11 Jun 2014

Smu mba finance management sample paper set three


Unit 10 Mark 2
Question:
Which approach to capital rationing tries to achieve maximum NPV subject to many constraints.
Response:
Profitability index
Should have chosen
Linear programming
Integer programming
Capital budgeting
Question:
When project are not divisible _________can be employed to avoid the change of accepting fraction of a project.
Response:
Linear programming
Integers
Should have chosen
Integer programming
Capital budgeting
Question:
Projects are to be ___________ under capital rationing
Response:
Should have chosen
Ranked
Listed
Selected
Prioritized
Question:
Ranking is done under capital rationing on basic of
Response:
Profitability
Certainty equivalent
IRR
Correct
NPV
Question:
When a firm imposes constraints on the total size of its capital budget, it is know as ___________.
Response:
Capital planning
Capital rationing
Capital budgeting
Capital expenditure
Question:
What factors are irrelevant to the external capital rationing?
Response:
Investors confidence is low
High volatile market
Inability of the firm to satisfy regulatory norms
Correct
Low issue cost for securities
Unit 10 Mark 4
Question:
Profitability index of project A is 1.1637 ; B is 1.216 and C is 1.1964. The ranking are:
Response:
A, B, C
B, A, C
Should have chosen
B, C, A
A, C, B

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