UNIT 1 1 mrks

Question: The forecasting of the income and expenditures the firm is going to have for a specific period is an example of which system? Response: Finance Budget Project financing Build-Transfer-operate Score of NA Question: ___________ can be called as the science of managing funds. Response: Budget Project financing Finance Limited recourse debt Score of NA Question: A good project manager must identify the _______________, analyse the potential financing choices, and discover the ways to restructure debt position. Response: Project finance practice Project finance methods Financing requirements Financing demands

Score of NA Question: Hiring a private company to run a plant for an agreed period of time, under certain price conditions is an example of which type of project? Response: BOOT BOT BLT BTO Score of NA Question: Project finance is at times cited as _________ Response: Contract finance Board structure Ownership structure Capital structure Score of NA Question: The financiers consist of _________ and _________. Response: Share holders, clients Shareholders, sponsors Clients, sponsors Clients, government agencies

UNIT 1 2 MRKS
Question: State true or false 1. BOT project consumes significant time and involves higher costs. 2. Any BOT or BOO project require close cooperation among the government agency, financial providers, and the private sponsor, to make them successful. Response: 1T, 2T 1F, 2T 1F, 2F 1T, 2F Score of NA Question: State whether true or False 1. Project finance decreases the opportunity cost of underinvestment due to leverage and incremental distress costs in sponsoring firms 2. Project finance primarily benefits sectors or industries Response: 1T, 2T 1T, 2F 1F, 2T 1F, 2F Score of NA Question: These loans are sanctioned by lending institutions and commercial banks under various lines of credits, already procured by them from the international markets. Which of the following are the loans which is referred here? Response: Rupee Loan

Foreign Currency Term Loan Deferred Payment Guarantee Soft Loan Score of NA Question: This identifies and evaluates the particular areas where the funds are being overspend. And also check whether these funds were spent on programs which are not worth. Which of the following refer to this stage/method? Response: BOOT Budget Project finance

UNIT1-4MARKS
Question: Match the following sets Response: User answer Feedbac k

Match Special purpose entities BOT project Construction contractor Funds Score of NA Question: Match the following sets Response: SPE

Correct Answer

Require close co-operation among the government agency Constructing and completing the risks Mezzanine loans

Match Match Correct Answer

Correct Answer User answer Feedbac k

Stand alone production Example of project finance plant Require broad risk analysis Budgeting procedure BOOT Score of NA Question: Match the following sets. Response: User answer Feedbac k Disadvantages Routine review of annual expenditures Forms of concession

Match Project financing Types of project financing Sources of finance Soft loan

Correct Answer Exercise in risk allocation and mitigation Non recourse project financing Two types of funds Available under a special scheme

UNIT2-1MARK
Question: Expansion of WACC is: Response: Weighed annual case of company Weighed average cost of capital Weekly average calculation of cash Weighed annual coverage of capital Score of NA Question: The management must attempt to maximise the __________ of the expected future cash flows to the shareholders of the firm Response: Net present (or current) value Ceiling Guarantee Internal Rate of Return Score of NA Question: ________ is considered as one of the most important processes for a project success. Response: Guarantee Ceiling Special Purpose Vehicles Project Financing Management Score of NA Question:

_________ is a long-term financial method in which a bank obtains a product and gives it as lease to the importer. Response: Capital Budgeting Leasing Forfeiting Cash Balances Score of NA Question: _________ ratio determines the PV of all inflows (benefits) to the PV of all outflows (costs). Response: The Interest Based Cash Balance Cash Balances The Profitability Index- PI Cost of Capital Score of NA Question: _________ refers to the discounted sum of the expected net cash flows. Response: Cash Balances The Internal Rate of Return (IRR) Net Present Value (NPV) Equity capital

UINT2-2MARK
Score of NA Question:

It is the buying and selling of commercial credits such as bills of exchange, promissory notes, and other negotiable instruments with medium-term maturities. What is it referred to? Response: Forfeiting Leasing Venture Capital Companies Profitability Index Score of NA Question: State whether the statements are True or False. 1. A time overrun equal to 50% of the time slender is permitted for downgrading the asset to substandard category. 2. The projects under execution are classified into three categories for the purpose of determining the date when the project ought to be completed. Response: 1T, 2T 1T, 2F 1F, 2T 1F, 2F Score of NA Question: State whether the statements are True or False. 1. Funds are invested in both short-term and long-term assets. 2. Capital budgeting is mainly pertained with sizable investments in short-term assets. Response: 1T, 2T 1F, 2F 1F, 2T 1T, 2F Score of NA

Question: When it is due, they release viability gap funding support and obtain reimbursement from the Department of Economic Affairs. What is it referred to? Response: Cash Balances NPV Internal Rate of Return Project Finance

UNIT2-4MARK
Question: Match the following Response: Correct Answer User Feedbac answer k

Match

It emphasises on the cash flow analysis and is referred to as Cash Flow Finance. The main concept is that the financing agency Project Finance chooses a specific plan or business entity to provide financing This is allowed, provided the bank which issues the guarantee, takes a funded share in Guarantee the project at least to the extent of 5% of the project cost It is also known as the benefit-cost ratio, is Analysing another measure that uses a simple rule to Profitability evaluate cash flow results for a given Index project In this the project manager considers the financial information and resources to make Project a decision. This enables the project Financing manager to get results on time and within Management the budget Score of NA

Question: Calculate Profitability Index, where : Year:- Y0, Y1, Y2, Y3 F Method:- -1,000 459 421 387 Response: - 1.267 12.67 1267.00 1.267 Score of NA Question: State whether the following statements are True or False. 1. Assets may also consist some of the intangible items such as new technology, patents or trademarks. 2. The goals of the firm such as feasibility and independent financing should be taken into consideration while setting the strategy of the company. 3. The shareholder wealth maximisation goal states that, the management must attempt to maximise the net present (or current) value of the expected future cash flows to the shareholders of the firm. 4. You can calculate the NPV by adding the capital outlay from the present value of the annual net operating cash flows (and the net terminal cash flows). Response: 1T, 2T, 3T, 4F 1T, 2F, 3T, 4T 1F, 2T, 3T, 4T 1F, 2T, 3T, 4F

UNIT3-IMARK
Score of NA Question: One of the step in reducing the project risks is: Response: Risk assesment Risk management Risk response Risk allocation Score of NA Question: Some of the common cost related risks in projects are: 1. Unsuitable construction planning 2. Price inflation 3. Delay in approval procedures 4. Lower level competency of sub contractors Response: 1, 2, 3, & 4 2&3 1&2 2, 3, & 4 Score of NA Question: Steps of risk mitigation process in are: 1. Risk identification and analysis 2. Risk allocation 3. Risk assesment 4. Risk management Response:

1, 2, & 3 1, 2, & 4 1&3 3&4 Score of NA Question: What are the risks that make an impact on the project objectives? 1. Tight project schedule 2. Design variation 3. High management competency of subcontractors 4. Occurrence of dispute Response: 1, 2 & 3 2, 3, & 4 1, 2, & 4 1, 3, & 4 Score of NA Question: Which of the following is not a factor involved in control activities? Response: Appropriate documentation of transaction and internal control. Top level reviews of actual performance. Relationship with overweight agencies. Reviews by management at the functional and activity level. Score of NA Question: Which of the following is not a rule for managing risks in a project? Response: Top level review of actual performance.

Identify risks early in your project. Communicate about risks. consider both threats and opportunities.

UNIT2-2MARK
Question: To make sure that there are sufficient project revenues to service project debt, which of the following risk lenders can be included in the project liability documentation provision. Response: Risk related to local, legal and regulatory environment. Political risk coverage given by specific event carve-outs. Risk related to change over the project firms account receivable. Risk related to the development, construction, operation and maintenance of assets. Score of NA Question: Which of the following are the possible entity control risks? 1. Control environment 2. Control activities 3. Objective setting 4. Risk response Response: 1&3 2&3 1& 4 1&2 Score of NA Question: Which of the following is not a time related risks? Response: Lack of proper training among the labourers.

Lack of coordination between the participants of the project. Variation in the construction programs. Incomplete approval procedures. Score of NA Question: The recommendation suggested by the risks investigation team are: 1. Awareness from the part of the client regarding the kind of the product as defined in the project brief. 2. Disigners must conduct deatiled investigation of site conditions, to meet the clients requirement in a technically competent way. 3. Client must prepare a practical schedule allowing sufficient and redundant time to figure out key risks, to accommodateall design and construction activities. 4. Government bodies must avoid bureaucracy and create a smooth atmosphere, to facilitate the development of the project. Response: 1, 2, & 3 1, 2, & 4 2, 3, & 4 1, 3, & 4

UNIT3-4MARK
Question: Match the following sets Response: Feedbac k

Match

Correct Answer

User answer

Rule 1 Make risk management part of your project Rule 2 Identify risks early in your project Rule 3 Communication about risks

Match

Correct Answer

User answer

Feedbac k

Rule 4 Consider both threats and opportunities Score of NA Question: Match the following sets. Response: User answer Feedbac k

Match Strategic

Correct Answer High level objectives, aligned with and supporting its mission

Operational Effective and efficient use of its resources Reporting Compliance Score of NA Question: Identify the correct sequence of component which are incorporated in the management process: Response: Internal environment--> Object setting --> Risk assessment --> Event identification Object setting --> Risk assessment --> Internal environment-->Event identification Internal environment--> Object setting --> Event identification--> Risk assessment Object setting --> Internal environment-->Risk assessment -->Event identification Reliability of reporting Compliance with applicable laws and regulations

UNIT4-1MARK
Question: Budgeting benefits projects that have ________ years of implementation cycles. Response: 2-3 1-2 3-5 7-8 Score of NA Question: Budgeting is a process that increases the __________ of the business. Response: Costs Time-schedule Productivity Customers Score of NA Question: Which budget deals with fundamental things like salaries, power and light bill? Response: Expense budget Purchase budget Profit budget Cash flow budget Score of NA Question: While creating a budget, it is also crucial to decide the ________one wants to plan for.

Response: Customer requirements Period of time Anticipated sales Account structure Score of NA Question: ___________ is the total of the uneven costs for the specific production level or the output. Response: Semi variable costs Returns Fixed costs Total variable costs Score of NA Question: _____________ is regarded as a cycle of cash in-flows and cash out-flows that decide the solvency of business. Response: Cash flow Cash flow statement Operating activities Investing activities

UNIT4-2MARK
Score of NA Question: It provides detailed descriptions regarding, every payment that is done periodically on an amortising loan. What is referred here? Response:

Break even analysis Amortisation schedule Break even chart Cash flow statement Score of NA Question: Purchase budget deals with the ___________ and _________ required in order to produce the product. Response: Cash flow, Goods Stock level, Raw materials Cash flow, Stock level Raw materials, Goods Score of NA Question: State whether the below statements are True or False. 1. The details of the task time does not include average cost. 2. External or material costs include the requirements each project has with regard to material, amenities, outside services, and so on. Response: 1T, 2T 1F, 2T 1F, 2F 1T, 2F Score of NA Question: State whether true or False 1. Financial goals of a business can be achieved through budgeting. 2. Project budgeting is chosen to reduce political risks affecting the project. Response:

1T, 2T 1T, 2F 1F, 2T 1F, 2F

UNIT4-4MARK
Score of NA Question: Match the following sets Response: User answer Feedbac k

Match Labour costs Material costs Budget Capital budget Score of NA Question: Match the following sets Response:

Correct Answer Multiplying a persons labour rate by number of hours Material and amenities Obtaining statistics for actual results Future payment of expenses

Match Operating activities Budgeting

Correct Answer In- flow and out flow of cash To put down incentives and standards

User answer

Feedbac k

Match Break even point Break even chart Score of NA Question:

Correct Answer Describes the time when an investment makes a positive return Pictorial representation of the costs at different stages of activity

User answer

Feedbac k

Credit scoring models are used by the banking industry to process an applicants credit history. The applicants are then ranked to assess their loan repayment capacities. What is being performed here? Response: Risk Detection and Analysis Risk Allocation Risk Management Risk Retention

UNIT5-1MARK
Score of NA Question: Match the following sets Response: User answer Feedbac k

Match Labour costs Material costs Budget Capital budget Score of NA Question: Match the following sets Response:

Correct Answer Multiplying a persons labour rate by number of hours Material and amenities Obtaining statistics for actual results Future payment of expenses

Match Operating activities Budgeting Break even point Break even chart Score of NA

Correct Answer In- flow and out flow of cash To put down incentives and standards Describes the time when an investment makes a positive return Pictorial representation of the costs at different stages of activity

User answer

Feedbac k

Question: Credit scoring models are used by the banking industry to process an applicants credit history. The applicants are then ranked to assess their loan repayment capacities. What is being performed here? Response: Risk Detection and Analysis Risk Allocation Risk Management Risk Retention

UNIT5-2MARK
Question: Identify correct statement Response: NPV is preferred in debt financing, whereas IRR is preferable while comparing two projects against one another. IRR is preferred in debt financing, whereas NPV is preferable while comparing two projects against one another. Incremental IRR is preferred in debt financing, whereas IRR is preferable while comparing two projects against one another. IRR is preferred in debt financing, whereas Incremental IRR is preferable while comparing two projects against one another. Score of NA Question: Identify the correct equation: Profitability Index (PI) = Response: Present Value of Cash Outflows / Present Value of Cash Inflows Future Value of Cash Inflows / Present Value of Cash Outflows Present Value of Cash Inflows / Present Value of Cash Outflows Future Value of Cash Outflows / Present Value of Cash Inflows Score of NA

Question: Identify the correct statement with respect to NPV: Response: NPV measures the project's value. NPV measures the project's success. NPV measures the project's loss. NPV measures the project's failure. Score of NA Question: The disadvantages of _________ are similar to the disadvantages of _________ . Response: Net Present Value (NPV) and Profitability Index (PI) Profitability Index (PI) and Net Present Value (NPV) Profitability Index (PI) and Incremental IRR Profitability Index (PI) and Internal Rate of Return (IRR)

UNIT5-4MARK
Question: Match the following aspects related with CPA. Response: User answer Feedbac k

Match Qualitative Analysis Quantitative Analysis Cash Flows Discounted Cash Flow

Correct Answer Used by analysts in credit and security Scientific approach to managerial decision making Key concepts in finance Estimates project's investment opportunities

Score of NA Question: ______ is a superior method than _______ . Response: Profitability Index (PI), Net Present Value (NPV) Net Present Value (NPV), Profitability Index (PI) Profitability Index (PI), Internal Rate of Return (IRR) Internal Rate of Return (IRR), Profitability Index (PI) Score of NA Question: ________ is a method to estimate the project, company or assets investment opportunities by means of the conception of ______________ . Response: Operation Cash Flow, Time value for money Discounted Cash Flow (DCF), Time value for money Discounted Cash Flow (DCF), Timing of cash flow Operation Cash Flow, Timing of cash flow

UNIT6-1MRK
Question: The risks that govern licenses and approvals required to construct and operate a project are classified as _____________. Response: Regulatory risk Currency Risk Commercial Risks Volume Risks Score of NA Question: What is the formula for calculating Average Investment? Response: Original Investment / Salvage Value Original Investment - Salvage Value (Original Investment + Salvage Value)/2 Original Investment * Salvage Value Score of NA Question: Which of the following is a financing approach? Response: Follow-on offering Secondary Market Offering Private placement. Transactions Score of NA Question:

________ is a project cash flow approach? Response: Growth potential Analysis of macro scenario The cyclic cash flows Factors that determine the cash flow Score of NA Question: __________ study involves analysing how the managers and end-users feel about the system. Response: Operational feasibility Schedule feasibility Legal feasibility Market feasibility Score of NA Question: _______________ is defined as the extent to which an investor or business utilises the borrowed money. Response: Leverage Equity Offerings Valuation Mergers and Acquisitions

UNIT6-2MARK
Question: State witch of the following statement are True or False. 1. DCF stand for discounted Cash Flow

2. Net Present Value (NPV) Response: 1T, 2T 1F, 2T 1T, 2F 1F, 2F Score of NA Question: Which of the following are the conclusions or assumptions on which the feasibility are based. A. Source of funds B. Off take Agreements C. Financial feasibility D. Commercial feasibility Response: A&B A & C Not the right Option C is a type of feasibility study. C & D Not the right Option C and D are a type of feasibility study. B & D Not the right Option D is a type of feasibility study. Score of NA Question: Which of the following are the two categories of cost of project? A. Project related costs. B. Operational costs C. Legal costs D. Equity Funding Response:

A&B A&C C&D B&D Score of NA Question: Which of the following statements indicate the importance of project identification? 1. It focuses on customer expectations. 2. It focuses on short term consequences. 3. It acts as a catalytic agent for economic development. 4. It identifies resources like manpower, capital, raw material, and so on. Response: 1&3 2&4 3&4 2&4

UINT6-4MARK
Question: Match the following sets. Response: User Feedbac answer k

Match Payback period Average Investment ARR

Correct Answer Investment/Cash flow per year (Original Investment + Salvage Value)/2 Average Annual Profits after depreciation and Taxes X 100/Average Investment

Match PI Score of NA

Correct Answer Present value of Cash Inflow /Present value of Cash Outflow

User Feedbac answer k

Question: Match the following with correct examples. Response: User Feedbac answer k

Match Sponsor Risk Force Majeure risk

Correct Answer The risk involved when an organisation chooses sponsorship as promotional strategy The risk that may arise due to catastrophic events

Environmental Environmental impact by taking up iron risk and steel production project Currency Risk Score of NA Question: Which of the following is an Example for capital investment? Response: If a firm sells 30 lakhs in equity and 60 lakhs in debt, then it can be said that the firm has 30% of equity finance and 60% of debt finance. The 60% debt financing is also referred to as the firm We may have the technology but not necessarily have the skills required to apply that technology. Schedule feasibility identifies if we need to hire new people or train existing systems staff. It also tells us if hiring or training will have an impact on the schedule. An electricity retailer with fixed price contracts could face two types of volume risks. Firstly the increase in the spot power price and secondly the increase in customer demand If improving the manual filing system in achievable then purchasing a new expensive computerised database can be negligible. The risk that occurs due to the reduction in the value of local currency

UNIT7-1MARK
Question: ROA is sometimes referred to as ______. Response: Dollar weighted rate of return Rate of return Return on investment Yield on the investment Score of NA Question: The drawback of NPV is: Response: It does not account for flexibility or uncertainty after the project decision. It makes no adjustments for risk. It ignores the time value of money. It does not specify any necessary comparison to other investments or even to not making an investment. Score of NA Question: ______ assesses the earnings of a firm in association with all the resources it possess and it has at its disposal. Response: Return on Assets Return on Net Worth Return on Sales Minimum Equity on Loan Score of NA Question:

______ measures the urgency of the problem or the acceptability of a solution. Response: Technical feasibility Schedule feasibility Economic feasibility Operational feasibility Score of NA Question: _______ refers to the period of time and period required for the return of an investment. Response: Internal Rate of Return Payback period Weighted Average Cost of Capital equation Project Cycle Score of NA Question: ________ helps to evaluate how beneficial or practical will be the development of an information system about the project to the organisation. Response: Net Present Value Feasibility Pay Back Period Discounted Cash Flow

UNIT7-2MARK
Question: State whether the statement is True or False. 1. A project is considered as feasible if the IRR is greater than the expected rate of return on investment.

2. IRR stands for the average earning power of the money used in the project in the timeline of the project. Response: 1T , 2F 1F , 2T 1F , 2F 1T , 2T Score of NA Question: The above formula is used to calculate: Response: Internal Rate of Return Discounted Cash Flow Payback Period Net Present Value Score of NA Question: Which of the following does the discount rate reflect? 1. A risk premium that reflects the extra return which the investors demand. 2. Computation of likely free cash flows that result out of investment. 3. The process of carrying out a project through the different stages of project. 4. The time value of money. Response: 2&3 4&3 1&4 1&3 Score of NA Question:

Which of the following explains Return on Sales? 1. It is one of the conditions that is required to be fulfilled for getting finance for any project. 2. It shows the way in which the profitability of a firm is related to its total assets. 3. It is a ratio used extensively to assess a firms or projects operational capability. 4. It helps the management to have an insight into the amount of profit generated on per rupee of sales. Response: 2&1 3&4 3&2 4&1

UNIT7-4MARK
Question: Identify the correct sequence of steps undertaken in Net Present Value method. Response: Computation of likely free cash flows that result out of investment --> Subtraction or discounting for the cost of capital --> Calculation of the intermediate result which is called Present Value --> Subtraction of the initial investment. Computation of likely free cash flows that result out of investment --> Calculation of the intermediate result which is called Present Value --> Subtraction or discounting for the cost of capital --> Subtraction of the initial investment. Subtraction or discounting for the cost of capital --> Computation of likely free cash flows that result out of investment --> Calculation of the intermediate result which is called Present Value --> Subtraction of the initial investment. Computation of likely free cash flows that result out of investment --> Subtraction or discounting for the cost of capital --> Subtraction of the initial investment --> Calculation of the intermediate result which is called Present Value. Score of NA Question:

MTS Limited is a firms whose market value of liability is 300 rupees and the market value of equity is 400 rupees. If the cost of liability of this firm is 8%, the corporate tax rate is 35% and the cost of equity is 18%, calculate and find out what would be the WACC of this firm? Response: 11.5% 12% 12.5% 12.25% Score of NA Question: Which of the following are true about Payback Period? 1. Payback period focuses on the cost of investments in a project. 2. Shorter payback periods are more preferable than longer payback periods. 3. Payback period is the time, to repay the sum of the original investment. 4. Payback period helps to estimate costs before identifying requirements and technical solutions. Response: 1, 2 & 4 3, 1 & 2 2, 4 & 3 1, 3, 4 & 2

UNIT8-1MARK
Question: In the context of project financing, the valuation of a project should reflect both _______ and _______ after taxes. Response: Long Term Financing and Debt Financing Equity Financing and Debt Financing Equity Financing and Export Financing Long Term Financing and Export Financing Score of NA Question: State True or False 1. The contents of a project proposal and the way they are shown in the document vary depending on the organisation standards. 2. It is irrelevant to emphasise the goals that are related to the agency who receive the proposal. Response: 1T, 2F 1F, 2F 1T, 2T 1F, 2T Score of NA Question: State True or False 1. The existence of withholding taxes cannot influence the design of the financing plan for a project. 2. The cash flow will have a crucial impact on the mix of bank loans and long-term fixed-rate debt.

Response: 1T, 2F 1F, 2F 1T, 2T 1F, 2T Score of NA Question: The appropriate project debt equity ratio depends upon: 1. The existing market conditions. 2. The expected profitability and operating risks of the project. 3. The adequacy of the projects security arrangements. 4. The emergency factors included in the project. Response: 1&2 2&4 3&1 2&3

UNIT8-2MARK
Question: In the context of project financing, the valuation of a project should reflect both _______ and _______ after taxes. Response: Long Term Financing and Debt Financing Equity Financing and Debt Financing Equity Financing and Export Financing Long Term Financing and Export Financing Score of NA

Question: State True or False 1. The contents of a project proposal and the way they are shown in the document vary depending on the organisation standards. 2. It is irrelevant to emphasise the goals that are related to the agency who receive the proposal. Response: 1T, 2F 1F, 2F 1T, 2T 1F, 2T Score of NA Question: State True or False 1. The existence of withholding taxes cannot influence the design of the financing plan for a project. 2. The cash flow will have a crucial impact on the mix of bank loans and long-term fixed-rate debt. Response: 1T, 2F 1F, 2F 1T, 2T 1F, 2T Score of NA Question: The appropriate project debt equity ratio depends upon: 1. The existing market conditions. 2. The expected profitability and operating risks of the project.

3. The adequacy of the projects security arrangements. 4. The emergency factors included in the project. Response: 1&2 2&4 3&1 2&3

UNIT8-4MARK
Question: Match the following sets: Response: User answer Feedbac k

Match Amortisation schedule Borrowing Capacity Model Project proposals Financing plan Score of NA Question: Match the following sets: Response: Match Match

Correct Answer A table with a row for each payment period of an amortised loan Determines a given set of project and loan parameters Documents which are intended to present a plan of action Is one of the prominent steps in the preparation of financing proposal

Correct Answer Correct Answer User Feedbac answer k

Match

Correct Answer

User Feedbac answer k

Emphasise on the goals that are Goals of the project relevant to the agency who receive the proposal Justification of the project Project location Technical description of the project Score of NA Question: Match the following: Response: User Feedbac answer k Provide a good reason as to why the project is being carried out Need to specify the project location, if the location is relevant to the success of the project Explains the type of technology that is to be used in the project

Match Private Placements

Correct Answer Provides a business description and a set of financial statements for each of the project sponsors

Equity kickers Broaden the market for the projects debt Withholding tax Standard mortgage Governed by a tax treaty Has a grace period where borrowers can make the payments without penalty

UNIT9-1MARK
Question: Direct labour which comes under budget report consists of _______, which indicated the insertion of the dates relating to the current reporting segment. Response: Percentage time Number of months Project name Reporting segment Score of NA Question: _______ is used to interpret the financial statements of a firm to determine its strength and weakness, historic performance and current financial condition. Response: Ratio Analysis Sensitivity Analysis Sensitivity Reports Fiscal Report Score of NA Question: _______ are financial institutions developed by individual countries in order to finance development projects, in developing countries and emerging markets. Response: Regional development banks Bilateral development banks International financial institutions Financial Stability Forum Score of NA

Question: _______ can be gathered through debt or equity financing and each potential source has certain criteria for providing financing. Response: Internal financing External financing Equity financing Finance from international sources Score of NA Question: _______ is broadly defined as the market for medium term and long term securities. Response: International capital market Stock market Capital market Share market Score of NA Question: _______ shows the investors how the short-term liquidity or the company's assets are turned quickly into cash. Response: Current Ratio Inventory Turnover Ratio Acid-Test Ratio Receivable Turnover Ratio

UNIT9-2MARK
Question: Current Assets - Inventory / Current Liabilities The above formula is used to calculate:

Response: Current Ratio Defensive Interval Ratio Acid Test Ratio Inventory to Net Working Capital Score of NA Question: In the standard cover page of budget report, actual expenditures includes: Response: The total amount of gross salary and social benefits. The total cumulative expenditures incurred by the company, from the start of the project, to the end of the reporting period. Expenses related to the project such as hotels, car rental, daily allowance for meals and communication. The trip expense reports and vouchers that substantiate the reported expenditure. Score of NA Question: State whether the statement is True or False. For the MDBs, G20 has agreed to take actions such as: 1. Bilateral financing of $250 billion from members as an immediate measure. 2. A substantial increase in lending of 100 billion to low income countries, in a total of around 300 billion, over the next three years. Response: 1T , 2F 1T , 2T 1F , 2F 1F , 2T Score of NA Question:

Which of the following assumptions are included in water supply project? 1. A stable political situation. 2. Ensuring sufficient flexibility in the project design. 3. The disbursement of funds on time. 4. Assessing the consequences of doing nothing. Response: 2&3 3&4 1&3 1&4

UNIT9-4MARK
Question: Match the following set: Response: User answer Feedbac k

Match Profitability Ratio

Correct Answer It is the gross profit margin or profit margin on sales

It is defined as an ability to convert an Liquidity Ratio asset into quick cash avoiding price discount Efficiency Ratio Stock Market Ratio Score of NA Question: Identify the correct sequence of steps undertaken in Sensitivity Analysis. It is also known as asset turnover ratio This ratio includes earnings per share and price earnings ratio

Response: 1. Identify key variables which are sensitive to the project decision. --> 2. Calculate the effect of the variable changes on the base-case IRR or NPV. --> 3. Calculate a sensitivity indicator and switching value. --> 4. Consider possible combinations of variables that may change at the same time in an undesirable direction. --> 5. Analyse the direction and level of likely changes for the key variables which are identified, in relation with the identification of the sources of change. 1. Identify key variables which are sensitive to the project decision. --> 2. Calculate a sensitivity indicator and switching value. --> 3. Calculate the effect of the variable changes on the base-case IRR or NPV. --> 4. Consider possible combinations of variables that may change at the same time in an undesirable direction. --> 5. Analyse the direction and level of likely changes for the key variables which are identified, in relation with the identification of the sources of change. 1. Calculate the effect of the variable changes on the base-case IRR or NPV. --> 2. Identify key variables which are sensitive to the project decision. --> 3. Calculate a sensitivity indicator and switching value. --> 4. Consider possible combinations of variables that may change at the same time in an undesirable direction. --> 5. Analyse the direction and level of likely changes for the key variables which are identified, in relation with the identification of the sources of change. 1. Identify key variables which are sensitive to the project decision. --> 2. Calculate the effect of the variable changes on the base-case IRR or NPV. --> 3. Calculate a sensitivity indicator and switching value. --> 4. Analyse the direction and level of likely changes for the key variables which are identified, in relation with the identification of the sources of change. 5. Consider possible combinations of variables that may change at the same time in an undesirable direction. Score of NA Question: XYZ Inc is a firm whose debentures equals to Rs.6,000, Loans equal to Rs.5,000 and its bank overdraft equals to Rs.3,000. The total assets of the firm equals to Rs.20,000. Which of the following formula the company uses to calculate leverage for debt cover using the U.S. measures of leverage. Response: Liquid Assets Daily Operating Expense Debentures Total Share Holders Fund (Net Worthy) Debentures + Loans + Bank overdrafts Total Assets Debentures + Loans + Bank Overdrafts Total Long Term Financing + Bank Overdrafts

UNIT10-IMARK
Question: Financially successful organisations depend on strict ______________ with the support of corporate accounting. Response: Budgeting Financial control Project timelines Inventory control Score of NA Question: In the 1950s that organisations started to systematically apply _____________ tools and techniques to complex projects. Response: Activity based Practised Process management Project management Score of NA Question: The Cost Management Process is implemented in order to record all expenses within the ___________ lifecycle. Response: Project Process Organisations Cost Score of NA

Question: __________ turns to be really important, as they are frequently required for three principal reasons. Response: Reserve analysis Cost budgeting Accurate estimation Estimated cost Score of NA Question: ___________ is a duration-phased budget that is used for project cost management, monitoring, and project cost reporting. Response: Cost performance baseline Funding limits Expert judgement Reserve analysis Score of NA Question: _____________ is critical to project management. Response: Cost Management Strategy Staffing Investment

UNIT10-2MARK
Score of NA Question:

Identify the step(s) involved in the cost management process: 1. Determining Budget 2. Well-define budget of the project. 3. Control Cost 4. Funding limit reconciliation Response: 3&4 1&3 2&4 1, 2, 3, 4 Score of NA Question: State whether the statement is True or false: 1. Financially successful organisations depend on strict financial control with the support of corporate accounting. 2. In corporate financial management money is the central purpose and is not treated like a commodity. Response: 1T, 2F 1F, 2F 1T, 2T 1F, 2T Score of NA Question: State whether the statement is true or false: 1. To estimate the project cost, the project manager must identify the various constituent physical elements and related activities.

2. The project manager relies upon the information or data he has gathered from estimates to set up a realistic project budget. Response: 1T, 2F 1F, 2F 1T, 2T 1F, 2T Score of NA Question: State whether the statement is True/False: 1. The initial cost estimates of the elements and the project does not form the baseline budget for measuring the cost performance of the project during the implementation phase. 2. They are the connection between the customer and the project team that at times will not complete the customers project on time. Response: 1T, 2F 2T, 1F 1T, 2T 1F, 2T

UNIT10-4MARK
Question: Match the following Response: User Feedbac answer k

Match

Correct Answer

To justify the It permits the cost to be compared with the project anticipated benefits Cost Estimating The estimate for the current project based upon the past results

Match Cost Budgeting Cost Control Score of NA Question: Match the following: Response:

Correct Answer Information or data gathered from estimates to set up a realistic project budget Monitoring will include observation of whether actual cost has varied from estimated cost

User Feedbac answer k

Match

Correct Answer

User Feedbac answer k

Relate management judgment to estimate and justify costs, base cost authorisation on Estimate Costs staffing commitments, make general cost target to monitor spending Establish estimates of time-phased budget Determine goals. Track staff usage against plan to Budget assess project spending Organise periodic guesstimates of percent accomplished and percent spent compared to Cost Control progress and spending plans. Account cost and schedule variances and performance Cost It is one of the Types of Tools and performance techniques of cost management baseline Score of NA Question: The project manager develops the estimate by summing the resource __________ for project cost elements. Later, by extension, the project manager computes the elemental and _____________costs. Response: Requirement, Project Budgeted, control

Estimation, project Cost control, strategy based

UNIT11-1MARK
Question: A __________ can be as simple as a single equation or as complex as an ____________of many equations and functions. Response: Model, interrelation Parametric estimating systems , interconnection t statistics f statistics Score of NA Question: A ____________ is a collection of cost estimating relationships. Response: Parametric cost model Parametric cost estimating Top down approach Bottom down approach Score of NA Question: The _________ is used to measure the impact of the design decisions on the total cost. Response: Cost Estimating Relationships Mean Absolute Deviation Parametric estimating systems Estimated cost Score of NA Question:

The ____________ measures the ratio of description of the explanatory variables and the residual or error term. Response: Estimate Reliability Cost and Price Analysis F statistic Consumer Price Index Score of NA Question: Two commonly used techniques in cost estimation are _________ and _____________. Response: Budget, estimate Budget, top -down approach Top- down approach, bottom up approach Budget, bottom up approach Score of NA Question: ________ serves as a standard to evaluate the actual performance of a company. Response: Top down approach Budget Bottom up approach Parametric cost model

UNIT11-2MARK
Question: State whether true or False 1. F statistic should have a value greater than 4.0 or 5.0 to indicate that we have selected a good cost driver for the cost model and that the form of the equation is acceptable. 2. The t statistic can be used to check the validity of adding a particular cost driver variable.

Response: 1T, 2T 1T, 2F 1F, 2T 1F, 2F Score of NA Question: State Whether True or False 1. Top- Down Approach is less time consuming. 2. The implementation cost is likely to be higher in Bottom-Up Approach. Response: 1T, 2F 1F, 2T 1F, 2F 1T, 2T Score of NA Question: The system can also be designed to estimate items as small as modules or components, or as large as subsystems, systems, total programs, or large development activities. What is the system referred to? Response: Cost drivers Parametric Model ICOR F statistic Score of NA Question: The system is used to measure and/or estimate the cost associated with the development, manufacture, or modification of a specified end item. Which is the system referred here?

Response: CER Cost drivers Parametric cost model Parametric cost estimating technique

UNIT-4MARK
Score of NA Question: Match the following sets Response: User answer Feedbac k

Match Parametric cost model WBS Sources of data Mean absolute deviation Score of NA Question: Match the following sets Response: Match Match Budget

Correct Answer Collection of cost estimating relationships Work breakdown structure Basic accounting records MAD

Correct Answer Correct Answer User answer Feedbac k

Has two sides called income and expenditure

Match Top down approach Task analysis ICOR Score of NA Question: Match the following sets Response:

Correct Answer Sum of a budget or magnitude is first settled down Dismantling of objects into components Incremental capital output ratio

User answer

Feedbac k

Match Models

Correct Answer For doing computing operations

User answer

Feedbac k

Advantages of parametric Negotiates vendor estimating systems Estimated cost Measure the impact of the design products on the total cost

Breaking the projects into Identify the main tasks stages

UNIT12-1MARK
Question: Post accommodation and divestment plan phase of project development includes _______. Response: Evaluating the technical resources of the project. Identifying and managing the required resources. Estimating cost, schedule, and performance. Maintaining project accounts up to date. Score of NA Question: The third stage in the project life cycle is _______. Response: Definition Planning Operational Conceptualisation Score of NA Question: ______ help to measure the magnitude of any variances that invariably occurs. Response: Cost change control system Performance measurement techniques Project performance reviews Cost variance Score of NA Question: _______ is a factor based on which the basic cost of the project varies.

Response: Site characteristic Unexpected ground condition Funding problem Land acquisition cost Score of NA Question: _______ is a process of examining project performance over time to determine if performance is improving or deteriorating. Response: Variance analysis Earned Value Technique Trend analysis Forecasting Score of NA Question: _______ refers to the worth of work that should be completed by a specific time in the project schedule. Response: Earned Value Actual Cost Estimate to Complete Planned Value

UNIT12-2MARK
Question: ? = Earned Value - Actual Cost The above formula is used to calculate: Response:

Cost Variance Cost Performance Index Schedule Performance Index Schedule Variance Score of NA Question: State whether the statement is True or False. 1. The organisation has to prepare cost control techniques for various phases of project development to make the project successful. 2. The important part of proposal preparation process is the preparation of an accurate budget. Response: 1T , 2F 1T , 2T 1F , 2F 1F , 2T Score of NA Question: The operational phase of project development includes which of the following steps: 1. Determining sufficient allocated resources. 2. Virtual linking of project service to the system. 3. Evaluating the technical resources of the project. Response: 1&2 2&3 2, 3 & 1 3&1 Score of NA Question: Which of the following are true about inflation? 1. If rate of inflation decreases below the predicted level during the project, then the original cost estimate will exceed.

2. It will result in lack of control over time and cost inputs. 3. Inflation increases the original estimates of construction costs. 4. It is the rate at which the overall general level of prices for goods and services in an economy is rising, and, subsequently, purchasing power is falling. Response: 2&3 3&4 1&3 1&4

UNIT12-4MARK
Question: Identify the correct sequence of steps undertaken in the definition phase of project development. Response: 1. Fabricating the final system performance requirements. --> 2. Preparing detailed plans. --> 3. Estimating cost, schedule, and performance. --> 4. Identifying and preparing the documents required, such as procedures, documents, budgets and finance. --> 5. Spotting areas of high risks. 1. Estimating cost, schedule, and performance. --> 2. Preparing detailed plans. --> 3. Fabricating the final system performance requirements. --> 4. Spotting areas of high risks. --> 5. Identifying and preparing the documents required, such as procedures, documents, budgets and finance. 1. Preparing detailed plans. --> 2. Fabricating the final system performance requirements. --> 3. Estimating cost, schedule, and performance. --> 4. Spotting areas of high risks. --> 5. Identifying and preparing the documents required, such as procedures, documents, budgets and finance. 1. Fabricating the final system performance requirements. --> 2. Preparing detailed plans. --> 3. Estimating cost, schedule, and performance. --> 4. Spotting areas of high risks. --> 5. Identifying and preparing the documents required, such as procedures, documents, budgets and finance. Score of NA Question: Match the following set: Response:

Match Match Force Majeure Direct Costs Variance analysis Indirect Costs Score of NA Question: Correct Answer These include disasters such as natural calamities, revolution, war, economic instability Refers to specific line items in a budget It is the process by which a group of certain variables or elements are broken down into its constituent parts, and analysed These are less readily allocable to specific individual projects

Correct Answer User Feedbac answer k

Three Square Inc. is a well established infrastructure company. It now wants to enter into the software development field and explore the opportunities here in the name of Three Square Software Inc. and create a brand name for itself in the development of software's. Which of the following factors it has to consider in deciding the overall cost of the project. 1. Timescale 2. Features of site 3. New build or improvements 4. Project specifications Response: 2, 4 & 3 1, 4 & 3 1, 2 & 3 2, 4 & 1

UNIT-13-1MARK
Question: Identify the correct choice with respect to ARR: Response: ARR favours capital projects that return large early cash flows. The percentage returns generated using ARR is more familiar to financiers. ARR acts as a built-in safeguard against risk and uncertainty. ARR over emphasises short run profitability Score of NA Question: Identify the correct choice with respect to Capital Investment. Response: Capital investment is the allocation of the unlimited resources required between two competing firms. Capital investment is the allocation of the limited resources required between two competing projects. Capital investment is the allocation of the limited resources required between two allied projects. Capital investment is the allocation of the unlimited resources required between two allied firms. Score of NA Question: Identify the correct choice with respect to classification of investment projects. Response: Departmental managers approve small projects. Departmental managers approve large projects. Departmental managers approve projects having a half million rupees or more . The Board of Directors approve all projects whether small or large projects having a half million rupees or more .

Score of NA Question: Identify the correct statement that describes Net Present Value (NPV). Response: DCF framework helps in accessing the profitability of a proposed project. Net Present Value helps in accessing the profitability of an investment. DCF framework is used to analyse the profitability of an investment. Net Present Value (NPV) is used to analyse the profitability of an investment. Score of NA Question: The ______________ is one of the most important aspects to be considered in financial modelling and valuation. Response: NPV IRR Weighted Average Cost of Capital (WACC) ARR Score of NA Question: ________ fails to capture the project's new path of action to obtain the end result. Response: NPV DCF DTA ROA

UNIT13-2MARK
Question: Identify the correct equation: Average Rate of Return (ARR) = Response: Average Annual Profit subtracted by Average Investment x100% Average Annual Profit subtracted by Average Loss x100% Average Annual Profit divided by Average Investment x100% Average Annual Profit divided by Average Loss x100% Score of NA Question: Identify correct statement. A. Dividends do not matter and dividend policy does not affect value if companies can issue stock. B. Dividends are bad, and increasing dividends will reduce value if dividends have a tax disadvantage. C. Dividends are good, and increasing dividends will increase value if dividends operate as a signal of present prospects. D. Dividends are good, and increasing dividends will increase value if dividends operate as a signal of future prospects. Response: A, D, C A, B, D C, A, B B, C, A Score of NA Question: Identify the correct sequence of statement with respect to Capital Investment. While making capital investment decisions it is required to ___________________. A. Define the objectives of the capital investment. B. Define an objective in decision making to maximise the value of the firm. C. Define an objective to maximise stockholder's wealth. D. Define an objective to minimise the stock price.

Response: A, B,C D, C, B A, B, D C, D, A Score of NA Question: The _________ often termed as the project _______ is critical in making an appropriate decision. Response: Internal Rate or Return (IRR), Hurdle rate Accounting Rate of Return (ARR), Hurdle rate Investment rate, Hurdle rate Discount rate, Hurdle rate

UNIT13-4MARK
Question: Match the following aspects related with CPA. Response: User Feedbac answer k

Match Economic Profitability Analysis Financial Feasibility Analysis Objective Function Investment Appraisal Techniques

Correct Answer Determines if the investment in a project contributes to long run profits Shows if the cash flows are sufficient to make the required principal and interest payments for a project One of the capital investment decisions Used in project valuation

Score of NA Question: Match the following aspects related with CPA. Response: User answer Feedbac k

Match Future Value of Money

Correct Answer Original Investment x (1+(interest rate*number of years))

Time Value of Measures the value of money over time Money Pecking order Firms keep away from external financing theory when internal financing is available Trade-Off Theory Score of NA Question: ________ and _________ are the two most commonly used flexibility valuation tools. Response: Decision Tree Analysis, Real Options Analysis Net Present Value, Payback Period Decision Tree Analysis, Net Present value Playback Period, Real Options Analysis Trades off the tax benefits of debt with the bankruptcy costs

UNIT14-1MARK
Question: An offering memorandum is also known as a __________. Response: Private Placement Memorandum Process Placed Memorandum Product Placement memory Private Placed Memorandum Score of NA Question: Project evaluation is a _____________ process of collecting, recording and organising about project results. Response: First step Step-by-step Strategic Funding Score of NA Question: The accounting process begins with basic _____________. Response: Income Cash flow Bookkeeping House keeping Score of NA

Question: The definition of information memorandum is given in the ______________. Response: (Amendment) Act 2005 Section 2 (322C) Companies (Amendment) Act 2000 Section 2 (19) (Amendment) Act 2000 Section 2 (19C) (Amendment) Act 2010 Section 2 (19A) Score of NA Question: There are _________ C's of credit analysis. Response: Twelve Five One Three Score of NA Question: _________ analysis is neither completely a science nor an art. It allows us to gain an accurate profile of a organisation's expenses. Response: Project Product Credit Process

UNIT14-2MARK
Score of NA Question:

A financial section of a company should include the _____________ and balance sheet of the company. Response: Profit Investment Tax Income statement Score of NA Question: A offering memorandum is a ____________ document, stating the objectives, _________, and terms of investment involved. Response: Legal, risks Official, legal DuPont, risks Private, Official Score of NA Question: Du Pont is a method of performance evaluation that was started by ____________ in __________. Response: Du Pont,1920 Government , 1974 United States, 1990 India, 1969 Score of NA Question: The subscription agreement is the _______document signed by the_______ and retuned to the company.

Response: Company's, investor Legal, customer Closing, investor Opening , stakeholder

UNIT14-4MARK
Question: A financial statement is a __________________ of a company's accounts, __________condition and its ____________ results. Response: Documentation, financial, operations Income, financial, overall Tax, Operations, income Documentation, income, financial Score of NA Question: FASB first defined the Cash Flow Statement in _______. The Cash Flow Statement has_______ cash flow accounts, one of them is ___________________. Response: 1969, three, the elements is major in any change of ROE 2000, One, Financing Cash Flow from investors or long-term creditors 1987, Three, Operating cash flow created by normal business operations 1999, Five, Research the industry that the company works in Score of NA Question: Identify the correct statement: 1. The Companies (Amendment) Act, 2000 has inserted Section 2(19), which defines the term information memorandum. 2. The Companies (Amendment) Act, 2000 has inserted Section 2(19c), which defines the term information memorandum.

3. The Companies (Amendment) Act, 2000 has inserted Section 2(210), which defines the term information memorandum. 4. The Companies (Amendment) Act, 2000 has inserted Section 2(322a), which defines the term information memorandum. Response: 1,2,3 & 4 1 1,2 &3 1&2