Classical

June 2015 - Paper 3

31:  

Which of the following techniques for appraisal of investment proposals are based on time value of money ?

(a) Accounting Rate of Return

(b) Internal Rate of Return

(c) Profitability Index Method

(d) Earnings Per Share

Codes:

A.

(a) and (b)

B.

(b) and (c)

C.

(a) and (d)

D.

(a), (b) and (d)

 
 

Option: B

Explanation :


32:  

On the basis of the following information, what will be the EBIT corresponding to financial indifference point ?

Total capital outlay Rs 60,00,000

Financing Plans

(a) 100% Equity @ Rs 10/- per share

(b) Debt - equity ratio 2 : 1

Rate of interest 18% p.a., corporate tax rate 40%

A.

Rs 10,00,000

B.

Rs 12,00,000

C.

Rs 10,80,000

D.

Rs 12,80,000

 
 

Option: C

Explanation :


33:  

Which one of the following assumptions is not included in the James E. Walter Valuation model ?

A.

All financing by retained earnings only

B.

No change in the key variables such as EPS and DPS

C.

The firm has finite life

D.

All earnings are either distributed as dividends or invested internally immediately

 
 

Option: C

Explanation :


34:  

Match the items of List - I with the items of List - II and find out the correct matching.ugc net commerce

A.

(ii) (iii) (i)

B.

(i) (ii) (iii)

C.

(iii) (ii) (i)

D.

(ii) (i) (iii)

 
 

Option: A

Explanation :


35:  

Statement - I :

Working capital leverage measures the responsiveness of Return on Equity for changes in current Assets.

Statement - II :

When the annual demand for an item is 3200 units, unit cost Rs 6, inventory carrying charges 25% p.a. and cost of one procurement Rs 150, the economic ordering quantity would be 700 units.

Codes

 

 

A.

Both statements are correct

B.

Both statements are incorrect

C.

Statement - I is correct and Statement - II is incorrect

D.

Statement - I is incorrect and Statement - II is correct

 
 

Option: B

Explanation :




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