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Program Name: PGDBASubject: Financial ManagementAssessment Name: FM - ExamWeightage: 70Total Marks: 70Duration: 80 mins

Online Examination:

Online examination is a Computer based examination.

Online examination comprises of Total 29 Questions - Out of 70 marks.

Duration of online examination will be of 1 Hour 20 minutes (80 minutes).

Section - I Instructions:

- It is compulsory and has total 3 Subjective Questions.- Students are required to solve any 2 Subjective Type Questions. Each question is of 5 marks.- Section – I is out of 10 Marks.

 Please refer following instructions regarding Subjective examination:

-  While attempting subjective examination Text formatting facility will be disabled such as use of bullets,making the text bold, underlining the text etc. Only normal character on the key board will be available.-  Special characters available on the keyboard will be allowed.-  Students can not attempt more than 2 questions out of given 3.-  A blank (space typed) or any entry in the space provided will be considered as question is answered.-  Hand written answers are not allowed. Subjective test can be answered by using key board.-  No brail support shall be provided, but writer assistance shall be allowed. The student has   to intimate it toSCDL well in advance by completing applicable formalities. -  Answers for both the questions should not exceed more than 110 words. The maximum word limit peranswer is 55 words (for Subjective part).

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1) Why are capital budgeting decisions crucial for a business?(5)

The reasons are as follows: As these decisions deal with purchase of fixed assets they have long termimplications on the operations of the business. Such decisions usually involve outlay of a large amount ofthe funds. These decisions are irreversible as it is difficult to find a market for capital goods in case theyhave been mistakenly purchased. Such decisions carry much risk as the payback period is several years.

2) What are the objectives of cash management?(5)

The main objective of cash management is to reduce the operating cash need to the minimum possibleextent without affecting routine transactions. To enable this, the finance manager has to: Increase thespeed of cash collections Negotiate delayed cash payments Maintain optimum cash balance Profitablyinvest excess cash available in short and long term securities

3) How does age-wise analysis of debtors help in speeding up collections?(5)

Age-wise analysis of debtors is a practical tool to analyze debtors. In this analysis, every month say thedebtors are classified into three or four categories based on the time period for which the debt exists, suchas less than 30 days, more than 60 days, more than 90 days, etc. Those more than 90 days will be followedup more intensively for collection.

Section 1 is complete.

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Section - II Instructions:

-  It comprises of Objective Questions Only.-  Total 60 marks are allotted for objective type questions.-  The objective questions are of following type and carries marks as given under.

Multiple Choice Multiple Response  : 4 Questions - 16 Marks (Each 4 marks)Multiple Choice Single Response     : 9 Questions - 18 Marks (Each 2 marks)True or False                                      : 5 Questions - 5 Marks (Each 1 mark)Select a Blank                                    : 5 Questions - 5 Marks (Each 1 mark)Match the Column                             : 4 Questions - 16 Marks (Each 4 marks)

Total Questions                                 : 27

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         : 60Total Marks                              

1) The value created by the use of resources is more than the total of the input resources is referred to as(2)

1] Income2] Profit3] Interest4] Dividend

2) Accounts Receivable is an example of current assets.(1)

1] True2] False

3) The working Partner is a Partner who(2)

1] Takes only crucial decisions2] Participates in day-to-day affairs of the firm3] Does not participate in day to day affairs, only takes remuneration4] Appoints representative to carry on the activities of the firm

4) Premium paid on the life policy of the proprietor is debited to the Profit and Loss Account.(1)

1] True2] False

5) Credit period is(2)

1] The time allowed by the company to the customers to pay their dues2] Time required by the company to process the received cheques and deposit the same in the bank3] Time taken for the delivery of the goods4] Administrative delay for raising the invoices or bills in favour of the customer

6) Match the Following(4)

1] Without recourses factoring2] With recourses factoring3] Role of factor4] Role of client

1] Risk of non-payment assumed by factor2] Risk of non-payment assumed by selling company3] Follows up with debtors4] Sends the invoice copy to factor5] Places the order6] Bills discounting

7) Wealth maximisation theory considers time value of money .(1)

1] True2] False

8) Identify the fixed assets.

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(4)1] Debtors2] Computers3] Plant & Machinery4] Stock

9) Gross Profit Indicates the relation between production cost and Purchases .(1)

1] True2] False

10) Capital turnover ratio is calculated as(2)

1] Sales/Debt Capital2] Sales/Fixed Assets3] Sales/Capital4] Sales/Current Assets

11) Price earning ratio indicates the price currently being paid in the stock market for every one rupee ofEarning per share .

(1)1] True2] False

12) The Ratio that discloses the financial position or solvency of the firm is :BLANK(1)

1] Debt Equity ratio2] Current Ratio3] Liquid Ratio4] Net Profit Ratio

13) Match the Following(4)

1] Bank overdraft taken2] Interest received on debentures purchased3] Increase in current assets4] Decrease in current liabilities

1] Financing cash flow activity2] Investing cash flow activity3] Increases working capital4] Cash equivalent5] Results in insolvency

14) Undercapitalisation means(2)

1] Shortage of Capital2] excess capital as compared to the level of activity3] excess of real worth of assets over the aggregate capital4] Less Cash on Hand

15) The economical use of the asset is permitted by the Lessor on the payment of(2)

1] Lease Rent2] Instalment

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3] Hiring Charges4] Interest

16) Types of preference shares are(4)

1] Convertible2] Non transferable3] Cumulative4] Non convertible

17) Advantages of Debentures from investor's point of view are(4)

1] Debentures are unsecured2] Debentures are secured3] Debentures carry fixed rate of interest4] Debentures carry voting rights

18) Selling the securities in the primary market to the existing shareholders is called as _________(2)

1] Bonus Issue2] ESOP3] Rights Issue4] Book Building

19) Match the Following(4)

1] Pay back period2] Accounting rate ofreturn3] Net Present value4] Discounted Pay backperiod

1] indicates the period within which the cost of the project will be completelyrecovered2] computes average annual yield on the net investment in the project3] method by subtracting present value of cash outflows from the present valueof cash inflows4] indicates that period within which the discounted cash inflows equal to thediscounted cash outflows5] Indicates the Profitability Index6] Computes the No Profit No Loss Level

20) If neither the ownership nor the possession of the goods is transferred to the lender, the mode of creatingcharge is called as

(2)1] Mortgage2] Pledge3] Assignment4] Hypothecation

21) Marathe committee was appointed to review the(2)

1] Working Capital Finance by Banks2] Cash Credit scheme3] Credit authorization scheme4] Documentation for Bank Finance

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22) :BLANK was appointed to review the credit authorization scheme(1)

1] Tandon Committee2] Nayak Committee3] Chhore Committee4] Marathe

23) Advantages of factoring are(4)

1] Immediate availability of Cash2] Expertise of the Factor3] Relief from administrative responsibilities4] Cost less than interest cost

24) To speed up the credit collection :BLANK is offered to the debtors.(1)

1] Factoring2] Cash discount3] Credit limit4] Interest

25) Match the Following(4)

1] Credit Analysis2] Source of information for deciding credit worthiness3] Management attitude conservative4] Discount Policy

1] Deciding the creditworthiness2] Bank reference3] Restrict the credit period4] Cost benefit analysis5] Risk Management6] Rating Agency

26) The symptom of low capacity utilisation will be shown by:BLANK .(1)

1] Creditors Turnover Ratio2] Debtors Turnover Ratiio3] High Inventory Turnover Ratio4] Low inventory turnover ratio

27) A company has to pay interest at :BLANK during the period for which default in payment of dividendcontinues.

(1)1] 18.00%2] 12.00%3] 15.00%4] 10.00%

Section 2 is complete.

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