ACC501 VU Current Final Paper Spring 2012

64 questions
4 of 3 mrk’s
4 of 5 mrk’s
56 mcq’s

Mcq new thay zeyada tar past papers me sy 2,3 he ay thay mujy bs

Define Solo proprietership,explain its 2 advantages nd 2 disadvantages. 5 mrk

Bankcurptcy and its types 5 mrk

1 numerical simple Initial investment and 3 years Cf’s were given, to find out NPV nd pay back period 5 mrk.
1 i guess about flat or aisa he kuch topic ha.
find out cost of debt.3 mrk
1 question about Return in dolllar terms. 3 mrk
1 numerical very simple for finding out tax rate nd average tax rate on taxalbe amount which was 80000/- tax schdule was also given.

PAPER 2;

Mostly MCQ’s from past papers

Short  quiz’s theory based mostly from last 10 lectures

1.Which of the following type of bond pays no coupon at all and are offered at

a price that is much lower than its stated value?

Select correct option:

Government bonds

Zero coupon bonds pg 85

Floating-rate bonds

Euro bonds

2.A company’s ability to meet long-term obligations can be estimated by using

which of the following set of ratios?

►Liquidity Ratio

►Solvency Ratios

pg 34

►Asset Management Ratios

►Market Value Ratios

3.Which of the following is an example of positive covenant?

Select correct option:

Maintaining any collateral or security in good condition

Limiting the amount of dividend according to some formula

Restricting pledging assets to other lenders

Barring merger with another firm

4.If the dividend for a share is growing at a steady rate then which of the

following formula(s) can be used to find the dividend in two periods?

Select correct option:

D2 = D1 x (1 + g )

D2 = Do x ( 1 + g )2

D2 = Do x ( 1 + g )2

All of the given options pg 92

5.An investment should be accepted if the net present value is __________ and

rejected if it is ________.

Positive; positive

Positive; negative

Negative; negative

Negative; positive

6.Which of the following is NOT a shortcoming of Payback Rule?

Select correct option:

Time value of money is ignored

It fails to consider risk differences

Simple and easy to calculate

None of the given options pg 106

7.Which of the following measures the present value of an investment per

dollar invested?

Select correct option:

Net Present Value (NPV)

Average Accounting Return (AAR)

Internal Rate of Return (IRR)

Profitability Index (PI) pg 119

8_________ paid by corporation is tax deductible but _________ paid are not tax

deductible.

Select correct option:

Interest; dividend

Dividend; interest

Bonus; interest

None of the given options

9.Sumi Inc. has just paid a dividend of Rs. 7 per share. The dividend of this company

grows at a steady rate of 5% per year. What will be the dividend in 5 years?

Select correct option:

Rs. 4.41

Rs. 6.12

Rs. 7.35

Rs. 8.93

10.Which one of the following typically applies to preferred stock but not to

common stock?

Select correct option:

Dividend yield

Cumulative dividends

Voting rights

Tax deductible dividends

11.Which of the following rate makes the Net Present Value (NPV) equal

to zero?

Select correct option:

Average Accounting Return (AAR)

Internal Rate of Return (IRR) pg 109

Required Rate of Return (RRR)

Weighted Average Cost of Capital (WACC)

12.—————- refers to the extent to which fixed-income securities (debt and

preferred stock) are used in a firm’s capital structure.

Select correct option:

Financial risk

Portfolio risk

Operating risk

Market risk

13.Which of the following describes how a product moves through the current asset

accounts ?

Cash Cycle

Operating Cycle

Current Cycle

None of the given options

14.Your gain (or loss) on an investment that you buy is called your : Select

correct option:

Risk on investment

Return on investment

Gain on investment

loss on investment

15.Speculative Motive - the need to hold cash to take advantage of additional investment

opportunities,

such as bargain purchases, attractive interest rates and favorable exchange rater fluctuations.

•Reserve borrowing utility and Marketable securities

16.Standard deviations for Investment A and Investment B are 25% and 12% respectively. This

indicates that :

Select correct option:

Investment A is less volatile than Investment B

Investment B is equally volatile to Investment A

Investment A is more volatile than Investment B

Investment B is more volatile than Investment A

17.of the following statement measures performance over a specific period of

time?

Select correct option:

Income Statement

Balance Sheet

Cash Flow Statement

Retained Earning Statement

18.Which of the expenses in given options is not a cash outflow for the firm?

Select correct option:

Depreciation

Dividends

Interest payments

Taxes

19.Which of the following type of risk can be eliminated by diversification ?

Select correct option:

Systematic Risk

Market Risk

Unsystematic Risk

None of the given options

20.Restocking costs are normally assumed to be ?

fixed.

Variable.

21.Rule of 72 is

To double the money

PAPER 3

d/f between debt and equity?5 marks

d/f between temporary and permanent current assets?5 marks

types of inventory? 3 marks

find portfolio weight

find risk premium

find NPV and PI
PAPER 4

Ali wants to invest Rs.500,000 for 5 years in a bank. On the basis of below information by two banks, suggest him the best alternate. Show complete calculation to support your decision.

Bank
Annual Interest Rate
Type of Interest
Bank A
9%
Simple Interest
Bank B
8.50%
Compound Interest

Define credit instruments? Write a note on different types credit instruments

Briefly describe cost of equity and cost of debt.

A company is evaluating a project that costs Rs. 20,000 and has cash flows of Rs. 5,000 a year for six years. Company has 12 percent cost of capital. Calculate project’s NPV (Net Present Value) and PI (Profitability Index). Is the project feasible?

Define Variance. What does it tell regarding return?

If you plan to save Rs. 12,000 with a bank at an interest rate of 9%, what will be the worth of your amount after 4 years if interest is compounded annually?

What is Weighted Average Cost of Capital (WACC)?

What are the recommendations if policies are flexible with regard to current assets?

Acc501 Fall 2011 Final Term 16 Feb 2012

Total 69 question
62 mcqs related to discounting, cash flows, financial policy, asset management,
short question were
 

1:- cost of bankruptcy, and definition of bankruptcy
2:- how we measure the cost of debt
3:- characteristics of short term financial policy
4:- A question of effective annual interest rate calculation in which bank A offer 16.50% rate quarterly, and Bank B offers 16.75% rate semi annually, so we
have to decide which one is better to invest.(the answer was BANK A , As it offers 17.55% effective rate and bank B offers 17.45%)
5:- EDI (electronic data interchange) definition and advantage

Another Paper:

Total Questions were 69
MCQ s were conceptual and also included the short Numerical
Eg. If the stock
 

Price is $ xxx and the Rate is x% then what it the outcome after the tax where the tax is X%
And also about A/ Receivable period and the cash cycle
The subjective Questions were following:
What the static theory of optimal capital structure states? (3)
What the optimal capital structure ?(3)
” Unsystematic risk is essential to eliminate by the diversification” Explain(3)
Describe the Systematic risk and the unsystematic risk with different examples ? And what is retail business? (5)
Describe what is the relationship between the WACC and the capital structure? (5)
What are the types of the inventories of a manufacturing firm and also describe the diversification?
Make the balance sheet with the following detail (5)
Current assets 500000
Net fixed asset 700000
Short term debt 400000
Long term debt 25000

ACC501 Business Finance Final Term 2011 paper subjective

Total 59 mcqs

10 Subjective questions as under

1. what is optimal credit policy state? 3
2. what is difference between market value and book value? 3
3. how cost of debt can be measured? 3
4. define benchmarking and its method? 5
5. find out portfolio?  5
6. find out capita gain and dividend yeild and total percentage of return? 5
7. describe difference type of firm's inventory and retail business? 5
8. what is the best cash policy?   5

ACC501-Business Finance-Current-Midterm-Subjective-Paper-2011

Difference between public issued bond and public bond (3)
Why value of ordinary annuity is less than due annuity? (3)
What is dividend payout and retention ratio? and their relationship? (5)
calculate real rate if
a) Nominal rate is 15% and inflation rate is 6%.
b)Nominal rate is 12% and inflation rate is 5% .

Long Questions

1: Dividend payout and retention ratio and their relationship
2: Bond Theorism ........
3: How does Bond price fluctuate with the change of interest rate?
4:FV calculation ? when principal was 12000 and 9% interest rate four years investment period.

ACC501 Business Finance Paper Midterm 2011 Subjective Questions

Question # 1 (3 Marks)

Method of Calculating Yield to Maturity?

Question # 2 (3 Marks)
what is meant by total vu39 assets management ratios? name any common ratio under this category?

Question # 3 (5 marks)
Bond valuation Numerical Question, given from discount bond valuation.?
Question Material:
face value = 1000
annual coupon = 80
t = 15 years
Market value of the identical bond = 10%

Question # 4 (5 Marks)
Find the debt equity? when profit margin ratio = 10% You need Rs. 500,000 to buy a new vehicle. If you have Rs. 60,000 to invest at 15 percent compounded annually, how long will you have to wait to buy the vehicle

ACC501 Business Finance Subjective Final Term Questions Jan-2012

Electronic Dara Interchange and its advantages.

Define portfolio....What is portfolio weight give example.
Difference between Cash Cycle and Operating Cycle.
What is the reason of tax deduction on the difference between book value and market value.
What is the relationship between Capital structure and WACC.
Two aspects of short term financial policy.
Draw the cost table for chain matrix multiplication problem with initial state.
(2)
What is the common problem in communications networks and circuit designing?
(2)
How shortest path information is propagated in graph using Bell-Ford algorithm?
(2)
The following adjacency matrix represents a graph that consists of four vertices labeled 0.
1, 2 and 3. The entries in the matrix indicate edge weights.
0 1 2 3
0 0 1 0 3
1 2 0 4 0
2 0 1 0 1
3 2 0 0 0
Answer the following question.
Supposing we encounter an algorithm that works on weighted graphs, but we want to run
it on an un-weighted graph. How do we do this?
(2)
Consider the following two problems. In P1 we are given as input a set of n squares
(specified by their corner points), and a number k. The problem is to determine whether
there is any point in the plane that is covered by k or more squares.
In P2 we are given as input an n–vertex graph, and a number k; the problem is to
determine whether there is a set of k mutually adjacent vertices. (E.g. for k = 3 we are just
looking for a triangle in the graph.).
Obviously, the problems are both in NP. There exists a simple translation from P1 to P2:
just make a graph vertex for each square, and add an edge between a pair of vertices if
the corresponding two squares overlap.
If P1 is NP-complete, would this translation imply that P2 is NP-complete?
(Give your Answer in Yes or No)
(3)
Briefly discuss at least three variants of the shortest path problem.

ACC501-Business Finance Midterm Subjective Paper May-2012

ACC501-Business Finance Midterm Subjective Paper May-2012

• Aslam will receive Rs.30,000 after 5 years at a discount rate of 12 percent what is the present value of this amount to Aslam (3).

• Calculate the price of a share of stock of ABC Corporation if it pay Rs. 21 per share dividend every year the policy continuous indefinitely and required rate of return is 25%(3).

• Shahid is planning to save amount for future suggest him the effective option from the flowing different Bank on saving account

               Bank A = 16.5% compounded quarterly
               Bank A = 16.75% compounded quarterly (5)

• ABC company bound have face value of 8,000 and promised annual coupon of Rs.880 the bound return in 12 years. Determine the current value of bound if present market condition justify a 13% required rate of return is this a premium bound or discreet bound (5).