ACC501 Final Term Past Paper Spring 2007

FINALTERM EXAMINATION

SPRING 2007 ACC501 - BUSINESS FINANCE (Session - 3 ) Marks: 60 Time: 150min

Student Name:

Center Name/Code:

Exam Date: Wednesday, July 11, 2007

All questions are compulsory. This exam consists of 10 Multiple Choice Questions (MCQ’s), 5 True/False Questions, 3 Short Questions and 3 Numerical Questions.

Q1. 10 are MCQs carrying 1 Mark each, Question No. 11-15 are True/False Questions carrying 1 Mark each, Question No.16-18 are short questions carrying 5 Marks each and Question No. 19-21 are numerical questions carrying 10 Marks each.

For each MCQ, read the choices available carefully and select the choice which you consider is the correct one. You are required to show all the working of short questions as well as Numerical questions. The use of calculator and financial tables is allowed. The use of mobile phones in exam center is strictly prohibited. A clock has been given in the exam software. Software will automatically be closed after 150 minutes. Remember do not spend too much time on any one MCQ. Since all MCQ’s carry equal marks, it is important to manage your time and responses to test questions effectively. This Examination is closed book, closed notes and closed neighbours. Failure to comply with the supervisor’s directions will result in your test being cancelled. Please comply with supervisor’s directions to avoid any unpleasant event.

Question Question Marks Question Marks

Q1. The process of planning and managing a firm’s long-term investments is called : (1 marks)

1. Planning Process
2. Capital Structure
3. Capital Budgeting
4. Managing Process

Q2. Return on Equity (ROE) = _________ x Total Assets Turnover x Equity Multiplier (1 marks)

1. Profit Margin
2. Total Sales
3. Net Income
4. Total Equity

Q3. If a bank loans out Rs. 10,000 for 90 days at 8% simple interest, the Present Value (PV) will be : (1 marks)

1. Rs. 9,105
2. Rs. 9,807
3. Rs. 10,325
4. Rs. 10,765

Q4. The ____________ is the rate where NPV (Net Present Value) equals to zero. (1 marks)

1. WACC (Weighted Average Cost of Capital)
2. IRR (Internal Rate of Return)
3. MIRR (Modified Internal Rate of Return)
4. AAR (Average Accounting Return)

Q5. ______________ is adopted to permit minority participation. (1 marks)

1. Cumulative Voting
2. Straight Voting
3. Proxy Voting
4. Staggering

Q6. Which one of the following statements projects future years’ operations in a summarized format ? (1 marks)

1. Income Statement
2. Cash Flow Statement
3. Pro Forma Financial Statement
4. None of the given options

Q7. The direct and indirect costs associated with going bankrupt or experiencing financial distress, are known as : (1 marks)

1. Direct Bankruptcy Costs
2. Indirect Bankruptcy Costs
3. Financial Distress Costs
4. All of the given options

Q8. Suppose you bought 1,500 shares of a corporation at Rs. 25 each. After a year, you received Rs. 3,000 (Rs. 2 per share) in dividends. The dividend yield will be : (1 marks)

1. 5.00 %
2. 8.00%
3. 10.00%