Sikkim-Manipal University of Health Medical and Technological Sciences (SMUHMTS) 2007 M.B.A Financial and Management Accounting - university paper

33. Accounting rate of return is the ratio of avg. value of
a) Income tax to avg. investment
b) Income after tax to investment
c) Income after tax to current value of investment
d) Profit before tax to salvage value to investment

34. Debit is the cheapest source of finance because
a) Tax deductibility of interest payments
b) Lower the risk, lower is the expectation of reward by the investors
c) It is the safest form of corporate security
d) All

35. Risk less cost of particular source business risk premium are 2 components of cost of capital .Which is the 3rd components
a) Commercial risk premium
b) Financial risk issues
c) Internet risk premium
d) return at zero risk level

36 Which of the subsequent act/s indiacate/s likely future higher profits
a) Splitting of shares
b) problem of bonus shares
c) problem of right shares
d) Both A & B

37. Which of the subsequent is actual with respect to Modigliani – miller model on dividend policy
a) Market value of equity share is not affected by dividend policy
b) With declaration of dividend share prices decline as retained earnings reduces
c) Share prices fluctuate due to fluctuation in prices in international stork markets
d) Share prices increase with problem of bonus shares

38. According to Walters’s model on dividend decisions When the return on on investment is more than the cost of capital ,the firm should
a) Retain 50% and Payout50%
b)Retain 100% of profits in the business
c) Not pay dividend
d) Follow 100% dividend payout policy

39. Reverse split is considered as an indication of
a) Growth & similar future profits
b) Trouble in future
c) Increase in number of shared issued
d) payment of higher dividend ion future
40. A firm sells its product for Rs 100 per unit. The variable cost is Rs 60 per unit and fixed cost is Rs. 30,000. What is the operating profit when the firm sells 1000 units?
A) 40,000 B) 60,000
C) 30,000 D) 10,000

41 For the above issue what is the operating leverage?
A) 1.5 B) 3
C) 4 D) 6.2
42. What is compounded value When Rs. 1,000 is invested for three years and the interest on it is compounded at 10 % P.A, Semi-annually?

Earning:   Approval pending.