Reference no: EM132575709

Problem 1:- If the net working capital is negative then it indicates that:

a) Long tem funds have been used for financing short term assets.

b) Long term funds have been used for financing long term assets.

c) Short term funds have been used for financing long term assets.

d) Short term funds have been used for financing short term assets.

Problem 2:- The following information is available for Navkar and Co. : EBIT Rs 20,20,000 ; Profit before tax Rs 13,20,000 ; Fixed costs Rs 7,00,000. The percentage change in EPS is ................, if the sales are expected to increase by 5%.

a) 16.02%

b) 24.87%

c) 25.50%

d) 10.25%

Problem 3:- Which of the following is a technique for monitoring the status of the receivables?

a) Ageing Schedule

b) Outstanding creditors

c) Selection matrix

d) Funds flow analysis

Problem 4:- The cash flows from a project is estimated as follows: Year 0- Rs 160 lakh, Year 1- Rs 60 lakh, year 2- Rs 80 lakh, year 4- Rs 116 lakh. The benefit cost ratio for the above project is ( Assume the cost of capital as 12%):

a) 0.25

b) 0.8

c) 1.25

d) 1.8

Problem 5:- The net cash flow from a project (with initial investment of Rs 16,20,000) are as follows: year 1- Rs 2,00,000; year 2- Rs 4,00,000; year 3- Rs 5,00,000; year 4- Rs 5,20,000; year 5- Rs 5,25,000; year 6- Rs 5,40,000; year 7- Rs 6,50,000. What is the pay back period for the above project

a) 2 years

b) 3 years

c) 4 years

d) 5 years

Problem 6:- Which of the following is not a money market instrument:

a) Treasury bill

b) Commercial papers

c) Convertible debentures

d) Certificate of deposits

Problem 7:- The average daily cost of production is Rs 35 lakh and average conversion period is 3 days. The closing stock work in progress is 10% higher than the opening stock of work in process. The value of closing stock of work in progress is:

a) 100 lakhs

b) 110 lakhs

c) 120 lakhs

d) 130 lakhs

Problem 8:- During the four busiest days in a month od March, the firm` cash outflows were Rs 20,000; Rs 30,000; Rs 40,000 and Rs 50,000. The Finance Manager desires sufficient cash to cover payments for 4 days during the peak periods. The safety levels is Rs:

a) 1,10,000

b) 1,40,000

c) 1,20,000

d) 1,00,000

Problem 9:- If the current assets and current liabilities are Rs 2,000 lakh and Rs 1,200 lakh respectively. How much amount can be borrowed on a short term basis without reducing current ratio below 1.5?

a) Rs 400 lakh

b) Rs 1,000 lakh

c) Rs 1,200 lakh

d) Rs 1,400 lakh

Problem 10:- The following details pertain to Anand Industries Ltd: Average stock of work in progress Rs 16 lakh; Annual cost of production Rs 160 lakh. Assume 360 days in a year. The work in process period for the company is :

a) 10 days

b) 16 days

c) 23 days

d) 36 days