ARPWOOD Capital IIT Recruitment Test 2023 - Aptitude, Finance and Accounting

This set is drawn from the ARPWOOD Capital IIT Recruitment Test 2023, section "AC Test 2023". Every item is a single-answer multiple-choice question carrying 3 marks, with a penalty of 1 mark for an incorrect answer. The 22 questions mix quantitative aptitude and probability with corporate finance, financial accounting and microeconomics. Choose exactly one option per question.

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Q1. Suppose a fair six-sided die is rolled once. If the value on the die is 1, 2, or 3, the die is rolled a second time. What is the probability that the sum total of values that turn up is at least 6?

A. 10/21
B. 2/3
C. 5/12
D. 1/6

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Q2. Over the past month, the swiss franc (CHF) has depreciated 12% against pound sterling (GBP). How much has the pound sterling appreciated against the swiss franc?

A. 12%
B. less than 12%
C. more than 12%
D. No appreciation/depreciation

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Q3. Biocon has announced following results for the fiscal year ending on 31st March 2023, Revenue $4,000 Mn, Cost of Goods sold $2,400 Mn, Operating Expenses $600 Mn, Interest Expenses $100 Mn. Compute Gross and operating profit margin for the above stated results. Assume corporate tax to be 35%

A. 40% and 25%
B. 25% and 22.5%
C. 40% and 22.5%
D. 26% and 16.25%

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Q4. The risk-free rate is 7%, and the expected market return is 12%. A stock with a beta of 1.1 is selling for $35 and will pay a $2 dividend next year. If, in your opinion, the stock will be priced at $41 at year-end, it is:

A. overpriced, so short it.
B. underpriced, so buy it
C. Priced fairly
D. Can't comment

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Q5. Alkem had 300,000 of fixed assets on their balance sheet at the beginning of the year. At the year-end this had increased to 370,000. You see from the footnotes that they have charged depreciation of 43,000. How much did the company spend on capital expenditure for the year

A. 27,000
B. 113,000
C. 413,000
D. 327,000

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Q6. A faulty clock gains 15 minutes every hour. The time is set correctly between 3 PM and 4 PM, when the hour and minute hands of the clock coincide. How many times will the minute-hand and hour-hand meet in the next 30 hours?

A. 33
B. 34
C. 35
D. 36

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Q7. Which Corporate action is least likely to cause a change in the market cap of listesd company?

A. Announcement of dividend
B. Merger and Acquisition
C. Share buy-back
D. Stock-split

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Q8. A company will shut down production in the short run if the total revenue is less than total:

A. fixed costs
B. variable costs
C. opportunity costs
D. none of these

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Q9. If P(a^2, 2a) is a point on the line segment joining the points A(2,0) and B(0,4), what is the ratio of the distances AP and PB?

A. 2^0.5 : 1
B. 1:1
C. 2:1
D. 1 : 3^0.5

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Q10. A function y=f(n) is defined, for all natural numbers, as the sum of the digits of n. If k is a natural number such that f(f(f(f(k))))=1 and k>f(k)>f(f(k))>f(f(f(k)))>1, what is the least number of digits that k can have?

A. 21
B. 22
C. 23
D. 24

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Q11. Which of the following is the most appropriate description of gross domestic product (GDP)?

A. The total income earned by all households, firms, and the government whose value can be verified
B. The total amount spent on all final goods and services produced within the economy over a given time period
C. The total market value of resalable and final goods and services produced within the economy over a given time period
D. none of these

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Q12. Inventory which originally cost 80.0 is sold for 120.0 in cash. Which answer best describes how this transaction would be reflected in the company's balance sheet?

A. Cash increases by 40.0, sales increase by 120.0, and inventory decreases by 80.0
B. Inventory decreases 80.0, sales increase 120.0, cash increases 120.0, accounts payable decreases 80.0
C. Retained earnings decreases 80.0, inventory decreases 80.0, retained earnings increases 120.0, accounts receivable increases 120.0
D. Inventory decreases 80.0, cash increases 120.0, retained earnings increases 40.0

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Q13. A government entity that regulates an authorized monopoly will most likely base regulated prices on:

A. marginal cost
B. long run average cost
C. first degree price discrimination
D. opportunity costs

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Q14. What is the sum of the digits of the smallest number which when divided by 7 leaves a remainder of 6, when divided by 8 leaves a remainder of 7 and when divided by 9 leaves a remainder of 1?

A. 11
B. 10
C. 5
D. 9

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Q15. Post the HDFC and HDFC Bank merger announcement, the shareholders of HDFC are offered a swap ratio of 25:40. As of date of merger, HDFC Bank trades at 1,000 and HDFC trades at 2,700 and your portfolio has 60 shares of HDFC Bank and 95 shares of HDFC. What would be the composition of your portfolio after the merger completion?

A. HDFC Bank - 180 shares & Cash - 54,000
B. HDFC Bank - 192 shares & Cash - 42,000
C. HDFC Bank shares - 212
D. HDFC Bank shares - 119 & Cash - 375

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Q16. Marico's management has to choose one project out of the four projects with IRR and NPV as follow

Project A: IRR 35%, NPV $2,000 Mn
Project B: IRR 30%, NPV $1,800 Mn
Project C: IRR 15%, NPV $2,400 Mn
Project D: IRR 22%, NPV $2,100 Mn

Which Project should Marico's management take up ?

A. A
B. B
C. C
D. D

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Q17. Car A starts from city X at 7:00 a.m. at 50 kmph and travels towards city Y. Car B starts from X at 8:00 a.m. at 40 kmph and travels towards Y. Car C starts at 9:00 a.m. from Y and travels towards X at 30 kmph. When is the first time that the distance between A and B equal to that between A and C if XY = 120 km?

A. 8:20 am
B. 8:40 am
C. 9:10 am
D. 9:20 am

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Q18. Anja has a December financial year-end. Her contract with her tax consultant is from from April 1 to March 31. For the financial year ending March 31 2023, the tax consultant has charged her 48,000. How much of this amount is shown as a prepaid item in the balance sheet as at December 31 2022?

A. 48,000
B. 12,000
C. 36,000
D. 20,000

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Q19. The total cost of 2 pencils, 5 erasers and 7 sharpeners is Rs.30, while 3 pencils and 5 sharpeners cost Rs.15 more than 6 erasers. By what amount (in Rs.) does the cost of 39 erasers and 1 sharpener exceed the cost of 6 pencils? (Assuming costs of pencil, eraser, sharpener are natural numbers)

A. 20
B. 27
C. 30
D. Cannot be Determined

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Q20. Calculate the net book value at the end of year 3 using the straight-line depreciation method

Cost of machine = 1,20,000
Estimated life, years = 5
Salvage value = 24,000

A. 24,000
B. 81,600
C. 57,600
D. 62,400

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Q21. A coin is tossed 8 times and the output written as a string. What is the expected number of HH? Note that in HHH, number of HH = 2.

A. 2
B. 7/4
C. 9/4
D. 5/2

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Q22. Given -8<=x<=-5, -4<=y<2, -1<=z<=5, which of the following statements is/are always true?

A. 9z+5>x+2y
B. 6z>5x+9y
C. 2(x+y)<5z
D. More than one of the above