Welcome to your International Navodaya Chamber of Commerce (INCOC) Platform ! Subject: Strategic Financial Management Total Number of Question: 40 Time: 41 Minutes Please check your email after completion of test for result. All the best... Name Phone No Email State 1. The Profitability Index of a project is 1.28, and its cost of investment is ₹2,50,000. The NPV of the project is: ₹75,000 ₹80,000 ₹70,000 ₹65,000 None 2. The IRR of a project is 10%. If the annual cash flow after tax is ₹1,30,000 and the project duration is 4 years, what is the initial investment in the project? ₹4,10,000 ₹4,12,100 ₹3,90,000 ₹4,05,000 None 3. The NPV of a 4-year project is ₹220 lakh, and PVIFA at 12% for 4 years is 3.037. The Equivalent Annual Benefit of the project is: ₹66.52 lakh ₹94.74 lakh ₹66.96 lakh ₹76.65 lakh None 4. The following is not a disadvantage of the pay-back period as an evaluation measure for selecting a project: Before the pay-back period, the mix of cash flows can be rearranged to get the same result. It does not consider the magnitude of cash flows after the payback period. It can give a conflicting decision compared to the net present value method. A company that is cash-poor gauges the early recovery of funds invested None 5. Annual Cost Saving ₹4,00,000; Useful life 4 years; Cost of the Project ₹11,42,000. The Payback period would be: 2 years 8 months 2 years 11 months 3 years 1 year 10 months None 6. The Profitability Index of a project is 1.28, and its cost of investment is ₹2,50,000. The NPV of the project is: ₹75,000 ₹80,000 ₹70,000 ₹65,000 None 7. A project with an initial investment of ₹100 lakhs and life of 10 years generates CFAT of ₹20 lakh per annum. The Payback Reciprocal is: 25% 20% 10% 30% None 8. A company with PAT of ₹40 lakh, tax rate of 50%, and RONW of 100% will have pre-tax EPS of: ₹4.00 ₹40.00 ₹36.00 ₹42.00 None 9. A bond with a par value of ₹1,000 has a 6% annual coupon rate, and the price of the bond is ₹1,025. What is the current yield? 3.0% 2.9% 6.2% 5.9% None 10. Given a project with an annual cost savings of ₹4,00,000, IRR of 15%, and a useful life of 4 years, the Discounted Payback Period is: 2.85 years 2.89 years 3.54 years 2.95 years None 11. The following is not a disadvantage of the pay-back period as an evaluation measure: It ignores cash flows after the payback period. It can give conflicting decisions compared to NPV. It measures the risk of early cash recovery. It ignores the time value of money. None 12. According to the constant growth model, the market price with a next year’s dividend of ₹2.00, a required rate of return of 15%, and a growth rate of 10% would be: ₹50 ₹45 ₹40 ₹48 None 13. A stock with a dividend pay-out ratio of 45%, required rate of return of 15%, and a growth rate of 10% will have a P/E ratio of: 3 times 9 times 8 times 7.5 times None 14. A 20-year bond with semi-annual payments at a coupon rate of 8% and YTM of 9% is priced at: ₹1080 ₹1000 ₹908 ₹966 None 15. A project with an initial cost of ₹15,000 and projected cash flows over three years requires analysis of the NPV. The expected net present value is: ₹6,995 ₹7,500 ₹6,000 ₹5,995 None 16. If a company with limited funds needs to choose between four projects, it should select: The project with the highest NPV The project with the lowest risk The combination with the highest total profitability index The shortest payback period None 17. Which of the following securities is most liquid? Money Market instruments Capital Market instruments Gilt-edged securities Index futures None 18. The beta of a stock is 2.00, and if the expected return increases from 10% to 12%, what would be the new required rate of return on the stock? 15.0% 16.0% 20.0% 22.5% None 19. The MIRR of a project with an initial outlay of ₹50,000, a cost of capital of 12%, and a future value of cash flows of ₹1,04,896.50 is: 20.35% 21.53% 31.25% 12.25% None 20. A mutual fund wants to hedge its portfolio of shares worth ₹10 crore using the NIFTY Index Futures. The number of contracts to be traded is: 110 116 145 123 None 21. If the profitability index of a project is greater than 1, then: The project should be rejected The project is acceptable The IRR is less than the discount rate None of the above None 22. What is the impact of inflation on investment decisions? No effect It reduces the real cash flows It increases the nominal discount rate Both b and c None 23. Which of the following investment avenues has the least risk associated with it? Corporate Fixed Deposits Government Securities Equity Real Estate None 24. If the cost of an investment is ₹25,000 and it results in a net cash inflow of ₹1,800 per annum forever, the Net Profitability Index of the investment is: 0.9 (-) 0.1 1.11 0.8 None 25. A project has the following cash flows. If the discount rate is 20%, then the NPV of the project is: 11.75 12.34 12.74 11.50 None 26. A project with an initial investment of ₹100 lakhs and a life of 10 years generates cash flows after tax (CFAT) of ₹20 lakh per annum. The Payback Reciprocal is: 25% 20% 10% 30% None 27. The NPV of a 5-year project is ₹250 lakh and PVIFA at 10% for 5 years is 3.79. The Equivalent Annual Benefit of the project is: ₹65.96 lakh ₹947.5 lakh ₹56.96 lakh ₹96.65 lakh None 28. For an investment project, the following information is available: Annual Cost Savings = ₹4,00,000; IRR = 15%; Useful life = 4 years; PVIFA (15%, 4) = 2.85. The Discounted Payback Period is: 2.85 years 2.89 years 3.54 years 2.95 years None 29. NPV at discounting rate of 10% = ₹1250 and NPV at discounting rate of 11% = ₹(-) 200. The IRR of the proposal is: 11.86% 10.86% 9.87% 11.96% None 30. The Profitability Index of a project is 1.28 and its cost of investment is ₹2,50,000. The NPV of the project is: ₹75,000 ₹80,000 ₹70,000 ₹65,000 None 31. The IRR of a project is 10%. If the annual cash flow after tax is ₹1,30,000 and the project duration is 4 years, what is the initial investment in the project? ₹4,10,000 ₹4,12,100 ₹3,90,000 ₹4,05,000 None 32. The NPV of a 4-year project is ₹220 lakh and PVIFA at 12% for 4 years is 3.037. The Equivalent Annual Benefit of the project is: ₹66.52 lakh ₹94.74 lakh ₹66.96 lakh ₹76.65 lakh None 33. A real option provides the firm the _______, but not the obligation, to take some action in the future. right duty responsibility commitment None 34. If nominal discounting rate is 15% and inflation rate is 5%, then real discounting rate will be: 9.52% 9.25% 10.25% 10.52% None 35. A 20-year bond with semi-annual payments at a coupon rate of 8% and YTM of 9% is priced at: ₹1080 ₹1000 ₹908 ₹966 None 36. Which of the following securities is most liquid? Money Market instruments Capital Market instruments Gilt-edged securities Index futures None 37. A stock with a dividend pay-out ratio of 45%, required rate of return of 15%, and a growth rate of 10% will have a P/E ratio of: 3 times 9 times 8 times 7.5 times None 38. Which of the following techniques is the most suitable, when NPV and IRR lead to inconsistent ranking due to life disparity between two or more projects? Modified Net Present Value Modified Internal Rate of Return Uniform Annual Equivalent Cost/Benefit Discounted Payback Period None 39. A bond with a par value of ₹1,000 has a 6% annual coupon rate, and the price of the bond is ₹1,025. What is the current yield? 3.0% 2.9% - 6.2% 5.9% None 40. Which investment has the highest risk? - X: SD = 37,947, Expected NPV = 90,000 - Y: SD = 44,497, Expected NPV = 1,06,000 - Z: SD = 42,163, Expected NPV = 1,00,000 - U: SD = 41,997, Expected NPV = 90,000 X Y Z U None 1 out of 4 Great job on taking the INCOC Test! We appreciate your interest in test. Look out for results and future opportunities. Stay Connected !! Your quiz time is about to finish. Few seconds left. Time's upYou cannot switch tabs while taking this quiz!You are not allowed to switch tabs violation has been recorded.you cannot minimize full screen mode!You are not allowed to minimize full screen while taking this quiz, violation has been recorded.Access denied! To begin the quiz, please grant this quiz access to your camera.Time is Up!Time is Up!
