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Ever since the the initiation of the process of deregulation of the Indian banking system

and gradual freeing of interest rates to market forces, and consequent injection of a dose
of competition among the banks, introduction of asset-liability management (AL! in the
public sector banks ("#$s! has been suggested by several e%perts& $ut, initiatives in this
respect on the part of most bank managements have been absent& 'his seems to have led
the (eserve $ank of India to announce in its monetary and credit policy of )ctober *++,
that it -ould issue AL guidelines to banks& .hile the guidelines are a-aited, an
informal check -ith several "#$s sho-s that none of these banks has moved decisively
to date to introduce AL&
)ne reason for this neglect appears to be a -rong notion among bankers that their banks
already practice AL& As per this understanding, AL is a system of matching cash
inflo-s and outflo-s, and thus of liquidity management& /ence, if a bank meets its cash
reserve ratio and statutory liquidityratio stipulations regularly -ithout undue and frequent
resort to purchased funds, it can be said to have a satisfactory system of managing
liquidity risks, and, hence, of AL&
'he actual concept of AL is ho-ever much -ider, and of greater importance to banks0
performance& /istorically, AL has evolved from the early practice of managing
liquidity on the bank0s asset side, to a later shift to the liability side, termed liability
management, to a still later realisation of using both the assets as -ell as liabilities sides
of the balance sheet to achieve optimum resources management& $ut that -as till the
*+,1s& In the *+21s, volatility of interest rates in 3#A and Europe caused the focus to
broaden to include the issue of interest rate risk& AL began to e%tend beyond the bank
treasury to cover the loan and deposit functions& 'he induction of credit risk into the issue
of determining adequacy of bank capital further enlarged the scope of AL in later
*+21s& In the current decade, earning a proper returnof bank equity and hence
ma%imisation of its market value has meant that AL covers the management of the
entire balance sheet of a bank& 'his implies that the bank managements are no- e%pected
to target required profit levels and ensure minimisation of risks to acceptable levels to
retain the interest of investors in their banks& 'his also implies that costing and pricing
policies have become of paramount importance in banks&
In the regulated banking environment in India prior to the *++1s, the equation of AL to
liquidity management by bankers could be understood& 'here -as no interest rate risk as
the interest rates -ere regulated and prescribed by the ($I& #preads bet-een the deposit
and lending rates -ere very -ide (these still are considerable!4 also, these spreads -ere
more or less uniform among the commercial banks and -ere changed only by ($I& If a
bank suffered significant losses in managing its banking assets, the same -ere absorbed
by the comfortably -ide spreads& 5learly, the bank balance sheet-as not being managed
by banks themselves4 it -as being 6managed0 through prescriptions of the regulatory
authority and the government& 'his situation has no- changed& 'he banks have been
given a large amount of freedom to manage their balance sheets& $ut the kno-ledge, ne-
systems and organisational changes that are called for to manage it, particularly the ne-
banking risks, are still lagging& 'he turmoil in domestic and international markets during
the last fe- months and impending changes in the country0s financial system are a grim
-arning to our bank managements to gear up their balance sheet management in a single
heave& 'o begin -ith, as the ($I0s monetary and credit policy of )ctober *++,
recommends, an adequate system of AL to incorporate comprehensive risk
management should be introduced in the "#$s& It is suggested that the "#$s should
introduce AL -hich -ould focus on liquidity management , interest rate risk
management and spread management& $roadly, there are 7 requirements to implement
ALin these banks, in the stated order8 (a! developing a better understanding of AL
concepts, (b! introducing an AL information system, and, (c! setting up AL decision-
making processes (AL 5ommittee9AL5)!& 'he above requirements are already met by
the ne- private sector banks, for e%ample& 'hese banks have their balance sheets
available at the close of every day& (epeated changes in interest rates by them during the
last 7 months to manage interest rate risk and their maturity mismatches are based on data
provided by their I#& In contrast, loan and deposit pricing by "#$s is based partly on
hunches, partly on estimates of internal macro data, and partly on their competitors0 rates&
/ence, "#$s -ould first and foremost need to focus son putting in place an AL -hich
-ould provide the necessary frame-ork to define, measure, monitor, modify and manage
interest rate risk& 'his is the need of the hour& Project Finance

'rue9:alse
;uestion8 5ost under-estimation at the project preparation and evaluation stage leads to
cost and time over run&
5orrect Ans-er8 'rue

ultiple 5hoice #ingle Ans-er
;uestion8 'he assets held by a business -hich can be converted in the form of cash or
used during the course of normal operations is termed as8-
5orrect Ans-er8 5urrent assets

'rue9:alse
;uestion8 'he <etailed "roject report spells out the modus operandi for the
implementation of the "roject and the reali=ation of the "roject objectives&
5orrect Ans-er8 'rue

ultiple 5hoice ultiple Ans-er
;uestion8 .hile choosing the location for a project, the follo-ing factors should be
considered8-
5orrect Ans-er8 "ro%imity to ra- materials and markets, Availability of infrastructure,
>overnment policies and other factors

ultiple 5hoice #ingle Ans-er
;uestion8 'he cost of "lant and achinery may be adjusted for a possible increase
kno-n as8-
5orrect Ans-er8 Escalation

#elect 'he $lank
;uestion8 ???????? is that scarce input -hich financial resources alone cannot mobilise&
5orrect Ans-er8 anagement

'rue9:alse
;uestion8 'he construction of @ational >olden ;uadrilateral can be recognised as
"roject&
5orrect Ans-er8 'rue

'rue9:alse
;uestion8 @ame of the finance manager comes under the "roject organi=ation category of
the "roject report&
5orrect Ans-er8 'rue

#elect 'he $lank
;uestion8 @ame and designation of the chief e%ecutive comes under the ????????
category&
5orrect Ans-er8 >eneral

'rue9:alse
;uestion8 In the $5> atri%, the key term of 5ash 5o-s require further commitment of
funds&
5orrect Ans-er8 :alse

ultiple 5hoice #ingle Ans-er
;uestion8 'he cost -hich change in the same proportion in -hich the level of production
changes is kno-n as8-
5orrect Ans-er8 Aariable cost

ultiple 5hoice #ingle Ans-er
;uestion8 >eneral Electric #top Light atri% analyses products in terms of8-
5orrect Ans-er8 $usiness strength and Industrial Attractiveness and 5ompany0s financial
strength

ultiple 5hoice ultiple Ans-er
;uestion8 After the #"A5E chart is constructed, -e -ould normally get any one of the
follo-ing basic strategic postures8-
5orrect Ans-er8 Aggressive "osture, 5ompetitive "osture, <efensive "osture

'rue9:alse
;uestion8 'he ratios of one organi=ation compared -ith the ratios of the same
organi=ation is termed as inter-firm comparison&
5orrect Ans-er8 :alse

ultiple 5hoice #ingle Ans-er
;uestion8 'he ratio that roughly measures the company0s potential reserve of cash is
termed as8-
5orrect Ans-er8 @et .orking capital to total assets

ultiple 5hoice #ingle Ans-er
;uestion8 'he sources of funding have e%panded from banks, insurance companies and
multilateral agencies to include the8-
5orrect Ans-er8 5apital market

'rue9:alse
;uestion8 In the $5> atri% B<)>#B indicate products -hich are generally during the
stage of <ecline of a "roduct Life 5ycle&
5orrect Ans-er8 'rue

atch 'he :ollo-ing

;uestion 5orrect Ans-er Cour Ans-er
"roject organi=ation :inance manager :inance manager
>eneral category of project
report
Location of factory Location of factory
5ost aspect of the project report 5onsultancy fees 5onsultancy fees
:inancing plan 3nsecured loans 3nsecured loans

ultiple 5hoice #ingle Ans-er
;uestion8 <elays in infrastructure <evelopment by #tate Agencies may lead to8-
5orrect Ans-er8 5ost and time overrun

ultiple 5hoice #ingle Ans-er
;uestion8 A "roject is a temporary endeavor to achieve some specific objectives -ithin
a8-
5orrect Ans-er8 "redefined time

'rue9:alse
;uestion8 'he advantage of secondary sources of data is that it is readily and
economically available&
5orrect Ans-er8 'rue

'rue9:alse
;uestion8 $anks and :inancial Institutions, -orld--ide, are no- financing projects -ith
strategies and terms that -ould have been hard to believe9imagine just a fe- years back&
5orrect Ans-er8 'rue

#elect 'he $lank
;uestion8 ???????? is the summary of cash book or (eceipts and "ayments statement&
5orrect Ans-er8 5ash flo- statement

'rue9:alse
;uestion8 5ost and time overrun of the project may lead to loss on account of lost market
opportunities&
5orrect Ans-er8 'rue

ultiple 5hoice #ingle Ans-er
;uestion8 'he $5> product "ortfolio atri%, >eneral Electric #top Light atri% and
#trategic "osition and Action Evaluation odel are considered to be highly relevant as8-
5orrect Ans-er8 "ortfolio "lanning 'ools

#elect 'he $lank
;uestion8 As the plant capacity increase, the investment cost unit capacity ????????&
5orrect Ans-er8 <ecreases

'rue9:alse
;uestion8 iscellaneous e%penditure is -ritten on the asset side of the $alance sheet&
5orrect Ans-er8 'rue

#elect 'he $lank
;uestion8 'he company having ????????, is appropriate for the strategic posture of
defensive under the #"A5E approach&
5orrect Ans-er8 Lacks both competitive advantage as -ell as financial strength and
belongs to a not so attractive industry, operating in an unstable environment

'rue9:alse
;uestion8 If the organi=ation is a trading organisation, the requirement of -orking capital
-ill be on the lo-er side&
5orrect Ans-er8 :alse

#elect 'he $lank
;uestion8 3nder the #"A5E odel, 5ustomer loyalty is determined under the ????????
dimension&
5orrect Ans-er8 5ompany0s competitive advantage

'rue9:alse
;uestion8 <ebt #ervice 5overage (atio is one of the most important ratios calculated by
the bankers or financial institutions giving long term finance to the organisation&
5orrect Ans-er8 'rue

ultiple 5hoice #ingle Ans-er
;uestion8 <isposal of fi%ed assets is categorised under8-
5orrect Ans-er8 iscellaneous

#elect 'he $lank
;uestion8 A "roject has a ???????? represented by gro-th, maturity and decay&
5orrect Ans-er8 Life cycle

ultiple 5hoice #ingle Ans-er
;uestion8 'he point at -hich the unit neither earns profit nor incurs loss is kno-n as8-
5orrect Ans-er8 $reak Even "oint

#elect 'he $lank
;uestion8 3nder ???????? method, the forecasts are modified in the light of observed
errors&
5orrect Ans-er8 E%ponential smoothing

ultiple 5hoice ultiple Ans-er
;uestion8 "rovision for ta% can be treated as8-
5orrect Ans-er8 Item of current liabilities, Added back to the profit as per profit and loss
account to arrive at operating profits

#elect 'he $lank
;uestion8 (etained earnings indicates that -hatever profits are earned by the company
are not distributed by it by -ay of ???????? but are kept aside for use in
5orrect Ans-er8 <ividend

'rue9:alse
;uestion8 Land and site development comes under the cost aspect of the project report&
5orrect Ans-er8 'rue

#elect 'he $lank
;uestion8 'he ???????? market is longer the order of the day since this is an era of
professionali=ation and specialised services are available at cost&
5orrect Ans-er8 onopolistic

#elect 'he $lank
;uestion8 ore accurate the estimation of the level of current assets and current
liabilities, more accurate -ill be estimation of the requirement of ????????&
5orrect Ans-er8 .orking capital

ultiple 5hoice ultiple Ans-er
;uestion8 <efaults category of the "roject report may be in respect of8-
5orrect Ans-er8 'erm loans, "rincipal, Interest

#elect 'he $lank
;uestion8 5ost of fencing comes under the ???????? category of the "roject report&
5orrect Ans-er8 Land and site development

ultiple 5hoice #ingle Ans-er
;uestion8 "rofit is the result of customer satisfaction, indeed customer delight under the8-
5orrect Ans-er8 arketing concept

ultiple 5hoice ultiple Ans-er
;uestion8 'he permanent requirement of -orking capital should be financed out of8-
5orrect Ans-er8 <ebentures, 5ash "rofits, #hares, 5ash "rofits, #hares

ultiple 5hoice #ingle Ans-er
;uestion8 'echnology, design, layout of the plant as -ell as inputs and infrastructural
facilities are to be considered under8-
5orrect Ans-er8 'echnical appraisal

ultiple 5hoice #ingle Ans-er
;uestion8 'he formula for $reak Even "oint is8-
5orrect Ans-er8 :i%ed cost 9 (#ales "rice - Aariables!

'rue9:alse
;uestion8 @ame of the finance manager comes under the "roject organisation category of
the "roject report&
5orrect Ans-er8 'rue

'rue9:alse
;uestion8 5hange in the project concept itself may lead to cost and time overrun&
5orrect Ans-er8 'rue

ultiple 5hoice #ingle Ans-er
;uestion8 'he statement -hich sho-s the movement of cash into and out of firm0s kittie
is kno-n as8-
5orrect Ans-er8 5ash flo- statement

'rue9:alse
;uestion8 In both the e%treme situations of trade cycles i&e& Inflation and depression,
requirement of -orking capital may be high&
5orrect Ans-er8 'rue

'rue9:alse
;uestion8 'rend projection method is the important technique for forecasting demand&
5orrect Ans-er8 'rue

'rue9:alse
;uestion8 'here is a need for studying "roject finance both for the lenders as -ell as the
borro-ers as both of them have equal stake in making the "roject a success&
5orrect Ans-er8 'rue

ultiple 5hoice #ingle Ans-er
;uestion8 'he "rojects -hich are undertaken to manufacture certain products -hich
require the products of e%isting units as ra- material is kno-n as8-
5orrect Ans-er8 :or-ard Integration "rojects

ultiple 5hoice #ingle Ans-er
;uestion8 'he profit earned from operations of the project during life of the project is
kno-n as8-
5orrect Ans-er8 5ash inflo-

#elect 'he $lank
;uestion8 Longer the duration of production cycle, higher the requirement of ????????&
5orrect Ans-er8 .orking capital

ultiple 5hoice #ingle Ans-er
;uestion8 'he ratio -hich indicates the ability of the company to meet current obligations
is termed as8-
5orrect Ans-er8 5urrent ratio

#elect 'he $lank
;uestion8 /aving decided on the location and product, the promoter takes into account
the ???????? that is to be adopted for producing the product&
5orrect Ans-er8 anufacturing process and technology

ultiple 5hoice #ingle Ans-er
;uestion8 $5> "roduct "ortfolio atri% analyses products on the basis of8-
5orrect Ans-er8 (elative arket share and Industry >ro-th rate

ultiple 5hoice #ingle Ans-er
;uestion8 "reliminary e%penses include8-
5orrect Ans-er8 <rafting of emorandum e%penses

#elect 'he $lank
;uestion8 <etails regarding Administrative 9 controlling office comes under the
???????? category&
5orrect Ans-er8 >eneral

#elect 'he $lank
;uestion8 'he company having ????????, is appropriate for the strategic posture of
5onservative under the #"A5E approach&
5orrect Ans-er8 Limited competitive advantage, belonging to a not so attractive industry
but enjoying financial strength and operating in a relatively stable environment

ultiple 5hoice #ingle Ans-er
;uestion8 5ost of utilities include8-
5orrect Ans-er8 5ost of electricity

ultiple 5hoice ultiple Ans-er
;uestion8 arketing category of the "roject report consists of8-
5orrect Ans-er8 'arget market, arket potential, "ricing policy

ultiple 5hoice ultiple Ans-er
;uestion8 Advantages of fund flo- statement are8-
5orrect Ans-er8 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

ultiple 5hoice #ingle Ans-er
;uestion8 'he "rojects -hich are undertaken for further enhancing9augmenting the
e%isting capacity is kno-n as8-
5orrect Ans-er8 E%pansion "rojects

#elect 'he $lank
;uestion8 #ometimes the term ???????? is interpreted as cash equivalent i&e& cash and
marketable securities&
5orrect Ans-er8 :und

#elect 'he $lank
;uestion8 A smaller unit into -hich the overall requirement of capital of a company is
sub-divided is termed as ????????&
5orrect Ans-er8 #hare

ultiple 5hoice #ingle Ans-er
;uestion8 Infrastructural projects include8 -
5orrect Ans-er8 "o-er >eneration and <istribution

#elect 'he $lank
;uestion8 A smaller unit into -hich the overall requirement of capital of a company is
subdivided is termed as ????????&
5orrect Ans-er8 #hare

ultiple 5hoice #ingle Ans-er
;uestion8 5ost of laying roads comes under8-
5orrect Ans-er8 Land and site cost

ultiple 5hoice #ingle Ans-er
;uestion8 "re-operative e%penses include8-
5orrect Ans-er8 Interest on deferred payments

ultiple 5hoice #ingle Ans-er
;uestion8 'he rate of discount -hich -ould equate the present value of investments to
the present value of benefits over the life of the project is kno-n as8-
5orrect Ans-er8 Internal rate of return

atch 'he :ollo-ing

;uestion 5orrect Ans-er Cour Ans-er
Econometric
method
athematical representation of
economic relationship
athematical representation of
economic relationship
primary source of
data
arket survey arket survey
#econdary source
of data
5ollected in some other conte%t 5ollected in some other conte%t
Leading indicators Aariables that change faster than
others
variables that change faster than
others


'rue9:alse
;uestion8 'he emphasis of a finance manager should be on taking a synergistic vie- of
the project rather than looking at it only from the financial aspects&
5orrect Ans-er8 'rue

#elect 'he $lank
;uestion8 'he basic difference bet-een the feasibility study report and ???????? is the
level of accuracy and degree of detail&
5orrect Ans-er8 <etailed "roject report

#elect 'he $lank
;uestion8 ???????? tries to have -hat the customer -ill -ant- -here, -hen, in -hat
form and at -hat price&
5orrect Ans-er8 arketing

#elect 'he $lank
;uestion8 In order to meet the cost of large project, the technique of ???????? has been
developed so that the financial commitment and risks associated -ith a project are shared
bet-een the project sponsor and the lending institutions&
5orrect Ans-er8 Limited recourse financing

ultiple 5hoice #ingle Ans-er
;uestion8 'he norms for providing open areas have to be strictly follo-ed for safety of
labour and allo- sufficient space for outflo- of effluents safely in case of8-
5orrect Ans-er8 5hemical unit

ultiple 5hoice ultiple Ans-er
;uestion8 As per the >E0s #top Light atri%, "roducts may justify substantial
commitment of funds -here there is8-
5orrect Ans-er8 #trong $usiness #trength and high Industry attractiveness, Average
$usiness strength and high Industry attractiveness

#elect 'he $lank
;uestion8 <etailed "roject (eport is generally prepared from a ???????? report -ith
additional information&
5orrect Ans-er8 :easibility

ultiple 5hoice #ingle Ans-er
;uestion8 'he second phase of the technical appraisal -hich focuses upon appraising the
likely technical gaps consists of8-
5orrect Ans-er8 "roblems faced during the 5onstruction and "roject implementation

ultiple 5hoice #ingle Ans-er
;uestion8 'he third phase of the technical appraisal -hich focuses upon appraising the
likely technical gaps consists of8-
5orrect Ans-er8 "roblems pertaining to the period -hen the project is in operation

ultiple 5hoice #ingle Ans-er
;uestion8 $orro-er0s contribution to-ards .orking capital is kno-n as8-
5orrect Ans-er8 argin money
ultiple 5hoice ultiple Ans-er
;uestion8 $uilding cost consists of8-
5orrect Ans-er8 :actory building, Au%iliary buildings, Administrative block

ultiple 5hoice #ingle Ans-er
;uestion8 In $5> atri% B 5A#/ 5).#B indicate8-
5orrect Ans-er8 "roducts -hich have high market share but lo- gro-th potential
ultiple 5hoice ultiple Ans-er
;uestion8 In the <etailed "roject (eport, arketing aspects includes8-
5orrect Ans-er8 <emand forecasting, "romotion, <istribution

ultiple 5hoice #ingle Ans-er
;uestion8 5ost of the "roject encompasses8-
5orrect Ans-er8 'he total of all items of outlay associated -ith a project

'rue9:alse
;uestion8 It is mandatory for each unit to obtain necessary clearance from "ollution
5ontrol Authorities before setting up any project&
5orrect Ans-er8 'rue

ultiple 5hoice ultiple Ans-er
;uestion8 A project objective can be said to have the follo-ing dimensions vi=&8
5orrect Ans-er8 #trategic perspective, 'ime span, :inance cost aspect, 'ime span,
:inance cost aspect

#elect 'he $lank
;uestion8 ???????? profitability reduces the strain on -orking capital&
5orrect Ans-er8 /igh

ultiple 5hoice #ingle Ans-er
;uestion8 B:ly by nightB operator mentality is a8-
5orrect Ans-er8 anagement quality
ultiple 5hoice #ingle Ans-er
;uestion8 Every project involves financial outlay -hich can be referred to as8-
5orrect Ans-er8 "roject finance

ultiple 5hoice #ingle Ans-er
;uestion8 A project objective -hich states .hat Bachieving itB -ould cost is kno-n as8-
5orrect Ans-er8 :inance cost aspect

ultiple 5hoice ultiple Ans-er
;uestion8 Limitations of fund flo- statement are8-
5orrect Ans-er8 It does not provide any ne- information but only rearranges the various
facts, It does not consider non-fund transactions

ultiple 5hoice #ingle Ans-er
;uestion8 8-
5orrect Ans-er8 "roblems pertaining to the period -hen the project is in operation

ultiple 5hoice #ingle Ans-er
;uestion8 (eceivables is categorised under8-
5orrect Ans-er8 5urrent assets and liabilities

ultiple 5hoice #ingle Ans-er
;uestion8 It is said that a second rate project in the hands of firstrate management is
better than a first rate project in the hands of8-
5orrect Ans-er8 #econd rate management

#elect 'he $lank
;uestion8 E%cessive e%penditures on foreign technicians leads to ????????&
5orrect Ans-er8 5ost and time overrun

'rue9:alse
;uestion8 'he 0$5> atri% 0analysis various products of the organi=ation in the terms of
$usiness strength and Industry Attractiveness&
5orrect Ans-er8 :alse

ultiple 5hoice ultiple Ans-er
;uestion8 :inancial and economic aspect of the Aisit report consists of8-
5orrect Ans-er8 5ompany0s financial year, Impact of >overnment policies on company
operations, 5omments on the last published accounts

'rue9:alse
;uestion8 #ensitivity analysis consists of assessing the degree of risk&
5orrect Ans-er8 'rue

ultiple 5hoice #ingle Ans-er
;uestion8 A project objective -hich states B.hat0 is to be vie-edB is termed as8-
5orrect Ans-er8 #trategic perspective
'rue9:alse
;uestion8 'he cost factors of the product mi%ed is also taken into account to arrive at cost
at various levels of production and its cost impact of the manufacturing&
5orrect Ans-er8 'rue

ultiple 5hoice ultiple Ans-er
;uestion8 'rend "rojection method of demand forecasting consists of8-
5orrect Ans-er8 Linear (elationship, E%ponential (elationship, polynomial (elationship

'rue9:alse
;uestion8 arket potential should be determined under the marketing aspect of the
"roject report&
5orrect Ans-er8 'rue

ultiple 5hoice #ingle Ans-er
;uestion8 (atio analysis is a -idely used tool of8-
5orrect Ans-er8 :inancial analysis

ultiple 5hoice #ingle Ans-er
;uestion8 "reoperative e%penses includes8-
5orrect Ans-er8 $ank guarantees

ultiple 5hoice #ingle Ans-er
;uestion8 arketing aspect of <etailed "roject report includes8-
5orrect Ans-er8 <emand forecasting

'rue9:alse
;uestion8 'he secondary data is collected through market survey, specific for the project
being appraised&
5orrect Ans-er8 :alse

'rue9:alse
;uestion8 <ebt service coverage ratio indicates -hether cash earned is sufficient for debt
service&
5orrect Ans-er8 'rue

ultiple 5hoice #ingle Ans-er
;uestion8 'he basic document for facilitating "roject financing is the8-
5orrect Ans-er8 <etailed "roject report

ultiple 5hoice ultiple Ans-er
;uestion8 In the <etailed "roject (eport, 'echnical aspects includes8-
5orrect Ans-er8 "lant capacity, ;uality standards, (a- material requirement

ultiple 5hoice #ingle Ans-er
;uestion8 >eneral Electric #top Light atri%8-
5orrect Ans-er8 .hich is highly respected for the sophistication, maturity and quality in
its planning systems

ultiple 5hoice #ingle Ans-er
;uestion8 >eographic market appraisal ans-ers to8-
5orrect Ans-er8 .here do the customers liveD

ultiple 5hoice ultiple Ans-er
;uestion8 'he temporary requirement of -orking capital can be financed out of8-
5orrect Ans-er8 Inter-corporate <eposits, 5ommercial "apers

atch 'he :ollo-ing

;uestion 5orrect Ans-er Cour Ans-er
)rgani=ation and
anagement
#trikes9lay-offs9lockouts
etc&
#trikes9lay-offs9lockouts
etc&
aterial inputs and utilities #tock of ra- material #tock of ra- material
.orking capital #anctioned bank limit #anctioned bank limit
arketing "ricing policy "ricing policy

atch 'he :ollo-ing

;uestion 5orrect Ans-er Cour Ans-er
Increase in current liabilities <ecreases -orking capital Inflo- of funds
Increase in liabilities Inflo- of funds Increases -orking capital
<ecrease in liabilities )utflo- of funds )utflo- of funds
Increase in current assets Increases -orking capital #tability of funds

atch 'he :ollo-ing

;uestion 5orrect Ans-er Cour Ans-er
End use method of
5ommercial
appraisal
A list of industries -herein the
product is used is made and
quantity and volume is arrived
at
A list of industries -herein the
product is used is made and
quantity and volume is arrived
at
E%port market
technique of
5ommercial
appraisal
>overnment provides ample
encouragement
>overnment provides ample
encouragement
<emand 'echnique
forecasting of
5ommercial
:uture demand of the product :uture demand of the product
appraisal
"ast trend method of
5ommercial
appraisal
Adopted as a guide depending
on the consumption pattern of
the society as a -hole
Adopted as a guide depending
on the consumption pattern of
the society as a -hole

atch 'he :ollo-ing

;uestion 5orrect Ans-er Cour Ans-er
'echnical aspect of detailed
project report
<etailed "roject
Engineering
<etailed "roject
Engineering
:inancial aspect of <etailed
"roject report
"rofitability "rofitability
arketing aspect of <etailed
"roject report
<istribution <istribution
anagement aspect of detailed
project report
5onservativeness 5onservativeness

atch 'he :ollo-ing

;uestion 5orrect Ans-er Cour Ans-er
#ource of funds <epreciation Investment
:i%ed assets $uilding $uilding
5urrent assets <ebtors <ebtors
5urrent liability 'rade credit 'rade credit

atch 'he :ollo-ing

;uestion 5orrect Ans-er Cour Ans-er
"rivate investment "o-er generation "o-er generation
"roject 'ime -bound 'ime -bound
"rogramme @ot necessarily time bound @ot necessarily time bound
:oreign direct investment achine tools achine tools

atch 'he :ollo-ing

;uestion 5orrect Ans-er Cour Ans-er
"roject
appraisal
It is the evaluation of project from
technical, market, financial,
economic and social perspective
before committing funds for
investment
It is the evaluation of project from
technical, market, financial,
economic and social perspective
before committing funds for
investment
"rogram It is large in scope, is activity
oriented and is not necessarily time
bound
It is large in scope, is activity
oriented and is not necessarily time
bound
"roject It is one-shot, time-limited, goal
oriented, major undertaking
It is one-shot, time-limited, goal
oriented, major undertaking
requiring the commitment of varied
skills and resources
requiring the commitment of varied
skills and resources
"re-
feasibility
study
It is a preliminary assessment of the
project idea to determine -hether or
not the investment opportunity is
promising
It is a preliminary assessment of the
project idea to determine -hether or
not the investment opportunity is
promising

atch 'he :ollo-ing

;uestion 5orrect Ans-er Cour Ans-er
oving into ne- areas9product lines <iversification "rojects (ehabilitation "rojects
#uppliers0 credit #hort term finance #hort term finance
<eferred credit Long term finance Long term finance
#etting up ne- units @e- "rojects <iversification "rojects

atch 'he :ollo-ing

;uestion 5orrect Ans-er Cour Ans-er
"roject :inancing /elp improving
5orporate (eturn on
Equity
Industrial :inance
5orporation of India
:inance in international financial
markets
Issue of Euro bonds Issue of Euro bonds
International financial
institutions
.orld $ank Increasing emphasis on
the "rivate initiative
"olicy of Liberalisation,
"rivatisation and >lobalisation
Increasing emphasis on
the "rivate initiative
/elp improving 5orporate
(eturn on Equity

atch 'he :ollo-ing

;uestion 5orrect Ans-er Cour Ans-er
anagement problems Lack of e%posure Lack of e%posure
anagement ;uality Initiative Initiative
anagement "erception Aspiration level9 conservative Aspiration level9 conservative
)rganisational 5limate "erson oriented "erson oriented


'rue9:alse
;uestion8 5urrent assets include stock-in-process&
5orrect Ans-er8 'rue

ultiple 5hoice ultiple Ans-er
;uestion8 :inancing plans consists of8-
5orrect Ans-er8 #hare capital, 'erm loans, Internal accruals

ultiple 5hoice #ingle Ans-er
;uestion8 <isposition of funds includes8-
5orrect Ans-er8 Interest on term loans

ultiple 5hoice #ingle Ans-er
;uestion8 >ross .orking 5apital means8-
5orrect Ans-er8 5urrent assets

#elect 'he $lank
;uestion8 ???????? in assets involves outflo- of funds&
5orrect Ans-er8 Increase

#elect 'he $lank
;uestion8 'he "roject 5ycle should be in the ???????? order
5orrect Ans-er8 Identification of "roject - "roject Appraisal - @egotiations for loans

'rue9:alse
;uestion8 <ebt Equity ratio is a 0#olvency ratio0&
5orrect Ans-er8 'rue

#elect 'he $lank
;uestion8 ???????? is a current liability&
5orrect Ans-er8 'rade credit

ultiple 5hoice #ingle Ans-er
;uestion8 <epreciation method may be8-
5orrect Ans-er8 #traight line method

#elect 'he $lank
;uestion8 E(etained earningsF is a source of ???????? finance&
5orrect Ans-er8 Internal

ultiple 5hoice #ingle Ans-er
;uestion8 <istribution channels for the product is categorised under8-
5orrect Ans-er8 arketing

'rue9:alse
;uestion8 <elay in recruitment of staff may lead to cost and time overrun
5orrect Ans-er8 'rue

ultiple 5hoice #ingle Ans-er
;uestion8
5orrect Ans-er8 5ost of repairs and maintenance

ultiple 5hoice #ingle Ans-er
;uestion8
5orrect Ans-er8 :i%ation of means of financial structure

'rue9:alse
;uestion8 (atio analysis is a technique of planning and control&
5orrect Ans-er8 :alse

#elect 'he $lank
;uestion8 5ommission outstanding is ???????? of funds&
5orrect Ans-er8 Application

ultiple 5hoice #ingle Ans-er
;uestion8 <emographic market appraisal ans-ers to
5orrect Ans-er8 .ho they areD

#elect 'he $lank
;uestion8 >oods purchased on credit ???????? in flo- of funds&
5orrect Ans-er8 <oes not result

#elect 'he $lank
;uestion8 #hort term finance is normally for a period upto ???????? year&
5orrect Ans-er8 )ne

ultiple 5hoice #ingle Ans-er
;uestion8 arketing aspect of 7<etailed "roject report includes8-
5orrect Ans-er8 <emand forecasting

ultiple 5hoice #ingle Ans-er
;uestion8 (eceivables is categori=ed under8-
5orrect Ans-er8 5urrent assets and liabilities

'rue9:alse
;uestion8 A project is unique and no t-o projects are similar&
5orrect Ans-er8 'rue

#elect 'he $lank
;uestion8 ???????? in liabilities involves inflo- of funds&
5orrect Ans-er8 Increase

ultiple 5hoice #ingle Ans-er
;uestion8 In $5> atri% B;3E#'I)@ A(G#B indicate8-
5orrect Ans-er8 "roducts -hich have high gro-th potential but lo- market share

#elect 'he $lank
;uestion8 <epreciation is sometimes treated as ???????? funds&
5orrect Ans-er8 #ource

'rue9:alse
;uestion8 'he 0$5> atri%0 analysis various products of the organi=ation in the terms of
$usiness strength and Industry Attractiveness&
5orrect Ans-er8 :alse

'rue9:alse
;uestion8 :inancial analysis based on accounting ratios -ill give misleading results if the
effects of changes in price level are not taken into account&
5orrect Ans-er8 'rue

'rue9:alse
;uestion8 In small scale organi=ation, requirement of -orking capital is quite high due to
high amount of overheads, high buying costs and high selling cost&
5orrect Ans-er8 'rue

#elect 'he $lank
;uestion8 ???????? is a current asset
5orrect Ans-er8 $ook debts

ultiple 5hoice #ingle Ans-er
;uestion8 #e-erage and drainage cost of the project is categori=ed under8-
5orrect Ans-er8 $uilding cost

'rue9:alse
;uestion8 anagerial problems in a project are the most pervasive&
5orrect Ans-er8 'rue

#elect 'he $lank
;uestion8 sponsor and the lending institutions&
5orrect Ans-er8 Limited recourse financing

#elect 'he $lank
;uestion8 Inflo- of funds may not necessarily result in ????????&
5orrect Ans-er8 Inflo- of cash

ultiple 5hoice #ingle Ans-er
;uestion8 In $5> atri% B5A#/ 5).#B indicate8-
5orrect Ans-er8 "roducts -hich have high market share but lo- gro-th potential

#elect 'he $lank
;uestion8 ???????? is that scarce input -hich financial resources alone cannot mobili=e&
5orrect Ans-er8 anagement

ultiple 5hoice #ingle Ans-er
;uestion8 #anctioned bank limits is categori=ed under8-
5orrect Ans-er8 .orking capital

'rue9:alse
;uestion8 (atios are based only on the information -hich has been recorded in the
financial statements&
5orrect Ans-er8 '(3E

ultiple 5hoice #ingle Ans-er
;uestion8 <isposal of fi%ed assets is categori=ed under8-
5orrect Ans-er8 iscellaneous

ultiple 5hoice #ingle Ans-er
;uestion8 'he $5> "roduct "ortfolio atri%8-
5orrect Ans-er8 Is a tool for strategic (product! planning and resource allocation

ultiple 5hoice #ingle Ans-er
;uestion8 A business enterprise -hich has adopted the marketing concept as an essential
ingredient of its corporate policy, is basically8-
5orrect Ans-er8 5ustomer market-oriented

ultiple 5hoice #ingle Ans-er
;uestion8 'he first phase of the technical appraisal -hich focuses upon appraising the
likely technical gaps consists of8-
5orrect Ans-er8 "roblems relating to the "roject conception and formulation

#elect 'he $lank
;uestion8
5orrect Ans-er8 Average $usiness #trength and Lo- Industry attractiveness

ultiple 5hoice #ingle Ans-er
;uestion8 <issentions among the promoters is a8-
5orrect Ans-er8 anagement problem

ultiple 5hoice #ingle Ans-er
;uestion8
5orrect Ans-er8 'echnical appraisal

ultiple 5hoice #ingle Ans-er
;uestion8 @et .orking 5apital means8-
5orrect Ans-er8 5urrent assets less 5urrent liabilities

ultiple 5hoice ultiple Ans-er
;uestion8 'he Gey terms used in the $5> "roduct "ortfolio matri% are8-
5orrect Ans-er8 #tars, ;uestion8 marks

#elect 'he $lank
;uestion8 'he ???????? market is longer the order of the day since this is an era of
professionali=ation and speciali=ed services are available at cost&
5orrect Ans-er8 onopolistic

ultiple 5hoice #ingle Ans-er
;uestion8 In the 5ash flo- statement, the
5orrect Ans-er8 <evelopment rebate reserve

ultiple 5hoice #ingle Ans-er
;uestion8
5orrect Ans-er8 "ortfolio "lanning 'ools

atch 'he :ollo-ing

;uestion 5orrect Ans-er Cour Ans-er
5lassification of
ratios
"rofitability ratio "rofitability ratio
Advantages of (atio
Analysis
It helps in planning and
forecasting
Inter firm comparison
Limitation of (atio
analysis
:acts only those -hich can be
e%pressed in financial terms are
considered
:acts only those -hich can be
e%pressed in financial terms are
considered
"recautions before
using ratio analysis
Impact of the inflationary
conditions of changing price
levels to be taken in account
Impact of the inflationary
conditions of changing price
levels to be taken in account

#elect 'he $lank
;uestion8
5orrect Ans-er8 .orking capital

ultiple 5hoice #ingle Ans-er
;uestion8 Land and site development cost includes cost of8-
5orrect Ans-er8 >ates

#elect 'he $lank
;uestion8 In the >E0s #top Light atri%, -hen ???????? situation prevails, "roducts call
for /old&
5orrect Ans-er8 Average $usiness #trength and edium Industry Attractiveness

ultiple 5hoice #ingle Ans-er
;uestion8 Liabilities side of $alance sheet includes8-
5orrect Ans-er8 3nsecured loans

'rue9:alse
;uestion8
5orrect Ans-er8 'rue

'rue9:alse
;uestion8 E%port arket is a technique used for forecasting under 5ommercial appraisal
technique&
5orrect Ans-er8 'rue

ultiple 5hoice #ingle Ans-er
;uestion8 sources of funds include
5orrect Ans-er8 #hare Issue

atch 'he :ollo-ing

;uestion 5orrect Ans-er Cour Ans-er
"ermanent .orking 5apital
finance
#hares .orking capital
requirement high
5apital budgeting Acquire fi%ed asset #hares
.orking capital Invest in current asset .orking capital
requirement lo-
Inflationary conditions .orking capital
requirement high
Acquire fi%ed asset

ultiple 5hoice #ingle Ans-er
;uestion8 'he acronym for 0L">0 is8-
5orrect Ans-er8 Liberali=ation, "rivati=ation and >lobali=ation

ultiple 5hoice #ingle Ans-er
;uestion8 'he 5ash :lo- statement is also referred to as8-
5orrect Ans-er8 5ash flo- budget

atch 'he :ollo-ing

;uestion 5orrect
Ans-er
Cour Ans-er
Environmental stability dimension under #"A5E
odel involves
<emand
variability
$usiness strength
5ompany0s competitive advantage dimension
under #"A5E odel involves
"roduct life
cycle
<emand
variability
5ompany0s financial strength dimension under
#"A5E odel involves
Leverage
liquidity
Industry
attractiveness
industry strength dimension under #"A5E odel
involves
"rofit potential "roduct life cycle

ultiple 5hoice #ingle Ans-er
;uestion8 Location of the factory comes under the8-
5orrect Ans-er8 >eneral category

atch 'he :ollo-ing

;uestion 5orrect Ans-er Cour Ans-er
>eneral
functional
layout
"resent the general relationship
bet-een equipment buildings
and civil -orks
'he plan of -ork concerning
installation as -ell as initial
operation
Location $road area such as city,
industrial belt etc&
'he diagrams indicating the flo- of
materials, utilities, final product, by-
products and emission
#ite #pecific piece of land -here the
project -ould be set up
$road area such as city, industrial
belt etc&
"lant layout "hysical layout of the factory #pecific piece of land -here the
project -ould be set up


ultiple 5hoice #ingle Ans-er
;uestion8 anagement aspect of detailed project report includes
5orrect Ans-er8 )rgani=ation structure

ultiple 5hoice #ingle Ans-er
;uestion8 5ost of materials include8-
5orrect Ans-er8 5ost of components and consumable stores

#elect 'he $lank
;uestion8 'he company having ???????? is appropriate for the strategic posture of
<efensive under the #"A5E approach&
5orrect Ans-er8 Lacks both competitive advantage as -ell as financial strength and
belongs to a not so attractive industry, operating in an unstable environment

#elect 'he $lank
;uestion8 (etained earnings are a source of ???????? finance&
5orrect Ans-er8 Internal

ultiple 5hoice #ingle Ans-er
;uestion8 #tock in the beginning results in8-
5orrect Ans-er8 Application of funds

'rue9:alse
;uestion8 'he construction of @ational >olden ;uadrilateral can be recogni=ed as
"roject&
5orrect Ans-er8 'rue

atch 'he :ollo-ing

;uestion 5orrect Ans-er Cour Ans-er
5urrent ratio Liquidity ratio Liquidity ratio
<ebt-Equity ratio #olvency ratio #olvency ratio
E%ternal liabilities <ebt 5urrent liability
#hareholders funds Equity Equity

ultiple 5hoice ultiple Ans-er
;uestion8 'he data for ratio analysis is obtained from8-
5orrect Ans-er8 "rofit and Loss Account, $alance #heet

ultiple 5hoice ultiple Ans-er
;uestion8 'he objectives of the funds flo- statement is as follo-s8-
5orrect Ans-er8 'o find out the uses of loans raised by the business, 'o indicate the
financial strength and -eakness of the business, 'o help to understand the changes in
assets as -ell as asset sources -hich are not revealed by the income statement

ultiple 5hoice #ingle Ans-er
;uestion8 #trategic "osition and Action Evaluation odel8-
5orrect Ans-er8 Is an approach to hammer out an appropriate strategic posture for a firm
and its individual business

ultiple 5hoice ultiple Ans-er
;uestion8 'echnical appraisal is basically concerned -ith8-
5orrect Ans-er8 'echnology, Layout of the plant, <esign of the plant

ultiple 5hoice #ingle Ans-er
;uestion8 'he basic characteristic of a project is8-
5orrect Ans-er8 'hat it involves current outlay of funds in e%pectation of future benefits

ultiple 5hoice ultiple Ans-er
;uestion8 (atios relating to -orking capital are8-
5orrect Ans-er8 5urrent ratio, Internal measure, ;uick ratio

ultiple 5hoice #ingle Ans-er
;uestion8 iscellaneous fi%ed assets includes8-
5orrect Ans-er8 5ables

ultiple 5hoice #ingle Ans-er
;uestion8 In $5> atri% B#'A(#B indicate8-
5orrect Ans-er8 "roducts -hich enjoy a high market share as -ell as a high gro-thrate

ultiple 5hoice #ingle Ans-er
;uestion8 5apital Issue e%penses include8-
5orrect Ans-er8 $rokerage fees to registrars

ultiple 5hoice #ingle Ans-er
;uestion8 "ast trend method of 5ommercial appraisal technique is8-
5orrect Ans-er8 Adopted as a guide depending on the consumption pattern of the society
as a -hole

ultiple 5hoice ultiple Ans-er
;uestion8 anagement category of Aisit report consists of8-
5orrect Ans-er8 anaging <irector, Institutional nominees, 5ommittees of the board

ultiple 5hoice #ingle Ans-er
;uestion8 #anctioned bank limits is categorised under8-
5orrect Ans-er8 .orking capital

ultiple 5hoice ultiple Ans-er
;uestion8 "roduction and sales aspect of Aisit report consists of8-
5orrect Ans-er8 3tilisation of installed capacity, Input availability, #ales trends

ultiple 5hoice #ingle Ans-er
;uestion8 5ost of overheads include8-
5orrect Ans-er8 5ost of repairs and maintenance

ultiple 5hoice ultiple Ans-er
;uestion8 E%ternal sources of cash are as follo-s8-
5orrect Ans-er8 Issue of ne- shares, Long term loans, #hort term borro-ings

ultiple 5hoice #ingle Ans-er
;uestion8 'he cost of "lant and achinery includes8-
5orrect Ans-er8 5ost of stores and spares

ultiple 5hoice ultiple Ans-er
;uestion8 'he sources of long term and medium term finance are8-
5orrect Ans-er8 "ublic deposit, Equity shares

#elect 'he $lank
;uestion8 A market survey generally is a ???????? survey&
5orrect Ans-er8 #ample

'rue9:alse
;uestion8 'he <etailed "roject report must indicate the gestation period of the project&
5orrect Ans-er8 'rue

'rue9:alse
;uestion8 Interest and <ividend are to be considered -hile calculating )perating ratio&
5orrect Ans-er8 :alse

ultiple 5hoice #ingle Ans-er
;uestion8 #hort supplies of materials may lead to8-
5orrect Ans-er8 5ost and time overrun

ultiple 5hoice ultiple Ans-er
;uestion8 'he sources of cash are8-
5orrect Ans-er8 5ash from operations, #ale of machinery, Issue of ne- shares

ultiple 5hoice ultiple Ans-er
;uestion8 anagement qualities includes8-
5orrect Ans-er8 /onesty, :inancial resources, Initiative

'rue9:alse
;uestion8 'he 0$5> atri%0 analysis various products of the organi=ation in the terms of
$usiness strength and Industry Attractiveness&
5orrect Ans-er8 :alse

'rue9:alse
;uestion8 'he >eneral Electric 5ompany incorporated in the 3#A, is highly respected
for the sophistication, maturity and quality in its planning systems&
5orrect Ans-er8 'rue

ultiple 5hoice ultiple Ans-er
;uestion8 In the <etailed "roject (eport, anagement aspects includes8-
5orrect Ans-er8 <etermination, )rgani=ation $uilding, "erson 9 system oriented

ultiple 5hoice #ingle Ans-er
;uestion8 In $5> atri% B;3E#'I)@ A(G#B indicate8-
5orrect Ans-er8 "roducts -hich have high gro-th potential but lo- market share

ultiple 5hoice ultiple Ans-er
;uestion8 Internal sources of funds are8-
5orrect Ans-er8 :unds from operation, Loss on sale of fi%ed assets, >ood-ill -ritten off
s from operation, Loss on sale of fi%ed assets

ultiple 5hoice #ingle Ans-er
;uestion8 End use method of 5ommercial appraisal technique is8-
5orrect Ans-er8 A list of industries -herein the product is used is made and quantity and
volume is arrived at

ultiple 5hoice ultiple Ans-er
;uestion8 'he applications of cash are8-
5orrect Ans-er8 "urchase of fi%ed assets, "ayment of long term loans

#elect 'he $lank
;uestion8 Location of the factory comes under the ???????? category of the "roject
report&
5orrect Ans-er8 >eneral

ultiple 5hoice #ingle Ans-er
;uestion8 'he industrial concern earned profits by increasing the sales volume under
the8-
5orrect Ans-er8 #ales concept

'rue9:alse
;uestion8 'he 0$5> atri%0 analysis various products of the organi=ation in the terms of
$usiness strength and Industry Attractiveness&
5orrect Ans-er8 :alse

ultiple 5hoice ultiple Ans-er
;uestion8 >eneral category of the "roject report consists of8-
5orrect Ans-er8 @ame of the Industrial concern, "roposed product, Location of the
factory

ultiple 5hoice #ingle Ans-er
;uestion8 :inancial aspect of <etailed "roject report includes8-
5orrect Ans-er8 :i%ation of means of financial structure

ultiple 5hoice #ingle Ans-er
;uestion8 A project can be regarded as the sum of the activities directed to-ards a8-
5orrect Ans-er8 #pecific result

ultiple 5hoice #ingle Ans-er
;uestion8 #e-erage and drainage cost of the project is categorised under8-
5orrect Ans-er8 $uilding cost

#elect 'he $lank
;uestion8 ???????? capital represents permanent capital&
5orrect Ans-er8 Equity

ultiple 5hoice ultiple Ans-er
;uestion8 <emand technique forecasting of 5ommercial appraisal includes8-
5orrect Ans-er8 :uture demand of the product, "roper survey of the product, :uture
availability and supply of the product

ultiple 5hoice #ingle Ans-er
;uestion8 'he ratio -hich covers those assets -hich can be converted into cash
immediately is kno-n as8-
5orrect Ans-er8 ;uick ratio

ultiple 5hoice ultiple Ans-er
;uestion8 'ime #eries "rojection ethods of <emand forecasting consists of8-
5orrect Ans-er8 'rend "rojection method, oving Averages method

#elect 'he $lank
;uestion8 <etails regarding Internal accruals comes under the ???????? category of
project report&
5orrect Ans-er8 :inancing plan
ultiple 5hoice ultiple Ans-er
;uestion8 'he follo-ing are the sources of funds8-
5orrect Ans-er8 )perating "rofit, @on operating Income

'rue9:alse
;uestion8 "roduction line diagrams sho- the organi=ation structure of the project along
-ith information on location, personnel required for various departments, and their
interrelationship&
5orrect Ans-er8 :alse

ultiple 5hoice #ingle Ans-er
;uestion8 'echnical aspect of detailed project report includes8-
5orrect Ans-er8 <etailed "roject Engineering

ultiple 5hoice ultiple Ans-er
;uestion8 5asual methods of <emand forecasting consists of8-
5orrect Ans-er8 5onsumption-level method, Econometric method

ultiple 5hoice #ingle Ans-er
;uestion8 "sychographic market appraisal ans-ers to8-
5orrect Ans-er8 .hy they buyD

ultiple 5hoice #ingle Ans-er
;uestion8 Appointments made at senior level during the half-year is categorised under8-
5orrect Ans-er8 )rgani=ation and management
'rue9:alse
;uestion8 In small scale organisation, requirement of -orking capital is quite high due to
high amount of overheads, high buying costs and high selling cost&
5orrect Ans-er8 'rue

'rue9:alse
;uestion8 @ominal ma%imum capacity is the capacity that is technically attainable and
this corresponds to the supplier0s guaranteed capacity&
5orrect Ans-er8 'rue

#elect 'he $lank
;uestion8 Investors -ho invest in the debentures of the company are the ???????? of the
company&
5orrect Ans-er8 5reditors

ultiple 5hoice #ingle Ans-er
;uestion8 <elay in arrival of domestic9foreign machinery and technicians may lead to8-
5orrect Ans-er8 5ost and time overrun

'rue9:alse
;uestion8 (atio should be computed on the basis of inter-related figures -hich have a
cause and effect relationship&
5orrect Ans-er8 'rue

'rue9:alse
;uestion8 3nlike financial projections, there cannot be any fi%ed, -ell-recognised or
structure formula9steps for management evaluation9appraisal&
5orrect Ans-er8 'rue

ultiple 5hoice #ingle Ans-er
;uestion8 'he entire life of the project is taken into account under
5orrect Ans-er8 Average rate of return method

#elect 'he $lank
;uestion8 ???????? occupies a unique position in the macro economic development
-hich helps in induction of ne- technology and facilitates, greater efficiency as -ell as
higher productivity&
5orrect Ans-er8 Investment

ultiple 5hoice ultiple Ans-er
;uestion8 'he various aspects -hich need to be considered -hile assessing "roject
finance financing are8-
5orrect Ans-er8 Environmental factors, (isk involved, anagerial compensation

ultiple 5hoice #ingle Ans-er
;uestion8 'he "rojects -hich are undertaken to manufacture certain products -hich are
being used as ra- material by the e%isting units is kno-n as8-
5orrect Ans-er8 $ack-ard Integration "rojects

#elect 'he $lank
;uestion8 In the >E0s #top Light atri%, -hen ???????? situation prevails, "roducts call
for divestment&
5orrect Ans-er8 Average $usiness #trength and Lo- Industry attractiveness

ultiple 5hoice ultiple Ans-er
;uestion8 <ebt #ervice coverage ratio may be considered to be one of the most important
ratios calculated by the8-
5orrect Ans-er8 $ankers, :inancial Institutions

ultiple 5hoice #ingle Ans-er
;uestion8 'he emphasis of the $anks and :inancial institutions particularly in India has
shifted from 0#anctions0, 0<isbursements0 and 0#ecurity-orientation0 to
0(ecovery9(ecycling0 and8-
5orrect Ans-er8 Activity orientation

'rue9:alse
;uestion8 A high debt equity ratio may indicate that the financial stake of the creditors is
more than that of the o-ners&
5orrect Ans-er8 'rue

'rue9:alse
;uestion8 :inancial analysis based on accounting ratios -ill give mis-leading results if
the effects of changes in price level are not taken into account&
5orrect Ans-er8 'rue

'rue9:alse
;uestion8 'he ma%imum #eed 5apital assistance provided by I<$I under the project -ill
be restricted to H1I of the required promoter0s contribution or (s& H1 lakhs
5orrect Ans-er8 :alse

ultiple 5hoice #ingle Ans-er
;uestion8 'he cash flo- of all the years during the e%pected life of the project are
discounted at a pre-determined cut off rate and8-
5orrect Ans-er8 @et "resent value is obtained

'rue9:alse
;uestion8 :or computing Interest coverage ratio, "rofit after Interest and ta%es are taken
into account&
5orrect Ans-er8 :alse

'rue9:alse
;uestion8 <ebt #ervice means payment of installments and interest against an amount
borro-ed as per terms of loan&
5orrect Ans-er8 'rue

#elect 'he $lank
;uestion8 <etails regarding $ridge finance comes under the ???????? category of
"roject report&
5orrect Ans-er8 :inancing plan

ultiple 5hoice #ingle Ans-er
;uestion8 'he method for evaluating the profitability of industrial projects -hose object
is to ascertain the period required for recovering the entire investment made in a project
is kno-n as8-
5orrect Ans-er8 "ay back method

#elect 'he $lank
;uestion8 "osition regarding requirement and training of operational staff comes under
the ???????? category of "roject report&
5orrect Ans-er8 "roject organisation

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