Entrepreneurship Development MCQ || Entrepreneurship Development Questions and Answers Part 1

76. Estimated time required in normal conditions to complete an activity is ______

  1. pessimistic time
  2. optimistic time
  3. most likely time
  4. none of these

Answer.3. most likely time

Explanation:

Most Likely Time Estimate (t) is the time for completing an activity under normal conditions. In this case, conditions are not ideal and minor mishaps may occur.

 

77. _______ shows the changes in assets, liabilities, and net worth between two balance sheet dates.

  1. cash flow
  2. fund flow
  3. ratio
  4. breakeven

Answer.2. fund flow

Explanation:

Fund flow is the net of all cash inflows and outflows in and out of various financial assets.

A fund flow statement reveals the reasons for changes or anomalies in the financial position of a company between two balance sheets.

Fund flow is usually measured on a monthly or quarterly basis. The performance of an asset or fund is not taken into account, only share redemptions, outflows, and share purchases, or inflows.

 

78. _______  shows movement of cash into and out of the firm and its net effect on the balance sheet.

  1. cash flow
  2. fund flow
  3. ratio
  4. breakeven

Answer.1. cash flow

Explanation:

The term cash flow refers to the net amount of cash and cash equivalents being transferred in and out of a company. Cash received represents inflows, while money spent represents outflows.

 

79.  Which of the following is not a technique of financial analysis?

  1. ratio analysis
  2. risk analysis
  3. cash flow analysis
  4. fund flow analysis

Answer.2. risk analysis

Explanation:

The most common types of financial analysis are vertical analysis, horizontal analysis, leverage analysis, growth rates, profitability analysis, liquidity analysis, efficiency analysis, cash flow, fund flow, ratio analysis, rates of return, valuation analysis, scenario, and sensitivity analysis, and variance analysis.

Risk analysis is the project planning process.

 

80. Mathematical relationship between two figures taken from financial statements is called

  1. cash flow
  2. fund flow
  3. ratio
  4. breakeven

Answer.2. risk analysis

Explanation:

Accounting ratios are an important tool of financial statements analysis. A ratio is a mathematical number calculated as a reference to the relationship of two or more numbers and can be expressed as a fraction, proportion, percentage, and a number of times.

 

81. ______ is an equilibrium point.

  1. cash flow
  2. fund flow
  3. ratio
  4. breakeven

Answer.4. breakeven

Explanation:

A Breakeven is an equilibrium point at which cost and income are equal and there is neither profit nor loss also. It is a financial result reflecting neither profit nor loss.

 

82. _______ is described as the bread earning a point.

  1. cash flow
  2. fund flow
  3. ratio
  4. breakeven

Answer.4. breakeven

Explanation:

A Breakeven is an equilibrium point at which cost and income are equal and there is neither profit nor loss also.  Breakeven point is something like your ‘ Bread – even point ‘, since you start earning your bread only when you cross this point.

 

83. _______ ratio establishes relationship between contribution margin and total sales.

  1. p/v
  2. current
  3. profitability
  4. none

Answer.1. p/v

Explanation:

P/V ratio = Contribution/ Sales: It is used to measure the profitability of the company. Contribution is the excess of sales over variable costs. So basically P/V ratio is used to measure the level of contribution made at different volumes of sales.

 

84. Contribution margin ratio is better known as

  1. p/v
  2. current
  3. profitability
  4. none

Answer.1. p/v

Explanation:

P/V ratio = Contribution/ Sales: It is used to measure the profitability of the company. Contribution is the excess of sales over variable costs. So basically P/V ratio is used to measure the level of contribution made at different volumes of sales.

 

85. ______ Is also known as the marginal profit ratio.

  1. p/v
  2. current
  3. profitability
  4. none

Answer.1. p/v

Explanation:

Profit/Volume Ratio, commonly known as P/V Ratio, is the ratio of Contribution to Sales. This ratio is also known as Marginal Income Ratio, Contributions/Sales Ratio or, Variable Profit Ratio.

 

86. Raising capital from multiple sources is known as

  1. venture capital
  2. layered financing
  3. deferred credit
  4. lease financing

Answer.1. layered financing

Explanation:

Raising capital for a new venture or for expanding an existing business is often a challenge. Many MSMEs have difficulty accessing finance, and as such, they often adopt what is referred to as layering or layered financing.

Layered financing is the technique of raising capital from multiple sources.

This involves piecing together capital from as many sources as they can obtain, that is, putting together finance from various sources.

 

87. Giving capital to an enterprise that has risk and adventure is called _______

  1. venture capital
  2. layered financing
  3. deferred credit
  4. lease financing

Answer.1. venture capital

Explanation:

Venture capital (VC) is a form of private equity and a type of financing that investors provide to startup companies and small businesses that are believed to have long-term growth potential.

Thus venture capital implies committing capital resources to the enterprise that has risk and adventure i.e. funds made available for the financing of new business ventures. It is to finance the early stage of a new company that wants to grow rapidly. It is regarded as risk capital.

 

88. Arrangement where payments to suppliers are made in agreed installments over a specified period of time at some agreed rate of interest on the outstanding balance.

  1. venture capital
  2. layered financing
  3. Buyer credit
  4. lease financing

Answer.3. Buyer credit

Explanation:

Under the buyer’s credit scheme a buyer enters into an agreement with an overseas supplier company with deferred payment conditions.

The overseas supplier company realizes its money immediately from its country’s banking system. Thereafter, the bank collects the deferred installments with interest at specified rates from the enterprise through the Indian banking system.

 

89. _______ is a contract between the owner and user of the asset to use the asset for consideration.

  1. venture capital
  2. layered financing
  3. deferred credit
  4. lease financing

Answer.4. lease financing

Explanation:

Lease financing is a contractual agreement between the owner of the asset who grants the other party the right to use the asset in return for a periodic payment and the other party who is the user of such assets.

 

90. Project appraisal is the process of estimating the costs and benefits of a project to arrive at the ______ decision.

  1. investment
  2. profitability
  3. liquidity
  4. none of these

Answer.1. investment

Explanation:

Project appraisal is the process of estimating the costs and benefits of a project to arrive at an investment decision. It often involves comparing various options, using economic appraisal or some other decision analysis technique.

Scroll to Top