Organisation : Indian Institute of Materials Management
Degree : PGDMM(PG Diploma in Marketing Management)
Subject :Strategic & Financial Management
Document Type : Question Paper
Website : iimm.org
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IIMM Financial Management Question Paper
INDIAN INSTITUTE OF MATERIALS MANAGEMENT
JUN-2010 Post Graduate Diploma in Materials Management
Date: 16.6.2010
Max.Marks: 100
Time: 2.00 pm to 5.00 pm
Duration: 3 Hours
Related : Indian Institute of Materials Management Packaging & Distribution Management PGDMM Question Paper : www.pdfquestion.in/6738.html
Instructions
1. From Part-A answer all questions (compulsory). Each question carries 8 marks. Total: 32 Marks.
2. From Part B answer any 3 questions out of 5 questions. Each question carries 16 marks. Total: 48 Marks.
3. Part C is a case study (compulsory). Read the case carefully and answer the questions. Total: 20 Marks.
Model Questions
PART A
Q1.Choose the right answer from below:
1. Cash can be conserved by keeping:
a) Maximum quantity of stock
b) Minimum level of creditors
c) Best credit terms with suppliers
d) None of the above
2. Earning after interest and tax is Rs.40 crores. Interest is Rs. 8 crores and Income Tax is Rs. 32 crores. Interest coverage ratio will be:
a) 09
b) 10
c) 05
d) 07.50
3. A project is more acceptable to finance if its
a) Break even point is high
b) IRR is greater than cost of capital
c) Neither a) nor b)
d) Both A) and b)
4. A company manufacturing washing machines has an annual capacity of 5,000 units. Unit variable cost is Rs. 1600 and selling price is Rs. 2000. Annual fixed cost is Rs. 5,00,000. Its BEP in units will be :
(a) 1000
(b) 1250
(c) 1200
(d) 900.
5. Which of the following is not a use of funds?
a) Increase in fixed assets.
b) Increase in accrued expenses.
c) Payment of taxes.
d) Decrease in provisions
6. For arriving at the book value of equity shares which of the following would you consider?
a) Increase in market price per share.
b) Increase in share capital
c) Dividends paid
d) Networth
7. Current ratio can be improved by
a) More bank borrowing for working capital
b) Increase in credit sales
c) Long term borrowing for investment in current assets
d) Redemption of debentures
8. When the amount of under over absorbed overheads is significant, it should be disposed of by
a) Transfer to costing profit and loss account
b) Using a supplementary rate.
c) Carry over to next year.
d) None of the above.
Q2. State whether the following statements are ‘True’ or ‘False’:
1. At break even point, the firm earns only a marginal profit.
2. Abnormal loss or gain does not affect the cost of production in process costing.
3. Notional costs are recorded in the Cost Books.
4. NPV & IRR techniques recognize the risk element in capital budgeting.
5. A preference share is a hybrid security.
6. In the New Issues Market, only a new company can issue its securities.
7. Long term owned fund of the company is also known as long term debt.
8. Annual sales / Net fixed assets = Total assets turn over ratio
Q3. Fill in the blanks:
1. ————-clause in a contract provides that the contract price would be enhanced on the happening of the specified contingency.
2. A statement which is classified into three main categories, namely, operating,———– and financing is known as a Cash Flow statement.
3. The————– bears the risk of obsolescence under operating lease.
4. ————–is a market for short term securities such as Treasury Bills.
5. —————is calculated by dividing the Total Present Value of anticipated cash in flows by the initial outlay.
6. A ————–is incidental to the process of manufacturing the main product.
7. ————– merger takes place when firms engaged at different stages of production or distribution of the same product come together.
8. Cost of the capital is the—-rate of return expected by the investors.
Q4.Match the following:
1) Primary markets – a) Technique of capital budgeting based on accrued profits after tax
2) Factoring – b) An unsecured promissory note issued at discount.
3) Stock exchange – c) Responsibility fixation for costs incurred
4) Cost centre – d) Initial public offers of securities
5) Commercial paper – e) Purchase of book debts by a specialised agency
6) ARR – f) Cash flows from financing activities.
7) Modigliani-Miller – g) Trading in listed securities
8) Redemption of term loans – h) Financial leverage has no