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WorksheetsCIPM
Total questions: 90
Worksheet time: 1hrs 9mins
Which one of the following is not an advantage of progressive tax?
Cheap to collect.
Inflationary
Convenience
Certainty
Which one of these taxes is not collectible by the federal government?
Petroleum profits tax
Tertiary Education Tax
Slaughter slab fees.
Stamp duties on corporate bodies.
How many days’ notice would a Tax Appeal Tribunal give to an appellant and Federal
Inland Revenue Service of the date and place fixed for hearing of the appeal?
28 days
21 days
14 days
7 days
How many members or their representatives shall constitute a quorum at a meeting of
the Joint Tax Board?
7 members
6 members
5 members
4 members
Equity in financial management is also known as ……………….
Ordinary shares
Preference shares
Debenture
Bank Loan
Retained earnings also have certain disadvantages EXCEPT:
Misuses
Leads to monopolies
Over capitalization
Tax planning
The demerit of Equity Shares is
Permanent sources of finance
Non-Voting rights
No fixed dividend
Less cost of capital
Security finance consists of the following important features EXCEPT……………
Long-term sources of finance.
It is also called as corporate securities.
Security finance includes both shares and debentures
Repayment of finance is very limited.
Which of the following is not a procedure for hearing an appeal before the Tax Appeal
Tribunal
The Tax Appeal Tribunal gives seven (7) days’ notice to the appellant and FIRS of the date and place fixed for hearing of the appeal.
A member with vested interest in any matter before the Tax Appeal Tribunal must disclose such interest and abstain from attending any sitting, at which the matter is to be heard.
All appeals before the Tax Appeal Tribunal are heard in public
The Tax Appeal Tribunal can only entertain tax cases below N1 million
Within what period is a newly incorporated company expected to register with the
FIRS?
Eighteen months after incorporation or eight months after the end of its first accounting period
Eighteen months after incorporation or seven months after the end of its first accounting period.
Eighteen months after incorporation or six months after the end of its first accounting period
Twenty months after incorporation or six months after the end of its first accounting period
Which one of the following is not a function of the Joint Tax Board (JTB)?
Advise the Federal Government, on request, in respect of double taxation arrangement with any other country
Advise the Federal Government, on request, in respect of rates of capital allowances and other taxation matters, having effect throughout Nigeria in respect of any proposed amendment to PITA
Assess, collect, account and enforce payment of taxes as may be due to the government or any of its agencies.
Exercise the powers or duties conferred on it by the PITA and other Act
The measuring technique to understand the most business efficiency of a business concern is termed…………………….
liquidity
profitability
Solvency
Investment
An ownership source of finance includes all the following EXCEPT……………
Shares capital
Retained earnings
Surplus and Profits
Bank Loan
The sources of finance whose repayment period is more than five years is described as……….
Short term
Medium term
Long term
Payment term
Profit maximization objective consists of certain drawback except:
It is vague
It ignores the time value of money
It ignores risk
It is simple
The financial management which applied large numbers of mathematical and statistical tools and techniques is known as………………..
Endosckedacity
Quantitative
Econometrics
Econo-Finance
Which of the following is not a short-term source of finance?
Bank Credit
Customer Advances
Debenture
Factoring
The ways for mobilizing various terms of finance to the industrial concern is described as………………
expensing of finance
sources of finance
expansion of finance
disbursement of finance
The most important and first part of the business organization is financial ……………..
A.
B.
C.
D.
planning
controlling
motivating
coordinating
Sources of finance may be classified under various categories based on …………….. EXCEPT
ownership
term
generation
leadership
The entire business activities are directly related with ……………………
staffing employees.
supporting government.
making profit
Processing inputs.
The lifeblood of business organization is …………..
Finance
Borrowings
Management
Government
The type of management which is concerned with the duties of the financial managers in the business firm is described as………… management.
financial
production
research and development
marketing
Finance function is one of the major parts of corporate organization, which involves the permanent, and continuous process of the ……………….concern.
business
sport
social
government
The financial need analysis the involves disagreement to agreement in books of account is known as…………..
reconciliation
planning
creating
expanding
The financial needs analysis that involves risk assessment is known as …………analysis
insurance
production
marketing
purchasing
The goal of every business entity in the world is described as……
A.
B.
C.
D.
Financial security
Financial reconciliation
Financial needs
Financial spending
The art and science of managing money is described as………………
finance
accounting
purchasing
selling
The end product of financial needs analysis is
A. .
B.
C.
D.
Presenting the financial planning recommendation(s)
Implementing the financial planning recommendation(s)
Monitoring progress and updating
Distributing Financial Planning recommendation(s)
Corporation finance deals with the financial problems of …………………. enterprises.
public
social
public-private
private
The revenue and disbursement of government money such as central and state government financial matter is known as……………... finance
public
social
public-private
private
An overview of your current and future monetary situation of an entity is referred to as…………...
Financial Needs Analysis (FNA)
Business Environment Analysis (BEA)
Cost Volume Profit Analysis (CVPA)
Financial Statement Analysis (FSA)
The first component of a financial plan is tracking what an entity earn and spending is described as………………………
Income and Expenses
Financial Position
Cash flow
Capital
The financial plan of a business organization activity expressed in quantitative term is ………….
Budget
Control
Forecasting
Modelling
The financial analysis needs which takes care of what an entity will pay government is ………….
Grant
Loan
Taxation
Income
The steps in financial need analysis and assessments that involves the adoption of financial preparation is…………
Developing the financial planning recommendation(s)
Presenting the financial planning recommendation(s)
Implementing the financial planning recommendation(s)
Monitoring progress and updating
The first step involves in financial need analysis and assessments
Identifying and selecting goals.
Analysing the client's current course of action and potential alternative course(s) of action.
Understanding the client's personal and financial circumstances
Developing the financial planning recommendation(s).
The components of financial statements generally consist of the following important statements except
Income statement or profit and loss account.
Statement of financial position.
Statement of changes in owner’s equity.
Report statement
……….. measures the profitability, position, prospect and operation over a period of time
Statement of financial position
Ratio analysis
Capital budgeting
Statement of profit and loss
Ratios that measure how an organization is able to pay its long-term obligations or commitment to capital providers is called
Profitability
Solvency ratio
Investment Ratios
Liquidity
The critical examination of all variable in the financial statement for two or more companies in the same industry in order to determine their strengths or weaknesses is ………………
Trend analysis
Intra group analysis
Inter group analysis
Vertical analysis
The challenges of financial analysis include the following EXCEPT:
difference in methods adopted may lead to misinform judgment
is inherent assumption that historical data used for ratio analysis are inviolate
It may trigger off points for further investigations
it increases competition
Turnover 120,000
Net profit before interest and tax 60,000
Debenture interest 2,000
Net profit after interest 58,000
Stock 2,500
Debtors 5,000
Other current assets 24,000
Current liabilities 10,500
Tax for the year 20%
Calculate Acid test ratio
(a)
Turnover 120,000
Net profit before interest and tax 60,000
Debenture interest 2,000
Net profit after interest 58,000
Stock 2,500
Debtors 5,000
Other current assets 24,000
Current liabilities 10,500
Tax for the year 20%
Calculate current ratio
(a)
Turnover 120,000
Net profit before interest and tax 60,000
Debenture interest 2,000
Net profit after interest 58,000
Stock 2,500
Debtors 5,000
Other current assets 24,000
Current liabilities 10,500
Tax for the year 20%
Calculate gross profit margin
(a)
Turnover 120,000
Net profit before interest and tax 60,000
Debenture interest 2,000
Net profit after interest 58,000
Stock 2,500
Debtors 5,000
Other current assets 24,000
Current liabilities 10,500
Tax for the year 20%
Calculate profit after tax margin
(a)
Turnover 120,000
Net profit before interest and tax 60,000
Debenture interest 2,000
Net profit after interest 58,000
Stock 2,500
Debtors 5,000
Other current assets 24,000
Current liabilities 10,500
Tax for the year 20%
Calculate interest times earned
(a)
20X3 20X2
The Income Statements showed: ‘N Million ‘N Million
Turnover 600 500
Cost of Sales (300) (260)
Gross Profit 300 240
Admins Expenses (100) (90)
Selling and Distr. Expenses (50) (60)
Profit before Interest &Tax 150 90
Finance Expense (Interest) ( 24) (28.8)
Profit Before Tax 126 61.20
Tax Expenses (Provision ) (60) (21.20)
Profit After Tax 66 40
Proposed Dividend (50) (40)
Retained Earnings 16 Nil
calculate gross profit margin
(a)
20X3 20X2
The Income Statements showed: ‘N Million ‘N Million
Turnover 600 500
Cost of Sales (300) (260)
Gross Profit 300 240
Admins Expenses (100) (90)
Selling and Distr. Expenses (50) (60)
Profit before Interest &Tax 150 90
Finance Expense (Interest) ( 24) (28.8)
Profit Before Tax 126 61.20
Tax Expenses (Provision ) (60) (21.20)
Profit After Tax 66 40
Proposed Dividend (50) (40)
Retained Earnings 16 Nil
calculate gross profit mark-up
(a)
20X3 20X2
The Income Statements showed: ‘N Million ‘N Million
Turnover 600 500
Cost of Sales (300) (260)
Gross Profit 300 240
Admins Expenses (100) (90)
Selling and Distr. Expenses (50) (60)
Profit before Interest &Tax 150 90
Finance Expense (Interest) ( 24) (28.8)
Profit Before Tax 126 61.20
Tax Expenses (Provision ) (60) (21.20)
Profit After Tax 66 40
Proposed Dividend (50) (40)
Retained Earnings 16 Nil
Calculate Returns on Capital Employed
(a)
20X3 20X2
The Income Statements showed: ‘N Million ‘N Million
Turnover 600 500
Cost of Sales (300) (260)
Gross Profit 300 240
Admins Expenses (100) (90)
Selling and Distr. Expenses (50) (60)
Profit before Interest &Tax 150 90
Finance Expense (Interest) ( 24) (28.8)
Profit Before Tax 126 61.20
Tax Expenses (Provision ) (60) (21.20)
Profit After Tax 66 40
Proposed Dividend (50) (40)
Retained Earnings 16 Nil
Calculate Total Expenses Ratio
(a)
Ebonyi Plc is to undertake a project requiring an investment of N100,000 on necessary plant and machinery. The project is to last for 5 years at the end of which the plant and machinery will have net book value of N20,000. Profits before depreciation are as follows:
Yr Profit (N)
1 40,000
2 44,000
3 48,000
4 52,000
5 58,000
You are required to calculate the ARR of the project.
(a)
Certain projects require an initial cash outflow of N25,000. The cash inflows for 6 years are N5,000, N8,000, N10,000, N12,000, N7,000 and N3,000. Calculate Pay back period
(a)
Project cost is N30,000 and the cash inflows are N10,000, the life of the project is 5 years. Calculate the pay-back period.
(a)
….……. is the process of evaluating and selecting long term investment projects that yield future cashflows?
Working capital
Ratio analysis
Capital budgeting
Statement of cashflow
Profitability index is calculated as
the ratio of present value of cash inflows to cashflows
the ratio of initial investment to annual cash inflows
the ratio of total cash inflow to total cash outflows
the ratio of net asset income to assets
Which of this is a traditional method
net present value
internal rate of return
profitability index
account rate of return
A situation where a company places a limit on the total size of capital investment it can undertake during a particular period is referred to as……………………
Cost of capital
Capital rationing
capital budgeting
capital movement
Baale has a project the project has Present Value of ₦33,845,000 at a cost of ₦30,000,000 and first-year inflow of N3,000,000, calculate the NPV
(a)
financial market comprises of five key components, which are
debt market, equity market, foreign-exchange market, mortgage market, and derivative market
debt market, equity market, foreign-exchange market, forex market, and derivative market
debt market, equity market, foreign-exchange market, money market, and derivative market
debt market, equity market, money market, capital market, and derivative market
Calculate the payback period from the following information: Cash outlay ₦50,000 and cash inflow ₦12,500.
(a)
The discount factor of 15% at 3 years is
(a)
SP Limited company is having one project, requiring a capital outflow of ₦300,000. The expected annual income after depreciation but before tax is as follows:
Year ₦
1
9,000
2
80,000
3
70,000
4
60,000
5
50,000
Depreciation may be taken as 20% of original cost and cost of capital is 15%:
You are required to calculate Net Present Value
(a)
SP Limited company is having one project, requiring a capital outflow of ₦300,000. The expected annual income after depreciation but before tax is as follows:
Year ₦
1
9,000
2
80,000
3
70,000
4
60,000
5
50,000
Depreciation may be taken as 20% of original cost and cost of capital is 15%:
You are required to calculate Net Present Value Index
(a)
SP Limited company is having one project, requiring a capital outflow of ₦300,000. The expected annual income after depreciation but before tax is as follows:
Year ₦
1
9,000
2
80,000
3
70,000
4
60,000
5
50,000
Depreciation may be taken as 20% of original cost and cost of capital is 15%:
You are required to calculate Account rate of return
(a)
What is working capital management
Managing the total assets of a company.
Managing the total liability of a company.
Managing the difference between current assets and current liabilities.
Managing the difference between long term assets and long-term liabilities.
The importance of effective working capital management for a business include all except…………….
It helps to determine the profitability of a business.
It ensures smooth day to day operations.
It is used to finance long term investment projects.
It helps to attract investors and secure loans.
How can a company optimize its working capital management?
By increasing sales and revenue.
By reducing expenses and costs.
By managing inventory and accounts receivables efficiently.
By investing in long term assets.
What is cash conversion cash cycle?
The time it takes for a company to convert inventory into cash
The times it takes for a company to convert accounts receivables into cash
The time it takes for a company to convert account payables into cash
The time it takes for a company to convert all current assets into cash
The following are the participants of capital market
Banks, primary dealers, brokers and stock exchange
Insurance, brokers, companies and banks
Stock exchange, brokers, bank and insurance
None of the above
The maintenance of higher level of Working Capital to minimize risk id known as…………….
Conservative Working Capital
Aggressive Working Capital
Moderate Working Capital
Influence Working Capital
The amount of capital which is required to meet the seasonal demands and some special purposes is described as………………...
permanent working capital
fixed Working Capital
variable Working Capital
special working capital
What is the formula to calculate return on working capital?
𝑛𝑒𝑡 𝑝𝑟𝑜𝑓𝑖𝑡/𝑤𝑜𝑟𝑘𝑖𝑛𝑔 𝑐𝑎𝑝𝑖𝑡𝑎𝑙
𝑐𝑢𝑟𝑟𝑒𝑛𝑡 𝑎𝑠𝑠𝑒𝑡𝑠/𝑐𝑢𝑟𝑟𝑒𝑛𝑡 𝑙𝑖𝑎𝑏𝑖𝑙𝑖𝑡𝑖𝑒𝑠
𝑡𝑜𝑡𝑎𝑙 𝑎𝑠𝑠𝑒𝑡𝑠/𝑡𝑜𝑡𝑎𝑙 𝑙𝑖𝑎𝑏𝑖𝑙𝑖𝑡𝑖𝑒𝑠
𝑔𝑟𝑜𝑠𝑠 𝑝𝑟𝑜𝑓𝑖𝑡/𝑜𝑝𝑒𝑟𝑎𝑡𝑖𝑛𝑔 𝑒𝑥𝑝𝑒𝑛𝑠𝑒𝑠
The benefits of efficient working capital management are itemized below: except…………….
increased profitability and return on investment
improved cashflow and liquidity
low financial stability
reduced risk
The difference between total assets and liabilities is defined……………….
Working capital
Net assets
Loose capital
Fluctuating assets
Under Net Income approach; An increase in financial leverage will lead to_
Increase in WACC
Decrease in WACC
Increase in cost of equity
Decrease in cost of equity
Under, Net Income approach, the value of the firm will be maximum at a point where WACC is
Minimum
Maximum
Constant
None of the above
The following are the factors affecting capital structure EXCEPT……..
Financial leverage
Cost of capital
Growth and stability of sales
Investment in stock
The assumptions of Modigliani and Miller approach include the following, except
There is a perfect capital market
There are no corporate taxes
The investor act rationally
There is retained earnings
The capital of a company consists of EXCEPT….
equity shareholders fund
preference share capital
long term external debts.
Prepayment and trade receivables
These are all assumptions of capital structure except that...
The firm’s total financing remains constant
Taxes are not considered.
The pay-out ratio is 100%
The firm has no perpetual life
Under which approach is capital structure decisions of the firm are irrelevant.
Traditional approach
Net Income approach
Net operating Income approach
Modigliani and Miller approach
Dividends are classified into the following
Cash, stock, bonds and property dividend
Cash, stock, property and preference dividend
Bond, stock, equity and preference dividend
Cash, bond, equity and preference dividend
The following are the major criticisms of MM approach except
MM approach assumes that tax does not exist.
MM approach assumes that there is no risk and uncertain of the investment.
MM approach assumes that, investor behaves rationally.
MM approach assumes that the firm has constant return and cost of capital
If the capital market is prefect, it leads
to improve the higher dividend.
to decrease in the dividend
to constant dividend
to flexible dividend
GREAT Ltd.s EBIT is N500,000. The company has 10%, N2,000,000 debentures. The equity capitalization rate i.e. Ke is 16%. What is the market value of equity for the firm
(a)
GREAT Ltd.s EBIT is N500,000. The company has 10%, N2,000,000 debentures. The equity capitalization rate i.e. Ke is 16%. What will be the Value of the firm
(a)
What will be the overall cost of capital rate
(a)
Under which approach is capital structure decisions of the firm are irrelevant
Traditional approach
Net Income approach
Net operating Income approach
Modigliani and Miller approach
. …. buys shares in anticipation of a short-term rise, which fails to occur
A covered bear
A stale bull
Investors
Star
