.
MIDTERM
EXAMINATION
SPRING 2007 Marks: 40
ACC501 - BUSINESS
FINANCE (Session - 1 ) Time: 90min
StudentID/LoginID:
______________________________
Student Name:
______________________________
Center Name/Code:
______________________________
Exam Date: Saturday,
May 12, 2007
Please
read the following instructions carefully before attempting any question:
All questions are
compulsory.
This exam consists
of 10M ultiple Choice Questions (MCQs) of 1 mark each, 5 True/False
of 1
mark each,3 Short
questions of 5 marks each and 1comprehensive Numerical of 10marks.
For each Multiple
Choice Question, read the options available and select which you consider is
the
correct one.
You are required to
show all the working of short as well as practical question.
Use of calculator
is allowed.
This examination is
closed book, closed notes and closed neighbours.
Do not ask question
about the contents of this examination from anyone.
You may wish to
pace yourself with your own watch, but the Supervisor will be the official
timekeeper of the
test.
Failure to comply
with the Supervisor’s directions will result in your test being cancelled.
Please
comply with
supervisor’s directions to avoid any unpleasant event
For Teacher's use
only
Question 1 2 3 4 5 6
7 8 9 10 Total
Marks
Question 11 12 13 14
15 16 17 18 19
Marks
Question
Marks
.
Question No: 1 (
Marks: 1 ) - Please choose one
The Ratios showing
the ability of a firm to pay its bills in short-run are called:
Leverage Ratios
Liquidity Ratios
Profitability Ratios
Market Value Ratios
Question No: 2 (
Marks: 1 ) - Please choose one
Evaluating the size,
timing and risk of future cash flows is the essence of :
Capital Budgeting
Capital Structure
Inventory Control
None of the given
options
Question No: 3 (
Marks: 1 ) - Please choose one
Sumi Corporation is
dealing in furniture industry. It has an equity multiplier of 1.78
times. The debt to
equity ratio would be:
0.38 times
0.58 times
0.78 times
0.98 times
Question No: 4 (
Marks: 1 ) - Please choose one
________________
involves the sale of used securities from one investor to another.
Primary Market
Secondary Market
Tertiary Market
None of the given
options
.
Question No: 5 (
Marks: 1 ) - Please choose one
SNT Corporation paid
Rs. 28,900 as tax in 2006. If the tax rate was 34%, what was the
taxable income of the
corporation during 2006?
Rs. 90,000
Rs. 85,000
Rs. 65,000
Rs. 77,000
Question No: 6 (
Marks: 1 ) - Please choose one
______________ pays
no coupon at all and is offered at a price that is much lower than its
stated value.
Government Bond
Floating Rate Bond
Zero Growth Bond
None of the given
options
Question No: 7 (
Marks: 1 ) - Please choose one
Which of the
following statement provides a financial summary of the firm’s operating
results during a
specified period.
Balance Sheet
Income Statement
Cash Flow Statement
Retained Earning
Statement
Question No: 8 (
Marks: 1 ) - Please choose one
Depreciation expense
does not reflect a cash outflow but still shown as an expense on the
income statement to
serve as a:
Cash inflow
.
Cash outflow
Tax Shield
Interest Shield
Question No: 9 (
Marks: 1 ) - Please choose one
Investors demand
extra yield on a taxable bond as a compensation for the unfavorable tax
treatment, known as:
Taxability premium
Inflation premium
Interest Rate Risk
Premium
None of the given
options
Question No: 10 (
Marks: 1 ) - Please choose one
If you invest Rs. 150
in a bank on an interest rate of 14%. How much will you have in
your account after 5
years ?
Rs. 78
Rs.163
Rs. 207
Rs. 289
Question No: 11 (
Marks: 1 ) - Please choose one
A series of constant,
or level, cash flows that occur at the end of each period for some
fixed number of
periods is called Perpetuity.
True
False
Question No: 12 (
Marks: 1 ) - Please choose one
A dollar in hand today
is worth more than a dollar promised at some time in future.
True
False
.
Question No: 13 (
Marks: 1 ) - Please choose one
Profit Margin is
calculated by dividing Net Income over Sales.
True
False
Question No: 14 (
Marks: 1 ) - Please choose one
While making Common
Size Statements, Balance sheet items are shown as a percentage
of total liabilities.
True
False
Question No: 15 (
Marks: 1 ) - Please choose one
Present value of all
the cash inflows can be calculated by compounding each cash flow
separately.
True
False
Question No: 16 (
Marks: 5 )
Cash Flows for a
project are given below:
Period
Cash Flows
1 Rs.8,000
2 Rs.12,000
3 Rs.20,000
4 Rs.35,000
5 Rs.40,000
Compute the Future
Value of cash flow stream of project at the end of year 5 with a
compound annual
interest rate of 14%.
Question No: 17 (
Marks: 5 )
Explain the
difference between Simple Interest & Compound Interest with the help of
example.
Question No: 18 (
Marks: 5 )
.
A company has total
annual sales (25% on cash basis) of Rs.3,000,000 and a gross profit
margin of 20 %. Its
current assets are Rs. 500,000; current liabilities are Rs. 340,000;
inventories are Rs.
260,000; and cash is Rs. 60,000.
Calculate:
(a) How
much average inventory should be carried if management wants the inventory
turnover to be 5
times? and
(b)How
rapidly (in how many days) must accounts receivable be collected if
management wants to
have an average of Rs.240,000 invested in receivables? (Assume a
365-day year.)
Question No: 19 (
Marks: 10 )
ST manufacturing
company is offering the following bonds for issue. Calculate the value
of each bond.
Bond
Par Value Coupon Rate Years to Maturity Req. Stated
(Rs.)
(%) (Years) Return (%)
A 1,000
7 12 8
B 500
12 15 10
C 100
16 20 12
Note
:
>>In
case of Bond A, interest payments are made annually
>>In
case of Bond B, interest payments are made semi-annually
>>In case of Bond C, interest payments are made quarterly
� \ ; s ` | grid-align:none;text-autospace:none'>► None of the given choices
Question
No: 19 ( Marks: 1 ) - Please choose one
Which of the
following symbol is used for multiple line comments in JavaScript?
► /
► //
► /*
► //*
Question
No: 20 ( Marks: 1 ) - Please choose one
____________ is a
system software that converts the source code written in high level
language into machine
language code.
► Utilities
► Drivers
► Language Translator
► None of the these
Question
No: 21 ( Marks: 1 ) - Please choose one
__________ is a particularly
good language for processing numerical data, but it does
not lend itself very
well to large business programs
► BASIC
► PASCAL
► JAVA
► FORTRAN
Question
No: 22 ( Marks: 1 ) - Please choose one
Which of the
following number system is used by microprocessor?
► Binary
► Decimal
► Octal
► Hexadecimal
Question
No: 23 ( Marks: 1 ) - Please choose one
The
__________Processor is specially designed for PDA?
► PowerPC
► StrongARM
.
► Crusoe
► SPARC
Question
No: 24 ( Marks: 1 ) - Please choose one
Mainframe
Computers are also called _____
► Enterprise Servers
► Personal Servers
► Enterprise Managers
► Window Servers
Question
No: 25 ( Marks: 1 ) - Please choose one
URL
is a/an ________
► Device
► Component
► Address
► Tool
Question
No: 26 ( Marks: 1 ) - Please choose one
Ada,
Countess of Lovelace developed first:
► Computer
► Website
► Computer Program
► Analytical engine
Question
No: 27 ( Marks: 1 )
What is the problem
with Brute Force Strategy approach?
Question
No: 28 ( Marks: 1 )
What was the name of
first computer in which binary numbers were used instead of
decimal numbers ?
Question
No: 29 ( Marks: 2 )
How can we say that
JavaScript is Not Object-Oriented language?
Question
No: 30 ( Marks: 3 )
List down the names
of any three parameters on which we analyze an algorithm.
Question
No: 31 ( Marks: 5 )
Write differences
between Shareware and Trialware software.
Question
No: 32 ( Marks: 5 )
What is function of Goal
Seek command in Excel?
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