio Matrix :-
Correct Answer Is a tool for strategic ( product ) planning and resource allocation
Your Answer Is a tool for strategic ( product ) planning and resource allocation

Select The Blank

Question ________ capital represents permanent capital.
Correct Answer Equity

Your Answer Debentures


Relationship
Your Answer Linear Relationship , Exponential Relationship , Polynomial Relati onship

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
Select The Blank

Question ________ in liabilities involves inflow of funds.

Your Answer Cash
Select The Blank

Question ________ occupies a unique position in the macro economic development
which helps in induction of new technology and facilitates, greater efficiency as well as
higher productivity.
Correct Answer Investment



True/False
Correct Answer True

Your Answer True
Select The Blank

Question Excessive expenditures on foreign technicians leads to ________.


Question Appointments made at senior level during the half-year is categorised under
:-
Correct Answer Organisation and management
Your Answer Organisation and management





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

Your Answer Inflation

Question Demand technique forecasting of Commercial appraisal includes :-
Correct Answer Future demand of the product , Proper survey of the product , Future
availability and supply of the product
Your Answer Future demand of the product , Proper survey of the product , Future

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




Your Answer Purchase of fixed assets , Issue of new machinery
True/False
Correct Answer True
Your Answer True

Question The permanent requirement of working capital should be financed out of :-
Correct Answer Cash Profits , Shares , Debentures

Your Answer Cash Profits , Shares , Debentures
True/False
Question Ratio analysis is a technique of planning and control.

Your Answer False
True/False
Correct Answer True

Your Answer False
Select The Blank



Question The ratio which covers those assets which can be converted into cash
immediately is known as :-


Question The Projects which are undertaken to manufacture certain products which
are being used as raw material by the existing units is known as :-

Select The Blank

Question Retained earnings indicates that whatever profits are earned by the
company are not distributed by it by way of ________ but are kept aside for use in future
for expansion or other purpose.
Correct Answer Dividend

Your Answer Dividend

Question Time Series Projection Methods of Demand forecasting consists of :-
Correct Answer Trend Projection method , Moving Averages method
Your Answer Trend Projection method , Moving Averages method
True/False
Question Unlike financial projections, there cannot be any fixed, well-recognised or
structure formula/steps for management evaluation/appraisal.
Correct Answer True

Your Answer True
True/False
Question Production line diagrams show the organisation structure of the project
along with information on location, personnel required for various departments, and their
inter-relationship.

Your Answer False
Select The Blank

Question ________ is a current asset
Correct Answer Book debts

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

Your Answer True
Select The Blank

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

Your Answer Cost aspect


Your Answer Managing Director , Institutional nominees , Committees of the board
True/False
Correct Answer True

Your Answer False
Question The ratio that roughly measures the company's potential reserve of cash is
termed as :-
Correct Answer Net Working capital to total assets

Your Answer Net Working capital to total assets

Question The following are the sources of funds :-
Correct Answer Operating Profit , Non operating Income

Your Answer Operating Profit , Dividends
True/False
Correct Answer True

Your Answer True

Question Borrower's contribution towards Working capital is known as :-
Correct Answer Margin money
Your Answer Margin money

Question Building cost consists of :-
Correct Answer Factory building , Auxiliary buildings , Administrative block
Your Answer Factory building , Auxiliary buildings , Administrative block

Question In BCG Matrix " CASH COWS" indicate :-
Correct Answer Products which have high market share but low growth potential
Your Answer Products which have high market share but low growth potential

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

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
True/False
Question In both the extreme situations of trade cycles i.e. Inflation and depression, requirement of
working capital may be high.
Correct Answer True
Your Answer True
True/False
Question Name of the finance manager comes under the Project organisation category of the Project
report.
Correct Answer True
Your Answer True
True/False
Question It is mandatory for each unit to obtain necessary clearance from Pollution Control Authorities
before setting up any project.
Correct Answer True
Your Answer True

Match The Following

Management problems Lack of exposure Lack of exposure
Management Quality Initiative Initiative

Management Perception Aspiration level/ conservative Aspiration level/ conservative
Organisational Climate Person oriented Person oriented


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
Select The Blank

Question ________ profitability reduces the strain on working capital.
Correct Answer High
Your Answer Stable


Question The various aspects which need to be considered while assessing Project finance financing are
:-
Your Answer Environmental factors , Risk involved , Managerial compensation

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

Select The Blank

Your Answer Increases

Question Debt Service coverage ratio may be considered to be one of the most important ratios
calculated by the :-
Correct Answer Bankers , Financial Institutions
Your Answer Shareholders , Bankers , Financial Institutions

Question A project objective which states What "achieving it " would cost is known as :-
True/False
Correct Answer True
Your Answer True

Question Limitations of fund flow statement are :-
Correct Answer It does not provide any new information but only rearranges the various facts , It does
not consider non-fund transactions
Your Answer It does not provide any new information but only rearranges the various facts , It does not
consider non-fund transactions , It does not help in determining future requirement of funds

Question The third phase of the technical appraisal which focuses upon appraising the likely technical
gaps consists of :-

Question Receivables is categorised under :-
Correct Answer Current assets and liabilities
Your Answer Current assets and liabilities

Question It is said that a second rate project in the hands of first rate management is better than a first
rate project in the hands of :-
Correct Answer Second rate management
Your Answer Second rate management
Select The Blank

Question The company having ________, is appropriate for the strategic posture of Defensive under the
SPACE approach.
Correct Answer Lacks both competitive advantage as well as financial strength and belongs to a not so
attractive industry, operating in an unstable environment
Your Answer Lacks both competitive advantage as well as financial strength and belongs to a not so
Select The Blank

Your Answer Profit maximisation
True/False
Question The 'BCG Matrix 'analysis various products of the organisation in the terms of Business
strength and Industry Attractiveness.
Your Answer False
Select The Blank

Question Having decided on the location and product, the promoter takes into account the ________ that
is to be adopted for producing the product.
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 ,
True/False
Correct Answer True
Your Answer True


True/False
Question In the BCG Matrix "DOGS" indicate products which are generally during the stage of Decline
of a Product Life Cycle.
Correct Answer True
Your Answer True
True/False
Question The construction of National Golden Quadrilateral can be recognised as Project.
Correct Answer True
Your Answer True
Select The Blank

Question Under the SPACE Model, Customer loyalty is determined under the ________ dimension.
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
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 True
Your Answer True

Your Answer Cables

Question In the Detailed Project Report, Technical aspects includes :-
Correct Answer Plant capacity , Quality standards , Raw material requirement
Your Answer Quality standards , Raw material requirement , Power / telecom facilities

Correct Answer Linear Relationship , Exponential Relationship , Polynomial Relationship
Your Answer Linear Relationship , Exponential Relationship , Polynomial Relationship
True/False
Question Market potential should be determined under the Marketing aspect of the Project report.
Correct Answer True
Your Answer True

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

Question Preoperative expenses includes :-
Correct Answer Bank guarantees
Your Answer Bank guarantees
Select The Blank

Question A Project has a ________ represented by growth, maturity and decay.
Correct Answer Life cycle
Your Answer Life cycle
True/False
Question If the organisation is a trading organisation, the requirement of working capital will be on the
lower side.
Your Answer True
True/False
Question In the BCG Matrix, the key term of Cash Cows require further commitment
of funds.
Your Answer False
Select The Blank

Question In the GE's Stop Light Matrix, when ________ situation prevails , Products
call for divestment.

benefits
Select The Blank

Your Answer Finance




Select The Blank

Match The Following

Export market technique of Commercial appraisal Government provides ample

encouragement Government provides ample encouragement
Demand Technique forecasting of Commercial appraisal Future demand of the product

Future demand of the product
Past trend method of Commercial appraisal Adopted as a guide depending on the

consumption pattern of the society as a whole Adopted as a guide depending on the
consumption pattern of the society as a whole
End use method of Commercial appraisal A list of industries wherein the product is used
is made and quantity and volume is arrived at A list of industries wherein the product is
used is made and quantity and volume is arrived at

Relationship
Your Answer Linear Relationship , Exponential Relationship , Polynomial
Relationship

Question After the SPACE chart is constructed, we would normally get any one of the
Select The Blank

Your Answer Cash
Select The Blank


True/False
Correct Answer True
Your Answer True
Select The Blank


Question Appointments made at senior level during the half-year is categorised under
:-



Match The Following

Source of funds Depreciation Equity capital
Fixed assets Building Building
Current assets Debtors Investment
Current liability Trade credit Debtors

known as :-

Your Answer Future demand of the product , Proper survey of the product , Future

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 :-
Select The Blank


True/False
Correct Answer True
Your Answer True

True/False
Your Answer False
True/False
Correct Answer True
Your Answer False
Select The Blank



Select The Blank

Question Retained earnings indicates that whatever profits are earned by the company
are not distributed by it by way of ________ but are kept aside for use in future for
expansion or other purpose.

True/False
Question Unlike financial projections, there cannot be any fixed, well-recognised or
structure formula/steps for management evaluation/appraisal.
Correct Answer True
Your Answer True
True/False
Question Production line diagrams show the organisation structure of the project along
with information on location, personnel required for various departments, and their inter-
relationship.
Your Answer False
Select The Blank

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

Question Details regarding Internal accruals comes under the ________ category of
Project report.

True/False
Correct Answer True
Your Answer False

termed as :-

True/False
Correct Answer True
Your Answer True
True/False
Question 1 The advantage of secondary sources of data is that it is readily and
economically available.
Correct Answer True
Your Answer True
True/False
Question2 In small scale organisation, requirement of working capital is quite high due
Correct Answer True
Your Answer True
True/False
Question3 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
Select The Blank

Question 4 ________ is a current asset
Your Answer Furniture

Question 5 Trend Projection method of demand forecasting consists of :-
Relationship
Relationship

Question 6 Delays in infrastructure Development by State Agencies may lead to :-

Question 7 Technical aspect of detailed project report includes :-
Correct Answer Detailed Project Engineering
Your Answer Detailed Project Engineering

Question 8 Sources of funds includes :-
borrowing
Your Answer Preliminary expenses written off , Increase in secured borrowing

Question 9 Delay in arrival of domestic/foreign machinery and technicians may lead to
:-
Select The Blank

Question 10 A smaller unit into which the overall requirement of capital of a company
is sub-divided is termed as ________.
Your Answer Share

Question11 A project objective which states "What' is to be viewed" is termed as :-

Question 12 Sewerage and drainage cost of the project is categorised under :-

Question13 Internal sources of funds are :-
off
Your Answer Funds from operation , Goodwill written off
Question14 In the Detailed Project Report, Management aspects includes :-
Select The Blank

Question15 Short term finance is normally for a period upto ________ year.
Correct Answer One
Your Answer One
True/False
Question16 Current assets includes stock-in-process.
Correct Answer True
Your Answer True

Question17 The basic characteristic of a project is :-
benefits

Question18 Time Series Projection Methods of Demand forecasting consists of :-
Select The Blank

Question 19 ________ is a current liability.
True/False
Question20 Managerial problems in a project are the most pervasive.
Correct Answer True
Your Answer True
Select The Blank

Question21 Longer the duration of production cycle, higher the requirement of
________.
Select The Blank

Question22 Retained earnings is a source of ________ finance.
Correct Answer Internal
Your Answer Short term
Select The Blank

Question23 ________ is the summary of cash book or Receipts and Payments
statement.
Your Answer Trial balance
True/False
Question24 In the BCG Matrix, the key term of Cash Cows require further
commitment of funds.
Your Answer True
True/False
Question25 Cost and time overrun of the project may lead to loss on account of lost
Correct Answer True
Your Answer True

Question26 A project objective which states What "achieving it " would cost is known
as :-

Question27 Casual methods of Demand forecasting consists of :-

Question 28 In BCG Matrix "STARS" indicate :-
rate

Question 29 Psychographic market appraisal answers to :-
Correct Answer Why they buy?
Your Answer Why they buy?
True/False
Question30 Production line diagrams show the organisation structure of the project
along with information on location, personnel required for various departments, and their
inter-relationship.
Your Answer False

Question31 While choosing the location for a project, the following factors should be
considered :-

Question32 The cost which change in the same proportion in which the level of
Select The Blank

Question33 Goods purchased on credit ________ in flow of funds.
Correct Answer Does not result

Question34 Ratios relating to working capital are :-

Question35 Appointments made at senior level during the half-year is categorised
under :-

Question36 Cost of the Project encompasses :-

Question37 Production and sales aspect of Visit report consists of :-
Match The Following

Question38 Correct Answer Your Answer
Current assets Debtors Debtors
Current liability Trade credit Trade credit

Question39 Every project involves financial outlay which can be referred to as :-

Question 40 General category of the Project report consists of :-
Correct Answer Name of the Industrial concern , Proposed product , Location of the
factory
factory

Question 41 The data for ratio analysis is obtained from :-
Your Answer Profit and Loss Account , Balance Sheet

Question42 Short supplies of materials may lead to :-

Question43 After the SPACE chart is constructed, we would normally get any one of
the following basic strategic postures :-
Select The Blank

Question 44 ________ occupies a unique position in the macro economic development

Question45 Infrastructural projects include :-
Select The Blank

Question46 Name and designation of the chief executive comes under the ________
category.
Your Answer General
Match The Following

Private investment Power generation Machine tools
Programme Not necessarily time bound Not necessarily time bound

Project Finance _15

Correct Answer To help to understand the changes in assets as well as asset

sources which are not revealed by the income statement , To
find out the uses of loans raised by the business , To indicate the
financial strength and weakness of the business
Select The Blank


as :-
True/False
implementation of the Project and the realization of the Project
objectives.
Correct Answer True
Your Answer True
Select The Blank

Question As the plant capacity increase, the investment cost unit capacity
________.

Correct Answer Funds from operation , Loss on sale of fixed assets , Goodwill
written off
-1 -
Project Finance _15

Correct Answer A list of industries wherein the product is used is made and
quantity and volume is arrived at
Your Answer A list of industries wherein the product is used is made and

True/False
Question In small scale organisation, requirement of working capital is
quite high due to high amount of overheads, high buying costs
and high selling cost.
Correct Answer True
Your Answer True
Match The Following

Project organisation Finance manager Finance manager
General category of Location of factory Location of factory

Project report
report
Financing plan Unsecured loans Unsecured loans
Select The Blank

Question Longer the duration of production cycle, higher the requirement
of ________.

-2 -
Project Finance _15
Select The Blank

Question Cost of fencing comes under the ________ category of the
Project report.
True/False
Question Trend projection method is the important technique for
forecasting demand.
Correct Answer True
Your Answer True
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 True
Your Answer True
Select The Blank

Select The Blank

Question The basic difference between the feasibility study report and
________ is the level of accuracy and degree of detail.

Question Delays in infrastructure Development by State Agencies may
lead to :-
-3 -
Project Finance _15
Select The Blank

Question Location of the factory comes under the ________ category of
the Project report.
Your Answer General


True/False
Question Market potential should be determined under the Marketing
aspect of the Project report.
Correct Answer True
Your Answer True
Select The Blank

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

is known as :-

as :-
-4 -
Project Finance _15
True/False
Question Nominal maximum capacity is the capacity that is technically
attainable and this corresponds to the supplier's guaranteed
capacity.
Correct Answer True
Your Answer True
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.


benefits
benefits


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

Question The norms for providing open areas have to be strictly followed
for safety of labour and allow sufficient space for outflow of
effluents safely in case of :-

-5 -
Project Finance _15
Select The Blank

Question Investors who invest in the debentures of the company are the
________ of the company.
Match The Following

Private investment Power generation Power generation

bound
Foreign direct investment Machine tools Machine tools

Your Answer Strong Business Strength and high Industry attractiveness ,


Question The industrial concern earned profits by increasing the sales
volume under the :-
True/False
-6 -
Project Finance _15

Your Answer False
Select The Blank

Question Detailed Project Report is generally prepared from a ________
report with additional information.

may lead to :-
True/False
Question Miscellaneous expenditure is written on the asset side of the
Balance sheet.
Correct Answer True
Your Answer True

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

Question A Project is a temporary endeavor to achieve some specific
objectives within a :-

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
-7 -
Project Finance _15
Your Answer Proximity to raw materials and markets , Availability of



Question The cost which change in the same proportion in which the level
of production changes is known as :-

Question The second phase of the technical appraisal which focuses upon
appraising the likely technical gaps consists of :-
Correct Answer Problems faced during the Construction and Project
implementation
Your Answer Problems faced during the Construction and Project
implementation

Question The third phase of the technical appraisal which focuses upon
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
-8 -
Project Finance _16
Select The Blank

Your Answer Source

Correct Answer Issue of new shares , Long term loans , Short term
borrowings
Your Answer Long term loans , Short term borrowings , Issue of new
shares

Correct Answer Products which have high market share but low growth
potential
Your Answer Products which have high market share but low growth
potential
Select The Blank


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
True/False
Question Ratio should be computed on the basis of inter-related
figures which have a cause and effect relationship.
-1 -
Project Finance _16
Correct Answer True

Your Answer True

Select The Blank

Question Retained earnings is a source of ________ finance.
Your Answer Internal
Select The Blank

Correct Answer High
Your Answer High

True/False
Question Cost under-estimation at the project preparation and
evaluation stage leads to cost and time over run.
Correct Answer True
Your Answer False

Question Cost of laying roads comes under :-
Correct Answer Land and site cost
Your Answer Preoperative cost
-2 -
Project Finance _16

Your Answer Current ratio , Internal measure , Quick ratio
True/False
Correct Answer True
Your Answer True

Question Borrower's contribution towards Working capital is known
as :-

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

Question A project objective can be said to have the following
dimensions viz.:
Your Answer Time span , Finance cost aspect , Strategic perspective


-3 -
Project Finance _16

True/False
Question Unlike financial projections, there cannot be any fixed,
well-recognised or structure formula/steps for management
evaluation/appraisal.
Correct Answer True
Your Answer True

Match The Following

Preliminary and capital Brokerage and Foundation and erection

issue expenses commission charges
Land and site Cost of laying roads Brokerage and
development cost commission
Building cost Cost of factory building Cost of factory building
Plant and machinery Foundation and Cost of laying roads

cost erection charges

Correct Answer That it involves current outlay of funds in expectation of
future benefits
Your Answer That it involves current outlay of funds in expectation of
future benefits
Select The Blank

Your Answer Equity
-4 -
Project Finance _16


Question The entire life of the project is taken into account under
Correct Answer Average rate of return method
Your Answer Pay back method
Select The Blank


Question BCG Product Portfolio Matrix analyses products on the
basis of :-
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
Match The Following

Project Financing Help improving Help improving

Corporate Return on Corporate Return on
Equity Equity
Finance in international Issue of Euro bonds World Bank
financial markets
-5 -
Project Finance _16
International financial World Bank Issue of Euro bonds

institutions
Policy of Liberalisation, Increasing emphasis on Increasing emphasis on
Privatisation and the Private initiative the Private initiative
Globalisation
True/False
Question Land and site development comes under the cost aspect of
the Project report.
Correct Answer True
Your Answer True
Select The Blank

________ has been developed so that the financial
commitment and risks associated with a project are shared
between the project sponsor and the lending institutions.
Your Answer Limited recourse financing

Question Debt Service coverage ratio may be considered to be one of
the most important ratios calculated by the :-
Your Answer Bankers , Financial Institutions
True/False
Question Debt Equity ratio is a 'Solvency ratio'.
Correct Answer True
Your Answer True

Question Technical aspect of detailed project report includes :-
True/False
-6 -
Project Finance _16
Question Cost and time overrun of the project may lead to loss on
account of lost market opportunities.
Correct Answer True
Your Answer True
Select The Blank

Question A smaller unit into which the overall requirement of capital
of a company is sub-divided is termed as ________.
Your Answer Share
True/False
Question There is a need for studying Project finance both for the
lenders as well as the borrowers as both of them have equal
stake in making the Project a success.
Correct Answer True
Your Answer True
Select The Blank


Correct Answer Utilisation of installed capacity , Input availability , Sales
trends
Your Answer Utilisation of installed capacity , Input availability , Sales
trends

Question The rate of discount which would equate the present value
of investments to the present value of benefits over the life
of the project is known as :-
Your Answer Internal rate of return
Select The Blank
-7 -
Project Finance _16

Your Answer Book debts

Correct Answer Factory building , Auxiliary buildings , Administrative
block
Your Answer Factory building , Auxiliary buildings , Administrative
block
True/False
Question Nominal maximum capacity is the capacity that is
technically attainable and this corresponds to the supplier's
guaranteed capacity.
Correct Answer True
Your Answer True

Question In the Cash flow statement, the sources of funds include
Correct Answer Share Issue
Your Answer Share Issue

Question The permanent requirement of working capital should be
financed out of :-
Select The Blank

-8 -
Project Finance _17





True/False
Question In both the extreme situations of trade cycles i.e. Inflation and depression, requirement of
working capital may be high.
Correct Answer True
Your Answer True
True/False
Question Name of the finance manager comes under the Project organisation category of the Project
report.
Correct Answer True
Your Answer True
True/False
Correct Answer True
Your Answer True

Match The Following

-1-
Project Finance _17


Select The Blank

Correct Answer High
Your Answer Stable


Question The various aspects which need to be considered while assessing Project finance financing are
:-


Select The Blank



-2-
Project Finance _17
True/False
Correct Answer True
Your Answer True

Correct Answer It does not provide any new information but only rearranges the various facts , It does
not consider non-fund transactions
Your Answer It does not provide any new information but only rearranges the various facts , It does not
consider non-fund transactions , It does not help in determining future requirement of funds

Question The third phase of the technical appraisal which focuses upon appraising the likely technical
gaps consists of :-


Question It is said that a second rate project in the hands of first rate management is better than a first
rate project in the hands of :-
Select The Blank

Question The company having ________, is appropriate for the strategic posture of Defensive under the
SPACE approach.
Correct Answer Lacks both competitive advantage as well as financial strength and belongs to a not so
Your Answer Lacks both competitive advantage as well as financial strength and belongs to a not so
Select The Blank

True/False
Your Answer False
Select The Blank

Question Having decided on the location and product, the promoter takes into account the ________ that
is to be adopted for producing the product.
-3-
Project Finance _17

Correct Answer Company's financial year , Impact of Government policies on company operations ,
Your Answer Company's financial year , Impact of Government policies on company operations ,
True/False
Correct Answer True
Your Answer True


True/False
Question In the BCG Matrix "DOGS" indicate products which are generally during the stage of Decline
of a Product Life Cycle.
Correct Answer True
Your Answer True
True/False
Question The construction of National Golden Quadrilateral can be recognised as Project.
Correct Answer True
Your Answer True
Select The Blank

Question Under the SPACE Model, Customer loyalty is determined under the ________ dimension.
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
True/False
Correct Answer True
Your Answer True

Your Answer Cables
-4-
Project Finance _17


True/False
Correct Answer True
Your Answer True


Select The Blank

True/False
Question If the organisation is a trading organisation, the requirement of working capital will be on the
lower side.
Your Answer True
-5-
Project Finance _18

Correct Answer Public deposit , Equity shares

Your Answer Increase in working capital , Dividend , Preliminary expenses

written off
Select The Blank

posture of Conservative under the SPACE approach.
industry but enjoying financial strength and operating in a
relatively stable environment
Your Answer Limited financial strength, enjoying competitive advantage,
belonging to attractive industry and operating in a relatively
volatile environment
Select The Blank

Your Answer Sample


may lead to :-
-1 -
Project Finance _18

Select The Blank

the product.

Correct Answer To find out the uses of loans raised by the business , To indicate
the financial strength and weakness of the business , To help to
which are not revealed by the income statement

Your Answer Profit and Loss Account , Balance Sheet , Cash flow statement
Select The Blank


Your Answer Technical appraisal
-2 -
Project Finance _18
True/False
the project.
Correct Answer True
Your Answer False
True/False
Question Interest and Dividend are to be considered while calculating
Operating ratio.
Your Answer False

True/False
Correct Answer True
Your Answer True

is known as :-
Select The Blank

current liabilities, more accurate will be estimation of the

-3 -
Project Finance _18
Your Answer Net Present value
Multiple Choice Multiple Answ er

Match The Following

Private investment Power generation Nearness to market

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

as :-

viz.:
True/False
-4 -
Project Finance _18
Correct Answer True
Your Answer True





benefits
benefits
Select The Blank

Payments statement.
Select The Blank

Question Under the SPACE Model, Customer loyalty is determined under
the ________ dimension.
-5 -
Project Finance _18
True/False
Your Answer False
Select The Blank

Your Answer Share

Your Answer Average Business Strength and Medium Industry Attractiveness
, Average Business strength and high Industry attractiveness ,
Average Business Strength and Low Industry attractiveness

Question The ratio which indicates the ability of the company to meet
current obligations is termed as :-
True/False
Question The General Electric Company incorporated in the USA, is highly
respected for the sophistication, maturity and quality in its
planning systems.
Correct Answer True
Your Answer False
Select The Blank

Your Answer Outflow of cash
Match The Following
-6 -
Project Finance _18
Current ratio Liquidity ratio Current liability
Debt-Equity ratio Solvency ratio Debt
External liabilities Debt Relationship between Net

Profit after taxes and total
shareholders funds
Shareholders funds Equity Equity
True/False
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

as :-
Your Answer Balance Sheet

Select The Blank

Your Answer Source
-7 -
Project Finance _18
True/False
Correct Answer True
Your Answer True

True/False
Your Answer True
-8 -
Project Finance _19
Select The Blank


Question Marketing category of the Project report consists of :-
Correct Answer Target market , Market potential , Pricing policy
Your Answer Target market , Market potential , Pricing policy
Select The Blank

Question Under the SPACE Model, Customer loyalty is determined under the ________
dimension.

Question Sources of funds include :-
Correct Answer Increase in secured borrowing
Your Answer Increase in secured borrowing
True/False
Question It is mandatory for each unit to obtain necessary clearance from Pollution Control
Authorities before setting up any project.
Correct Answer True
Your Answer False

Select The Blank

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


Question The second phase of the technical appraisal which focuses upon appraising the likely
technical gaps consists of :-
-1-
Project Finance _19
True/False
Correct Answer True
Your Answer True

Question Land and site development cost includes cost of :-
Correct Answer Gates
Your Answer Gates

Select The Blank

Match The Following

Match The Following


Question Disposal of fixed assets is categorised under :-
Correct Answer Miscellaneous
Your Answer Miscellaneous
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 True
Your Answer True
-2-
Project Finance _19

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

Select The Blank

Question ________ occupies a unique position in the macro economic development which
helps in induction of new technology and facilitates, greater efficiency as well as higher
productivity.
Your Answer Production


Question Pre-operative expenses include :-
Correct Answer Interest on deferred payments
Your Answer Interest on deferred payments

Question Advantages of fund flow statement are :-
Correct Answer It determines financial consequences of the business operations , It enables
the firm to plan its financial resources properly , It helps as a reliable guide for the future
requirement of funds
Your Answer It determines financial consequences of the business operations , It considers
non-fund transactions , It enables the firm to plan its financial resources properly
True/False
Question Managerial problems in a project are the most pervasive.
Correct Answer True
Your Answer True
True/False
Question In the BCG Matrix "DOGS" indicate products which are generally during the stage of
Decline of a Product Life Cycle.
Correct Answer True
Your Answer True

Your Answer Purchase of fixed assets , Payment of long term loans , Issue of new machinery
True/False
Correct Answer True
Your Answer True
-3-
Project Finance _19
True/False
Question Current assets includes stock-in-process.
Correct Answer True
Your Answer True


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

Question The rate of discount which would equate the present value of investments to the
present value of benefits over the life of the project is known as :-
Select The Blank


Question After the SPACE chart is constructed, we would normally get any one of the following
basic strategic postures :-
Select The Blank

Question ________ is the summary of cash book or Receipts and Payments statement.

Question The point at which the unit neither earns profit nor incurs loss is known as :-
Correct Answer Break Even Point
Your Answer Break Even Point


Question The various aspects which need to be considered while assessing Project finance
financing are :-

-4-
Project Finance _19
Select The Blank

Question Under ________ method, the forecasts are modified in the light of observed errors.
Correct Answer Exponential smoothing
Your Answer Exponential smoothing

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
Select The Blank

Question Retained earnings indicates that whatever profits are earned by the company are not
distributed by it by way of ________ but are kept aside for use in future for expansion or other
purpose.


Question The ratio that roughly measures the company's potential reserve of cash is termed as
:-
Select The Blank

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

Your Answer Cables

-5-
Project Finance _20
True/False
Question Land and site development comes under the cost aspect of the Project report.
Correct Answer True
Your Answer True

Question Location of the factory comes under the :-
Correct Answer General category
Your Answer General category
Match The Following

Project appraisal It is the evaluation of project from technical, market, financial, economic and
social perspective before committing funds for investment It is a preliminary assessment of the
project idea to determine whether or not the investment opportunity is promising
Program It is large in scope, is activity oriented and is not necessarily time bound It is large in
scope, is activity oriented and is not necessarily time bound
Project It is one-shot, time-limited, goal oriented, major undertaking requiring the commitment of
varied skills and resources It deals with the impact of the investment project on people and their
lives
Pre-feasibility study It is a preliminary assessment of the project idea to determine whether or not
the investment opportunity is promising It is one-shot, time-limited, goal oriented, major
undertaking requiring the commitment of varied skills and resources

Question The sources of funding have expanded from banks, insurance companies and
multilateral agencies to include the :-
Correct Answer Capital market
Your Answer Debt market

Your Answer Cost of electricity
True/False
Question The Detailed Project report spells out the modus operandi for the implementation of
the Project and the realization of the Project objectives.
Correct Answer True
Your Answer True
True/False
Question Debt Service means payment of installments and interest against an amount
borrowed as per terms of loan.
Correct Answer True
Your Answer True
True/False
-1-
Project Finance _20
Question The ratios of one organisation compared with the ratios of the same organisation is
termed as inter-firm comparison.
Your Answer False
Select The Blank

Your Answer Application
Select The Blank


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




Correct Answer 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

Correct Answer It does not provide any new information but only rearranges the various facts ,
It does not consider non-fund transactions
Your Answer It does not consider non-fund transactions , It does not help in determining future
requirement of funds , It does not provide any new information but only rearranges the various
facts
Select The Blank
-2-
Project Finance _20

Your Answer Brokerage on capital issue

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

Question The ratio which covers those assets which can be converted into cash immediately is
known as :-

Your Answer Managing Director , Electrical engineers , Institutional nominees


Question The basic document for facilitating Project financing is the :-
Select The Blank

Question The ________ market is longer the order of the day since this is an era of
professionalization and specialised services are available at cost.
Correct Answer Monopolistic
Your Answer Monopolistic
True/False
-3-
Project Finance _20
Question Ratio should be computed on the basis of inter-related figures which have a cause
and effect relationship.
Correct Answer True
Your Answer True

Your Answer Future demand of the product , Export market , Future availability and supply of
the product
Select The Blank

Question Having decided on the location and product, the promoter takes into account the
________ that is to be adopted for producing the product.

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 ________.

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

General functional layout Present the general relationship between equipment buildings and civil
works The plan of work concerning installation as well as initial operation
Location Broad area such as city, industrial belt etc. The diagrams indicating the flow of materials,
utilities, final product, by-products and emission
Site Specific piece of land where the project would be set up Broad area such as city, industrial
belt etc.
Plant layout Physical layout of the factory Specific piece of land where the project would be set up
True/False
Question If the organisation is a trading organisation, the requirement of working capital will be
on the lower side.
Your Answer True
Select The Blank
-4-
Project Finance _20

Your Answer Increase in working capital , Preliminary expenses , Preliminary expenses written
off

Correct Answer Depreciation , Preliminary expenses written off , Increase in secured borrowing
Your Answer Depreciation , Preliminary expenses written off , Increase in secured borrowing ,
Preliminary expenses

Question The Projects which are undertaken to manufacture certain products which are being
used as raw material by the existing units is known as :-
Select The Blank

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

Question Investors who invest in the debentures of the company are the ________ of the
company.

Your Answer Shareholders , Bankers , Creditors

Question Dissentions among the promoters is a :-
Correct Answer Management problem
Your Answer Management perception
Select The Blank

Question Goods purchased on credit ________ in flow of funds.
Your Answer Does not result
True/False
Question The secondary data is collected through market survey, specific for the project being
appraised.
Your Answer False
-5-
Project Finance _20

Question Profit is the result of customer satisfaction, indeed customer delight under the :-

Correct Answer Funds from operation , Loss on sale of fixed assets , Goodwill written off
Your Answer Funds from operation , Goodwill written off , Funds from long term loans
-6-
Project Finance _21

Correct Answer Debentures , Cash Profits , Shares
Your Answer Debentures , Cash Profits , Shares

Your Answer Equity shares , Bridge loan , Public deposit

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

Question Technology, design, layout of the plant as well as inputs and infrastructural facilities
are to be considered under :-
Your Answer Financial appraisal
Select The Blank

Question Detailed Project Report is generally prepared from a ________ report with additional
information.
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

Question The formula for Break Even Point is :-
Correct Answer Fixed cost / ( Sales Price - Variables)
Your Answer (Profit after tax +Depreciation + Interest)/ Interest

Your Answer Material inputs and utilities

Your Answer Current ratio , Debt Equity ratio , Internal measure
Select The Blank

Your Answer Fixed assets
-1-
Project Finance _21

Your Answer Organisation Building , Person / system oriented , Promoter's equity / stake
True/False
Question Financial analysis based on accounting ratios will give mis-leading results if the
effects of changes in price level are not taken into account.
Correct Answer True
Your Answer True

Your Answer Plant capacity , Quality standards , Raw material requirement
Select The Blank

Your Answer Decrease in funds

Your Answer cost of development , Factory building , Auxiliary buildings
Match The Following

Increase in current liabilities Decreases working capital Stability of funds
Increase in liabilities Inflow of funds Inflow of funds
Decrease in liabilities Outflow of funds Increases working capital
Increase in current assets Increases working capital Outflow of funds
Select The Blank

Question Sometimes the term ________ is interpreted as cash equivalent i.e. cash and
marketable securities.
Correct Answer Fund
Your Answer Fund
True/False
Question Name of the finance manager comes under the Project organisation category of the
Project report.
Correct Answer True
Your Answer False
True/False
Correct Answer True
Your Answer True
True/False
-2-
Project Finance _21
Question The maximum Seed Capital assistance provided by IDBI under the project will be
restricted to 50% of the required promoter's contribution or Rs. 50 lakhs whichever is lower.
Your Answer True
Match The Following

Project organisation Finance manager Completion date of the project
General category of Project report Location of factory Reasons for cost escalations
Cost aspect of the project report Consultancy fees Finance manager
Financing plan Unsecured loans Location of factory
True/False
Correct Answer True
Your Answer True

Your Answer Utilisation of installed capacity , Input availability

Your Answer Purchase of fixed assets , Cash from operations , Sale of machinery

True/False
Question Production line diagrams show the organisation structure of the project along with
information on location, personnel required for various departments, and their inter-relationship.
Your Answer True
Select The Blank

Select The Blank

Question The company having ________, is appropriate for the strategic posture of Defensive
under the SPACE approach.
Correct Answer Lacks both competitive advantage as well as financial strength and belongs to
a not so attractive industry, operating in an unstable environment
Your Answer High financial strength, high industrial strength, enjoying a competitive advantage
and belonging to an attractive industry, operating in a relatively stable environmental conditions
-3-
Project Finance _21

Question Management aspect of detailed project report includes
Correct Answer Organisation structure
Your Answer Demand forecasting
Select The Blank

Correct Answer High
Your Answer High

Your Answer Operating Profit , Operating Loss , Non operating Income

Question The cash flow of all the years during the expected life of the project are discounted at
a pre-determined cut off rate and :-
Correct Answer Net Present value is obtained
Your Answer Internal rate of return is obtained

Correct Answer To find out the uses of loans raised by the business , To indicate the financial
strength and weakness of the business , To help to understand the changes in assets as well as
asset sources which are not revealed by the income statement
Your Answer To find out the uses of loans raised by the business , To indicate the financial
strength and weakness of the business , To help to understand the changes in assets as well as
asset sources which are not revealed by the income statement

Question Cost of materials include :-
Correct Answer Cost of components and consumable stores
True/False
Question The Detailed Project report must indicate the gestation period of the project.
Correct Answer True
Your Answer True

Correct Answer Is an approach to hammer out an appropriate strategic posture for a firm and
its individual business
Your Answer Which is highly respected for the sophistication, maturity and quality in its
planning systems
Select The Blank

Question Location of the factory comes under the ________ category of the Project report.
Your Answer General
Select The Blank

-4-
Project Finance _21

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
Select The Blank

Question Short term finance is normally for a period upto ________ year.
Correct Answer One
Your Answer Two

Question Appointments made at senior level during the half-year is categorised under :-
Select The Blank

Question Commission outstanding is ________ of funds.
Correct Answer Application

Question The statement which shows the movement of cash into and out of firm's kittie is
known as :-
Your Answer Profit and Loss statement

Question Cost of utilities include :-
Correct Answer Cost of electricity
Your Answer Cost of components and consumable stores

Question Marketing aspect of Detailed Project report includes :-
Correct Answer Demand forecasting
True/False
Question In both the extreme situations of trade cycles i.e. Inflation and depression,
requirement of working capital may be high.
Correct Answer True
Your Answer False

Question While choosing the location for a project, the following factors should be considered :-
Your Answer Proximity to raw materials and markets , Plant capacity , Availability of
infrastructure
-5-
True/False
Question For computing Interest coverage ratio, Profit after Interest and
taxes are taken into account.
Your Answer True

Your Answer Working capital loan , Equity shares

True/False
Question Debt Service means payment of installments and interest
against an amount borrowed as per terms of loan.
Correct Answer True
Your Answer True

Question Sewerage and drainage cost of the project is categorised under
:-
Your Answer Land and site cost

as :-

Your Answer A method based on the assumption that the behavior of the
variables would continue in similar/same direction and
magnitude, as in the past
Select The Blank

of ________.
Your Answer Equity financing
True/False
Correct Answer True
Your Answer True
Select The Blank

Question Details regarding Bridge finance comes under the ________
category of Project report.

Your Answer Cost of insurance
Select The Blank

Your Answer Census



lead to :-
Select The Blank

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

Payments statement.
Your Answer Fund flow statement

viz.:
Your Answer Strategic perspective , Finance cost aspect


benefits
Your Answer That it is for an indefinite period of time
True/False
Correct Answer True
Your Answer True

Question Time Series Projection Methods of Demand forecasting consists
of :-

may lead to :-
True/False
Correct Answer True
Your Answer True
Select The Blank

the product.
Your Answer Size of the plant
Select The Blank


Your Answer Cost / Time overruns , Promotion
Match The Following

Increase in current Decreases working capital Decreases working capital

liabilities
Increase in liabilities Inflow of funds Cash flow analysis
Select The Blank

Select The Blank

Correct Answer One
Your Answer One
Select The Blank

Your Answer Selling
True/False
capacity.
Correct Answer True
Your Answer True
Select The Blank


Your Answer Profitability concept
True/False
Question The secondary data is collected through market survey, specific
for the project being appraised.
Your Answer False

Question The method for evaluating the profitability of industrial projects
whose object is to ascertain the period required for recovering
the entire investment made in a project is known as :-
Correct Answer Pay back method


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
True/False
forecasting demand.
Correct Answer True
Your Answer True
Match The Following

Organisation and Strikes/lay-offs/lockouts Sanctioned bank limit

Management etc.
Material inputs and utilities Stock of raw material Stock of raw material
Working capital Sanctioned bank limit Finished goods
Marketing Pricing policy Receivables
True/False
Question Cost under-estimation at the project preparation and evaluation
stage leads to cost and time over run.
Correct Answer True
Your Answer True
True/False
Correct Answer True
Your Answer True

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

Your Answer Fixed cost / ( Sales Price - Variables)

Select The Blank


Question The assets held by a business which can be converted in the
form of cash or used during the course of normal operations is
termed as :-
Correct Answer Current assets
Your Answer Current assets
True/False
implementation of the Project and the realization of the Project
objectives.
Correct Answer True
Your Answer True

Project Finance _2

Your Answer Sales rise


benefits
benefits

Your Answer Stars , Question marks

Your Answer Profit and Loss Account , Auditors report
Match The Following

Technical aspect of Detailed Project Transport

detailed project report Engineering
Financial aspect of Profitability Detailed Project
Detailed Project report Engineering
Marketing aspect of Distribution Conservativeness
Detailed Project report
Management aspect of Conservativeness Distribution
detailed project report
True/False
capacity.
-1 -
Project Finance _2
Correct Answer True
Your Answer True

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

Your Answer Increase in working capital , Preliminary expenses
Match The Following

Project appraisal It is the evaluation of It is a preliminary

project from technical, assessment of the project
market, financial, idea to determine whether
economic and social or not the investment
perspective before opportunity is promising
committing funds for
investment
Program It is large in scope, is It deals with the impact of
activity oriented and is not the investment project on
necessarily time bound people and their lives
Project It is one-shot, time-limited, It involves the allocation of
goal oriented, major resources among
undertaking requiring the competing projects
commitment of varied
skills and resources
Pre-feasibility study It is a preliminary It is large in scope, is
assessment of the project activity oriented and is not
idea to determine whether necessarily time bound
or not the investment
opportunity is promising
-2 -
Project Finance _2
True/False
Question Change in the project concept itself may lead to cost and time
overrun.
Correct Answer True
Your Answer True
True/False
Question Land and site development comes under the cost aspect of the
Project report.
Correct Answer True
Your Answer True

Question It is said that a second rate project in the hands of first rate
management is better than a first rate project in the hands of :-
Select The Blank

the Project report.
True/False
Your Answer True
Select The Blank

Correct Answer Identification of Project - Project Appraisal - Negotiations for

loans
Your Answer Procurement of Goods/services - Project Appraisal - Monitoring
of operations on completion

-3 -
Project Finance _2

Your Answer Share capital , Term loans
True/False
the project.
Correct Answer True
Your Answer True
Select The Blank

the product.

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

Your Answer No flow
Select The Blank

Question ________ is that scarce input which financial resources alone
cannot mobilise.
Correct Answer Management
Your Answer Sales
-4 -
Project Finance _2

operation
operation
Select The Blank


Your Answer Products which enjoy a high market share as well as a high
growth rate
Select The Blank

Your Answer Equity

Question Demographic market appraisal answers to
Correct Answer Who they are?
Your Answer When they buy?
Select The Blank

True/False
Question The construction of National Golden Quadrilateral can be
recognised as Project.
-5 -
Project Finance _2
Correct Answer True
Your Answer True
Select The Blank

Project report.


True/False
Question Name of the finance manager comes under the Project
organisation category of the Project report.
Correct Answer True
Your Answer True
True/False
Question Delay in recruitment of staff may lead to cost and time overrun
Correct Answer True
Your Answer True

Your Answer Plant and machinery
-6 -
Project Finance _2
Select The Blank

Question Name and designation of the chief executive comes under the
________ category.


Correct Answer Depreciation , Preliminary expenses written off , Increase in

secured borrowing

Your Answer Technology , Layout of the plant , Production costs

Select The Blank


-7 -
Project Finance _2

implementation
implementation

Your Answer Operating Profit , Non operating Income , Dividends
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


financed out of :-
Your Answer Cash Profits , Shares
-8 -

Your Answer Sales rise


benefits
benefits

Your Answer Stars , Question marks

Your Answer Profit and Loss Account , Auditors report
Match The Following

Technical aspect of Detailed Project Transport

detailed project report Engineering
Financial aspect of Profitability Detailed Project
Detailed Project report Engineering
Marketing aspect of Distribution Conservativeness
Detailed Project report
Management aspect of Conservativeness Distribution
detailed project report
True/False
capacity.
Correct Answer True
Your Answer True

True/False
Your Answer True

Your Answer Increase in working capital , Preliminary expenses
Match The Following

Project appraisal It is the evaluation of It is a preliminary

project from technical, assessment of the project
market, financial, idea to determine whether
economic and social or not the investment
perspective before opportunity is promising
committing funds for
investment
Program It is large in scope, is It deals with the impact of
activity oriented and is not the investment project on
necessarily time bound people and their lives
Project It is one-shot, time-limited, It involves the allocation of
goal oriented, major resources among
undertaking requiring the competing projects
commitment of varied
Pre-feasibility study It is a preliminary It is large in scope, is
assessment of the project activity oriented and is not
idea to determine whether necessarily time bound
or not the investment
opportunity is promising
True/False
overrun.
Correct Answer True
Your Answer True
True/False
Project report.
Correct Answer True
Your Answer True

Question It is said that a second rate project in the hands of first rate
management is better than a first rate project in the hands of :-
Select The Blank

the Project report.
True/False
Your Answer True
Select The Blank

Correct Answer Identification of Project - Project Appraisal - Negotiations for

loans
Your Answer Procurement of Goods/services - Project Appraisal - Monitoring
of operations on completion


Your Answer Share capital , Term loans
True/False
the project.
Correct Answer True
Your Answer True
Select The Blank

the product.

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

Your Answer No flow
Select The Blank

Question ________ is that scarce input which financial resources alone
cannot mobilise.
Your Answer Sales

operation
operation
Select The Blank


Your Answer Products which enjoy a high market share as well as a high
growth rate
Select The Blank

Your Answer Equity

Your Answer When they buy?
Select The Blank

True/False
Question The construction of National Golden Quadrilateral can be
recognised as Project.
Correct Answer True
Your Answer True
Select The Blank

Project report.


True/False
Correct Answer True
Your Answer True
True/False
Correct Answer True
Your Answer True

Your Answer Plant and machinery

Select The Blank
________ category.



secured borrowing

Your Answer Technology , Layout of the plant , Production costs

Select The Blank


implementation
implementation

Your Answer Operating Profit , Non operating Income , Dividends
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


financed out of :-

Correct Answer To help to understand the changes in assets as well as asset sources
which are not revealed by the income statement , To find out the uses of
loans raised by the business , To indicate the financial strength and
weakness of the business
understand the changes in assets as well as asset sources which are not
revealed by the income statement , Helps to prepare financial statements
Select The Blank


True/False
Correct Answer True
Your Answer True
Select The Blank

________.


Correct Answer A list of industries wherein the product is used is made and quantity and

True/False
Question In small scale organisation, requirement of working capital is quite high
due to high amount of overheads, high buying costs and high selling cost.
Correct Answer True
Your Answer True
Match The Following

General category of Project Location of factory Location of factory

report
report
Select The Blank

________.

Select The Blank

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

Select The Blank

Question The basic difference between the feasibility study report and ________ is
the level of accuracy and degree of detail.

Select The Blank

Question Location of the factory comes under the ________ category of the Project
report.
Your Answer General


True/False
Project report.
Correct Answer True
Your Answer True
Select The Blank


Question A project objective which states What "achieving it " would cost is known
as :-

True/False
Question Nominal maximum capacity is the capacity that is technically attainable
and this corresponds to the supplier's guaranteed capacity.
Correct Answer True
Your Answer True
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 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

Question The norms for providing open areas have to be strictly followed for safety
of labour and allow sufficient space for outflow of effluents safely in case of
:-

Select The Blank

Question Investors who invest in the debentures of the company are the ________
of the company.

Match The Following



the :-
True/False
Your Answer False
Select The Blank

Question Detailed Project Report is generally prepared from a ________ report with
additional information.

Question Delay in arrival of domestic/foreign machinery and technicians may lead to
:-
True/False
Question Miscellaneous expenditure is written on the asset side of the Balance
sheet.
Correct Answer True
Your Answer True


Question A Project is a temporary endeavor to achieve some specific objectives
within a :-

considered :-


Question The cost which change in the same proportion in which the level of


Question The third phase of the technical appraisal which focuses upon appraising

True/False
Question 1 The advantage of secondary sources of data is that it is readily and economically
available.
Correct Answer True
Your Answer True
True/False
Question2 In small scale organisation, requirement of working capital is quite high due to high
amount of overheads, high buying costs and high selling cost.
Correct Answer True
Your Answer True
True/False
Question3 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
Select The Blank



Question 7 Technical aspect of detailed project report includes : -


Question 9 Delay in arrival of domestic/foreign machinery and technicians may lead to :-
Select The Blank

Question 10 A smaller unit into which the overall requirement of capital of a company is sub-
divided is termed as ________.
Your Answer Share




Select The Blank

Correct Answer One
Your Answer One
True/False
Correct Answer True
Your Answer True

Select The Blank

True/False
Correct Answer True
Your Answer True
Select The Blank

Question21 Longer the duration of production cycle, higher the requirement of ________.
Select The Blank

Select The Blank

Question23 ________ is the summary of cash book or Receipts and Payments statement.
True/False
Question24 In the BCG Matrix, the key term of Cash Cows require further commitment of
funds.
Your Answer True
True/False
Question25 Cost and time overrun of the project may lead to loss on account of lost market
opportunities.
Correct Answer True
Your Answer True

Question26 A project objective which states What "achieving it " would cost is known as :-


Correct Answer Products which enjoy a high market share as well as a high growth rate

True/False
Question30 Production line diagrams show the organisation structure of the project along with
Your Answer False

Question31 While choosing the location for a project, the following factors should be
considered :-

Question32 The cost which change in the same proportion in which the level of production
changes is known as :-
Select The Blank



Question35 Appointments made at senior level during the half-year is categorised under :-


Match The Following







Question43 After the SPACE chart is constructed, we would normally get any one of the
Select The Blank

Question 44 ________ occupies a unique position in the macro economic development which
helps in induction of new technology and facilitates, greater efficiency as well as higher
productivity.

Select The Blank

Question46 Name and designation of the chief executive comes under the ________ category.
Your Answer General
Match The Following


Match The Following

Econometric method Mathematical Mathematical

representation of representation of
economic relationship economic relationship
Secondary source of data Collected in some other Collected in some other

context context
Leading indicators Variables that change Variables that change
faster than others faster than others
Select The Blank

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

Select The Blank

Your Answer Share
Select The Blank

Select The Blank

Select The Blank


Question Debt Service coverage ratio may be considered to be one of the
most important ratios calculated by the :-
Your Answer Bankers , Creditors , Financial Institutions



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 Retained earnings indicates that whatever profits are earned by
the company are not distributed by it by way of ________ but
are kept aside for use in future for expansion or other purpose.

Correct Answer Determination , Organisation Building , Person / system

oriented
Your Answer Organisation Building , Person / system oriented , Promoter's
equity / stake
True/False
Question The Detailed Project report spells out the modus operandi for
the implementation of the Project and the realization of the
Project objectives.
Correct Answer True
Your Answer True

Question General Electric Stop Light Matrix analyses products in terms of
:-
Your Answer Company's competitive advantage and Company's financial

strength
True/False
Correct Answer True
Your Answer True

Question After the SPACE chart is constructed, we would normally get
any one of the following basic strategic postures :-
True/False
Question The ratios of one organisation compared with the ratios of the
same organisation is termed as inter-firm comparison.
Your Answer False
Select The Blank

Select The Blank

Question Under ________ method, the forecasts are modified in the light
of observed errors.
Your Answer Cobb Douglas Relationship
Match The Following

Source of funds Depreciation Investment
True/False
the project.
Correct Answer True
Your Answer True
True/False
Correct Answer True
Your Answer True

lead to :-


Question The method for evaluating the profitability of industrial projects
whose object is to ascertain the period required for recovering
the entire investment made in a project is known as :-
Select The Blank


Select The Blank

Project report.

Question The ratio that roughly measures the company's potential
reserve of cash is termed as :-

Question The sources of funding have expanded from banks, insurance
companies and multilateral agencies to include the :-
Your Answer Capital market
True/False
Correct Answer True
Your Answer True

financed out of :-

True/False
capacity.
Correct Answer True
Your Answer True


True/False
Correct Answer True
Your Answer True
True/False
Question In the BCG Matrix "DOGS" indicate products which are
generally during the stage of Decline of a Product Life Cycle.
Correct Answer True
Your Answer True


Relationship
Your Answer Linear Relationship , Chain ratio Relationship , Exponential
Relationship



Select The Blank

Question A Project has a ________ represented by growth, maturity and
decay.

viz.:
Your Answer Strategic perspective , Time span , Social aspect

Your Answer Trend Projection method , Consumption-level method , Moving

Averages method

Question The statement which shows the movement of cash into and out
of firm's kittie is known as :-

Correct Answer To help to understand the changes in assets as well as asset

sources which are not revealed by the income statement , To
find out the uses of loans raised by the business , To indicate
the financial strength and weakness of the business
Select The Blank


as :-
True/False
Question The Detailed Project report spells out the modus operandi for
the implementation of the Project and the realization of the
Project objectives.
Correct Answer True
Your Answer True
Select The Blank

________.

written off


True/False
Correct Answer True
Your Answer True
Match The Following

General category of Location of factory Location of factory

Project report
report
Select The Blank

of ________.

Select The Blank

Project report.
True/False
forecasting demand.
Correct Answer True
Your Answer True
True/False
Correct Answer True
Your Answer True
Select The Blank

Select The Blank

Question The basic difference between the feasibility study report and
________ is the level of accuracy and degree of detail.

lead to :-
Select The Blank

the Project report.
Your Answer General



True/False
Question Market potential should be determined under the Marketing
aspect of the Project report.
Correct Answer True
Your Answer True
Select The Blank


is known as :-

Question A project objective which states "What' is to be viewed" is
termed as :-
True/False
capacity.
Correct Answer True
Your Answer True
Select The Blank

________ has been developed so that the financial
commitment and risks associated with a project are shared


benefits
benefits

Correct Answer 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


Select The Blank

Match The Following

Programme Not necessarily time Not necessarily time

bound bound



Question The industrial concern earned profits by increasing the sales
volume under the :-
True/False
Question The 'BCG Matrix 'analysis various products of the organisation
in the terms of Business strength and Industry Attractiveness.
Your Answer False
Select The Blank


may lead to :-
True/False
Question Miscellaneous expenditure is written on the asset side of the
Balance sheet.
Correct Answer True
Your Answer True


the factory
the factory

Question A Project is a temporary endeavor to achieve some specific
objectives within a :-



Question The cost which change in the same proportion in which the
level of production changes is known as :-

Question The second phase of the technical appraisal which focuses
upon appraising the likely technical gaps consists of :-
implementation
implementation

operation
operation
Pg
Topic Number
industrial policy after independence 1
project 2
investment decisions and resource identification 2
foreign direct investment 2
location of project 3
environmental aspects - a matter of public interest 3
object of environmental clearance 4
project objective 4
project financing - a strategic prespective and models 7
BCG product portfolio matrix 7
seynive tiles 7
SPACE 7
relative market share 8
STARS 8
QUESTION MARKS 8
CASH COWS 8
DOGS 8
GE's stop light matrix 9
business strength 10
industry attractiveness 10
the SPACE model 10
dimesion and factor evaluated 11
company's competitive advantage 11
company's financial strength 11
industry strength 11
environmental stability 11
SPACE modus operandi 11
SPACE chart 13
THE OUTCOME strategic posture 13
postures 13
aggressive posture 14
competetive posture 14
conservative posture 14
defensive posture 14
SPACE CHART 15
generic strategies and key options 15
project finance 17
what / why is the need for project financing 19
project 21
project cycle 23
types of project 25
new projects 25
expansion project 25
diversification project 25
backward integration projects 25
forward integration projects 25
modernisation projects 25
rehabiliation projects 25
short term finance 26
long term finance 26
bridge loan 26
seed money 27
seed capital 27
technical appraisal 29
phase I , II , III 29
process / production technology 30
project engineering 30
competitiveness indicators 30
manufacturing process / technology 31
technical arrangements 31
size of the plant 32
product mix 32
selection of the plant and machinery 32
procurement of plant and machinery 32
plant layout 33
appraisal - financial 35
capital cost of the project 35
sources of funds 36
financial projections 36
ratio analysis 36
break even point 36
cost of the project 36
land and site development 37
buildings and civil construction / works 37
plant and machinery 38
technical know-how and related feeds / charges 38
expenses on foregin technicians 38
misc fixed assets 38
preliminary expenses 39
capital issue expenses 39
pre-operative expenses 39
provision of contingencies 40
margin money for working capital 40
initial cash loses 40
sources of funds 40
sales / production forecast 45
cost of production 46
discounted cash flow techniques 47
pay back method 47
average rate of return method 50
time value of money - discounting technique 50
net present value method 50
internal rate of return 51
information required for calculation of net present value and IRR 51
life of the project 51
cash outflow 52
cash inflow 52
residual or terminal value of the project 52
cost of the capital 52
cost of convertibe debentures 53
cost of working capital 53
break even point analysis 53
fixed costs 54
variable cost 54
BEP 54
significance / utility of BEP for financial appraisal 55
projected cash flow 55
sources of funds 56
deployment of funds 56
cash flows 57
cash inflow 58
projected balance sheets 58
liablities 58
assets 58
financial indicators 59
debt serice coverage ratio 59
interest cover ratio 59
appraisal - commercial 61
demand technique forecasting 61
past trend method 61
end use method 61
export market 61
supply depth of competition 62
marketing aspects 62
appraisal market 66
market appraisal 66
demand analysis 67
qualitative methods 67
time series projection methods 68
casual methods 68
quantitative methods 68
jury or executive opninion method 68
delphi method 68
time series projection methods 69
trend projection method 69
exponential smoothing method 69
casual methods 69
chain ratio method 69
consumption level method 69
end use method 69
appraisal management 73
management perception 74
management qualities 74
organisational climate 74
organisational structure form 74
management problems 74
appraisal environmental 77
working capital requirement / fianancing 79
working capital 79
margin money for working capital 80
ratio analysis 82
net working capital to total assets 82
current ratio 82
quick (acid test) ratio 82
internal measure 82
projected working results 84
profitablity projections or estimates of working results 84
project implementation 87
financing plan 92
comments 92
project organization 92
project scheduling 93
additional comments 93
capital expenditure and financing 94
production sales and profitability 94
current assets and liabilities 95
material inputs and utilities 95
working capital commercial bank borrowing 95
organization and management 95
visit report 96
production and sales 98
financial and economic 99
financial projections 100
key steps in market and demand analysis and their relationships 101
project report 103
norms of regulatory authority and Fis 103
key business considerations 104
detailed project report 106
financial aspects 106
marketing aspects 106
management aspects 106
technical aspects 106
government policies 106
infrastructure 107
social cost benefit 107
sensitivity analysis 107
vegprotein LTS 109
basic assumptions underlying financial projections 111
depreciation schedule 112
LIST OF ATTEMPTED QUESTIONS AND
ANSWERS
True/False
Correct Answer True
Your Answer True
True/False
Question2 In small scale organisation, requirement of working capital is quite
high due to high amount of overheads, high buying costs and high selling cost.
Correct Answer True
Your Answer True
True/False
Question3 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
Select The Blank


Relationship
Relationship



secured borrowing

Question 9 Delay in arrival of domestic/foreign machinery and technicians may
lead to :-
Select The Blank

Question 10 A smaller unit into which the overall requirement of capital of a
Your Answer Share

Question11 A project objective which states "What' is to be viewed" is termed as
:-


written off

Select The Blank

Correct Answer One
Your Answer One
True/False
Correct Answer True
Your Answer True

benefits
benefits

Select The Blank

True/False
Correct Answer True
Your Answer True
Select The Blank

________.
Select The Blank

Select The Blank

statement.
True/False
Your Answer True
True/False
Question25 Cost and time overrun of the project may lead to loss on account of
lost market opportunities.
Correct Answer True
Your Answer True

Question26 A project objective which states What "achieving it " would cost is
known as :-


Correct Answer Products which enjoy a high market share as well as a high
growth rate
Your Answer Products which enjoy a high market share as well as a high growth
rate

True/False
Question30 Production line diagrams show the organisation structure of the
project along with information on location, personnel required for various
departments, and their inter-relationship.
Your Answer False

Question31 While choosing the location for a project, the following factors should
be considered :-

Select The Blank



under :-


Match The Following


the factory
factory



Question43 After the SPACE chart is constructed, we would normally get any one
of the following basic strategic postures :-
Select The Blank

Question 44 ________ occupies a unique position in the macro economic
development which helps in induction of new technology and facilitates, greater
efficiency as well as higher productivity.
Select The Blank

Question46 Name and designation of the chief executive comes under the
________ category.
Your Answer General
Match The Following

True/False
Your Answer False
Select The Blank

Question In the GE's Stop Light Matrix, when ________ situation prevails ,
Products call for divestment.

benefits
benefits
Select The Blank

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


Question A project can be regarded as the sum of the activities directed towards a
:-



Select The Blank

Match The Following

Export market technique of Commercial appraisal Government provides ample

encouragement Government provides ample encouragement
Demand Technique forecasting of Commercial appraisal Future demand of the

product Future demand of the product
Past trend method of Commercial appraisal Adopted as a guide depending on the
consumption pattern of the society as a whole Adopted as a guide depending on the
consumption pattern of the society as a whole
End use method of Commercial appraisal A list of industries wherein the product is
used is made and quantity and volume is arrived at A list of industries wherein the
product is used is made and quantity and volume is arrived at

Relationship
Relationship

Question After the SPACE chart is constructed, we would normally get any one of
the following basic strategic postures :-
Select The Blank

Your Answer Cash
Select The Blank

Question ________ occupies a unique position in the macro economic

True/False
Question Financial analysis based on accounting ratios will give mis-leading
results if the effects of changes in price level are not taken into account.
Correct Answer True
Your Answer True
Select The Blank

Question Appointments made at senior level during the half-year is categorised
under :-



Match The Following

Current assets Debtors Investment
Current liability Trade credit Debtors

known as :-
Correct Answer Future demand of the product , Proper survey of the product ,
Future availability and supply of the product
Your Answer Future demand of the product , Proper survey of the product ,

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 :-
Select The Blank

________.

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

Question The permanent requirement of working capital should be financed out
of :-
True/False
Your Answer False
True/False
Question Miscellaneous expenditure is written on the asset side of the Balance
sheet.
Correct Answer True
Your Answer False
Select The Blank

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


Question The Projects which are undertaken to manufacture certain products
which are being used as raw material by the existing units is known as :-
Select The Blank

company are not distributed by it by way of ________ but are kept aside for use in
future for expansion or other purpose.

True/False
Question Unlike financial projections, there cannot be any fixed, well-recognised
or structure formula/steps for management evaluation/appraisal.
Correct Answer True
Your Answer True
True/False
Question Production line diagrams show the organisation structure of the project
along with information on location, personnel required for various departments,
and their inter-relationship.
Your Answer False
Select The Blank
True/False
Question For computing Interest coverage ratio, Profit after Interest and taxes
are taken into account.
Your Answer True
Select The Blank

Question Details regarding Internal accruals comes under the ________ category
of Project report.

Correct Answer Managing Director , Institutional nominees , Committees of the
board
Your Answer Managing Director , Institutional nominees , Committees of the
board
True/False
Question Nominal maximum capacity is the capacity that is technically attainable
and this corresponds to the supplier's guaranteed capacity.
Correct Answer True
Your Answer False

Question The ratio that roughly measures the company's potential reserve of cash
is termed as :-

True/False
Correct Answer True
Your Answer True
True/False
Correct Answer True
Your Answer True
True/False
Question2 In small scale organisation, requirement of working capital is quite
high due to high amount of overheads, high buying costs and high selling cost.
Correct Answer True
Your Answer True
True/False
Question3 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
Select The Blank


Relationship
Relationship



secured borrowing

Question 9 Delay in arrival of domestic/foreign machinery and technicians may
lead to :-
Select The Blank

Question 10 A smaller unit into which the overall requirement of capital of a
Your Answer Share

Question11 A project objective which states "What' is to be viewed" is termed as
:-


written off

Select The Blank

Correct Answer One
Your Answer One
True/False
Correct Answer True
Your Answer True

benefits
benefits

Select The Blank

True/False
Correct Answer True
Your Answer True
Select The Blank

________.
Select The Blank

Select The Blank

statement.
True/False
Your Answer True
True/False
Question25 Cost and time overrun of the project may lead to loss on account of
lost market opportunities.
Correct Answer True
Your Answer True

Question26 A project objective which states What "achieving it " would cost is
known as :-


Correct Answer Products which enjoy a high market share as well as a high
growth rate
Your Answer Products which enjoy a high market share as well as a high growth
rate

True/False
Question30 Production line diagrams show the organisation structure of the
Your Answer False

Question31 While choosing the location for a project, the following factors should
be considered :-

Select The Blank



under :-


Match The Following



the factory
factory



Question43 After the SPACE chart is constructed, we would normally get any one
of the following basic strategic postures :-
Select The Blank

Question 44 ________ occupies a unique position in the macro economic

Select The Blank

Question46 Name and designation of the chief executive comes under the
________ category.
Your Answer General
Match The Following






True/False
Question In both the extreme situations of trade cycles i.e. Inflation and depression,
requirement of working capital may be high.
Correct Answer True
Your Answer True
True/False
Question Name of the finance manager comes under the Project organisation category
of the Project report.
Correct Answer True
Your Answer True
True/False
Correct Answer True
Your Answer True

Match The Following



Select The Blank

Correct Answer High
Your Answer Stable

benefits
Question The various aspects which need to be considered while assessing Project
finance financing are :-


Select The Blank


Question Debt Service coverage ratio may be considered to be one of the most
important ratios calculated by the :-

Question A project objective which states What "achieving it " would cost is known as
:-
True/False
Correct Answer True
Your Answer True

Correct Answer It does not provide any new information but only rearranges the
various facts , It does not consider non-fund transactions
Your Answer It does not provide any new information but only rearranges the various
facts , It does not consider non-fund transactions , It does not help in determining future
requirement of funds
Question The third phase of the technical appraisal which focuses upon appraising the
likely technical gaps consists of :-


Question It is said that a second rate project in the hands of first rate management is
better than a first rate project in the hands of :-
Select The Blank

Defensive under the SPACE approach.
Correct Answer Lacks both competitive advantage as well as financial strength and
belongs to a not so attractive industry, operating in an unstable 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

True/False
Your Answer False
Select The Blank


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
True/False
Correct Answer True
Your Answer True


True/False
Question In the BCG Matrix "DOGS" indicate products which are generally during the
stage of Decline of a Product Life Cycle.
Correct Answer True
Your Answer True
True/False
Project.
Correct Answer True
Your Answer True
Select The Blank

Question Under the SPACE Model, Customer loyalty is determined under the
________ dimension.
True/False
Correct Answer True
Your Answer True
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 True
Your Answer True

Your Answer Cables


Relationship
Relationship
True/False
Project report.
Correct Answer True
Your Answer True


Select The Blank

True/False
Question If the organisation is a trading organisation, the requirement of working
capital will be on the lower side.
Your Answer True
Select The Blank


Select The Blank

________ dimension.

True/False
Correct Answer True
Your Answer False

Question A project objective which states "What' is to be viewed" is termed as
:-
Select The Blank

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


implementation
implementation
True/False
Correct Answer True
Your Answer True

Your Answer Gates

Question A project objective which states What "achieving it " would cost is
known as :-
Select The Blank

Match The Following

Management Perception Aspiration level/ conservative Aspiration level/

conservative
Match The Following


True/False
synergistic view of the project rather than looking at it only from the financial
aspects.
Correct Answer True
Your Answer True


Select The Blank


benefits
benefits


Correct Answer It determines financial consequences of the business
operations , It enables the firm to plan its financial resources properly , It helps as
a reliable guide for the future requirement of funds
Your Answer It determines financial consequences of the business operations
, It considers non-fund transactions , It enables the firm to plan its financial
resources properly
True/False
Correct Answer True
Your Answer True
True/False
Question In the BCG Matrix "DOGS" indicate products which are generally
during the stage of Decline of a Product Life Cycle.
Correct Answer True
Your Answer True

Your Answer Purchase of fixed assets , Payment of long term loans , Issue of
new machinery
True/False
Correct Answer True
Your Answer True
True/False
Correct Answer True
Your Answer True


investments to the present value of benefits over the life of the project is known
as :-
Select The Blank

decay.

Question After the SPACE chart is constructed, we would normally get any
one of the following basic strategic postures :-
Select The Blank

Question ________ is the summary of cash book or Receipts and Payments
statement.

Question The point at which the unit neither earns profit nor incurs loss is
known as :-

Question The various aspects which need to be considered while assessing
Project finance financing are :-
Correct Answer Environmental factors , Risk involved , Managerial
compensation

Select The Blank

Question Under ________ method, the forecasts are modified in the light of
observed errors.

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
Select The Blank

company are not distributed by it by way of ________ but are kept aside for use
in future for expansion or other purpose.


Question The ratio that roughly measures the company's potential reserve of
cash is termed as :-
Select The Blank

________ category.
Your Answer General

Your Answer Cables

Select The Blank


Select The Blank

________ dimension.

True/False
Correct Answer True
Your Answer False

Question A project objective which states "What' is to be viewed" is termed as
:-
Select The Blank

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


implementation
implementation
True/False
Correct Answer True
Your Answer True

Your Answer Gates

Question A project objective which states What "achieving it " would cost is
known as :-
Select The Blank
Match The Following

Management Perception Aspiration level/ conservative Aspiration level/

conservative
Match The Following


True/False
synergistic view of the project rather than looking at it only from the financial
aspects.
Correct Answer True
Your Answer True


Select The Blank


benefits
benefits


Correct Answer It determines financial consequences of the business
operations , It enables the firm to plan its financial resources properly , It helps as
a reliable guide for the future requirement of funds
Your Answer It determines financial consequences of the business operations
, It considers non-fund transactions , It enables the firm to plan its financial
resources properly
True/False
Correct Answer True
Your Answer True
True/False
Question In the BCG Matrix "DOGS" indicate products which are generally
during the stage of Decline of a Product Life Cycle.
Correct Answer True
Your Answer True
Your Answer Purchase of fixed assets , Payment of long term loans , Issue of
new machinery
True/False
Correct Answer True
Your Answer True
True/False
Correct Answer True
Your Answer True



investments to the present value of benefits over the life of the project is known
as :-
Select The Blank

decay.

Question After the SPACE chart is constructed, we would normally get any
one of the following basic strategic postures :-
Select The Blank

Question ________ is the summary of cash book or Receipts and Payments
statement.

Question The point at which the unit neither earns profit nor incurs loss is
known as :-


Question The various aspects which need to be considered while assessing
Project finance financing are :-
compensation

Select The Blank

Question Under ________ method, the forecasts are modified in the light of
observed errors.

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
Select The Blank

company are not distributed by it by way of ________ but are kept aside for use
in future for expansion or other purpose.


Question The ratio that roughly measures the company's potential reserve of
cash is termed as :-
Select The Blank

________ category.
Your Answer General

Your Answer Cables

True/False
Project report.
Correct Answer True
Your Answer True

Question Location of the factory comes under the :-
Correct Answer General category
Match The Following

Project appraisal It is the evaluation of project from technical, market, financial,
economic and social perspective before committing funds for investment It is a
preliminary assessment of the project idea to determine whether or not the
investment opportunity is promising
Program It is large in scope, is activity oriented and is not necessarily time bound
It is large in scope, is activity oriented and is not necessarily time bound
Project It is one-shot, time-limited, goal oriented, major undertaking requiring the

commitment of varied skills and resources It deals with the impact of the
investment project on people and their lives
Pre-feasibility study It is a preliminary assessment of the project idea to

determine whether or not the investment opportunity is promising It is one-shot,
time-limited, goal oriented, major undertaking requiring the commitment of varied

Question The sources of funding have expanded from banks, insurance
companies and multilateral agencies to include the :-
Your Answer Debt market

True/False
Correct Answer True
Your Answer True
True/False
Question Debt Service means payment of installments and interest against an
amount borrowed as per terms of loan.
Correct Answer True
Your Answer True
True/False
Question The ratios of one organisation compared with the ratios of the same
organisation is termed as inter-firm comparison.
Your Answer False
Select The Blank
Select The Blank


Your Answer Stars , Question marks , Invest
True/False
Correct Answer True
Your Answer True


Relationship
Your Answer Linear Relationship , Chain ratio Relationship , Exponential
Relationship

Question Delay in arrival of domestic/foreign machinery and technicians may
lead to :-

Correct Answer Adopted as a guide depending on the consumption pattern of
Your Answer Adopted as a guide depending on the consumption pattern of the
society as a whole
Correct Answer It does not provide any new information but only rearranges
the various facts , It does not consider non-fund transactions
Your Answer It does not consider non-fund transactions , It does not help in
determining future requirement of funds , It does not provide any new information
but only rearranges the various facts
Select The Blank

________.

Your Answer Brokerage on capital issue

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


Correct Answer Managing Director , Institutional nominees , Committees of the
board
Your Answer Managing Director , Electrical engineers , Institutional nominees


Select The Blank

Question The ________ market is longer the order of the day since this is an
era of professionalization and specialised services are available at cost.
Correct Answer Monopolistic
Your Answer Monopolistic
True/False
Question Ratio should be computed on the basis of inter-related figures which
have a cause and effect relationship.
Correct Answer True
Your Answer True

Correct Answer Future demand of the product , Proper survey of the product ,
Your Answer Future demand of the product , Export market , Future availability
and supply of the product
Select The Blank

Question Having decided on the location and product, the promoter takes into
account the ________ that is to be adopted for producing the product.

Select The Blank

current liabilities, more accurate will be estimation of the requirement of
________.

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

General functional layout Present the general relationship between equipment

buildings and civil works The plan of work concerning installation as well as initial
operation
Location Broad area such as city, industrial belt etc. The diagrams indicating the
flow of materials, utilities, final product, by-products and emission
Site Specific piece of land where the project would be set up Broad area such as
city, industrial belt etc.
Plant layout Physical layout of the factory Specific piece of land where the project
would be set up
True/False
Question If the organisation is a trading organisation, the requirement of
working capital will be on the lower side.
Your Answer True
Select The Blank

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

Your Answer Increase in working capital , Preliminary expenses , Preliminary
expenses written off
secured borrowing
Your Answer Depreciation , Preliminary expenses written off , Increase in
secured borrowing , Preliminary expenses

Question The Projects which are undertaken to manufacture certain products
which are being used as raw material by the existing units is known as :-
Select The Blank

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


Question Debt Service coverage ratio may be considered to be one of the
most important ratios calculated by the :-
Your Answer Shareholders , Bankers , Creditors

Question Dissentions among the promoters is a :-
Correct Answer Management problem
Your Answer Management perception
Select The Blank

True/False
Question The secondary data is collected through market survey, specific for
the project being appraised.
Your Answer False
Question Profit is the result of customer satisfaction, indeed customer delight
under the :-

written off
Your Answer Funds from operation , Goodwill written off , Funds from long
term loans

Question The permanent requirement of working capital should be financed
out of :-
Correct Answer Debentures , Cash Profits , Shares
Your Answer Debentures , Cash Profits , Shares

Your Answer Equity shares , Bridge loan , Public deposit

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

Your Answer Financial appraisal
Select The Blank

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

Your Answer (Profit after tax +Depreciation + Interest)/ Interest

Your Answer Material inputs and utilities

Your Answer Current ratio , Debt Equity ratio , Internal measure
Select The Blank

________.
Your Answer Fixed assets

Correct Answer Determination , Organisation Building , Person / system
oriented
Your Answer Organisation Building , Person / system oriented , Promoter's
equity / stake
True/False
Question Financial analysis based on accounting ratios will give mis-leading
results if the effects of changes in price level are not taken into account.
Correct Answer True
Your Answer True

Select The Blank

Your Answer Decrease in funds

Your Answer cost of development , Factory building , Auxiliary buildings
Match The Following

Increase in current liabilities Decreases working capital Stability of funds
Increase in liabilities Inflow of funds Inflow of funds
Select The Blank

Question Sometimes the term ________ is interpreted as cash equivalent i.e.
cash and marketable securities.
Correct Answer Fund
Your Answer Fund
True/False
Question Name of the finance manager comes under the Project organisation
category of the Project report.
Correct Answer True
Your Answer False
True/False
overrun.
Correct Answer True
Your Answer True
True/False
Question The maximum Seed Capital assistance provided by IDBI under the
project will be restricted to 50% of the required promoter's contribution or Rs. 50
lakhs whichever is lower.
Your Answer True
Match The Following
General category of Project report Location of factory Reasons for cost

escalations
Cost aspect of the project report Consultancy fees Finance manager
Financing plan Unsecured loans Location of factory
True/False
Question Trend projection method is the important technique for forecasting
demand.
Correct Answer True
Your Answer True


Correct Answer Cash from operations , Sale of machinery , Issue of new
shares
Your Answer Purchase of fixed assets , Cash from operations , Sale of
machinery

True/False
Your Answer True
Select The Blank

Select The Blank

posture of Defensive under the SPACE approach.
Correct Answer Lacks both competitive advantage as well as financial strength
and belongs to a not so attractive industry, operating in an unstable environment
Your Answer High financial strength, high industrial strength, enjoying a
competitive advantage and belonging to an attractive industry, operating in a
relatively stable environmental conditions

Question Management aspect of detailed project report includes
Correct Answer Organisation structure
Select The Blank

Correct Answer High
Your Answer High

Your Answer Operating Profit , Operating Loss , Non operating Income

Question The cash flow of all the years during the expected life of the project
are discounted at a pre-determined cut off rate and :-
Your Answer Internal rate of return is obtained

Correct Answer To find out the uses of loans raised by the business , To
indicate the financial strength and weakness of the business , To help to
understand the changes in assets as well as asset sources which are not
revealed by the income statement
Your Answer To find out the uses of loans raised by the business , To indicate
the financial strength and weakness of the business , To help to understand the
changes in assets as well as asset sources which are not revealed by the income
statement

True/False
Question The Detailed Project report must indicate the gestation period of the
project.
Correct Answer True
Your Answer True

Correct Answer Is an approach to hammer out an appropriate strategic
posture for a firm and its individual business
Your Answer Which is highly respected for the sophistication, maturity and
quality in its planning systems
Select The Blank

Question Location of the factory comes under the ________ category of the
Project report.
Your Answer General
Select The Blank


Correct Answer Name of the Industrial concern , Proposed product , Location
of the factory
the factory
Select The Blank

Correct Answer One
Your Answer Two

Question Appointments made at senior level during the half-year is
categorised under :-
Select The Blank


Question The statement which shows the movement of cash into and out of
firm's kittie is known as :-
Your Answer Profit and Loss statement


True/False
Question In both the extreme situations of trade cycles i.e. Inflation and
depression, requirement of working capital may be high.
Correct Answer True
Your Answer False

Question While choosing the location for a project, the following factors should
be considered :-
Your Answer Proximity to raw materials and markets , Plant capacity ,
Availability of infrastructure
Project Finance assgn :01: Sushant
True/False
forecasting demand.
Correct Answer True
Your Answer True

Correct Answer Is a tool for strategic ( product ) planning and
resource allocation
Your Answer Is a tool for strategic ( product ) planning and resource
allocation
Select The Blank

Your Answer Primary
Select The Blank

Your Answer Equity

Correct Answer That it involves current outlay of funds in
expectation of future benefits
Your Answer That it involves current outlay of funds in expectation
of future benefits
True/False
Question Nominal maximum capacity is the capacity that is
technically attainable and this corresponds to the supplier's
guaranteed capacity.
Correct Answer True
Your Answer True

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
True/False
Question There is a need for studying Project finance both for the
lenders as well as the borrowers as both of them have equal stake in
Correct Answer True
Your Answer True

Correct Answer Managing Director , Institutional nominees ,
Committees of the board
Your Answer Managing Director , Institutional nominees ,
Committees of the board

Question Every project involves financial outlay which can be
referred to as :-
Your Answer Financial arrangement
True/False
Question Debt service coverage ratio indicates whether cash earned
is sufficient for debt service.
Correct Answer True
Your Answer False

compensation

Your Answer Operating Profit , Non operating Income
Select The Blank

Question ________ occupies a unique position in the macro
economic development which helps in induction of new technology and
facilitates, greater efficiency as well as higher productivity.
True/False
Question In both the extreme situations of trade cycles i.e. Inflation
and depression, requirement of working capital may be high.
Correct Answer True
Your Answer True

Question In the Detailed Project Report, Marketing aspects includes
:-

Question The Projects which are undertaken to manufacture certain
products which require the products of existing units as raw material is
known as :-
Correct Answer Forward Integration Projects
Match The Following


Management Quality Initiative Person oriented
Management Perception Aspiration level/ conservative Corporate
Organisational Climate Person oriented Aspiration level/ conservative

Question Demand technique forecasting of Commercial appraisal
includes :-
Correct Answer Future demand of the product , Proper survey of the
product , Future availability and supply of the product
Your Answer Future demand of the product , Proper survey of the
product , Export market , Future availability and supply of the product
Select The Blank

Question Details regarding Administrative / controlling office comes
under the ________ category.

Correct Answer Depreciation , Preliminary expenses written off ,
Increase in secured borrowing
Your Answer Preliminary expenses written off , Increase in secured
borrowing
Question A project objective which states What "achieving it " would
cost is known as :-

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

Question The profit earned from operations of the project during life
of the project is known as :-
Correct Answer Cash inflow
Your Answer Profit after appropriation

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 , Sales trends
Select The Blank

Question A Project has a ________ represented by growth,
maturity and decay.
True/False
Correct Answer True
Your Answer True
Match The Following

Export market technique of Commercial appraisal Government

provides ample encouragement Government provides ample
encouragement
Demand Technique forecasting of Commercial appraisal Future
demand of the product A method based on the assumption that the
behaviour of the variables would continue in similar/same direction
and magnitude, as in the past
Past trend method of Commercial appraisal Adopted as a guide

depending on the consumption pattern of the society as a whole
Adopted as a guide depending on the consumption pattern of the
society as a whole
End use method of Commercial appraisal A list of industries wherein

the product is used is made and quantity and volume is arrived at A
list of industries wherein the product is used is made and quantity and

Question A project objective which states "What' is to be viewed" is
termed as :-
True/False
synergistic view of the project rather than looking at it only from the
financial aspects.
Correct Answer True
Your Answer True


Correct Answer Interest on term loans

Question Gross Working Capital means :-
Correct Answer Current assets
Your Answer Current assets less Current liabilities
Select The Blank
Select The Blank

Correct Answer Identification of Project - Project Appraisal -
Negotiations for loans
Your Answer Identification of Project - Project Appraisal -
Negotiations for loans
True/False
Correct Answer True
Your Answer True
Select The Blank

Question Investors who invest in the debentures of the company
are the ________ of the company.
Select The Blank

Question Longer the duration of production cycle, higher the
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

Question The ratio which indicates the ability of the company to
meet current obligations is termed as :-

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

Correct Answer Technology , Layout of the plant , Design of the
plant
True/False
Question Market potential should be determined under the
Marketing aspect of the Project report.
Correct Answer True
Your Answer True
Select The Blank

Question Having decided on the location and product, the promoter
takes into account the ________ that is to be adopted for producing
the product.


Question BCG Product Portfolio Matrix analyses products on the
basis of :-

Question Preliminary expenses include :-
Correct Answer Drafting of Memorandum expenses
Your Answer Drafting of Memorandum expenses
True/False
Question Cost under-estimation at the project preparation and evaluation stage leads to
cost and time over run.
Correct Answer True
Your Answer True

Match The Following

General category of Project report Location of factory Location of factory
Cost aspect of the project report Consultancy fees Reasons for cost escalations
Financing plan Unsecured loans Finance manager
Select The Blank



Your Answer Cash Profits , Commercial Papers
True/False
Correct Answer True
Your Answer True
Select The Blank
Your Answer No flow


understand the changes in assets as well as asset sources which are not revealed by the

True/False
Correct Answer True
Your Answer True

considered :-
infrastructure
True/False
Correct Answer True
Your Answer True
Select The Blank

Question Name and designation of the chief executive comes under the ________
category.
Select The Blank


off
Your Answer Funds from operation , Funds from long term loans


Select The Blank

Question ________ is that scarce input which financial resources alone cannot
mobilise.
Your Answer Management


Select The Blank

Correct Answer One
Your Answer One
Select The Blank



Business Strength and Medium Industry Attractiveness , Average Business strength and
high Industry attractiveness
Select The Blank

________.
Select The Blank

True/False
into account.
Your Answer True

Question The cash flow of all the years during the expected life of the project are
discounted at a pre-determined cut off rate and :-
Your Answer Average rate of return is obtained
Question The ratio which indicates the ability of the company to meet current
obligations is termed as :-
True/False
Correct Answer True
Your Answer True
True/False
Correct Answer True
Your Answer True

True/False
Question The secondary data is collected through market survey, specific for the
project being appraised.
Your Answer True
True/False
Question Debt service coverage ratio indicates whether cash earned is sufficient for
debt service.
Correct Answer True
Your Answer True
Select The Blank

Question Position regarding requirement and training of operational staff comes under
the ________ category of Project report.
Match The Following

Moving into new areas/product lines Diversification Projects Rehabilitation Projects
Suppliers' credit Short term finance Short term finance

Deferred credit Long term finance Long term finance
Setting up new units New Projects Diversification Projects
Select The Blank


Your Answer Articles of Association

Your Answer Plant capacity , Quality standards , Power / telecom facilities

termed as :-

Question General Electric Stop Light Matrix :-
Correct Answer Which is highly respected for the sophistication, maturity and quality
in its planning systems

Select The Blank

Correct Answer Fund
Your Answer Fund
Question The temporary requirement of working capital can be financed out of :-
Correct Answer Inter-corporate Deposits , Commercial Papers
Your Answer Inter-corporate Deposits , Commercial Papers
True/False
Correct Answer True
Your Answer True
Match The Following

Project Financing Help improving Corporate Return on Equity Industrial Finance

Corporation of India
Finance in international financial markets Issue of Euro bonds Issue of Euro bonds
International financial institutions World Bank Increasing emphasis on the Private

initiative
Policy of Liberalisation, Privatisation and Globalisation Increasing emphasis on the

Private initiative Help improving Corporate Return on Equity


Select The Blank

True/False
Correct Answer True
Your Answer True

the :-
True/False
Correct Answer True
Your Answer True

Your Answer Honesty , Initiative , Too ambitious promoters

Relationship
True/False
Correct Answer True
Your Answer True

Your Answer To indicate the financial strength and weakness of the business , To help
to understand the changes in assets as well as asset sources which are not revealed by the
True/False
Question The maximum Seed Capital assistance provided by IDBI under the project
will be restricted to 50% of the required promoter's contribution or Rs. 50 lakhs
whichever is lower.
Your Answer True


Your Answer Strategic perspective , Time span , Finance cost aspect , Social aspect
Correct Answer Is an approach to hammer out an appropriate strategic posture for a
firm and its individual business


True/False
Correct Answer True
Your Answer True

considered :-

benefits
Select The Blank

________.
Select The Blank


Select The Blank

Question Details regarding Administrative / controlling office comes under the
________ category.

Select The Blank

Your Answer Source

Your Answer Cables

rate
Select The Blank

Match The Following

Econometric method Mathematical representation of economic relationship Suitable for

forecasting the demand for intermediate products
Secondary source of data Collected in some other context Collected in some other
context
Leading indicators Variables that change faster than others Mathematical representation
of economic relationship

borrowing
Your Answer Depreciation , Increase in secured borrowing
True/False
Project.
Correct Answer True
Your Answer True
True/False
Correct Answer True
Your Answer True

Question Capital Issue expenses include :-
Correct Answer Brokerage fees to registrars
Select The Blank


society as a whole

Your Answer Managing Director , Electrical engineers , Committees of the board


Your Answer Business strength and Industrial Attractiveness



Select The Blank

Conservative under the SPACE approach.
industry but enjoying financial strength and operating in a relatively stable environment
Your Answer High financial strength, high industrial strength, enjoying a competitive
advantage and belonging to an attractive industry, operating in a relatively stable
environmental conditions
True/False
Correct Answer True
Your Answer True
True/False
Correct Answer True
Your Answer True

Question The cost of Plant and Machinery includes :-
Correct Answer Cost of stores and spares
Your Answer Building and civil construction
Select The Blank

Your Answer Audit report
True/False
Question The Detailed Project report spells out the modus operandi for the implementation of the Project
and the realization of the Project objectives.
Correct Answer True
Your Answer True
True/False
Question Production line diagrams show the organisation structure of the project along with information on
location, personnel required for various departments, and their inter-relationship.
Your Answer False

Question The second phase of the technical appraisal which focuses upon appraising the likely technical
gaps consists of :-


Select The Blank

Your Answer Set of objectives

Your Answer Consumption-level method
Select The Blank
1

Your Answer Time span


Correct Answer Sale of machinery , Cash from operations , Issue of new shares

Your Answer Industrial machinery
Select The Blank

Question ________ is the summary of cash book or Receipts and Payments statement.

True/False
Correct Answer True
2
Your Answer True
Match The Following

End use method of Commercial A list of industries wherein the product A list of industries wherein the product is
appraisal is used is made and quantity and used is made and quantity and volume
volume is arrived at is arrived at
Export market technique of Government provides ample Government provides ample
Commercial appraisal encouragement encouragement
Demand Technique forecasting of Future demand of the product Future demand of the product
Commercial appraisal
Past trend method of Commercial Adopted as a guide depending on the Adopted as a guide depending on the
appraisal consumption pattern of the society as consumption pattern of the society as a
a whole whole

Question A Project is a temporary endeavor to achieve some specific objectives within a :-
Select The Blank

True/False
Correct Answer True
Your Answer True


3
Select The Blank

Your Answer General
True/False
Correct Answer True
Your Answer False

Your Answer Interest on term loans

Your Answer Funds from operation
Select The Blank


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 , Average Business Strength and Low Industry attractiveness

4
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

Question The various aspects which need to be considered while assessing Project finance financing are :-

Match The Following

Technical aspect of detailed project Detailed Project Engineering Detailed Project Engineering
report
Financial aspect of Detailed Project Profitability Profitability
report
Marketing aspect of Detailed Project Distribution Distribution
report
Management aspect of detailed project Conservativeness Conservativeness
report

Correct Answer It determines financial consequences of the business operations , It enables the firm to plan its
financial resources properly , It helps as a reliable guide for the future requirement of funds
Your Answer It determines financial consequences of the business operations , It enables the firm to plan its
financial resources properly , It helps as a reliable guide for the future requirement of funds

Question After the SPACE chart is constructed, we would normally get any one of the following basic
strategic postures :-
Select The Blank
5
Question Details regarding Internal accruals comes under the ________ category of Project report.
True/False
Question The 'BCG Matrix 'analysis various products of the organisation in the terms of Business strength
and Industry Attractiveness.
Your Answer False

Your Answer Purchase of fixed assets , Payment of long term loans , Issue of new machinery
Select The Blank

True/False
Question Financial analysis based on accounting ratios will give mis-leading results if the effects of changes
in price level are not taken into account.
Correct Answer True
Your Answer True
True/False
Question There is a need for studying Project finance both for the lenders as well as the borrowers as both
of them have equal stake in making the Project a success.
Correct Answer True
Your Answer True

True/False
Correct Answer True
6
Your Answer False

Your Answer Issue of new shares , Depreciation

Correct Answer A list of industries wherein the product is used is made and quantity and volume is arrived at
Your Answer A list of industries wherein the product is used is made and quantity and volume is arrived at

Question The Projects which are undertaken for further enhancing/augmenting the existing capacity is
known as :-
Correct Answer Expansion Projects
Your Answer Expansion Projects
Select The Blank

Question Sometimes the term ________ is interpreted as cash equivalent i.e. cash and marketable
securities.
Correct Answer Fund
7
True/False
Question 1 The advantage of secondary sources of data is that it is readily and economically available.
Correct Answer True
Your Answer True
True/False
Question2 In small scale organisation, requirement of working capita l is quite high due to high amount
of overheads, high buying costs and high selling cost.
Correct Answer True
Your Answer True
True/False
Question3 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
Select The Blank






Question 9 Delay in arrival of domestic/foreign machinery and technicians may lead to :-
Select The Blank

Question 10 A smaller unit into which the overall requirement of capital of a company is sub-divided is
termed as ________.
Your Answer Share

1


Select The Blank

Correct Answer One
Your Answer One
True/False
Correct Answer True
Your Answer True


Select The Blank

True/False
Correct Answer True
Your Answer True
Select The Blank

Question21 Longer the duration of production cycle, higher the requirement of ________.
Select The Blank

Select The Blank

Question23 ________ is the summary of cash book or Receipts and Payments statement.
2
True/False
Question24 In the BCG Matrix, the key term of Cash Cows require further commitment of funds.
Your Answer True
True/False
Question25 Cost and time overrun of the project may lead to loss on account of lost market
opportunities.
Correct Answer True
Your Answer True

Question26 A project objective which states What "achieving it " would cost is known as :-

Question27 Casual methods of Demand forecasting consists of : -


True/False
Question30 Production line diagrams show the organisation structure of the project along with
Your Answer False

Question31 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

Question32 The cost which change in the same proportion in which the level of production changes is
known as :-
Select The Blank


3
Question35 Appointments made at senior level during the half-year is categorised under :-


Match The Following



Question 40 General category of the Project report consists of : -



Question43 After the SPACE chart is constructed, we would normally get any one of the following basic
strategic postures :-
Select The Blank

Question 44 ________ occupies a unique position in the macro economic development which helps in
induction of new technology and facilitates, greater efficiency as well as higher productivity.
4
Question45 Infrastructural projects include : -
Select The Blank

Question46 Name and designation of the chief executive comes under the ________ category.
Your Answer General
Match The Following


Match The Following
Econometric method Mathematical representation of Mathematical representation of

economic relationship economic relationship
Secondary source of data Collected in some other context Collected in some other context
Leading indicators Variables that change faster than Variables that change faster than
others others
Select The Blank

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

Select The Blank

Question A smaller unit into which the overall requirement of capital of a company is sub-
divided is termed as ________.
5
Your Answer Share
Select The Blank

developed so that the financial commitment and risks associated with a project are
Select The Blank

Select The Blank


Your Answer Bankers , Creditors , Financial Institutions



6
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 Retained earnings indicates that whatever profits are earned by the company are not
distributed by it by way of ________ but are kept aside for use in future for expansion
or other purpose.

Your Answer Organisation Building , Person / system oriented , Promoter's equity / stake
True/False
Question The Detailed Project report spells out the modus operandi for the implementation of
the Project and the realization of the Project objectives.
Correct Answer True
Your Answer True

Your Answer Company's competitive advantage and Company's financial strength
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 True
Your Answer True

Question After the SPACE chart is constructed, we would normally get any one of the following
basic strategic postures :-
True/False
7
Question The ratios of one organisation compared with the ratios of the same organisation is
termed as inter-firm comparison.
Your Answer False
Select The Blank

information.
Select The Blank

Question Under ________ method, the forecasts are modified in the light of observed errors.
Your Answer Cobb Douglas Relationship
Match The Following

Source of funds Depreciation Investment
True/False
Question The Detailed Project report must indicate the gestation period of the project.
Correct Answer True
Your Answer True
True/False
Correct Answer True
Your Answer True

8

Question The method for evaluating the profitability of industrial projects whose object is to
ascertain the period required for recovering the entire investment made in a project is
known as :-
Select The Blank


Question The rate of discount which would equate the present value of investments to the
present value of benefits over the life of the project is known as :-
Select The Blank


Question The ratio that roughly measures the company's potential reserve of cash is termed as
:-

Question The sources of funding have expanded from banks, insurance companies and
multilateral agencies to include the :-
Your Answer Capital market
True/False
9
Correct Answer True
Your Answer True


True/False
Question Nominal maximum capacity is the capacity that is technically attainable and this
corresponds to the supplier's guaranteed capacity.
Correct Answer True
Your Answer True


True/False
Question Ratio should be computed on the basis of inter-related figures which have a cause and
effect relationship.
Correct Answer True
Your Answer True
True/False
Question In the BCG Matrix "DOGS" indicate products which are generally during the stage of
Decline of a Product Life Cycle.
Correct Answer True
10
Your Answer True



Select The Blank


Your Answer Strategic perspective , Time span , Social aspect

Your Answer Trend Projection method , Consumption-level method , Moving Averages method

Question The statement which shows the movement of cash into and out of firm's kittie is
known as :-
11
Correct Answer To help to understand the changes in assets as well as asset sources which are not
revealed by the income statement , To find out the uses of loans raised by the business
, To indicate the financial strength and weakness of the business
Your Answer To find out the uses of loans raised by the business , To help to understand the changes
in assets as well as asset sources which are not revealed by the income statement ,
Helps to prepare financial statements
Select The Blank


True/False
Question The Detailed Project report spells out the modus operandi for the implementation of the
Project and the realization of the Project objectives.
Correct Answer True
Your Answer True
Select The Blank



Correct Answer A list of industries wherein the product is used is made and quantity and volume is
arrived at
Your Answer A list of industries wherein the product is used is made and quantity and volume is
arrived at
12
True/False
Question In small scale organisation, requirement of working capital is quite high due to high
amount of overheads, high buying costs and high selling cost.
Correct Answer True
Your Answer True
Match The Following

Cost aspect of the project report Consultancy fees Consultancy fees
Select The Blank


Select The Blank

True/False
Correct Answer True
13
Your Answer True
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 True
Your Answer True
Select The Blank

Select The Blank

Question The basic difference between the feasibility study report and ________ is the level of
accuracy and degree of detail.

Select The Blank

Your Answer General


True/False
14
Correct Answer True
Your Answer True
Select The Blank

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


True/False
Question Nominal maximum capacity is the capacity that is technically attainable and this
corresponds to the supplier's guaranteed capacity.
Correct Answer True
Your Answer True
Select The Blank

developed so that the financial commitment and risks associated with a project are


15
Correct Answer 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

Question The norms for providing open areas have to be strictly followed for safety of labour and
allow sufficient space for outflow of effluents safely in case of :-

Select The Blank

Question Investors who invest in the debentures of the company are the ________ of the
company.
Match The Following


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

16
Question The industrial concern earned profits by increasing the sales volume under the :-
True/False
Your Answer False
Select The Blank

information.

True/False
Correct Answer True
Your Answer True


Question A Project is a temporary endeavor to achieve some specific objectives within a :-

17


Question The cost which change in the same proportion in which the level of production changes
is known as :-

Question The second phase of the technical appraisal which focuses upon appraising the likely

Question The third phase of the technical appraisal which focuses upon appraising the likely
18

Question Borrower's contribution towards Working capital is
known as :-

Correct Answer Factory building , Auxiliary buildings ,
Administrative block
Your Answer Factory building , Auxiliary buildings ,
Administrative block

Correct Answer Products which have high market share but low
growth potential
Your Answer Products which have high market share but low
growth potential

Question In the Detailed Project Report, Marketing aspects
includes :-

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
True/False
Question In both the extreme situations of trade cycles i.e.
Inflation and depression, requirement of working capital may be
high.
Correct Answer True
Your Answer True
True/False
Correct Answer True
Your Answer True
True/False
Question It is mandatory for each unit to obtain necessary
clearance from Pollution Control Authorities before setting up any
project.
Correct Answer True
Your Answer True

Question A project objective can be said to have the following
dimensions viz.:
Correct Answer Strategic perspective , Time span , Finance cost
aspect
Your Answer Strategic perspective , Time span , Finance cost
aspect
Match The Following


Management Perception Aspiration level/ conservative Aspiration
level/ conservative


Question BCG Product Portfolio Matrix analyses products on
the basis of :-
Select The Blank

Question ________ profitability reduces the strain on working
capital.
Correct Answer High
Your Answer Stable

Correct Answer That it involves current outlay of funds in
Your Answer That it involves current outlay of funds in

Correct Answer Environmental factors , Risk involved ,
Managerial compensation
Your Answer Environmental factors , Risk involved ,
Managerial compensation


Question Every project involves financial outlay which can be
referred to as :-
Select The Blank

Question As the plant capacity increase, the investment cost unit
capacity ________.

Question Debt Service coverage ratio may be considered to be
one of the most important ratios calculated by the :-

Question A project objective which states What "achieving it "
would cost is known as :-
True/False
Correct Answer True
Your Answer True

Correct Answer It does not provide any new information but
only rearranges the various facts , It does not consider non-fund
transactions
Your Answer It does not provide any new information but only
rearranges the various facts , It does not consider non-fund
transactions , It does not help in determining future requirement of
funds

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


Question It is said that a second rate project in the hands of first
rate management is better than a first rate project in the hands of :-
Select The Blank

Question The company having ________, is appropriate for the
strategic posture of Defensive under the SPACE approach.
Correct Answer Lacks both competitive advantage as well as
financial strength and belongs to a not so attractive industry,
operating in an unstable 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 Excessive expenditures on foreign technicians leads to
________.
True/False
Question The 'BCG Matrix 'analysis various products of the
organisation in the terms of Business strength and Industry
Attractiveness.
Your Answer False
Select The Blank

Question Having decided on the location and product, the
promoter takes into account the ________ that is to be adopted for
producing the product.

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
True/False
Question Sensitivity analysis consists of assessing the degree of
risk.
Correct Answer True
Your Answer True

Question A project objective which states "What' is to be
viewed" is termed as :-

Question The permanent requirement of working capital should
be financed out of :-
True/False
Question In the BCG Matrix "DOGS" indicate products which
are generally during the stage of Decline of a Product Life Cycle.
Correct Answer True
Your Answer True
True/False
Question The construction of National Golden Quadrilateral can
be recognised as Project.
Correct Answer True
Your Answer True
Select The Blank

Question Under the SPACE Model, Customer loyalty is
determined under the ________ dimension.
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
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 True
Your Answer True

Your Answer Cables

Question In the Detailed Project Report, Technical aspects
includes :-
Correct Answer Plant capacity , Quality standards , Raw
material requirement
Your Answer Quality standards , Raw material requirement ,
Power / telecom facilities

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 Market potential should be determined under the
Marketing aspect of the Project report.
Correct Answer True
Your Answer True


Select The Blank

Question A Project has a ________ represented by growth,
maturity and decay.
True/False
Question If the organisation is a trading organisation, the
requirement of working capital will be on the lower side.
Your Answer True
True/False
Question Cost under-estimation at the project preparation and evaluation stage leads to
cost and time over run.
Correct Answer True
Your Answer True

Match The Following

Cost aspect of the project report Consultancy fees Reasons for cost escalations
Financing plan Unsecured loans Finance manager
Select The Blank



Your Answer Cash Profits , Commercial Papers
True/False
Correct Answer True
Your Answer True
Select The Blank
Your Answer No flow


understand the changes in assets as well as asset sources which are not revealed by the

True/False
Correct Answer True
Your Answer True

considered :-
infrastructure
True/False
Correct Answer True
Your Answer True
Select The Blank

Question Name and designation of the chief executive comes under the ________
category.
Select The Blank


off
Your Answer Funds from operation , Funds from long term loans


Select The Blank

Question ________ is that scarce input which financial resources alone cannot
mobilise.
Your Answer Management


Select The Blank

Correct Answer One
Your Answer One
Select The Blank



Business Strength and Medium Industry Attractiveness , Average Business strength and
high Industry attractiveness
Select The Blank

________.
Select The Blank

True/False
into account.
Your Answer True

Question The cash flow of all the years during the expected life of the project are
discounted at a pre-determined cut off rate and :-
Your Answer Average rate of return is obtained
Question The ratio which indicates the ability of the company to meet current
obligations is termed as :-
True/False
Correct Answer True
Your Answer True
True/False
Correct Answer True
Your Answer True

True/False
Question The secondary data is collected through market survey, specific for the
project being appraised.
Your Answer True
True/False
Question Debt service coverage ratio indicates whether cash earned is sufficient for
debt service.
Correct Answer True
Your Answer True
Select The Blank

Question Position regarding requirement and training of operational staff comes under
the ________ category of Project report.
Match The Following

Moving into new areas/product lines Diversification Projects Rehabilitation Projects
Suppliers' credit Short term finance Short term finance

Deferred credit Long term finance Long term finance
Setting up new units New Projects Diversification Projects
Select The Blank


Your Answer Articles of Association

Your Answer Plant capacity , Quality standards , Power / telecom facilities

termed as :-

Question General Electric Stop Light Matrix :-
Correct Answer Which is highly respected for the sophistication, maturity and quality
in its planning systems

Select The Blank

Correct Answer Fund
Your Answer Fund
Question The temporary requirement of working capital can be financed out of :-
Correct Answer Inter-corporate Deposits , Commercial Papers
Your Answer Inter-corporate Deposits , Commercial Papers
True/False
Correct Answer True
Your Answer True

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LIST OF ATTEMPTED QUESTIONS AND ANSWERS

Match The Following

Project Financing Help improving Corporate Return on Equity Industrial Finance

International financial institutions World Bank Increasing emphasis on the Private

Policy of Liberalisation, Privatisation and Globalisation Increasing emphasis on the

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Econometric method Mathematical representation of economic relationship Suitable for

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Correct Answer Public deposit , Equity shares

Your Answer Equity shares , Bridge loan , Working capital loan

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Correct Answer Increase in working capital , Preliminary expenses , Dividend

Your Answer Increase in working capital , Dividend , Preliminary expenses

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Correct Answer Sample

Your Answer Sample

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Your Answer Quick ratio

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Your Answer Cost and time overrun

Correct Answer Consumption-level method , Econometric method

Your Answer Consumption-level method , Econometric method

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Your Answer Manufacturing process and technology

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Correct Answer Profit and Loss Account , Balance Sheet