C:-Opening Stock - Net purchase + Direct expense + closing stock = cost of
goods sold

D:-Opening Stock + Net purchase + Direct expense + closing stock = cost of
goods sold

Correct Answer:- Option-B

Question21:-Match the following working capital management strategies
(a) Hedging approach (i) Short term sources should be used only during
emergency

(b) Aggressive approach (ii) Permanent working capital requirement should
be financed

by long term funds
(€) Conservative approach (iii) Firm relies more on short term sources to
finance its
current assets
(d) Zero working capital (iv) the concept developed by Kampouris
approach
A:-(a)-(ii), (b)-(iii), (c)-(i), (d)-(iv)
B:-(a)-(iii), (b)-(ii), (c)-(iv), (6)-(1)
C:-(a)-(ii), (b)-(i), (c)-(iii), (d)-(iv)
D:-(a)-(iv), (b)-(ii), (c)-(i), (d)-(iii)
Correct Answer:- Option-A
Question22:-What will be the cost of preference capital if a company issues 1000

7% preference shares of Rs. 100 each at a premium of 10% redeemable after 55
years at par

A:-4.50%

B:-4.76%

C:-4.65%

D:-5%

Correct Answer:- Option-B

Question23:-Which of the following statement is/are incorrect about cash
management

(1) Delay cash disbursement as much as possible without damaging the firm's
credit rating will enhance efficiency of cash management

(11) Pre-authorized cheques and zero balance accounts are methods of
synchronizing cash flows

(111) The optimum level of cash is that level if cash at which there is a trade off
between cost of maintaining the cash surplus and cost of deficit financing

(iv) Cash conversion cycle is calculated by subtracting the average payment
period from the operating cycle

A:-Only (iii)
B:-(ii) and (iv)
C:-(iii) and (iv)
D:-Only (ii)