CS Executive Financial and Strategic Management PYQ December 2022: Question Paper and Available Answers

CS Executive Financial and Strategic Management PYQS Series December 2022 100 Questions Indexed

ICSI Examination Archive & Suggested Answers: This directory contains indexed questions from the paper for CS Executive Financial and Strategic Management PYQS (December 2022). Open the source paper and available answers. Older sessions follow the syllabus and statutory provisions applicable to their examination year.

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Indexed questions

Which of the following does not fall within the ambit of investment decisions ? (A) Inventory Management (B) Strategic Investment (C) Replacement Investment (D) None of the above
Which of the following is/are key factors that influence investment decisions of a firm ? (A) Capital Outlays and future earnings of the proposed project (B) Availability of Capita
Which of the following scholar commented : "Cost of Capital is the rate of return the firm required from investment in order to increase the value of the firm in the market place"
Though the cost of retained earnings is generally as equal to the cost of equity capital, it is not to be adjusted for : (A) Tax (B) Floatation cost (C) Under-pricing (D) All of th
Which of the following statements is true ? (A) There is no restriction on a company to be an all debt company. Debt can be raised even without any equity base in the company (B) D
Which of the following statements regarding liquidity ratios is true ? (A) Higher the current ratio of a firm is, greater is its ability to pay off its current liabilities. (B) Cur
Which of the following is not a dimension of liquidity management of firms ? (A) Management of Cash and Marketable Securities (B) Credit Policy Decision (C) Management and Control
Which of the following statements is false ? (A) There is an inverse relationship between Liquidity and Profitability and these two are competing goals for a finance manager (B) Wh
The total capital invested in Firm A is ₹500 Crore, including 40% of borrowed funds. The total capital invested in Firm B is ₹500 Crore, including 20% of borrowed funds. There are
Which of the following statements is False ? (A) A Finance Manager can take the financial decisions of the firm by considering the return dimension only (B) Usually, as the return
Economic Order Quantity of a product is 3000 units. Its cost per unit is ₹1.50 and ordering cost is ₹18 per order. If the carrying cost per annum is 20% per annum for average inven
Which of the following is not an example of Systematic Risk ? (A) Changes in Laws/Regulations (B) Natural Disasters (C) Entry of a new competitor in market (D) Volatility in Curren
The total amount of shareholders' equity of a company is ₹1,50,00,000. It owns 20000 preference shares of ₹100 each and 5,00,000 equity shares of ₹20 each. The current market price
A wants to invest ₹10,000 for a period of 3 years. The rate of return on amount to be invested is 10% p.a. compounded annually. By how much amount the return will differ approximat
What is the future value of an annuity amount of ₹2,000 payable at the beginning of each of the next 5 years, if the rate of return is 10% p.a. ? (A) ₹13,410 approx. (B) ₹11,230 ap
A company has invested ₹7,00,000 in a project, ₹5,00,000 initially and remaining at the end of first year. It also invested ₹2,00,000 in working capital at the end of 2nd year, whi
Pay-back Period method of capital budgeting is not suitable in which of the following circumstances ? (A) Where the firm is more interested in quick recovery of funds than profitab
A project has an outlay of ₹14,100 in the beginning. It generated annual cash flows of ₹4,500 during its useful life of 4 years. The Internal Rate of return of the project will be
The capital outlay on a project was ₹75,000. Assuming that it generated NPV of ₹765 at discount rate of 12% and NPV of (₹1162) at discount rate of 13%, its IRR will be: (A) 12.4% (
A capital structure that has small component of equity capital, reasonable level of retained earnings and an ever increasing component of debt is termed as: (A) Vertical Capital St
Which of the following statements is false ? (A) Financial structure refers to all the components of finance in an organization. It consists of all assets, all liabilities and capi
Which of the following statements is true ? (A) Optimal capital structure means a particular arrangement of various components of the capital which is in tune with long-term object
The capital structure of a company consists of 9% ₹8,00,000 bank loan. It also has 50000 equity shares of ₹10 each. The company is expecting EBIT of ₹2,00,000 per annum. If the cos
The EBIT of a firm is ₹1,25,000. It consist of 8% Bank loan of ₹5 Lakh, 10% Preference share capital of ₹2 Lakh and 30000 Equity shares of ₹10 each. If applicable income tax rate i
When an investor wishes to magnify the impact of change in sales into a relatively larger change in earning per share, it shall use: (A) Operating Leverage only (B) Financial Lever
A firm's fixed operating cost is ₹40,000. Its degree of operating leverage is 3. If its contribution is 20% of sales, the amount of variable cost will be (₹): (A) 60,000 (B) 3,00,0
Which of the following statements is false ? (A) Indifference point is the point of sales at which different sets of debt ratios results in same earning per share (B) Indifference
A firm is considering investment in a project that requires ₹50 Lakhs. Either the firm can invest the entire amount through equity shares of ₹100 each (option A), or it can arrange
Which of the following statements is false ? (A) As the financial leverage increases, the firm is required to sell more of its products/services in order to break even (B) Higher f
Which of the following is false in respect to Non-convertible debentures ? (A) These are debt instruments carrying a fix rate of interest (B) These instruments have a maturity peri
A company issued 1000 10% debentures of ₹100 each at par and spent 3% on account of floatation cost and commission to brokers. These debentures are redeemable at 5% premium at the
A company issued 20,000 9% preference shares of ₹100 each at 5% discount. Floatation cost amounted 2% of the face value of shares. These are redeemable after 7 years at par. Applic
A company has 20,000 equity shares of ₹200 each and its current earnings for equity shareholders is ₹3,60,000. The growth rate expected in EPS is 7%. The current market price of co
A company has 1,00,000 outstanding equity shares of ₹100 each with current market price of ₹124, 50000 9% preference shares of ₹50 each with market price of ₹47.5 each and floatati
A company has equity share capital of ₹50 Lakhs with specific cost of 13%, preference share capital of ₹30 Lakhs with specific cost of 11% and Bank Loan of ₹20 Lakhs with specific
The capital structure of a company consists of 12,000 equity shares of ₹100 each and 10% Bank Loan of ₹10 Lakhs. Its P/V ratio is 40% and annual fixed cost excluding interest is ₹1
Which of the following is not a constituent of primary feasibility study conducted during primary stage evaluation of a project ? (A) Market Feasibility (B) Technical Feasibility (
Which of the following statements is not true in respect to a project plan ? (A) A Project plan is the basis of all the efforts of the management in association with the project (B
When it is determined that the project is not on track, project re-planning is considered. This is part and parcel of: (A) Project Start-up stage (B) Project Execution stage (C) Pr
Which of the following is not a principle on which bank lending must necessarily be based ? (A) Safety (B) Liquidity (C) Profitability (D) Risk Neutralization
Which of the following effects is not calculated in course of Social Cost-Benefit Analysis of a project ? (A) Direct or Primary effects (B) Indirect or Secondary effects (C) Intern
Which of the following is an important ingredient of project appraisal under normal conditions ? (A) Accuracy of methods and measurements planned to be adopted is well adhered to (
Which of the following is not a category of private equity ? (A) Leveraged Buyout (B) Management Buyout (C) Venture Capital (D) Growth Capital
Which of the following is not a pre-requisite condition to become a SEZ unit ? (A) The unit must be engaged in exports of goods and services from April 1, 2005 onwards (B) The unit
Which of the following forms of dividend is not prevalent in India ? (A) Property Dividend (B) Stock Dividend (C) Bond Dividend (D) Cash Dividend
Which of the following theories of dividend is set on the premise of irrelevance of dividend in firm's valuation ? (A) Walter's Model (B) Gordon's Model (C) M.M. Approach (D) All t
Consider the following information: Rate of Return on Investment of a firm is 15%. Cost of Equity Capital is 12%. Earnings Per Share is ₹5 and Dividend Per Share is ₹3. The market
The amount of working capital that is utilized at the time of contingencies is termed as: (A) Reserve Margin Working Capital (B) Irregular Working Capital (C) Temporary Working Cap
Which of the following statements is false ? (A) Assuming a constant level of fixed assets, a higher Current Assets to Fixed Assets Ratio indicates a conservative current asset pol
Which of the following statements is false in respect of Working Capital Leverage ? (A) It refers to the impact of level of working capital on company's profitability (B) It reflec
The per unit total cost of a company's product is ₹60 including Raw Materials ₹30, Direct Labour ₹7.5 and Overheads of ₹22.5. The company is planning to produce 4,00,000 units in t
The current assets of a firm include Inventory of ₹124 Lakh, Receivables (including bills with bankers) of ₹80 Lakhs and Cash and Bank Balance of ₹4 Lakhs. Its total current liabil
A firm is currently selling its goods on 30 days credit. It is selling 4 Lakh units @ ₹12.5 each. Variable cost is ₹10 per unit and average cost is ₹11.5 per unit. The firm is plan
Which of the following is not an example of transactional motive of holding cash ? (A) Purchase of Raw Materials and Components (B) Payment of Salaries and Wages (C) Purchase of Fi
Assume risk free rate of return and expected return on market portfolio to be 10% and 15% respectively. If the standard deviatiaon of an asset is 2.8%, market standard deviation is
A company is contemplating investment in a project requiring ₹72 Lakh. For the same, two options are available. Option I is 100% equity option where equity shares of face value ₹10
X invested ₹21,000 in shares of a company five years back. During this tenure, he received dividend of ₹2,100 and ₹1,800 during 1 st and 4 th year. The current market value of his
An investor bought a share for ₹50. The company paid a dividend of ₹3 for the current period. Long-term growth rate is expected to be 12% and expected rate of return is 15%. The cu
Who proposed the Portfolio Theory originally? (A) Eliot Wave (B) Kenneth Fisher (C) Harry Markowitz (D) Neil Woodford
An investment in a mutual fund has generated a return of 15% with a standard deviation of 5. The risk free rate of return in the market is 8% and standard deviation to security ind
Which of the followng is not a principle of Scientific Management theory propounded by F.W. Taylor ? (A) Each task should be studied to determine the most efficient way to do the t
Bureaucratic theory of Management was propounded by: (A) Max Weber (B) Douglas McGregor (C) Ludwig (D) George R. Terry
Which of the following leadership styles is rarely effective? (A) Strategic Leadership (B) Autocratic Leadership (C) Laissez Faire Leadership (D) Transactional Leadership
"Just as navigator continually takes reading to ensure whether he is relative to planned action, so should a business continually take reading to assure himself that his enterprise
"Building passion and commitment towards a common goal" is basic activity under which key strategic leadership roles ? (A) Mobilizer (B) Talent Advocate (C) Captivator (D) Change D
Which of the following is not a phase in strategic management process ? (A) Strategy Scanning (B) Strategy Formulation (C) Strategy Implementation (D) Strategy Evaluation
Organizations should not only keep a close watch on their rivals, but should also go beyond the boundaries of their competitors and make an assessment of other factors impacting th
Buyers exert poor bargaining power in which of the following conditions? (A) When they buy in high volumes (B) When they control many access points to the final consumers (C) When
Rivalry among competitors is poor when : (A) Exit barriers are high (B) Products can be easily substituted (C) Customer Loyalty is low (D) None of the above
Which of the following is false in relation to "Pizza Hut" as seen from Porter's five force model perspective ? (A) Competitive Rivalry is very high (B) Threat of Substitutes is lo
The evolution of the concept of Business Policy can be traced with: (A) American Assembly of Collegiate Schools of Business (B) Gordon and Howell Report (C) Harvard Business School
Which of the following is correct sequence of components/stages of Strategic Management Framework? (A) Business Assessment-Strategy Formulation-Translate Strategy to Action-Test, L
Which of the following may not be a purpose of Vision statement of the organization ? (A) Serving as foundation of broader strategic plan (B) Motivating existing employees and attr
Which of the following is false in respect of mission statement of an organization ? (A) It defines the basic reason for the existence of the organization (B) It reflects the corpo
Which of the following is not a generally acceptable principle for developing a mission statement? (A) Make it memorable (B) Make it unique to organization (C) Make it realistic (D
"To accelarate the world's transition to sustainable energy" is the mission statement of which of the following organizations ? (A) Tata Power (B) Tesla (C) Syska (D) Tata Motors
Which of the following is not a level of an organization's strategies ? (A) Economy-level strategies (B) Corporate Strategies (C) Business Strategies (D) Functional Strategies
Which of the following statements is false ? (A) Corporate Strategy is the essence of strategic planning process of an organization and it determines its growth objectives (B) Busi
Which of the following is not a step in efficient organizing? (A) Identification of activities (B) Delegating the authority (C) Departmentally organizing the activities (D) Classif
Which of the following is not true regarding Business Strategy and Corporate Strategy ? (A) Business Strategy is a strategy designed by business managers to improvise the overall p
Strategic gap develops as a result of difference in : (A) Deliberate Strategy and Inadvertent Strategy (B) Strategy Planning and Strategy Implementation (C) Strategic Planning and
Which of the following is false in respect of a firm that is Market Nicher ? (A) The firm holds a considerable market share in the industry (B) The objective of the firm is a build
Which of the following is not a component of Talent Life-cycle? (A) Engage (B) Deploy (C) Lead (D) Refrain
Which of the following is not a production strategy under 'competitive priorities' category of production strategies ? (A) Product Mix (B) Flexible Response (C) Service (D) Eco-fri
__________ is the set of guiding principles, driving forces and ingrained attitudes that help to coordinate goals, plans and policies between partners across a given supply chain.
Situation Analysis is conducted : (A) At the beginning of any program/project after developing a strategy (B) At the beginning of any program/project before developing a strategy (
The origin of SWOT analysis is supposed to be rooted in the concept of: (A) Force Field Analysis of K Levin (B) Interactive Course in Management of Harvard Business School (C) Gord
Which of the following is false in respect of various strategies of TOWS analysis ? (A) Strengths of the firm are used to maximise opportunities (B) Strengths of the firm are used
Which of the following is not a criticism of BCG Matrix ? (A) The market share of the matrix does not guarantee profitability (B) Both axes have been assigned the same value (C) Th
Which of the following is not a perspective of Balance Score Card ? (A) Financial Perspective (B) Business Process Perspective (C) Competitors Perspective (D) Customers Perspective
Which of the following is not an important benefit of McKinsey's 7S framework ? (A) It is a diagnostic tool for understanding the organizations which are non-effective (B) It helps
"Strict Financial Control" is an advantage of which of the following organizational structures? (A) Line and Staff (B) Divisional (C) Functional (D) Matrix
Under which strategic control technique, a system is designed to check that whether or not the assumptions set during strategy formulation and implementation process are valid? (A)
Which of the following may not be a strategy for managing change in organization ? (A) Education and Communication (B) Participation (C) Retrenchment (D) Training and Psychological
Which of the following is not an example of "Support Processes" from the perspective of Business Process Reengineering? (A) Information Technology (B) Order Fulfilment Process (C)
The correct sequence of steps of Business Process Reengineering is : (A) Identify-Define-Study-FormulateImplement (B) Define-Identify-Study-FormulateImplement (C) Identify-Define-S
Which of the following is not an approach of Benchmarking? (A) Internal Benchmarking (B) External Benchmarking (C) Divisional Benchmarking (D) Functional Benchmarking
Which of the following is not a component of Benchmarking Wheel? (A) Plan (B) Collect (C) Implement (D) Analyze
Which of the following is not a principle of Total Quality Management? (A) Management Commitment (B) Suppliers Empowerment (C) Fact Based Decision Making (D) Continuous Improvement
For a manufacturing company to be considered industry 4.0, it must not possess the feature of: (A) Interoperability (B) Information Transparency (C) Centralized Decision-making (D)

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