137 + Mcqs in Work Page 1 McqOptions

1.	_________ function includes a firm’s attempts to balance cash inflows andoutflows.
A.	finance
B.	liquidity
C.	investment
D.	dividend
Answer» C. investment

Discussion

2.	The art of managing, within the acceptable level of risk, the consolidatedfunds optimally and profitably is called _________.
A.	integrated treasury
B.	treasury management
C.	merchant banking
D.	none of the above
Answer» C. merchant banking

Discussion

3.	Which of the following is a technique that helps the exporter to sell thereceivables to any bank or financial institution without recourse?
A.	forfeiting
B.	leading & lagging
C.	derivatives
D.	netting
Answer» B. leading & lagging

Discussion

4.	Under which type of bank borrowing can a borrower obtain credit from abank against its bills?
A.	letter of credit
B.	cash
C.	purchase or discounting of bills
D.	working capital loan
Answer» D. working capital loan

Discussion

5.	Which of the following would be consistent with an aggressive approach tofinancing working capital?
A.	financing short-term needs with short-term funds.
B.	financing permanent inventory buildup with long-term debt.
C.	financing seasonal needs with short-term funds.
D.	financing some long-term needs with short-term funds.
Answer» E.

Discussion

6.	Which of the following would be consistent with a conservative approach tofinancing working capital?
A.	financing short-term needs with short-term funds.
B.	financing short-term needs with long-term debt.
C.	financing seasonal needs with short-term funds.
D.	financing some long-term needs with short-term funds.
Answer» C. financing seasonal needs with short-term funds.

Discussion

7.	Your firm has a philosophy that is analogous to the hedging (maturitymatching) approach. Which of the following is the most appropriate form for financing a new capital investment in plant and equipment?
A.	trade credit.
B.	6-month bank notes.
C.	accounts payable.
D.	common stock equity.
Answer» E.

Discussion

8.	Having defined working capital as current assets, it can be further classifiedaccording to __________.
A.	financing method and time
B.	rate of return and financing method
C.	time and rate of return
D.	components and time
Answer» E.

Discussion

9.	The amount of current assets that varies with seasonal requirements isreferred to as __________ working capital.
A.	permanent
B.	net
C.	temporary
D.	gross
Answer» D. gross

Discussion

10.	Your firm has a philosophy that is analogous to the hedging (maturitymatching) approach. Which of the following is the most appropriate non- spontaneous form for financing the excess seasonal current asset needs?
A.	trade credit.
B.	6-month bank notes.
C.	accounts payable.
D.	common stock equity.
Answer» C. accounts payable.

Discussion

11.	-Under a conservative financing policy a firm would use long-term financing tofinance some of the temporary current assets. What should the firm do when a "dip" in temporary current assets causes total assets to fall below the total longterm financing?
A.	use the excess funds to pay down long-term debt.
B.	invest the excess long-term financing in marketable securities.
C.	use the excess funds to repurchase common stock.
D.	purchase additional plant and equipment.
Answer» C. use the excess funds to repurchase common stock.

Discussion

12.	-Which of the following statements is correct for a conservative financing policyfor a firm relative to a former aggressive policy?
A.	the firm uses long-term financing to finance all fixed and current assets.
B.	the firm will see an increase in its expected profits.
C.	the firm will see an increase in its risk profile.
D.	the firm will increase its dividends per share (dps) this period.
Answer» B. the firm will see an increase in its expected profits.

Discussion

13.	Which of the following statements is correct for an aggressive financing policyfor a firm relative to a former conservative policy?
A.	the firm will use long-term financing to finance all fixed and current assets.
B.	the firm will see an increase in its expected profits.
C.	the firm will see a decline in its risk profile.
D.	the firm will need to issue additional common stock this period to finance the assets.
Answer» C. the firm will see a decline in its risk profile.

Discussion

14.	How can a firm provide a margin of safety if it cannot borrow on short notice tomeet its needs?
A.	maintain a low level of current assets (especially cash and marketable securities).
B.	shorten the maturity schedule of financing.
C.	increasing the level of fixed assets (especially plant and equipment).
D.	lengthening the maturity schedule of financing.
Answer» E.

Discussion

15.	Risk, as it relates to working capital, means that there is jeopardy to the firm for not maintaining sufficient current assets to __________.
A.	meet its cash obligations as they occur and take advantage of prompt payment discounts
B.	support the proper level of sales and take prompt payment discounts
C.	maintain current and acid-test ratios at or above industry norms
D.	meet its cash obligations as they occur and support the proper level of sales
Answer» E.

Discussion

16.	If a company moves from a "conservative" working capital policy to an"aggressive" policy, it should expect __________.
A.	liquidity to decrease, whereas expected profitability would increase
B.	expected profitability to increase, whereas risk would decrease
C.	liquidity would increase, whereas risk would also increase
D.	risk and profitability to decrease
Answer» B. expected profitability to increase, whereas risk would decrease

Discussion

17.	There is deterioration in the management of working capital of XYZ Ltd. Whatdoes it refer to?
A.	that the capital employed has reduced,
B.	that the profitability has gone up,
C.	that debtors collection period has increased,
D.	that sales has decreased.
Answer» D. that sales has decreased.

Discussion

18.	Walter’s Model suggests that a firm can always increase i.e. of the share by
A.	increasing dividend ,
B.	decreasing dividend,
C.	constant dividend,
D.	none of the above
Answer» E.

Discussion

19.	Which of the following stresses on investor's preference reorient dividend thanhigher future capital gains ?
A.	walter's model,
B.	residuals theory,
C.	gordon's model,
D.	mm model.
Answer» D. mm model.

Discussion

20.	If 'r' = 'ke', than MP by Walter's Model and Gordon's Model for different payoutratios would be
A.	unequal,
B.	zero,
C.	equal,
D.	negative
Answer» D. negative

Discussion

21.	Dividend Payout Ratio is
A.	pat÷ capital,
B.	dps ÷ eps,
C.	pref. dividend ÷ pat,
D.	pref. dividend ÷ equity dividend
Answer» C. pref. dividend ÷ pat,

Discussion

22.	Shares of face value of 10 are 80% paid up. The company declares adividend of 50%. Amount of dividend per share is
A.	. 5,
B.	.4
C.	. 80,
D.	. 50
Answer» C. . 80,

Discussion

23.	Which of the following generally not result in increase in total dividend liability?
A.	share-split,
B.	right issue,
C.	bonus issue
D.	all of the above
Answer» B. right issue,

Discussion

24.	Difference between between the bank balance as per Cash Book and Pass Bookmay be due to:
A.	overdraft,
B.	float,
C.	factoring,
D.	none of the above.
Answer» C. factoring,

Discussion

25.	If the closing balance of receivables is less than the opening balance for amonth then which one is true out of
A.	collections>current purchases,
B.	collections>current sales,
C.	collections<current purchases,
D.	collections < current sales.
Answer» C. collections<current purchases,

Discussion

26.	If the average balance of debtors has increased, which of the following mightnot show a change in general?
A.	total sales,
B.	average payables
C.	current ratio
D.	bad debt loss.
Answer» C. current ratio

Discussion

27.	80% of sales of 10,00,000 of a firm are on credit. It has a ReceivableTurnover of 8. What is the Average collection period (360 days a year) and Average Debtors of the firm?
A.	45 days and 1,00,000,
B.	360 days and 1,00,000,
C.	45 days and 8,00,000
D.	360 days and 1,25,000.
Answer» B. 360 days and 1,00,000,

Discussion

28.	In response to market expectations, the credit pence r j been increased from 45days to 60 days. This would result in
A.	decrease in sales,
B.	decrease in debtors,
C.	increase in bad debts,
D.	increase in average collection period.
Answer» E.

Discussion

29.	If the sales of the firm are . 60,00,000 and the average debtors are . 15,00,000 then the receivables turnover is
A.	4 times,
B.	25%,
C.	400%,
D.	0.25 times
Answer» B. 25%,

Discussion

30.	If cash discount is offered to customers, then which of the following wouldincrease?
A.	sales
B.	debtors,
C.	debt collection period,
D.	all of the above
Answer» B. debtors,

Discussion

31.	If no information is available, the General Rule for valuation of stock forbalance sheet is
A.	replacement cost,
B.	realizable value,
C.	historical cost,
D.	standard cost.
Answer» D. standard cost.

Discussion

32.	Which of the following is true for a company which uses continuous reviewinventory system
A.	order interval is fixed,
B.	order interval varies,
C.	order quantity is fixed,
D.	both (a) and (c).
Answer» C. order quantity is fixed,

Discussion

33.	EOQ determines the order size when
A.	total order cost is minimum
B.	total number of order is least,
C.	total inventory costs are minimum,
D.	none of the above.
Answer» D. none of the above.

Discussion

34.	If A = Annual Requirement, O = Order Cost and C = Carrying Cost per unitper annum, then EOQ
A.	(2ao/c) 2 ,
B.	2ao/c
C.	2a÷oc,
D.	2aoc.
Answer» C. 2a÷oc,

Discussion

35.	Commercial paper are generally issued at a price
A.	equal to face value,
B.	more than face value,
C.	less than face value,
D.	equal to redemption value
Answer» D. equal to redemption value

Discussion

36.	The basic objective of Tandon Committee recommendations is that thedependence of industry on bank should gradually
A.	increase,
B.	remain stable
C.	decrease
D.	none of the above
Answer» D. none of the above

Discussion

37.	A lease which is generally not cancellable and covers full economic life of theasset is known as
A.	sale and leaseback,
B.	operating lease
C.	finance lease,
D.	economic lease
Answer» D. economic lease

Discussion

38.	The first computer virus is__________.
A.	The famous
B.	HARLIE
C.	PARAM
D.	Creeper
Answer» E.

Discussion

39.	_______ Cryptography deals with traditional characters, i.e., letters & digits directly.
A.	Latest
B.	Asymmetri
C.	C Classic
D.	Modern
Answer» D. Modern

Discussion

40.	When an attacker sends unsolicited communication, it is an example of_____.
A.	Spoofing
B.	Spamming
C.	Crackers
D.	Sniffers
Answer» B. Spamming

Discussion

41.	For the AES-128 algorithm there are __________ similar rounds and _________ roundis different.
A.	9 ; the last
B.	8 ; the first and last
C.	10 ; no
D.	2 pair of 5 similar rounds ; every alternate
Answer» B. 8 ; the first and last

Discussion

42.	On comparing AES with DES, which of the following functions from DES does not have an equivalent AES function?
A.	Permutation P
B.	Swapping of halves
C.	XOR of subkey with function f
D.	F function
Answer» C. XOR of subkey with function f

Discussion

43.	The inverse transformation matrix times the forward transformation matrix equals the identity matrix.
A.	True
B.	False
C.	none
D.	all
Answer» B. False

Discussion

44.	What is the key size in the S-AES algorithm?
A.	32 bits
B.	24 bits
C.	16 bits
D.	None of the mentioned
Answer» D. None of the mentioned

Discussion

45.	Masquerading is _______.
A.	Attempting to hack a system through backdoors to an operating system or application.
B.	Pretending to be an authorized user
C.	Always done through IP spoofing
D.	Applying a subnet mask to an internal IP range
Answer» C. Always done through IP spoofing

Discussion

46.	Asymmetric key cryptography is used for all of the followingexcept_______.
A.	Encryption of data
B.	Access control
C.	Nonrepudiation
D.	Steganography
Answer» E.

Discussion

47.	Plain text are also called _____________.
A.	Encrypted text
B.	Clear-text
C.	Raw text
D.	Cipher-text
Answer» D. Cipher-text

Discussion

48.	The Initial Permutation table/matrix is of size _____.
A.	4×8
B.	8×8
C.	12×8
D.	16×8
Answer» C. 12×8

Discussion

49.	________ is a term used to describe a phishing attack that is specifically aimed at wealthy, powerful, or prominent individuals. Generally CEO’s and important celebrities.
A.	Message Authentication Code
B.	Steganography
C.	Whale phishing
D.	A cipher
Answer» D. A cipher

Discussion

50.	Compute private key (d, p, q) given public key (e=23, n=233 ´ 241=56,153).
A.	32432
B.	19367
C.	12543
D.	35212
Answer» C. 12543

Discussion

Explore topic-wise MCQs in Engineering Mechanics.

_________ function includes a firm’s attempts to balance cash inflows andoutflows.

The art of managing, within the acceptable level of risk, the consolidatedfunds optimally and profitably is called _________.

Which of the following is a technique that helps the exporter to sell thereceivables to any bank or financial institution without recourse?

Under which type of bank borrowing can a borrower obtain credit from abank against its bills?

Which of the following would be consistent with an aggressive approach tofinancing working capital?

Which of the following would be consistent with a conservative approach tofinancing working capital?

Your firm has a philosophy that is analogous to the hedging (maturitymatching) approach. Which of the following is the most appropriate form for financing a new capital investment in plant and equipment?

Having defined working capital as current assets, it can be further classifiedaccording to __________.

The amount of current assets that varies with seasonal requirements isreferred to as __________ working capital.

Your firm has a philosophy that is analogous to the hedging (maturitymatching) approach. Which of the following is the most appropriate non- spontaneous form for financing the excess seasonal current asset needs?

-Under a conservative financing policy a firm would use long-term financing tofinance some of the temporary current assets. What should the firm do when a "dip" in temporary current assets causes total assets to fall below the total longterm financing?

-Which of the following statements is correct for a conservative financing policyfor a firm relative to a former aggressive policy?

Which of the following statements is correct for an aggressive financing policyfor a firm relative to a former conservative policy?

How can a firm provide a margin of safety if it cannot borrow on short notice tomeet its needs?

Risk, as it relates to working capital, means that there is jeopardy to the firm for not maintaining sufficient current assets to __________.

If a company moves from a "conservative" working capital policy to an"aggressive" policy, it should expect __________.

There is deterioration in the management of working capital of XYZ Ltd. Whatdoes it refer to?

Walter’s Model suggests that a firm can always increase i.e. of the share by

Which of the following stresses on investor's preference reorient dividend thanhigher future capital gains ?

If 'r' = 'ke', than MP by Walter's Model and Gordon's Model for different payoutratios would be

Dividend Payout Ratio is

Shares of face value of 10 are 80% paid up. The company declares adividend of 50%. Amount of dividend per share is

Which of the following generally not result in increase in total dividend liability?

Difference between between the bank balance as per Cash Book and Pass Bookmay be due to:

If the closing balance of receivables is less than the opening balance for amonth then which one is true out of

If the average balance of debtors has increased, which of the following mightnot show a change in general?

80% of sales of 10,00,000 of a firm are on credit. It has a ReceivableTurnover of 8. What is the Average collection period (360 days a year) and Average Debtors of the firm?

In response to market expectations, the credit pence r j been increased from 45days to 60 days. This would result in

If the sales of the firm are . 60,00,000 and the average debtors are . 15,00,000 then the receivables turnover is

If cash discount is offered to customers, then which of the following wouldincrease?

If no information is available, the General Rule for valuation of stock forbalance sheet is

Which of the following is true for a company which uses continuous reviewinventory system

EOQ determines the order size when

If A = Annual Requirement, O = Order Cost and C = Carrying Cost per unitper annum, then EOQ

Commercial paper are generally issued at a price

The basic objective of Tandon Committee recommendations is that thedependence of industry on bank should gradually

A lease which is generally not cancellable and covers full economic life of theasset is known as

The first computer virus is__________.

_______ Cryptography deals with traditional characters, i.e., letters & digits directly.

When an attacker sends unsolicited communication, it is an example of_____.

For the AES-128 algorithm there are __________ similar rounds and _________ roundis different.

On comparing AES with DES, which of the following functions from DES does not have an equivalent AES function?

The inverse transformation matrix times the forward transformation matrix equals the identity matrix.

What is the key size in the S-AES algorithm?

Masquerading is _______.

Asymmetric key cryptography is used for all of the followingexcept_______.

Plain text are also called _____________.

The Initial Permutation table/matrix is of size _____.

________ is a term used to describe a phishing attack that is specifically aimed at wealthy, powerful, or prominent individuals. Generally CEO’s and important celebrities.

Compute private key (d, p, q) given public key (e=23, n=233 ´ 241=56,153).

For the AES-128 algorithm there are __ similar rounds and _ roundis different.