Project Finance

Project Finance

  Question :   Cost under-estimation at the project preparation and evaluation stage leads to cost and time over run.

 Answer   TRUE

  Question :   A project objective can be said to have the following dimensions viz.:

 Answer   Strategic perspective , Time span , Finance cost aspect

  Question :   A smaller unit into which the overall requirement of capital of a company is sub-divided is termed as ________.

 Answer   Share

  Question :   The profit earned from operations of the project during life of the project is known as :-

 Answer   Cash inflow

  Question :   Details regarding Internal accruals comes under the ________ category of Project report.

 Answer   Financing plan

  Question :   Management category of Visit report consists of :-

 Answer   Managing Director , Institutional nominees , Committees of the board

  Question :   Advantages of fund flow statement are :-

 Answer   It determines financial consequences of the business operations , It enables the firm to plan its financial resources properly , It helps as a reliable guide for the future requirement of funds

  Question :   Stock in the beginning results in :-

 Answer   Application of funds

  Question :   Longer the duration of production cycle, higher the requirement of ________.

 Answer   Working capital

  Question :   External sources of cash are as follows :-

 Answer   Issue of new shares , Long term loans , Short term borrowings

  Question :   Psychographic market appraisal answers to :-

 Answer   Why they buy?

  Question :   Retained earnings indicates that whatever profits are earned by the company are not distributed by it by way of ________ but are kept aside for use in future for expansion or other purpose.

 Answer   Dividend

  Question :   The rate of discount which would equate the present value of investments to the present value of benefits over the life of the project is known as :-

 Answer   Internal rate of return

  Question :   Current assets includes stock-in-process.

 Answer   TRUE

  Question :   The permanent requirement of working capital should be financed out of :-

 Answer   Cash Profits , Shares , Debentures

  Question :   The sources of long term and medium term finance are :-

 Answer   Equity shares , Public deposit

  Question :   ________ occupies a unique position in the macro economic development which helps in induction of new technology and facilitates, greater efficiency as well as higher productivity.

 Answer   Investment

  Question :   The data for ratio analysis is obtained from :-

 Answer   Profit and Loss Account , Balance Sheet

  Question :   Disposition of funds includes :-

 Answer   Increase in working capital , Preliminary expenses , Dividend

  Question :   Defaults category of the Project report may be in respect of :-

 Answer   Term loans , Principal , Interest

  Question :   Technical aspect of detailed project report includes :-

 Answer   Detailed Project Engineering

  Question :   In the Detailed Project Report, Marketing aspects includes :-

 Answer   Demand forecasting , Promotion , Distribution

  Question :   Time Series Projection Methods of Demand forecasting consists of :-

 Answer   Trend Projection method , Moving Averages method

  Question :   The Cash Flow statement is also referred to as :-

 Answer   Cash flow budget

  Question :   Borrower's contribution towards Working capital is known as :-

 Answer   Margin money

  Question :   Dissentions among the promoters is a :-

 Answer   Management problem

  Question :   Receivables is categorised under :-

 Answer   Current assets and liabilities

  Question :   Ratio analysis is a technique of planning and control.

 Answer   FALSE

  Question :   ________ tries to have what the customer will want- where, when, in what form and at what price.

 Answer   Marketing

  Question :   The construction of National Golden Quadrilateral can be recognised as Project.

 Answer   TRUE

  Question :   More accurate the estimation of the level of current assets and current liabilities, more accurate will be estimation of the requirement of ________.

 Answer   Working capital

  Question :   Debt service coverage ratio indicates whether cash earned is sufficient for debt service.

 Answer   TRUE

  Question :   In the GE's Stop Light Matrix, when ________ situation prevails, Products call for Hold.

 Answer   Average Business Strength and Medium Industry Attractiveness

  Question :   Financial and economic aspect of the Visit report consists of :-

 Answer   Company's financial year , Impact of Government policies on company operations , Comments on the last published accounts

  Question :   The basic difference between the feasibility study report and ________ is the level of accuracy and degree of detail.

 Answer   Detailed Project report

  Question :   Inflow of funds may not necessarily result in ________.

 Answer   Inflow of cash

  Question :   Ratios are based only on the information which has been recorded in the financial statements.

 Answer   TRUE

  Question :   For computing Interest coverage ratio, Profit after Interest and taxes are taken into account.

 Answer   FALSE

  Question :   In the GE's Stop Light Matrix, when ________ situation prevails , Products call for divestment.

 Answer   Average Business Strength and Low Industry attractiveness

  Question :   Trend Projection method of demand forecasting consists of :-

 Answer   Linear Relationship , Exponential Relationship , Polynomial Relationship

  Question :   Debt Equity ratio is a 'Solvency ratio'.

 Answer   TRUE

  Question :   In small scale organisation, requirement of working capital is quite high due to high amount of overheads, high buying costs and high selling cost.

 Answer   TRUE

  Question :   The third phase of the technical appraisal which focuses upon appraising the likely technical gaps consists of :-

 Answer   Problems pertaining to the period when the project is in operation

  Question :   The acronym for 'LPG' is :-

 Answer   Liberalisation, Privatisation and Globalisation

  Question :   Market potential should be determined under the Marketing aspect of the Project report.

 Answer   TRUE

  Question :   General Electric Stop Light Matrix analyses products in terms of :-

 Answer   Business strength and Industrial Attractiveness

  Question :   As per the GE's Stop Light Matrix, Products may justify substantial commitment of funds where there is :-

 Answer   Strong Business Strength and high Industry attractiveness , Average Business strength and high Industry attractiveness

  Question :   A project is unique and no two projects are similar.

 Answer   TRUE

  Question :   Demand technique forecasting of Commercial appraisal includes :-

 Answer   Future demand of the product , Proper survey of the product , Future availability and supply of the product

  Question :   Disposal of fixed assets is categorised under :-

 Answer   Miscellaneous

  Question :   Under ________ method, the forecasts are modified in the light of observed errors.

 Answer   Exponential smoothing

  Question :   Cost and time overrun of the project may lead to loss on account of lost market opportunities.

 Answer   TRUE

  Question :   The assets held by a business which can be converted in the form of cash or used during the course of normal operations is termed as :-

 Answer   Current assets

  Question :   If the organisation is a trading organisation, the requirement of working capital will be on the lower side.

 Answer   FALSE

  Question :   Internal sources of funds are :-

 Answer   Funds from operation , Loss on sale of fixed assets , Goodwill written off