Select Page
Generic selectors
Exact matches only
Search in title
Search in content
Search in posts
Search in pages
Filter by Categories
nmims post
Objective Type Set
Online MCQ Assignment
Question Solution
Solved Question
Uncategorized

Fill in the blanks
1. ____________ in business and economics refers to the period of time required for the return on an investment to “repay” the sum of the original investment.

### View Answer

Ans: Payback period

2. The __________ must be compensated for the declining spending/purchasing power of money.

### View Answer

Ans: lender

3. _________ is a way of comparing the value of money now with the value of money in the future.

### View Answer

Ans: Net Present Value (NPV)

4. The NPV is greatly affected by the discount rate, so selecting the proper rate – sometimes called the ________ is critical to making the right decision.

### View Answer

Ans: hurdle rate

5. The firm term on the right hand side of this equation captures the value of ________ in place and the second term the value of ___________.

### View Answer

Ans: growth opportunities

6. To some extent, the selection of the ________ is dependent on the use to which it will be put.

### View Answer

Ans: discount rate

7. Using variable rates over time, or discounting _________ cash flows different from _________ cash flows may be a superior methodology, but is seldom used in practice.

### View Answer

Ans: guaranteed

8. The internal rate of return (IRR) of a project is the discount rate which makes its NPV equal to _________

### View Answer

Ans: zero

9. In the NPV calculation we assume that the discount rate (cost of capital) is ________ and determine the NPV.

### View Answer

Ans: IRR

10. ____________ is an alternative method of evaluating software investments without estimating the discount rate.

### View Answer

Ans: IRR

11. The main problem with the IRR method is that it often gives __________ rates of return.

### View Answer

Ans: unrealistic

12. A project selected according to the NPV may be ____________ if the IRR method is used.

### View Answer

Ans: rejected

13. The IRR is a __________ that makes the present value of estimated cash flows equal to the initial investment.

### View Answer

Ans: discount rate

14. ____________ are common term used by many flexibly to denote specific action plans.

### View Answer

Ans: Projects

15. __________ is the process of assessing the project viability, both economic and technical, in a structured way, using economic appraisal or some other decision analysis.

### View Answer

Ans: Project appraisal

16. The ___________ aspects of appraisal are fundamental as they logically precede all other aspects.

### View Answer

Ans: economic

17. An ___________ study aspect refers to the appropriate and location selection of a geographical area where the project should be located the selection.

### View Answer

Ans: industrial feasibility

18. In setting up an _________ project, estimation of demand for the productgroup of products proposed to be produced by a promoter is the first important step.

### View Answer

Ans: industrial

19. Project appraisal – the process of assessing and questioning proposals before resources are committed- is done by the ____________

### View Answer

Ans: Project Appraisal Division

20. _________ is an essential part of project finance; it involves a thorough analysis of the ability of the project to fulfil the desired objectives.

### View Answer

Ans: Project appraisal

21. ________ is used to analyse whether an entity is stable, solvent, liquid, or profitable enough to be invested in.

### View Answer

Ans: financial analysis

22. _________ ratios indicate the ease of turning assets into cash.

### View Answer

Ans: Liquidity Ratios

23. _________ is more a measure of cash flow than a ratio.

### View Answer

Ans: Working Capital

24. _________ ratio is the percentage of sales dollars left after subtracting the cost of goods sold from net sales.

### View Answer

Ans: Gross Margin Ratio

25. ___________ ratio is the percentage of sales dollars left after subtracting the Cost of Goods sold and all expenses, except income taxes.

### View Answer

Ans: Net Profit Margin Ratio

26. ____________ratio reveals how well inventory is being managed.

### View Answer

Ans: Inventory Turnover Ratio

27. ____________ratio indicates how well accounts receivable are being collected.

### View Answer

Ans: Accounts Receivable Turnover Ratio

28. ____________is the long term financing of infrastructure and industrial projects based upon the projected cash flows of the project rather than the balance sheets of the project sponsors.

### View Answer

Ans: Project Finance

29. A riskier or more expensive project may require ___________ recourse financing secured by a surety from sponsors.

### View Answer

Ans: limited

30. An important (but not universal) feature of a corporation is ________

### View Answer

Ans: limited liability

31. ________ are chartered by a state, and regulated by the laws enacted by that state.

### View Answer

Ans: Corporations

32. Typically a corporation is governed by a _______ which has a fiduciary duty to look after the interests of the corporation.

### View Answer

Ans: board of directors

33. A ________ is an entity that is a group of people organized for some profitable or charitable purpose.

### View Answer

Ans: business

34. A ________ is a business organization owned and operated by a group of individuals for their mutual benefit.

### View Answer

Ans: cooperative (also co-operative; often referred to as a co-op)

35. A ________ is an arrangement where entities and/or individuals agree to cooperate to advance their interests.

### View Answer

Ans: partnership

36. If a partnership has both general partners and limited partners, it is sometimes termed a _______

### View Answer

Ans: Limited Partnerships

37. The advantage to an _______ is that the liability of members is limited to their investment.

### View Answer

Ans: LLC

38. In accounting, the _______ concept treats a business as distinct and separate from its owners.

### View Answer

Ans: separate entity

39. _________ of a business unit refers to shutting down of the various functional as well as non-functional areas of the company.

### View Answer

Ans: Closure

40. __________ of funds as an important aspect of financial management avoids the situations where funds are either kept idle or proper uses are not being made.

### View Answer

Ans: Effective utilization

41. Funds procured involve a certain _________ and _________

### View Answer

Ans: cost and risk

42. _______ is the rate at which you can borrow money to finance the equipment you want to buy.

### View Answer

Ans: Interest Rate

43. ________ is combined federal and provincial business tax rate.

### View Answer

Ans: Tax Rate

44. ________ is the debt which has no maturity value.

### View Answer

Ans: Perpetual Debt

45. ________ has a maturity value i.e. these debts are issued for specific time period.

### View Answer

Ans: Redeemable debt

46. ________ are a hybrid security i.e. a hybrid between debt and common/equity stock.

### View Answer

Ans: Preferred stocks

47. ________ are preference shares having maturity value. They are held for a specified time period.

### View Answer

Ans: Redeemable Preference Shares

48. ________ is the minimum rate of return a firm must offer shareholders to compensate for waiting for their returns, and for bearing some risk.

### View Answer

Ans: Cost of Equity

49. ________ states that expected return to investors from equity stock comprises of 2 components of benefits.

### View Answer

Ans: Dividend valuation approach or Constant Dividend Growth Model (Gordon’s Model)

50. ________ is the cost incurred in issuing the equity shares to the investors, by the company.

### View Answer

Ans: Floating cost

51. _______ is an equilibrium model which describes the pricing of assets, as well as derivatives.

### View Answer

Ans: capital asset pricing model (CAPM)

52. _______ asks what is the value of a derivative relative to the concurrent value of its underlying asset.

### View Answer

Ans: binomial option pricing model or the Black-Scholes formula

53. _______ describes a relation between the beta and the asset’s expected rate of return.

### View Answer

Ans: Security Market Line

54. ________is used in finance to measure a firm’s cost of capital.

### View Answer

Ans: Weighted Average Cost of Capital (WACC)

55. ________ is equivalent to perpetuity, where the holder is entitled to fixed payments forever.

### View Answer

Ans: Preferred equity

56. The cost of ________ is usually determined using the capital asset pricing model.

### View Answer

Ans: common equity

57. The ________ is the minimum cost of capital that any firm encounters in the market

### View Answer

Ans: risk free rate of interest

58. ________ is the risk of debt finance.

### View Answer

Ans: Financial risk

59. _________ represents ownership capital as equity holders collectively own the company and do not have any maturity date.

### View Answer

Ans: Equity Capital

60. The _______ of an equity share is the value stated in the memorandum and written on the share scrip.

### View Answer

Ans: par value

61. The _______ is the price at which the equity share is issued.

### View Answer

Ans: issue price

62. The amount offered by the company to the investors is called the……………………….

### View Answer

Ans: issued capital

63. The _________ of an equity share is the price at which it is traded in the market.

### View Answer

Ans: market value

64. As in the case of income, _________ have a residual claim over the assets of the firm in the event of liquidation.

### View Answer

Ans: equity shareholders

65. A _________ involves selling securities in the primary market by issuing rights to the existing shareholders.

### View Answer

Ans: rights issue

66. ________ represents a hybrid form of financing-it partakes some characteristics of equity and some attributes of debentures.

### View Answer

Ans: Preference capital

67. Preference shares do not carry _______ rights.

### View Answer

Ans: voting rights

68. There is no _______ liability in the case of perpetual preference shares.

### View Answer

Ans: redemption

69. The ______ of a firm consist of depreciation charges and retained earnings.

### View Answer

Ans: internal accruals

70. ______ earnings are that portion of equity earnings (profit after tax less preference dividends) which are ploughed back in the firm.

### View Answer

Ans: Retained

71. Use of internal accruals, in contrast to _______, eliminates issue costs and losses on account of under-pricing.

### View Answer

Ans: external equity

72. Term loans are also referred to as ________

### View Answer

Ans: term finance

73. ________ are employed to finance acquisition of fixed assets and working capital margin.

### View Answer

Ans: Term Loans

74. Term loans typically represent _______ borrowing.

### View Answer

Ans: secured

75. In order to protect their interest, financial institutions impose _______ condition on the borrowers.

### View Answer

Ans: restrictive condition

76. Debenture holders are the _______ of a company.

### View Answer

Ans: creditors

77. Debentures are typically ______ in nature.

### View Answer

Ans: redeemable

78. A debt obligation which is derived from another debt obligation is called a ________

### View Answer

Ans: Structured Note

79. In a private placement, there is greater ___________ in working out the terms of the issue.

### View Answer

Ans: flexibility

80. Interest on debt is a ________ expense, whereas equity and preference dividend are paid out of profit after tax.

### View Answer

Ans: tax-deductible

81. _______ entails fixed interest and principal repayment obligation.

### View Answer

Ans: Debt financing

82. Under a ______ arrangement, a predetermined limit for borrowing is specified by the bank.

### View Answer

Ans: cash credit or overdraft

83. _____ are advances of fixed amounts to the borrower. The borrower is charged with interest on the entire loan amount, irrespective of how much he draws.

### View Answer

Ans: Loans

84. Once the application is duly processed, it is put up for sanction to the _______

### View Answer

Ans: appropriate authority

85. Under _______, the owner of the goods borrows money against the security of movable property, usually inventories.

### View Answer

Ans: Hypothecation

86. The term ______ seems to be a misnomer because they do not have a physical location.

### View Answer

Ans: Euromarkets

87. ______ is usually managed by a syndicate of investment banks and offered to investors in many countries.

### View Answer

Ans: Eurobonds

88. _______ is a way to raise money internationally is to sell securities directly in the domestic capital markets of foreign countries.

### View Answer

Ans: Foreign Domestic Markets

89. Under ______, credit is provided directly to the Indian buyer for purchase of capital goods and/or technical services from the overseas exporter.

### View Answer

Ans: Buyer’s Credit

90. A _________ is a combination of constraint and uncertainty

### View Answer

Ans: risk

91. The _________ illustrates a set of functions that are identified as continuous activities throughout the life cycle of a project.

### View Answer

Ans: Risk Management Paradigm

92. ________ involves examining how project outcomes might change with modification of risk input variables.

### View Answer

Ans: Risk analysis

93. _______ is the process of managing risks to achieve the desired outcomes.

### View Answer

Ans: Risk control

94. There are two stages in the process of Project Risk Management, _______ and _________.

### View Answer

Ans: Risk Assessment and Risk Control

95. Risk Control cannot be effective without a previous _______

### View Answer

Ans: Risk Assessment

96. _______ ascertains which risks have the potential of affecting the project and documenting the risks’ characteristics.

### View Answer

Ans: Risk Identification

97. The _______ statement defines the project boundaries and assumptions.

### View Answer

Ans: Project Scope Statement

98. _______ is a technique for identifying essential causes of risk.

### View Answer

Ans: Root cause identification

99. _______ are commonly developed from historical information or lessons learned.

### View Answer

Ans: Checklists

100. Once risks have been identified, they must then be assessed as to their __________ of loss and to the probability of occurrence.

### View Answer

Ans: potential severity

101. The fundamental difficulty in risk assessment is determining the rate of _____ since statistical information is not available on all kinds of past incidents.

### View Answer

Ans: occurrence

102. The technique of building a pilot phase of the project is an example of _______

### View Answer

Ans: risk mitigation

103. Nothing can be ______ which cannot be measured.

### View Answer

Ans: controlled

104. _________ includes not performing an activity that could carry risk.

### View Answer

Ans: Risk Avoidance

105. _________ involves methods that reduce the severity of the loss.

### View Answer

Ans: Risk Reduction

106. _________ involves accepting the loss when it occurs.

### View Answer

Ans: Risk Retention

107. ______ needs to be approved by the appropriae level of management.

### View Answer

Ans: Risk mitigation

108. Initial risk management plans will never be ____

### View Answer

Ans: perfect

109. Risk analysis results and management plans should be updated ______

### View Answer

Ans: periodically

110. Internal Audit activity can focus more on areas of risk as identified in the _______

### View Answer

Ans: Risk Register

111. _______ are particularly useful for managing price risk.

### View Answer

Ans: Derivatives

112. A _______ analysis provides decision-makers information as to whether or not they can afford to do the project, as well as successfully operate it once constructed.

### View Answer

Ans: financial feasibility

113. Risk management has become an integral part of ______ and _________

### View Answer

Ans: Corporate Governance and Business Strategy

114. ________ Risk may involve financial loss in some cases; in other cases, there is no financial loss.

### View Answer

Ans: Financial and Non-financial risk

115. _______ risks are those resulting from changes in the economy.

### View Answer

Ans: Dynamic risks

116. Gambling is an example of a _________ risk.

### View Answer

Ans: speculative risk

117. _____ provide a way of examining the consequences of continuous risk.

### View Answer

Ans: Simulations

118. The ………………. has announced a scheme on Generation Based Incentive (GBI) for grid connected wind power projects.

### View Answer

Ans: Ministry of New & Renewable Energy

119. The proposed annual escalations agreed with the utility, as in force, should be reflected in the……

### View Answer

Ans: PPA

120. The combustion and cogeneration routes are meant for generation of power in………………….scale.

### View Answer

Ans: Megawatt

121. Any waste of renewable nature or biomass can be mixed to the extent of………………with MSW.

### View Answer

Ans: 25%

122. The programme for fast track promotion of projects for power generation from MSW involves development of a ………………..for specific cities.

### View Answer

Ans: project document

123. It is expected that State Nodal Agencies, HUDCO, IREDA, IL&FS, TCOs etc. will develop the projects with the help of……………………

### View Answer

Ans: consultants

124. A ………. is normally the first (supporting) party to be considered while looking for sources for debt financing.

### View Answer

Ans: bank

125. Finance companies may restrict financing to ………………..loans.

### View Answer

Ans: moderate-size

126. In a …………….., more than two individuals or groups share the Ownership of a project.

### View Answer

Ans: partnership

127. ………………………. provide financing for new, high-risk enterprises that promise very high returns on being successful.

### View Answer

Ans: Venture Capital Firms

128. In an……….., the user would receive the renewable energy equipment/system directly from the manufacturer in exchange for the purchase price.

### View Answer

Ans: ordinary sale

129. In ………the owner would purchase the renewable energy system from the manufacturer and then lease it to the end user in return for regular lease payments.

### View Answer

Ans: Third Party Lease

130. ……………… is primarily suggested for those parties who cannot normally take advantage of the investment tax credits.

### View Answer

Ans: Sale-leaseback Approach

131. The Indian Renewable Energy Development Agency Ltd. (IREDA) was incorporated as a Public Limited Government Company in…………………..

### View Answer

Ans: 1987

132 By giving the financial support and revolving funds the IREDA is working for development and deployment of ……………..

### View Answer

Ans: New and Renewable Sources of Energy (NRSE)

133. IREDA has been operating line of credit from the World Bank for development of …………….. Projects.

### View Answer

Ans: Small Hydro Power Projects

134. The companies who are eligible as per criteria laid down by………………can apply for loan and can get the loan disbursed without any hassle.

### View Answer

Ans: IREDA

135. ………………..is the movement of cash into or out of a business, project, or financial product.

### View Answer

Ans: Cash Flow

136. ………………..is very useful to help plan ahead in a business in such areas as the recruitment of new employees, whether to issue new stock, and/or acquisitions of long-term assets.

### View Answer

Ans: Project Cash Flow

137. ………………… are the fees associated with the initial setup of a plant or project.

### View Answer

Ans: Capital costs

138. ………………… are those business costs that are not directly related to the level of production or output.

### View Answer

Ans: Fixed costs

139. …………………… are those costs which vary directly with the level of output.

### View Answer

Ans: Variable costs

140. …………………… are those which can be directly attributable to the production of a particular product or service and allocated to a particular cost centre.

### View Answer

Ans: Direct variable costs

141. A …………. is used to determine how much sales volume your business needs to start making a profit.

### View Answer

Ans: breakeven analysis

142. …………. is the price that you receive per unit of sales.

### View Answer

Ans: Average per-unit sales price (per-unit revenue)

143. ………………. is the incremental cost, or variable cost, of each unit of sales.

### View Answer

Ans: Average per-unit cost

144. _________ is a method of financial modelling in which one or more variables within the model are random.

### View Answer

Ans: Stochastic Modelling

145. _________ is a review of the impact that changes in selected project inputs, costs or benefits, or a combination of these, can have on the project’s net present value or IRR.

### View Answer

Ans: Sensitivity Analysis

146. The _____ is an example of a stochastic model used in finance.

### View Answer

Ans: Monte Carlo Simulation

147. _______ is emulation of reality using mathematical model.

### View Answer

Ans: Simulation

148. ______ is part of every decision we make.

### View Answer

Ans: Risk analysis

149. In _______ values are positively skewed, not symmetric like a normal distribution.

### View Answer

Ans: Lognormal

150. The electricity sector in India is predominantly controlled by the Government of India’s ________

### View Answer

Ans: public sector undertakings (PSUs)

151. Electricity losses in India during transmission and distribution are extremely high and vary between ________ to _______

### View Answer

Ans: 30 to 45%

152. _______ reserves in India are substantial high but low in quality.

### View Answer

Ans: Coal

153. Under ________ a plant is constructed and operated for a predetermined period of time by a private electric power company.

### View Answer

Ans: BOT

154. A ________, the regulator, allows the price of electricity to increase by set amounts relative to inflation.

### View Answer

Ans: Director General of Electricity Supply

155. The amount of electricity supplied from hydroelectric plants in Asia represents _________ per cent of the total electricity generated.

### View Answer

Ans: 16

156. ____________ is one of the leading groups in the private sector for power generation.

### View Answer

Ans: Reliance Energy Ltd

157. ____________ installed India’s first new generation state of the art power project at Hazira in 1990’s.

### View Answer

Ans: Essar Oower Ltd

158. _______ of electricity is defined as bulk transfer of power over a long distance at high voltage, generally of 132kV and above.

### View Answer

Ans: Transmission

159. The total installed generating capacity in the country is over _______

### View Answer

Ans: 164,700 MW

160. ______ is a critical input for fuelling growth of major infrastructure sectors like power, steel and cement.

### View Answer

Ans: Coal

161. ______ refers to efforts made to reduce energy consumption.

### View Answer

Ans: Energy conservation

.woocommerce-message { background-color: #98C391 !important; }