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1 Ashish Gupta is having an idea for starting a new Chemical factory. He is writing a business plan
for himself partners, financers, etc. Which of the following points is not relevant in his Business
Plan?
Details of site location, accessibility
Details of production process followed and various technical parameters
Details of potential bulk purchasers and market segmentation
Elaborate details of past educational qualifications of the promoter

2 Jayesh Dalal is having an idea for starting a new software development start-up catering to
advanced movie animation business. He is writing a business plan for himself partners, financers,
etc. Which of the following points is relevant in his Business Plan?
Details of office location, accessibility
Details of government approval process
Details of research and past success of alternative/similar products
Details of private equity funding, cashflow statements

3 When an investor will be presented a business plan. He will look at some aspects of the plan in
great detail. Which of the following points might he not look into in great detail?
Estimated return on investment
Exit strategy for investors
Milestones or conditions that company will accept
Collateral offered, and a list of all existing liens against collateral

4 Nimish Zaveri is having an idea for starting a new plant to manufacture plastic bottles. He is
writing a business plan for himself partners, bankers, etc. Which of the following points is
irrelevant in his Business Plan?
Details of site location
Details and cost of availability of electric power
Details of government approval process
Details of market for end products, marketing team and potential

5 Bhavesh Anandpara is setting up a manufacturing company. When an investor will be presented a

business plan, which among the following is irrelevant for a manufacturing company?

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Planned production levels

Anticipated levels of direct production costs and indirect (overhead) costs
How the company protects intellectual property?
Production/capacity limits of planned physical plant

6 Which of the following is not one of the documents required alongwith your project loan
application?
Title documents of the land and building
Identification proof of the borrowers & guara
School Passing Certificate
Duly filled application form

7 Which of the following is not importance of a Business Plan?

To Hire new people
To develop new alliances
Sets specific objectives for managers
Share with your friends and community

8 Aakash is having an idea for starting a new restaurant. He is writing a business plan for himself
partners, financers, etc. Which of the following points is not relevant in his Business Plan?
Details of location, accessibility
Details of target customers
Details of government approval process
Details of funding and profitability

Give Your Comments

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1 Debt is least costly source of long-term financing because:

equity financers are very greedy and want more return
in case of default, the lender can seize the financed ass
interest on debt is tax-deductible
it is a universal trend since long time

2 Which of these is not an advantage of Term Loan?

Only large scale, creditworthy firm, whose assets are good for collateral can raise capital from long-
term debt.
Accounting entries for term loan transactions are clear and easy
The company can enjoy tax saving on interest on debt
Debt financing provides sufficient flexibility in the financial/capital structure of the company

3 Select the best answer. With reference to Term Loans, what is usually done in the ‘Monitoring’
stage?
Periodic site visits
Regular reports, furnished by the company, which provide information about placement of orders,
construction of buildings, procurement of plant, installation of plant and machinery trial production,
etc,
Audited accounts of the company
All of the above

4 Anand Jewellery Manufacturing Company needs Rs. 5,00,000/- Term Loan for manufacturing
exquisite diamond jewellery. Three loans are available to it for 5 years of financing required. Surat
bank requires annual instalments of Rs. 1,25,000/- each Kapol bank requires annual instalments of
150000, 150000, 120000, 100000, 100000 Baroda bank requires annual instalments of 75,000 for first
four years and 3,25,000 for the last year. The Company’s after tax cost of capital is 6% and its tax
bracket is 50%. Which loan is most advantageous cost-wise to the company?

5 Anand Jewellery Manufacturing Company needs Rs. 5,00,000/- Term Loan for manufacturing
exquisite diamond jewellery. Three loans are available to it for 5 years of financing required. Surat
bank requires annual instalments of Rs. 1,25,000/- each Kapol bank requires annual instalments of
150000, 150000, 120000, 100000, 100000 Baroda bank requires annual instalments of 75,000 for first
four years and 3,25,000 for the last year. The Company’s after tax cost of capital is 6% and its tax
bracket is 50%. Which loan is most advantageous cost-wise to the company?

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Surat bank
Kapol bank
Baroda bank

6 With reference to Term Loans, what is meant by ‘Execution of Loan Agreement’?

Counter sign by the borrower on the Sanction Letter, accepting its conditions
A Creation of mortgage over the immovable properties and hypothecation of the movable properties
to secure these assets
Signing of the properly stamped agreement enlisting various terms and conditions of the Loan by the
borrower
all of the above

7 What is meant by DSCR? What does it suggest?

Debt Service Coverage Ratio. It checks the leverage of the financial institution
Debt Service Coverage Ratio. It checks the net working capital level of the project
Debt Service Coverage Ratio. It checks the repayment potential of the project
answers a) and b) above

8 Tulsi Shah wants to take a Term Loan from a bank for starting her Media company. Which of the
following is considered before she decides to avail a Term Loan?
Idea Generation
Letter of Credit
Interest and Principal Repayment
all of the above

Give Your Comments

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1 Ratios relating to working capital are:

Net Profit Margin, Return on Total Assets, Inventory Turnover
Cash turnover ratio, Current Assets Turnover Ratio, Working Capital Turnover Ratio
Turnover of finished goods, Turnover of goods-in-process, Turnover of aggregate inventory
Current ratio, Interval Measure, Quick ratio

2 Which of the following is not a type of Working Capital facility?

Bank Overdraft
Cash Credit
Term Loan
Bank Guarantee

3 Which of the following is not correct with respect to Letter of Credit?

Buyer would buy a Letter of Credit and send it to the seller
Letter of Credit can be revoked in case of non-performance of the opposite party and money can be
remitted to the seller
It is also known as non-fund based working capital financing
Bank will pay the opposite party as soon as the party performs as per agreed terms

4 State whether True False. Bill Discounting is a non-fund based working capital facility
True
False

5 Fill in the appropriate word. ________________is the ratio of Net Current Assets to the Current
Liabilities
Quick Ratio
Current Ratio
Interval Measure
Cash turnover

6 Fill in the appropriate word. Dividend Yield is obtained by dividing _______________ by

______________.

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Dividend yield per share by Share Price

Dividend by the Net Profit after tax
Dividend by the Gross Sales
none of the above

7 State whether True or False. High dividend yield is indicative of investors' expectation of low
dividend growth or requirement of a high return.
True
False

8 Fill in the appropriate word. Price to Earnings ratio is obtained by dividing _______________ by
______________.
Inventory Price by Gross Earnings
Earnings per share by Stock Price
Stock Price by Earnings per share
none of the above

9 State whether True or False. A high Sales to Net Working Capital ratio indicates a very inefficient
use of working capital in the enterprise.
True
False

10 State whether True or False. A high inventory turnover ratio indicates an over investment in
inventory in relation to sales.
True
False

Give Your Comments

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1 What is Third-Round Funding w.r.t. Venture Capital?

The initial small amount of capital used to develop a product or prove a concept.
Financing for companies that is at least breaking-even and is considering expansion
Additional funds for the company to begin sales and manufacturing
Funds providing working capital to a company whose product in selling but is still losing money

2 Which among the following is not one of the top four private equity firms in the U.S.?
TPG Capital
Kohlberg Kravis Roberts
Goldman Sachs Principal Investment Area
J P Morgan Capital

3 State whether True or False. Venture represents financial investment in a risky proposition made
in the hope of earning a low rate of return.
True
False

4 Which among the following is not one of the leading private equity firms in India?
Blackstone group
Ascent Capital
TPG Capital
Everstone Capital

5 When should a company decide to take Private Equity?

When the promoters do not want to use their own equity
When the promoters are reluctant to approach banks, NBFCs
When the company is young having a great project or idea but not sufficient track record
When the promoters want to establish themselves as having some exposure in Private Equity

6 Samir Choksi wants to start a new biotechnology company. He has seen the performance of the
new molecule on cancer treatment and he has got a very good report from various Clinical Trials on
humans. He wants to start manufacturing it. He does not have any track record. He will require
Private Equity to covert his dreams to a reality. How must he present himself and his company

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before the Venture Capital Fund?

He must prepare a back-up plan in case they are not keen to fund his company
He must convey his vision of converting his company to public limited in 3 years
He must use technical and bombastic language to dominate the Venture Capital investors
He must emphasis the returns that the project is likely to generate

7 Which amongst the following is true with respect to Private Equity Companies in India?
It is difficult from outside to judge the performance of a Private Equity firm as they do not disclose
their financial statements
Private Equity is the last resort for any company
Many times Private Equity Investors talk sweetly and go for hostile takeovers after they have acquired
the necessary shareholding
Usually Private Equity Investors ask for a management seat on Board of Directors of the company

8 What does Turnaround Capital typically so?

It uses a mix of debt and equity to fulfil the financial needs of the project
It invests in financially-troubled companies, buys inexpensively, potentially restructured and exits
with a healthy profit
It invests in new companies – technology, biotechnology and green energy sectors
It invests in mature companies deemed to be undervalued

9 Mukesh Mistry, an electronics engineer has invented a new proto-type of decorative lights. He has
talked to a few lighting dealers and had got a very good report. He wants to start commercial
production of this product. He has just left his job with L&T to fully concentrate on his maiden
venture. He estimates the Cost of the Project to be around Rs. 30 crores (US$5 million). Which of
the following avenues of funding should he try for?
Ask his friends and relatives
Approach a Commercial bank
Approach a Venture Capital Fund
None of the above

10 Private Equity is defined as:

Money from the general public investing mainly in shares through the secondary market
Money borrowed from bank repayable usually as per terms of Sanction
Money from Private Equity firms that invest by taking shares in companies they consider attractive
Money collected from crowds to fund profitable and social projects

11 State whether True of False. An informal survey shows that nearly 27% of companies that are
seed-funded actually raise the required angel round.
True
False

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Give Your Comments

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1 For a company wanting to raise money by listing his company in Singapore. He will list his
company on which exchange?
ASX
Bourse
SSE
SGX

2 A company wants to raise money by listing his company in Malaysia. He will list his company on
which exchange?
NYSE
Bourse
MSE
NSE

3 State whether True False. To list its stock on an international exchange, a company must comply
with any listing requirements established by the exchange and a host of laws and regulations
enforced by the government regulator (True/False)
True
False

4 Which amongst these is not a type of stock which a company can offer to the public?
Warrants
Debentures
Rights
Loans

5 State True or False. Holders of Preferred Stock can get dividends every year, these shareholders
are also permitted to vote on important company resolutions. (True/False)
True
False

6 State True or False. Preferred Stock holders can force a company into bankruptcy if it misses
paying principal and interest payments on time. (True/False)

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True
False

7 Srenik Shah, Director of Aaryaman Capital Markets Ltd is a merchant banker for various SMEs
and helps in the listing of various companies in the Indian Stock Markets. Which of the following is
a Stock Exchange to list a company.
BSESME
ASX
NYSE
LSE

8 Shweta Jain is planning to raise funds to start her own chain of dance academies throughtout the
country. She meets Shripal Shah, director of Aryaman Capital Markets Ltd which helps SMEs
raise capital from the Capital Markets. By which of the following methods can she raise capital?
ESOPs
Rights Issue
IPO
ESOPs

9 Fill in the blank. A smaller unit into which the overall requirement of capital of a company is sub-
divided is termed as _____________.
Term Loans
Share
Quasi Equity Capital
Dividend

10 Girish Nulli is heading a very successful Software firm GN Software. In the past five years, he
has successfully steered his company from negligible turnover to the skies. He requires additional
capital to set-up offices in various parts of the country. After studying his annual reports and other
papers, his consultant’s advice him to list his company and raise money from the capital markets –
local or international. Which among the following is not a benefit of a company decides to go
public?
Dilution
Liquidity
Lower cost of capital
Respectability

11 State whether True False. Sweat Equity is a tool that a company by selline of additional shares to
existing company shareholders only and is not meant for general public
True
False

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12 State True or False. Public Listed companies enjoy more pool of capital but are bound by various
regulations such as submission of quarterly shareholding patterns, quarterly and annual results and
various company officials are bound by Insider trading regulations.
True
False

Give Your Comments

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1 State whether True or False. According to International experts, the equity issuance to Indian
companies by international investors started mainly after 2004 when the Indian economy saw a
good economic growth.
True
False

2 State whether True or False. Now, Indian domestic capital market is mature to handle even
“jumbo” equity offerings.
True
False

3 In 2005-06, which type of companies mainly raised capital from GDR Listings in Luxemburg?
Small deals around US$20-US$110 million issued by mid-cap firms
Large deals around US$1.0 billion issued by large-cap firms
Micro deals upto US$1.0 million issued by small -cap firms
Ultra-Large deals issued by Government Companies

4 Which of the following companies have not raised international capital in 2005-2010 period?
NMDC
Reliance Ltd
NTPC
ONGC

5 Why did the Indian GDR issuances die in 2007 as compared to earlier years? (Number of
issuances fell from 26 to 4)
That year the domestic Indian markets were at an all time hig
Indian GDRs died as more investors got access to domestic market via FII licenses
The American markets were very favourable that year and number of companies listed themselves on
NYSE/NASDAQ
None of the above

6 Which of the following is an attraction for Indian companies issuing GDRs?

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There is no regulatory control

They are issued in voting form but most international investors are generally absent during the AGMs
They can be issued in non-voting form
They can be issued in non-voting form

7 Which International crisis has occurred during 2008?

Agriculture Scam
U.S. Real Estate
Credit
U.S. Credit Card Scam

8 Why are Indian Banks attracted for listing to NYSE (New York)?
There is a perception that tighter disclosure norms and greater ADR liquidity will strengthen investor
confidence
As the regulatory requirements are easier to fulfil viz-a-viz London and Singapore
As the U.S. investors have a greater appetite towards Indian Companies
All of the above

9 Which was the only company to be still listed on AIM?

Noida Toll Bridge
Tata Steel
Essar Energy
Vedanta Resources

10 Why did the Government launch the 25% Rule in 2010?

They wanted greater participation by Indian investors in all companies
They wanted greater takeovers and arrangements as in international markets
They wanted companies to raise more capital from the markets
They wanted company share prices to reflect the true intrisinic value by greater public participation

Give Your Comments

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1 What is meant by Reward Crowd Funding?

Solicitation of funds for a social, artistic, philanthropic or other purpose and not in exchange of
anything of tangible value
Solicitation of funds wherein investors receive some existing or future tangible reward
Solicitation of funds via an online platform that matches lenders with borrowers to provide unsecured
loans at a decided interest rate
None of the above

2 What happens in Peer-to-Peer Lending?

It is solicitation of funds for social, artistic, philanthropic or other purpose, and not in exchange for
anything of tangible value
Investors receive some existing or future tangible reward
Lenders are matched with borrowers to provide unsecured loans
Lenders take equity in borrower – normal equity or preferred or combination of both

3 What is Crowd Funding?

It is solicitation of funds for social, artistic, philanthropic or other purpose, and not in exchange for
anything of tangible value
It is loan received by Investors with fixed repayment of interest and princip
It is issuance of shares of a company against money received from the investors
It is solicitation of funds (small amounts) from multiple investors through a web-based platform or
social networking site for a specific project, business venture or social cause

4 Which amongst the following is not a Crowd Funding site?

orkut
rockethub
someoland
invested.in

Give Your Comments

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1 Bimal Dalal has started a new firm www.charteredaccountantsonline.com to help clients with
their Returns Filings. To manage inquiries from new customers and for giving proper services to
existing clients, they have set-up a new call centre at the City Centre. They know that the modern
Project carries number of risks. Which one from the following is not a common project risk?
Customer review and feedback cycle too slow.
Abrupt and frequent changes in the project team members
Time and cost estimates too optimistic.
Lack of resource commitment.

2 Bhoumik, a freelancer is given an independent assignment by GE Power Engines to carry out a

Project Risk Management study for their new Airplane Engines Facility in California. Which one
from the following is not one of the process groups in Project Risk Management?
Monitoring and Controlling risks
Planning risk responses
Interviewing various stakeholders
Risk Identification

3 Suman Basu is setting up a new Training facility in Mumbai to train students on Mixed Martial
Art techniques. While going alongwith the Appraisal, she has asked her deputy to prepare a list of
the common reasons why some project fail? He prepares a list and shows to her. Which of the
following is/are some common reason/s for failure of a project?
Undefined objectives and goals
Poorly managed
Stakeholder conflict
All of the above

4 Ekta Jhaveri wants to start her new academy for training singing aspirants. Her advisor, Jyot
Jhaveri as part of being cautious is preparing a list on some common reasons for failure of projects?
Undefined objectives and goals
Poorly managed
Lack of management commitment
All of the above

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5 Ritu Nemani, an MBA wants to set-up a modern web-portal where traders and retail investors
can bid, buy and sell all kinds of liquid assets. Her friend and advisor, anticipating trouble in the
new venture are preparing a list of various problems which could shake up their plans. Which
amongst these is not a common reasons for failure of projects?
Perfectly defined objectives and goals
Team Weaknesses
Unrealistic timeframes and tasks
Scope creep

6 State whether True or False. Conflict between stakeholders is not a reason for failure of a Project.
True
False

7 Which among the following is/are benefit/s of a WBS?

Makes sure no important deliverables are forgotten.
Provides a proven and repeatable approach to planning projects.
Helps project managers with resource allocation.
All of the above

8 State whether True or False. The best way to project success is that rather than planning on the
project, one should simply get on with the work.
True
False

Give Your Comments

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1 Which among the following is not a component of the Quality Management Plan?
Quality objectives
Key project deliverables and processes to be reviewed for satisfactory quality level
Quality standards
Quantity Tools

2 How does a Quality Management Plan help a Project Manager?

He can improve the various forecasts
He can ascertain whether deliverables are of an acceptable quality level and also if the project
processes are effective and properly applied.
He can show this around to the various Directors and can help him if something goes wrong
All of the above All of the above All of the above [0]All of the above all the above [0] [0]

3 Which of the following is not one of the outcomes of a Project Audit?

It can help Identify termination opportunities
It can help Improve forecasts
It can help Improve operations
It can help improve in-depth research

4 Which of the following is not a part of successful Project Audit?

Quality Standards
Report Development
In-Depth Research
Success Criteria [0]

5 In a Project Audit Interview, which types of questions are most effective?

Yes-No type
Open-ended questions with detailed description
Multiple Choice Questions
Questions on a graphical user interface

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6 State whether True or False. A good Project Audit Report will simply tell us how we can improve
current project. It cannot improve future projects within the organisation.
True
False

7 State whether True or False. A good Project Audit Report will continue the improvement of
relationships between the organisation and its vendors.
True
False

Give Your Comments

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