Debt Equity Composition in Industries Quiz
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Questions and Answers

What aspect of a project do technical factors relate to?

  • Labour and stakeholders
  • Market and cost
  • Level of pollution and environmental degradation
  • Project scope and change in technology (correct)

In project feasibility studies, what are considered economic benefits apart from financial gains?

  • Level of pollution and environmental degradation
  • Market and cost
  • Employment generation and economic development (correct)
  • Labour and stakeholders

Which dimension includes factors like change in policy, competitive environment, and exchange rate?

  • Economical (correct)
  • Environmental
  • Technical
  • Socio-political

What is essential to analyze during the formulation and appraisal phase of a programme?

<p>Risk and uncertainties (A)</p> Signup and view all the answers

Which aspect is becoming increasingly important in project feasibility studies?

<p>Management aspects (D)</p> Signup and view all the answers

Under which category does 'environmental degradation' fall in the factors affecting projects?

<p>Environmental (C)</p> Signup and view all the answers

What factors are considered to identify the share of a proposed project in the market?

<p>Competitive position, existing and potential competitors, capacity utilization (C)</p> Signup and view all the answers

What is included in the study of commercial feasibility of a project?

<p>Arriving at physical requirements of production input and matching costs with revenues (A)</p> Signup and view all the answers

What does technical feasibility assessment involve?

<p>Detailed assessment of production process requirements and necessary goods/services (D)</p> Signup and view all the answers

In terms of technology, what should a feasibility report describe?

<p>Equipment requirements, labor needs, and project inputs (A)</p> Signup and view all the answers

Why is the location of the project given special attention in technical feasibility?

<p>In relevance to technical requirements like equipment and inputs (A)</p> Signup and view all the answers

What is the main purpose of determining the break-even point in a project?

<p>To evaluate the project's profitability threshold (B)</p> Signup and view all the answers

What is the promoters' contribution in a project?

<p>The promoter's financial stake in the project (A)</p> Signup and view all the answers

How is the debt-service coverage calculated in a project?

<p>By considering profit after tax but before depreciation and interest (D)</p> Signup and view all the answers

What indicates that a project is sound and viable in terms of cash flow?

<p>Cash flow is 1.5 to 2 times the total amount due (D)</p> Signup and view all the answers

When does the repayment of a loan typically start after commercial production begins?

<p>After 2 years of commercial production (C)</p> Signup and view all the answers

What is syndication in project financing?

<p>Where multiple institutions participate in financing the project (C)</p> Signup and view all the answers

What does a moratorium period in loan repayment refer to?

<p>A period before loan repayment starts after commercial production begins (A)</p> Signup and view all the answers

What is a de facto requirement for achieving attractive economics for large infrastructure financings?

<p>High leverage and long-tenor financing (C)</p> Signup and view all the answers

How can the efficacy of the remedy to Lenders/investors be negated in the event of a strategic sovereign default?

<p>By expropriation/nationalisation of assets (D)</p> Signup and view all the answers

What type of financing generally necessitates higher upfront transactional costs than traditional corporate lending?

<p>Limited Recourse financing (A)</p> Signup and view all the answers

How are additional transactional costs handled in the overall project budget for a large infrastructure endeavor?

<p>Capitalised into the overall project budget (B)</p> Signup and view all the answers

What type of risk can be mitigated through the use of financing products from multilateral and export credit agencies?

<p>Political risk (A)</p> Signup and view all the answers

What can increase the execution timetable for a Limited Recourse financing structure compared to traditional corporate lending?

<p>Complex legal, technical, and financial structures (A)</p> Signup and view all the answers

What is the formula to calculate the provision for escalation?

<p>(latest rate of annual inflation) × (length of the delivery period) (C)</p> Signup and view all the answers

What is considered an operating expense in terms of technical know-how and engineering services?

<p>Royalty payable annually (A)</p> Signup and view all the answers

What types of expenses should be included in the category 'Expenses on Foreign Technicians and Training of Indian Technicians Abroad'?

<p>Travel, boarding, lodging, salaries, and training expenses (B)</p> Signup and view all the answers

How are miscellaneous fixed assets defined in the context provided?

<p>Assets not related to the manufacturing process (A)</p> Signup and view all the answers

For what purpose might technical consultants or collaborators be engaged from India and/or abroad?

<p>Choice of technology selection (A)</p> Signup and view all the answers

What is included in the project cost related to technical know-how and engineering services?

<p>Salaries and allowances of consultants (D)</p> Signup and view all the answers

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