B.

TECH IV-II FAPM(16MB4201)

UNITWISE OBJECTIVE
QUESTIONS
UNIT-I
1. A company’s ‘return on investment’ indicates its . ( )
(a) Solvency (b) Stock turnover
(c) Profitability (d) Debtors collection
2. Which would a business be most likely to use its ‘solvency’ ( )
(a) Gross profit ratio (b) Debtors collection period
(c) Debt – Equity ratio (d) Current ratio
3. Higher ‘Assets turnover ratio’ explains . ( )
(a) More profitability (b) Higher sales turnover
(c) Better utilization of assets (d) large liability base
4. Which of the following measures company’s liquidity position ( )
(a) Stock Turnover ratio (b) Debtor’s collection period
(c) Current ratio (d) Net profit ratio
5. The difference between current assets and current liabilities is called . ( )
(a) Cost of goods sold (b) Outsiders funds
(c) Working capital (d) Shareholders funds
6. Debtor’s is a current asset, where as creditor’s is . ( )
(a) Fixed Asset (b) Fixed Liability
(c) Current Liability (d) Long-term Liability
7. What is the Desirable current Ratio ? ( )
(a) 1:2 (b) 3:2 (c) 2:1 (d) 1:1
8. Long-term stability of an enterprise indicates by ratios. ( )
(a) Liquidity (b) Profitability
(c) Solvency (d) Turnover
9. The Liquidity ratios assess the capacity of the company to repay
Its Liability. ( )
(a) Long-term (b) Profitability
(c) Solvency (d) Turnover
10. In which Book-keeping system, business transactions are recorded as
two separate accounts at the same time? ( )
 (a) Single entry (b) Triple entry
(c) Double entry (d) None
11. In which Concept “Business is treated separate from the Proprietor? ()
(a) Cost concept (b) Dual aspect concept
(c) Business entity concept (d) Matching concept
12. When a deduction allowed from the gross or catalogue price to traders;
then it is called as . ( )
(a) Cash discount (b) Credit discount
(c) Trade discount (d) None
13. “Out standing wages” is treated as . ( )
(a) Asset (b) Expense
(c) Liability (d) Income
14. How many types of accounts are maintained to record all types of
business transactions? ( )
(a) Five (b) four
(c) Three (d) Two
15. Which connects the link between Journal and Trial Balance? ( )
(a) Trading Account (b) Profit & Loss account
(c) Ledger (d) Balance sheet
16. Which assets can be converted into cash in short period? ( )
(a) Fixed Assets (b) Intangible Assets
(c) Current Assets (d) Fictious Assets
17. “Bank over draft” is a . ( )
(a) Asset (b) Expense
(c) Liability (d) Income
18. Profit and Loss account is prepared to find out the business . ( )
(a) Gross result (b) Financial position
(c) Net result (d) Liquidity position
19. The statement of “Debit and credit balances of Ledger accounts”
is called as . ( )
(a) Journal (b) Ledger
(c) Trial balance (d) Balance sheet
20. is a person who owes money to the firm. ( )
(a) Creditor (b) Owner
(c) Debtor (d) Share holder
21. The statement reveals the financial positions of a business at any given
date is called . ( )
 (a) Trading account (b) Profit and loss account
(c) Balance sheet (d) Trial balance
22. is called as ‘Book of Original Entry’. ( )
(a) Ledger (b) Trial Balance
(c) Journal (d) Trading account
23. Debit what comes in; Credit what goes out is account principle? ( )
(a) Nominal (b) Personal
(c) Real (d) None
24. The process of entering transactions in to Ledge accounts known as . ( )
(a) Journal entry (b) First entry
(c) Posting (d) None
25. Debit Expenses and Losses; Credit Incomes and Gains is account
Principle ( )
(a) Personal (b) Real
(c) Nominal (d) None
26. “Prepaid Insurance Premium” is treated as _ . ( )
(a) Gain (b) Income
(c) Asset (d) Liability
27. Acid Test Ratio is also called as . ( )
(a) Current Ratio (b) Absolute Liquid Ratio
(c) Quick Ratio (d) Debt-Equity Ratio
28. The relationship between two numerical values is called as . ( )
(a) Account (b) Ledger
(c) Ratio (d) Discount
29. “Gross Profit” can be found out by preparing _ . ( )
(a) Profit and Loss account (b) Balance sheet
(c) Trading account (d) Trial balance
30. “Net Profit” can be found out by preparing . ( )
(a) Trading account (b) Trial balance
(c) Profit and Loss account (d) Balance sheet
31. In which concept, the transactions are recorded at their actual cost? ( )
a) Going Concern Concept b) Dual-Aspect Concept
c) Money Measurement Concept d) Cost Concept
32. The daily transactions of business are recorded in the book called ( )
a) Trail Balance b) Ledger c) Balance Sheet d) Journal
33. Which type of account is the Capital Account? ( )
a) Personal A/C b) Real A/C c) Nominal A/C d) Impersonal A/C
34. Purchase returns book is also known as ( )
 a) Invoice Book b) Bought Book c) Day Book d) Return Outward Book
35. A complete and chronological record of the business transactions are called ( )
a) Ledger b) Trial Balance c) Journal d) Balance Sheet
36. Under which category does the Bank A/C fall? ( )
a) Personal A/C b) Real A/C c) Nominal A/C d) Impersonal A/C
37. Recording the business transactions after considering price level changes is known as ( )
a) Financial Accounting b) Inflation Accounting
c) Cost Accounting d) Management Accounting
38. The rule which says “debit all expenses and losses "and “credit all incomes and gains “relates to ( )
a) Personal A/C b) Real A/C c) Nominal A/C d) Impersonal A/C
39. The accounting which provides information to management in discharging cross sectional
functions like planning, control etc. is ( )
a)Financial Accounting b) Inflation Accounting
c) Cost Accounting d) Management Accounting
40. The book which records credit sales of the goods is known as
a) Purchase Book b) Sales Book c) Sales Returns Book d) purchase Returns Book
II. Fill in the blanks:
1.”T” Accounts are the simplified representation of ledger accounts.
2. Jounal Folio is the page number of the journal from where the posting has been
done in the ledger.
3. Suspense account opened temporarily to correct the error in the trial balance.
4. The task of preparing the Ledger Accounts on the basis of the journal is known as
“Ledger Posting”.
5. Discount is a concession allowed to the buyer by the seller in the price to be paid
by the buyer.
6. Creditors are the persons to whom business owes the money.
7. Convention of Prudence anticipates no profits but provides for all possible losses.
8. Equity means a right or claim over the property.
9. Subsidiary books are separate set of books maintained for recording transactions
of similar nature.
10. Assets = Equity+ Liabilities is known as Accounting equation.

UNIT-II

1. Excess of current assets over current liabilities is known as ( )

(a) Long run capital (b) Fixed capital
(c) Net working capital (d) Net worth
2. Long term investment of funds is called ( )
(a) Working capital (b) Revolving capital
 (c) Capital budgeting (d) Operational capital
3. A rate at which N.P.V = 0, then the rate is called ( )
(a) Minimum Rate of Return (b) Required Rate of Return
(c) Internal Rate of Return (d) Average Rate of Return
4. is the life blood of the business. ( )
(a) Price (b) Cost
(c) Finance (d) Production
5. Which method takes into consideration “The Time Value of Money”? ( )
(a) Traditional Method (b) Pay Back Period Method
(c) Discounted Cash Flow Method (d) Average Rate of Return Method
6. Under Capital budgeting, only Proposals are considered ( )
(a) Very short-term (b) Short-term
(c) Long-term (d) Mid-term
7. The investment in short-term assets is known as ( )
(a) Capital Budgeting (b) Fixed Investment
(c) Working capital management (d) Fixed capital management

8. Which assets yield a return over a period of time in future? ( )

(a) Short-term assets (b) Current assets
(c) Long-term assets (d) Fictious assets
9. The process of evaluating the relative worth of long-term
investment Proposals are called .( )
(a) Working capital management (b) Current liabilities management
(c) Capital Budgeting (d) Current assets management
10. What is the formula of Net Present Value (NPV)? ( )
(a) Present value of cash inflow (b) Original cost of the
project Present value of cash outflow Avg.
annual earnings
(c) Present value of cash inflow – Present value of cash outflow
(d) Avg. Investment
Avg. earnings
11. What is the formula for profitability index? ( )
(a) Present value of cash inflow – Present value of cash outflow
(b) Original cost of the project (c) Present value of cash
inflow Avg. annual earnings Present value of cash
outflow
(d) Avg. Investment
Avg. earnings
12. What is the current asset from the following? ( )
(a) Creditors (b) Bills payable
(c) Debtors (d) Bank over draft
13. What is the formula for Pay Back period? ( )
(a) Avg. Investment (b) Annual earnings
Avg. earnings Cost of the product
(c) Cost of the project (d) Cash inflow
Annual earnings Cash outflow
14. decision relates to the selection of assets in which
funds will be invested by a firm. ( )
(a) Finance (b) Dividend
(c) Investment (d) None
15. method is one of the traditional methods. ( )
(a) Net present value (b) Profitability index
(c) Pay back period (d) internal rate of return

16. Funds needed for short-term purpose is known as . ( )

(a) Fixed capital management (b) Capital Budgeting
(c) Working capital management (d) Long-term capital management
17. What is the formula for Average Rate of Return (ARR)? ( )
(a) Cost of the project (b) Present value of cash
inflow Avg. earnings Present value of cash
outflow
(c) Avg. earnings (d) Avg. investment
Avg. investment Avg. earnings
18. What is the current Liability from the following? ( )
(a) Bills Receivable (b) Closing stock
(c) Bills payable (d) Cash in hand
19. The Pay Back Period also called as . ( )
(a) Current Period (b) Pay reserve method
(c) Pay off Period (d) None
20. are deducted from Current Assets, while calculating
Working Capital. ( )
(a) Fixed Assets (b) Fixed Liabilities
(c) Current Liabilities (d) Fictious Assets
21. Capital budgeting is the process of making investment decision in the – ( )
 a) Sales b) sales planning c) cash d) capital expenditure
22. Investment in related projects is ( )
a) Contingent Investment b) Diversification Investment
c) Independent Investment d) Mutually Exclusive Investment
23. Capital budgeting is related to a time frame of – ( )
a) long-term b) short-term c) a profit d) a sales
24. Capital budgeting actually the process of making investment decisions in-( )
a) Sales planning b) current assets c) fixed capital d) fixed assets
25. The discount rate at which NPV of a project becomes zero is called ( )
a) PBP b) IRR c) ARR d) PI
26. Which of the following is not the traditional method ? ( )
a) pay-back method b) pay-out method
c) ARR d) discounted pay back method
27. Which of the following not the capital budgeting technique? ( )
a) NPV b) IRR c) ARR d) annuity
28. If the annual cash inflows are constant, the payback period can be computed by dividing
cash outlay by ( )
a) Annual cash inflow b) profit c) expense d) annual sales flows
29. If the project requires Rs. 20000/- as initial investment and it will generate an annual inflow
of Rs. 2000 for twenty years, the payback period will be- ( )
a) 15 b) 20 c) 14 d) 10
30. If the cash inflows are not uniform, the calculation of payback period takes a- ( )
a) Favorable positions b) common profit c) Cumulative form d) maximum inflow
31. Projects which yield the highest earnings are- ( )
a) Selected b) rejected c) budgeted d) decision put in reserve
32. Which one of the following is the time adjusted method of capital budgeting ? ( )
a) payback period b) pay-off method
c) Net present value methodd) payout method
33. The present values of total cash inflows should be compared with present value of ? ( )
a) Cash inflows b) cash outflows c) investment d) income
34. If the present value of cash inflows is greater than the present value of cash outflows, the
project would be ( )
a) Accepted b) rejected c) rejected with condition d) rejected with approval
35. The proposal is accepted if the profitability index is more than ( )
a) Zero b) one c) two d) three
36. The proposal is rejected in case of profitability index is ( )
a) Less than one b) less than zero c) less than five d) less than two
37. The investment of long term funds is made after a careful assessment of the various projects
through- ( )
a) cost of capital b) funds flow c) capital budgeting d) marketing plan
38. IRR is compared with ( )
 a) Km b)Ko c) Kt d)Kq
39. The ratio of average income to average investment is called ( )
a) NPV b) PI c) ARR d) IRR
40. NPV is expressed in financial values, where as IRR is expressed in- ( )
a) Hundred b) percentage terms c) one thousand d) one tens
41. The process of selecting from alternative long-term investment projects is called: ( )
a) net cash inflow max b) capital budgeting c) discounting cash inflows d) cash flow
42. Discounted cash flow criteria for investment appraisal does not include ( )
a) Net present value b) Benefit-cost ratio c) accounting rate of return d) IRR
43. Which of the following ignores the time value of money? ( )
a) internal rate of return b) profitability index c) net present value d) cash payback
44. Which technique says to accept the project if the value is greater than 1? ( )
a) NPV b) PI c) PBP d) ARR

Fill in the blanks

1. Profitability Index measures the present value of returns per rupee invested.
2. Pay back period is defined as number of years required to recover a project’s cost or
investment.
3. Capital rationing occurs when management places a constraint on the size of the firm’s
capital budget during a particular period.
4. When evaluating mutually exclusive projects, especially those that differ in scale and/or
timing, the NPV method should be used.
5. If a project has non normal cash flows, then we can get multiple IRR’s.
6. When evaluating only one project using IRR, for select/reject decision IRR has to be
compared with cost of capital
7. Formula for IRR calculation= L+((H-L)*(NPVL)/(NPVL-NPVH))
8. Two projects A and B are evaluated using payback period, A’s PBP is 3 yrs and B’s PBP is 5
years then A project is selected.
9. If NPV =0 then find the value of profitability index = 1(one)
10. Formula for pay back period = Initial cash outflow/Annual cash inflows
11. Formula for average rate of return = Average PAT/Initial Investment
12. Formula for NPV = Present value of cash inflows – Present value of cash outflow
13. Formula for profitability index = Present value of cash inflows/present value of cash
outflows
14. Risk refers to variability of expected returns.
15. If project is evaluated using profitability index (PI) method, the project is rejected if PI is
less than one.
16. CFAT stands for cash flow after taxes.
17. The annuity of an investment made today for a specified period of time at a given rate of
interest is called capital recovery.
18. Profitability index is also called benefit-cost ratio.
19. The simulation approach is really development of sensitivity analysis
20. Minimum rate of return without any risk is known as risk free rate of return.
21. Mutually exclusive projects are the one whose acceptance precludes the acceptance of one
or more alternative projects.
22. The ratio of present values of future net cash flows to the project’s initial cash flow is called
as profitability index.
23. Decision tree is a graphical or tabular approach for organizing the possible cash flow
streams generated by an investment.
24. The number of years required to recover the investment from discounted net cash flows is
called discounted payback period method.
25. If cash inflows are constant from year to y ear, NPV is calculated using annuity formula.
26. Normally IRR is calculated using trial-and-error method.
27. If calculated payback period >Standard payback period we should reject the project.
28. Discount cash flow technique is a method of investment project evaluation and selection
that adjusts cash flow over time for the time value of money.
29. If calculated ARR>Standard ARR project should be accepted.
30. Depreciation is a non cash expense that effects tax.

UNIT-III

1. 1Over capitalization may not be the result of which of the following: ( )

a) promotion of a company with inflated assets
b) application of low capitalization rate
c) shortage of capital d) liberal dividend policy
2. Which of the following approach is used to evaluate cost of equity capital ( )
a) interest is a deductible expense b) realized-yield
c) extended-yield d) dividend-yield
3. The dividend irrelevance theorem to share valuation was propounded by ( )
a) James E Walter b) Myron Gordon c) Modigliani and Miller d) I M Pandey
4. Which of the following is not used to estimate cost of equity capital? ( )
a) external yield criterion b) dividend plus growth rate
c)equity capitalization approach d)CAPM
5. Use of fixed interest securities in the capital structure is called ( )
a) operating leverage b) financial leverage c) combined leverage d) financial risk
6. A change in the capital structure will lead to corresponding change in overall cost of
capital as well as
a) total value of firm b) total cost of share
c) total profit of the firm d)total value of department
7. Advance form customers, finance from companies and trade credit are which source of
finance? ( )
 a) internal b) external c) short term d) mid term
1. Which of the following sources is not used for medium term financing? ( )
a) issue of equity shares b) issue of preference shares
c) issue of debentures d) term loans from banks
2. Which of the following sources of finance do not pose a burden on financial of the
company ( )
a) public deposit b) debenture c) loans from banks d) retained earnings
3. The arrangements of working capital and current assets can be done only by- ( )
a) short term sources b) long term sources c) financial plan d) cost of capital
4. If a company is new, then there is no- ( )
a) share capital b) employees c) directors d) retained earnings
5. The capital raised through equity share for the company is known as – ( )
a) floating capital b) variable capital c) permanent or fixed capital d) temporary
capital
6. If the equity share holder purchases the shares of the company at more than the face value
of the share then the ratio to be calculated is –( )
a) payout ratio b) earnings yield ratio c) dividend yield ratio d) debt equity ratio
7. A company should arrange the capital structure in such a way that there is a maximum
flexibility in the capital and the cost of capital is –( )
a) maximum b) minimum c) expensive d) none
8. A newly established company cannot be success in obtaining of finance by-( )
a) equity capital b) preference share capital c) debentures d) loans
9. Which is/are a good source in the financial structure of the company-( )
a) equity capital b) preference share capital c) debentures d) bank loan
10. A company may raise the funds either by issue shares or-( )
a) by borrowing b) by sale of goods c) by sale of assets d) by sale of services
11. The cost of capital is important concept in ( )
a) marketing management b) accounting c)management accounting d) financial
management
12. The cost of capital is the rate of return of company must earn on investment to maintain-
( )
a) the value of the company b) the value of the product c) price d) product quality
13. The cost of debt capital is the rate of interest payable on ( )
a) equity capital b) preference share capital c) debenture d) retained earnings
14. The capital structure of any business is – ( )
a) appropriate mixture of a number of securities b) income
c) interest d) sale of asset
15. Which is the source of finance – ( )
a) bank loan b) sale of assetc) sale of stock d) merger
16. A change in capital structure lead to corresponding change in overall cost of capital as
well as the – ( )
 a) total profit of the firm b) total cost of the share
c) total value of the firm d) none
25. Which of the following has the highest cost of capital? ( )
a) loans b) retained earnings c) preference d) equity
26. The Modigliani-Miller approach to capital structure theory is based on certain
assumptions. One them is not an assumption of M & M approach- ( )
a) capital markets are imperfect b) investors are rational
c) no corporate income tax d) investors have homogeneous expectations

Fill in the blanks

1. A firm’s optimal capital structure is the mix of debt and equity that maximize the stock
price.
2. Financial leverage is the extent to which fixed income securities (debt and preferred stock)
are used in firm’s capital structure.
3. The optimal capital structure strikes between the tax benefits of the debt and the costs
associated with bankruptcy.
4. A high debt ratio raises the threat of bankruptcy.
5. Operating leverage is the extent to which fixed operating costs are used in firm’s operations
6. Expand EBIT-EPS earnings before interest and tax- earnings per share
7. According to M & M theory with no taxes the value of levered firm is equal to value of
unlevered firm
8. According to MM theory with taxes, VL=Vu=SL+D
9. WACC or overall cost of capital is the weighted average of individual required rates of
return.
10. Leverage is the use of fixed costs in an attempt to increase or level up profitability.
11. Degree of operating leverage is the percentage change in a firms operating profit(EBIT)
resulting from 1 % change in output(sales).
12. Degree of financial leverage is the percentage change in firms EPS( earnings per share)
resulting from a 1 % change in operating profit.
13. DOL x DFL = Degree of combined leverage or Degree of total leverage.
14. According to NI approach the cost of debt capital and cost of equity capital remain
unchanged/ same when leverage ratio varies.
15. Behavioral support for the M & M preposition is based on arbitrage process.
16. The traditional approach to capital structure and valuation assumes that there is an
optimal capital structure and that management can increase the total value of the firm through
the judicious use of financial leverage.
17. M & M theory argues that in the absence of taxes and other market imperfections the total
value of the firm and its cost of capital are independent of capital structure.
18. Greater the risk higher the cost of capital
19. Unlevered firm has nil debt.
20. Levered firm has equity and debt.
21. M & M model with no taxes WACC is completely independent of its capital structure
22. The formula for cost of equity using capm i.e Ke=rf+(rm-rf)βi
23. According to NI approach, the capital structure decision is relevant to the valuation of the
firm.
24. According to NOI approach, overall capitalization rate of the firm is constant for all
degrees of leverage.
25. Debt is relatively cheaper source of funds as compared to ordinary shares.
26. The traditional approach is mid way between NOI and NI.
27. Formula for degree of financial leverage %change in EPS/%change in EBIT
28. Formula for operating leverage %change in EBIT/%change in sales
29. Formula for combined or total leverage %change inEPS/%change in sales
30. Marginal cost capital is the cost of additional funds.

UNIT-IV

Multiple choice questions

1. According to Walter, firm should pay 100% pay out dividend if ( )

a) r > k b) r=k c) r < k d) r=1
2. If the company announces dividend then it is necessary to pay it ( )
a) within certain time b) within five years c) within six years d) within three days
3. Which ratio explains how much portion of earnings is distributed in the form of
dividend? ( )
a) dividend per share ratio b) payout ratio c) earnings yield ratio d) equity debt ratio
4. Which is the type of dividend? ( )
a) cash dividend b) interest c) profit-cum reserve d) flexible capital
5. The dividend on equity shares is only paid when dividend on _____ has already been
paid. ( )
a) bond b) debentures c) preference shares d) bonus shares
1. The rate of dividend is not __________ on equity share. ( )
a) unfixed b) fixed c) flexible d) variable
2. Dividend is a product of – ( )
a) plant and machinery b) productivity c) management d) dividend policy
3. Dividend is given on ( )
a) debentures b) bonds c) retained earnings d) equity share capital
4. Dividend is income for- ( )
a) share holders b) customers c) vendors d) company
5. Dividends are the…….. Of a company distributed amongst members in propotion to their
shares ( )
a) undividable profits b) divisible profits c) reserves d) fund
 6. Dividend is a portion of – ( )
a) assets of the company b) debt c) profit d) reserve
7. After declaration dividends are paid to the share holders as per the provisions of – ( )
a) SEBI act b) RBI act c) FEMA act d) Indian companies act
8. When a company gives an option to its share holders to receive a dividend either in cash
or kind then it is called as – ( )
a) option dividend b) composite dividendc) property dividend d) interim dividend
9. Dividend policy must be in – ( )
a) fixed b) variable c) flexible d) fixed or flexible
10. A company pays its dividend at the- ( )
a) end of the month b) end of financial year c) end of the week d) any of the day in
the year
16. Working capital can be used for the purchase of – ( )
a) machinery b) goodwill c) land & building d) raw material
17. Letter of credit is now becoming an increasingly popular method of financing- ( )
a) fixed capitalb) working capital c) redemption of debt d) distribution of dividend
18. Which of the following meets the short term financial requirement of business enterprises
( )
a) share capital b) debentures c) working capital d) assets
27. Walter model is related with ( )
a) fund b) depreciation c) capital budgeting d) dividend policy
28. Gordan model is related with ( )
a) Fund b) Dividend policy c) Capital budgeting d) Financing decision

Fill in the blanks

1. Firm’s investment in current assets is gross working capital.
2. The difference between current assets and current liabilities is net working capital.
3. Current liabilities are anything that are due and payable with in a ____________ period
(twelve months/twenty four months)
4. Net working capital is Rs.80000 and Current ratio is 3:1. Then the value of current assets is
Rs.120000
5. Expand EBITEarnings before Interest and Tax
6. Dividend payout ratio computed by DPS/EPS
7. If Current assets are Rs. 20000 and current liabilities are Rs.15000, what is the value of
working capital Rs 5000
8. Formula for Walters’s dividend policy DIV + (EPS-DIV) r/k
9. A Cash discount attempts to encourage prompt payment from credit customers.
10. Management of working capital refers to the management of current assets and current
liabilities.
11. Formula for Gordon dividend policy P0= Div/(Ke-g)
12. The inventory level at which an order should be placed to replenish the inventory is called
 reorder point

14. The capital of working capital is requires deep study of cash flow and funds flow.
15. Normally working capital rarely retained longer than a year.
16. dividend decisions provide a sound base for adequate retention policy of share holders.
17. Dividend Irrelevance is provided by M & M
18. There is a positive correlation between level of business activity and working capital needs
of a business firm.
19. Longer the production cycle, the higher is the working capital needed.
20. Transaction motive refers to the holding of cash to meet anticipated obligations whose
time is not perfectly synchronized with cash receipts.
21. According to Walter model, the value of the share is not related at all proportion to the D/P
ratio.
UNIT-V

1-A ____ is a set of activities which are networked in an order and aimed towards achieving
the goals of a project.
(A) Project
(B) Process
(C) Project management
(D) Project cycle
 
2-Resources refers to
(A) Manpower
(B) Machinery
(C) Materials
(D) All of the above
 
3-Developing a technology is an example of
(A) Process
(B) Project
(C) Scope
(D) All of the above
 
4-The project life cycle consists of
(A) Understanding the scope of the project
(B) Objectives of the project
(C) Formulation and planning various activities
(D) All of the above
 
5-Following is(are) the responsibility(ies) of the project manager.
(A) Budgeting and cost control
(B) Allocating resources
(C) Tracking project expenditure
(D) All of the above
6-Following are the phases of Project Management Life Cycle. Arrange them in correct
order
1.Design, 2. Marketing, 3. Analysis and evaluation, 4. Inspection, testing and
delivery
(A) 3-2-1-4
(B) 1-2-3-4
(C) 2-3-1-4
(D) 4-3-2-1
 
7-Design phase consist of
(A) Input received
(B) Output received
(C) Both (A) and (B)
(D) None of the above
 
8-Project performance consists of
(A) Time
(B) Cost
(C) Quality
(D) All of the above
 
9-Five dimensions that must be managed on a project
(A) Constraint, Quality, Cost, Schedule, Staff
(B) Features, Quality, Cost, Schedule, Staff
(C) Features, priority, Cost, Schedule, Staff
(D) Features, Quality, Cost, Schedule, customer
 
10-Resorce requirement in project becomes constant while the project is in its _____
progress stage.
(A) 40 to 55%
(B) 55 to 70%
(C) 70 to 80%
(D) 80 to 95%
 
ANSWERS:
1-(A), 2-(D), 3-(B), 4-(D), 5-(D), 6-(A), 7-(C), 8-(D), 9-(B), 10-(D)

1. Project managers have the highest level of authority and the most power in which type of
organizational structure? ( )
a) Projectized b) Strong Matrix c) Functional d) Balanced Matrix

2. What is one of the most important skills a project manager can have? ( )
a) Negotiation skills b) Influencing skills c) Communication skills d) Problem Solving
skills

3. Which of the following contracts should you use for projects that have a degree of uncertainty
and require a large investment early in the project life cycle? ( )
a) Fixed Price b) Cost Reimbursable c) lump Sum d) Unit Price

4. A Project manager would find team development the most difficult in which form of
organization ? ( )
a) Weak Matrix Organization b) Balanced Matrix Organization
c) Projectized Organization d) Tight Matrix Organization
5. A narrative description of products or services to be supplied under contract is called ? ( )
a) The project plan b) A statement of work c) An exception report d) Pareto
analysis

6. All of the following are contract types except: ( )

a) Unit Price b) Make or Buy c) Cost Reimbursable d) lump Sum

7. Which type of leadership is best suited for optimizing team performance in projects? ( )
a) Democratic leadership b) Participative leadership
c) Autocratic leadership d) Authoritative leadership

8. What are the 4 stages of team development? ( )

a) Forming, Storming, Norming, Performing
b) Enthusiasm, Hope, Panic, Solution
c) Forming, Solutioning, Normalizing, Communicating
d) Direction, Motivation, Cooperation, Collaboration

9. Your IT Company is responsible for making software virus programs. You are responsible for
managing both individual product releases and co-ordination of multiple released over time.
Your role is that of a : ( )
a) Project Manager b) Program Manager c) Functional Manager d) Operations Manager

10. Which of the following is not a feature of a project? ( )

a) Constrained by limited resources b) Planned , executed and controlled
c) Creates unique product or service d) May be ongoing and repetitive

Answers for above project management questions and answers with multiple choices
are listed below:

1. a) Projectized
2. c) Communication skills
3. b) Cost Reimbursable
4. a) Weak Matrix Organization
5. b) A statement of work
6. b) Make or Buy
7. b) Participative leadership
8. a) Forming, Storming, Norming, Performing
9. b) Program Manager
10. d) May be ongoing and repetitive