Advance Level Credit for NCC Bank Limited

What is the primary purpose of financial appraisal in project evaluation?

To determine the optimal pricing strategy for the project
To assess the operational viability of the project in the future years (correct)
To determine the market feasibility of the project
To evaluate the competitive pressures affecting the project

Which of the following competitive forces can impact a company's pricing strategy?

Resource strengths and weaknesses
Market opportunities and external threats
Bargaining power of suppliers (correct)
Operational efficiency and cost structure

What is the primary goal of analyzing a company's competitive environment using Porter's Five Forces?

To assess the level of competitive pressure in the industry (correct)
To evaluate the company's financial performance
To identify opportunities for growth and expansion
To determine the company's strengths and weaknesses

Which of the following is NOT a component of Porter's Five Forces?

Resource strengths and weaknesses (C) Signup and view all the answers

What is the primary purpose of SWOT analysis in company strategy?

To match the company's strategy with its resource strengths and weaknesses (C) Signup and view all the answers

What was the Cost of Goods Sold in 2019?

1072,000 (A) Signup and view all the answers

What was the Cost of Goods Available for Sales in 2018?

1032,000 (B) Signup and view all the answers

What is the total of Raw Materials Used in 2017?

598,000 (B) Signup and view all the answers

What is the Closing Stock of Finished Goods in 2019?

40,000 (C) Signup and view all the answers

What is the Cost of Production/Manufacturing Cost in 2018?

1032,000 (C) Signup and view all the answers

What is the purpose of calculating IRR in project evaluation?

To determine the discount rate at which NPV is zero (C) Signup and view all the answers

What is the relationship between IRR and cost of capital (k) in project evaluation?

If IRR > k, accept the project (B) Signup and view all the answers

What is the formula to calculate IRR using the trial and error method?

IRR = LDR + NPV @ LDR × (HDR - LDR) / (NPV @ LDR - NPV @ HDR) (B) Signup and view all the answers

What is the purpose of selecting a lower discount rate (LDR) and a higher discount rate (HDR) in IRR calculation?

To determine the project's IRR (C) Signup and view all the answers

What is the decision criteria for IRR in project evaluation?

If IRR > k, accept the project, and if IRR < k, reject the project (A) Signup and view all the answers

What was the total manufacturing cost in 2019?

496,000 (D) Signup and view all the answers

What was the cost of raw materials used in 2018?

613,000 (B) Signup and view all the answers

What was the total cost of wages, bonus, and allowances in 2019?

21,000 (C) Signup and view all the answers

What was the depreciation cost in 2019?

10,000 (C) Signup and view all the answers

What was the total manufacturing cost in 2017?

346,000 (D) Signup and view all the answers

What is the primary objective of the industry analysis?

To identify the main sources of competitive forces (B) Signup and view all the answers

What tool is used to assess the strength of each of the five competitive forces?

Porter's Five Forces Model (D) Signup and view all the answers

What does the analysis of past and present demand and supply help in?

Estimating future demand of the product (D) Signup and view all the answers

What is analyzed in the company's internal or micro-environment?

Competencies, capabilities, resource strengths and weaknesses (A) Signup and view all the answers

What is considered while analyzing the marketing aspect?

Both company's external or macro-environment and internal or micro-environment (D) Signup and view all the answers

What does the gross margin ratio measure?

The difference between revenue and cost of goods sold (D) Signup and view all the answers

What is the rule of thumb for the operating profit margin?

20% to 25%, higher is better (A) Signup and view all the answers

What does the return on equity ratio measure?

The earning power on shareholders' equity (C) Signup and view all the answers

What is the rule of thumb for the dividend payout rate?

Lower is better for long-term creditors (A) Signup and view all the answers

What does the operating margin ratio measure?

The profitability of operations (C) Signup and view all the answers

What is the minimum IRR required for a project to be acceptable?

Greater than the cost of capital (B) Signup and view all the answers

What is the expected annual earnings before depreciation and taxes of the new milling machine?

Tk.2,00,000 (C) Signup and view all the answers

What is the proposed tax rate change for Khaleque's company?

From 34% to 40% (C) Signup and view all the answers

What is the cost of the new milling machine?

Tk.6,00,000 (D) Signup and view all the answers

What is the economic life of the new milling machine?

5 years (C) Signup and view all the answers

What is the expected annual reduction in labor costs due to the new machine?

Tk.8,000 (B) Signup and view all the answers

What is the depreciation method used for the new machine in Case-2?

Eight-year straight-line depreciation (C) Signup and view all the answers