Project Finance

Project Finance

LIST OF ATTEMPTED NEW PATTREN QUESTIONS AND ANSWERS -2010-11

1)                 Question – ________ ratios are calculated to measure the financial risk as well as the ability of using debts for the benefit of its shareholders.

Correct Answer – Leverage

2)                Question – These factors are to be considered under environmental trends

Correct Answer –

A)   Pollution control

B)   Corporate governance

C)   Auditing norms

3)                Question – These factors are to be considered under environmental trends

Correct Answer –

A)    Identify the specific activities and milestones

B)    Determine the proper sequence of the activities

C)    Construct a network  diagram

4)                Question – There are two basic variations of fixed-rate bonds, they are

Correct Answer –

A)    Original issue deep discount bonds

B)    Floating rate bonds

5)                Question –According to Indian stamp Act, in case of doubt, the collector can        decide the eligible stamp duty on an instrument.

Correct Answer – TRUE

6)    Question –_______ recognizes the value of giving subordinates feedback on their performance wherever possible.

Correct Answer – Coach

7) Question – The ___________ is usually conducted as a follow-up to the general audit.

Correct Answer – Detailed Audit

7)    Question – The organizational structure is not risky if the technology is simple and the project is small.

Correct Answer – Task Force oriented Organization structure

9)    Question – In this country, the price for power is generally the ‘ avoided cost’ of     the purchasing utility in connection with such power.

Correct Answer – USA

10)                       Question – Periodically evaluating and monitoring cost performance is the step implemented by project management to estimate cost.

Correct Answer – TRUE

11) Question – Under the component of nature of industry and products, the promoters have to give industry, product, licensed capacity, installed capacity , actual production and proposed capacity.

Correct Answer – TRUE

12) Question –                               Correct Answer

A) Equity holders    -                     want the equity as low as possible

B) Lenders -                          want the size of equity to be as large as  possible

C) Venture Capital -                        Ready to bear risk and provide finance

D) Bills Discounting Facilities     Ensuring prompt payment of the deferred installment

13) Question – According to this committee’s recommendations, The Indian  Telegraph Act 1885 be replaced with a new legislation

Correct Answer – Rakesh Mohan committee

14) Question – Name, age and addresses of promoters along with his/their qualification, past experience and business and industrial background are furnished in this component of the application form for project finance

Correct Answer – Management, Capital structure and Borrowing Powers

LIST OF ATTEMPTED NEW PATTREN QUESTIONS AND ANSWERS -2010-11

1) Question - ___________ audit are designed to examine the operation of a firm’s management system.

Correct Answer – Management

2) Question – These components are covered in the history and constitution component of the application from of project loan

Correct Answer –

C)     Whether it is a new/expansion/modernization/diversification project

D)   Brief history about the changes in effective control in management

E)    Is the MRTP Act application to the company

3) Question – The following is necessary for cash budgeting system

Correct Answer – Profit and Loss account, Fund-flow statement

4) Question – This statement include items and their movements capable of affecting the cash position of the concern i.e., involving receipt of payment of cash

Correct Answer – Cash flow

5) Question – All projects may not need all the data mentioned in the format of the application form

Correct Answer – FALSE

6) Question – Marketing problems like lack of distribution and service network leads to failure of project.

Correct Answer – TRUE

7) Question – According to this committee, Special purpose Vehicles should be able to vary their capital, they should be easy to wind up and should be tax-transparent

Correct Answer – Rakesh Mohan Committee

8) Question – There is no standard rule to decide acceptability of the length of working capital cycle or stocking pattern of any component.

Correct Answer – TRUE

9) Question – Large and lumpy investment are not the characteristics of infrastructure project financing.

Correct Answer – FALSE

10) Question – These are cost incurred for generating revenue and are therefore related to the operations of a business enterprise.

Correct Answer – Expenses

11) Question – ________ Expenses vary directly in proportion to production.

Correct Answer – Variable

12) Question – In pledge and hypothecation, the bank has to right to sell and sue for balance or sue for money and keep the goods as collateral security.

Correct Answer – Variable

13) Question – The adoption of the right methods and means towards the right ends is

Correct Answer – Ethics

14) Question – These are the advantages of lease

Correct Answer –

A)   Mo margin required – 100% financing

B)   Creation of working capital

C)   Avoidance of loan covenants, fast and flexible financing

15) Question – Presently, this systems is not followed

Correct Answer – Working Capital Demand Loan system

16) Question – Analysis of these statements for several years may reveal desirable or undesirable trends in the profit earning capacity of a business enterprise

Correct Answer – Profit and Loss

17) Question – The number of airports / airstrips in India are

Correct Answer – 449

18) Question – _________ enables organization to meet cost and quality expectations of customers / society.

Correct Answer – Ethicality

19) Question – These attractions are found in high-risk projects

Correct Answer –

A)   New invention or improved technology or skill

B)   Exploitation of human resources

C)   Large scale potential for product / service

20) Question – These are considered as best scenarios

Correct Answer –

A)   High demands

B)   High selling price

21) Question – According to lender’s perspective, these are assessed in political risk

Correct Answer –

A)   Insurance

B)   Buy-out clauses

22) Question – In this type of a project, creation of productive facilities from the manufacture of new products are implemented

Correct Answer – Diversification project

23) Question –                                                      Correct Answer

A)   Pay-back method                                        useful where the emphasis is on

B)   Net Terminal surplus method                  Uses the concept of

C)   Excess present value method                    Uses the concept of discounting

D)  In the internal rate of return method    sum of the discounted cash flow

24) Question – In case of ___________ , the bank does not lay out any funds.

Correct Answer – Deferred payment Guarantees.