• Machinery

• Factory Expenses
• Office Expenses

20. Which of the following can be categorized as discretionary Expense

• Purchase
• Salary
• Repair & Maintenance
• R&D Expense

21.Higher Debt-Equity ratio indicates

• High Operating Risk

• Low Operating Risk

• High Financial Risk

• Low Financial Risk

22.When a Liability is increased, it is recorded on the

• Credit Side
• Debit Side
• Left Hand Side
• Any of the above

23 Ram's account in the accounts payable ledger has a Rs.2000 beginning balance. After a transaction for
Rs.500 is posted from the purchases journal, the balance in Ram's account is __

• 1500 Credit
• 1500 Debit
• 2500 Credit
• 2500 Debit

24.Which of the following measure will be used for calculation of Inventory Turnover Ratio

• Net Sales
• Credit Sales
• Cost of Goods Sold
• Cos of Sales

25. Credit sales for the year is Rs I 00000 and closing debtors are Rs I 0000. Calculate the collection period of the
firm?

• 10 days
• 36.5 days
• 27.39 days
• None of the above

26. Loss on the sale of Fixed Assets will be shown in which part of the cash flow statement, if indirect method is
followed?

• Operating Cash Flow

• Financing Cash Flow
• Investing Cash Flow
 • None of the above

27. Which of the following can be categorized as Revenue

• Sale of goods
• Sale of Old Furniture
• Dividend Received
• All of the above

28. Inwhich of the following firm structure compliance cost is maximum

• Sole Proprietorship
• Ltd Liability Partnership
• Pvt. Ltd Company
• Public Ltd Company

29. In order to reflect the efficiency in debtor's management, Debtor turnover ratio should be. ?

• increased
• Decreased
• Kept Constant
• None of the above

30. Purchase of machinery against issue of shares will be shown in which part of the cash flow statement?

• Operating Cash Flow

• Financing Cash Flow
• Investing Cash Flow
• None of the above

1. Which of the following is an example of unsystematic risk

• Political Uncertainty
• Increased Steel Prices
• Global Economic Crises
• Interest Rates Fluctuations

4. Cost of equity is a ways equal to or ____ than WACC

Higher

5. What will be the price of bond with face value Rs 1000 carrying a coupon of I 0% maturing in 3 years at I 0%
premium on par value? Present value factor and PVAF at 10% for 3 years is .7513 and 2.4869 respectively .

• 826.43
• 1348.69
• 1075.12
• 1000

7. If the annual rent expense goes up, the operating leverage will ___ and will give rise to more than proportionate
change In ____ ?
 • 0.33
• 1.5
• 0.67
• 9.6

8. A tight working capital policy will lead to

• Low debtors
• Low inventory
• All of the above
• low inventory carrying cost

10. Stream of equal cashflows at regular interval starting at the beginning of the period is know as?

• 0Annuity Due
• Annuity
• Lumpsum Cash Flows
• Conventional Cash Flows

11. Arun buys an stock at Rs 20 & sells at Rs 25 after 10months. During this period, he receives a dividend of Rs
5 on his investments. Calculate the Holding Period Return?

• 0.25
• 0.5
• 0.4
• 0.2

12. For accepting the project IRR has to be compared with ____ ?

• required rate of return

• Cut off rate
• cost of capital
• All of the above

14. Increased financial leverage gives rise to ____ volatile EPS?

• more
• less
• None of the above
• none

16. Proportion of profit distributed among shareholders is known as _____ ?

• Pay-out ratio
• Dividend capitalization rate
• Dividend rate
• Retention ratio

17. The risk which can be reduced by diversification is known as___

• Systematic Risk
• Total Risk
• Unsystematic Risk
• Market Risk

18. If growth rate of expected earnings goes up than price of stock will ?

• remain same
• decrease