MCQs On VALUATION APPLICATION SITUATION SPECIFIC VALUATION part - 1

Q.1:- Which of the following is the key factor for choosing the type of financing?

• Assets of the venture
• Prevailing interest rates
• Availability of funds
• All of the given options

Q.2:- Being interested in computers, Jim Johnson came up with an idea of personalizing the screen saver programs with family pictures. After trying a couple of programs, Jim started marketing this service to neighbors and area businesses. Jim’s activities can be described as a(n)

• useless idea.
• entrepreneurship
• large business.
• intrapreneurship

Q.3:- Sangeeta , Kabir, and Ravi started selling computer software on college campuses under the name Student Software Company. Each person contributed Rs.15000/- toward start-up costs and agreed on dividing costs and profits equally. The legal structure for the company canbest be described as a

• trade alliance.
• corporation
• partnership.
• proprietorship

Q.4:- Robert Vadera is a business owner who works from home as a freelance video producer. He really enjoys his work, but isn’t looking to “set the world on fire” with his company. He just wants to make a good living and spend time with his family when he can. Vadera would be classified as a(n)

• micropreneur
• entrepreneur
• venture capitalist.
• intrapreneur.

Q.5:- Kylie is employed by Street Wheels, a large corporation that produces accessories for scooters, bicycles, and other children's vehicles. She is a creative force within the company and has helped launch several new successful products. Kylie is a/an

• Owner
• Entrepreneur
• Partner
• Intrapreneur

Q.6:- While calculating a business value of small and medium-size, which of the following factors need to be considered in particular?

• Determination' of management remuneration as part of valuation of the management factor.
• Reliability of source of information
• What make up the business being valued
• All of the above

Q.7:- Which of the following factor cannot be a basis for the calculated of business profits?

• Relationship of assets to earning
• Income tax effects
• Non- operating assets
• Cash flow orientation

Q.8:- An Investment Company value its investment based on:

• Liquidation value basis
• Book -value basis
• Replacement cost basis
• Fair value basis

Q.9:- Which of the following is not a way that aircraft insurance resembles auto insurance?

• Both require strict qualification and licensing of driver or pilot
• Both exclude obligation of the insured under workers compensation loss
• Both exclude loss due to wear and tear mechanical breakdown and lire damage.
• Both are divided into liability and physical damage

Q.10:- Which of the following is not a way that aircraft insurance resembles auto insurance?

• Both require strict qualification and licensing of driver or pilot
• Both exclude obligation of the insured under workers compensation loss
• Both exclude loss due to wear and tear mechanical breakdown and lire damage.
• Both are divided into liability and physical damage

Q.11:- _____estimates the cost of reinstating the property with a new modern equivalent for insurance purpose:

• Insurance valuation
• Book valuation
• Market valuation
• All of the above

Q.12:- Entrepreneurs are best as..............................:

• Venture capitalists
• Doers
• Managers
• Planners

Q.13:- In some countries, points of purchase displays are not allowed in retail stores. Such differences are studied by internationalentrepreneurs under ....................... the environment.

• Technological
• Cultural
• Economic
• Political

Q.14:- Which of the following is an internal factor that influence sentrepreneurs?

• Social environment
• Economic condition
• Technological Capacity
• Political environment

Q.15:- Which of the following is usually not a barrier to market entry for a small firm?

• switching costs
• access to distribution
• good ideas
• economy of scale

Q.16:- Before opening his own business, Tanay was writing a report that details the specifics of his ideas and future business operations. This document is known as:

• a business plan.
• a competitive analysis.
• a SWOT analysis.
• a business portfolio.

Q.17:- What are the primary sources of funding for entrepreneurs?

• the Small Business Administration and banks
• personal savings and individual investors
• former employers and the Economic Development Authority
• finance companies and banks

Q.18:- Which one of the followings statements is NOT true about trademarks?

• Some trademarks have no relationship with the product
• The filing date for the trademark becomes the first date use of the mark
• The entrepreneur cannot file after the mark already been in use
• A trademark could be a slogan or a particular sound

Q.19:- Which of the following method is not suitable for the valuation of the small and medium enterprise?

• Replacement cost method
• Book value method
• Discounted cash flow method
• None of the above

Q.20:- Which one of the following is a sound strategic option for an entrepreneur when synergy is present?

• Joint venture
• Majority interest
• Merger
• Minority interest

Q.21:- Steve Jacobi is an entrepreneur to the max. Steve has started three businesses, two of which he sold for a great deal of money. He is now involved in running his third business, with plans to sell it shortly and start yet another one. When commenting on his success as an entrepreneur, he says that once an idea comes to him, he just can’t wait to start working on it and bring it to reality, and that is what he focuses on. Which of the traits of successful entrepreneurs does this suggest is characteristic of Steve?

• Self nurturing
• Tolerant of uncertainty
• Action-oriented
• Self-directed

Q.22:- If an entrepreneur has an internal locus of control, this means that he/she:

• believes that success or failure depends on his/her own actions.
• believes fate is a powerful force
• has a high need for achievement
• feels comfortable in an unstructured situation

Q.23:- Having more than 50% ownership position that provides the entrepreneur with managerial control is called .

• Horizontal merger
• Joint venture
• Diversified activity merge
• Majority interest

Q.24:- The parties involved in franchise business are .............................:

• 2
• 6
• 1
• 4

Q.25:- The entrepreneur who is committed to the entrepreneurial effort because it makes good business sense is classed as a/an.................:

• hacker
• craftsman
• opportunist
• inventor

Q.26:- Felix is an entrepreneur. At this stage of his company , his main concerns are do we have enough customers and money. What stage of growth is Felix’s company in?

• Survival
• Resource maturity
• Start-up
• Takeoff

Q.27:- The primary concerns when first starting your business are:

• financing and marketing.
• financing and planning.
• marketing and accounting.
• planning and human resources.

Q.28:- Which one of the following is a barrier to new product creation and development?

• Opportunity cost
• Trial and error
• Intrapreneurship culture
• Opportunity parameter

Q.29:- An open ended fund is one of which is usually available from a mutual fund on:

• Annually
• Bi-annually
• Ongoing basis
• Weekly

Q.30:- Which of the following is not an activity of investment entity?

• Capital appreciation
• Other than capital appreciation and investment Income
• Fair value management
• Investment income

Q.31:- Which of the following factor is required to be considered In establishing the replacement or reinstatement Cost:

• Specific material used in the building
• Demolitions costs and removal of debris
• Location factors (remote or rural site versus metropolitan)
• All of the above

Q.32:- When reserving claim under long tail insurance classes, the amount can be discounted to allow for………….:

• Interest Income
• Short term income
• Investment Income
• Long term income

Q.33:- Factors contribute to the creation of new venture EXCEPT:

• Role models
• High interest rates
• Government
• Finance

Q.34:- Today, inspired by the growth of companies such as Amazon.com, entrepreneurs are flocking to the to start new businesses.

• Internet
• Small Business Administration
• Internet
• bookstore

Q.35:- Process of creating incremental wealth is called Entrepreneurship.

• Systematic
• Dynamic
• Static
• Continuous

Q.36:- The plan shows whether the business is economically feasible or not.

• Economic
• Marketing
• Business
• Financial

Q.37:- Which of the following is a reason why a person might prefer to purchase a franchise rather than open a completely new business?

• ability to benefit from previous experience.
• higher failure rate.
• reduced royalty fees.
• Increased independence.

Q.38:- The period of business when an entrepreneur must position the venture in a market and make necessary adjustments to assure survival is called the:

• early growth stage.
• later growth stage.
• Pre-startup stage.
• Startup stage.

Q.39:- Which one of the following is the step involved in setting up a new enterprises?

• Making a product choice
• Selecting the location
• Setting up infrastructure
• Creating a business plan

Q.40:- Information regarding all of the following is related to operations, EXCEPT:

• Labor skills
• Raw materials
• Location
• Promotion

Q.41:- To the ………………….., physical location does not matter because the Internet allows anyone to link to any Web site no matter where in the world that site might be.

• E-tailer
• B-to-G business
• bricks-and-clicks retailer
• bricks-and-mortar retailer

Q.42:- For Internet start-ups, one typical source of first funds is through ....................:

• government funds.
• angel financing.
• community development financing.
• stock financing.

Q.43:- The resistance of employees in an organization against flexibility, growth, and diversification can be overcome by developing:

• Managerial domain
• Administrative domain
• Intra preneurship
• Entrepreneurship

Q.44:- Which of the followings give the owners a negative right, preventing anyone from making, using, or selling the invention?

• Trade secret
• Trade mark
• Copyright
• Patent

Q.45:- A manufacturing enterprise is considered as medium enterprise:

• Where the investment in plant and machinery is more than Rs. 5 crore but does not exceed Rs. 10 crore.
• Where the investment in plant and machinery is more than Rs. 5 crore but does not exceed Rs. 15 crore.
• Where the investment in plant and machinery is more than Rs. 25 lakh but does not exceed Rs. 5 crore.
• None of the above

Q.46:- What makes the valuation of cyclical firm more complex:

• Volatility
• Sensitive to business cycle.
• Uncertainty
• All of the above

Q.47:- The discount rates used in the valuation of business by discounted cash flow method generally depends on which of the following factors?

• Specific expected return of the investor for an alternative investment
• The interest rate required to repay the planned debt
• An interest rate which is based on a subjective estimate of its components.
• All of the above.

Q.48:- Investment companies are not categories as:

• Mutual fund
• Closed ended fund
• High sea sales
• Open ended fund

Q.49:- One of the essential activities of an investment entity is that it obtain fund from order to provide those investor with investment management service:

• Fair value market
• Investment service condition
• Business Investment service condition
• Bench mark condition

Q.50:- ____Which of the following approach can be used in valuation of investment entity:

• Market Approach
• Income Approach
• None of the above
• Both (a) and (b)