Resource Mobilization – Finance, Tech, Raw Materials MCQs With Answer

Introduction

Resource Mobilization – Finance, Tech, Raw Materials MCQs With Answer is designed for M.Pharm students preparing to launch or manage pharmaceutical ventures. This set covers core concepts in raising and managing finance, securing technology and know‑how, and sourcing critical raw materials such as APIs and excipients. Questions emphasize practical decision‑making: choosing funding mixes, cost and risk evaluation, budgeting for CAPEX/OPEX, supplier qualification, inventory strategies, licensing arrangements, and regulatory implications for procurement and technology transfer. The quiz balances theoretical frameworks and industry practices, helping students sharpen analytical skills needed for entrepreneurship, project proposals, and operations management in the pharmaceutical sector.

Q1. Which of the following best describes “working capital” in a pharmaceutical start-up?

• Long-term funds used for plant expansion and machinery
• Short-term funds required to run daily operations like raw material purchases and payroll
• Equity invested by founders for research and development
• Venture capital used to acquire patents and licenses

Correct Answer: Short-term funds required to run daily operations like raw material purchases and payroll

Q2. Which financing instrument typically dilutes ownership but does not create immediate repayment obligations for a pharma company?

• Term loan from a commercial bank
• Convertible debentures
• Equity investment from angel investors
• Trade credit from suppliers

Correct Answer: Equity investment from angel investors

Q3. When evaluating a technology licensing agreement for a formulation process, which clause is most important to protect manufacturing freedom?

• Royalty payment schedule
• Exclusivity and territorial scope
• Termination notice period
• Confidentiality duration

Correct Answer: Exclusivity and territorial scope

Q4. For a drug product dependent on imported API with long lead times, which inventory strategy minimizes stockouts while controlling carrying cost?

• Just-in-time with zero safety stock
• High safety stock without reorder planning
• Calculated safety stock combined with reorder point and lead time analysis
• Daily emergency imports irrespective of demand forecast

Correct Answer: Calculated safety stock combined with reorder point and lead time analysis

Q5. In a capital budgeting exercise for a new formulation line, which metric best accounts for time value of money?

• Payback period
• Accounting rate of return
• Net present value (NPV)
• Gross margin percentage

Correct Answer: Net present value (NPV)

Q6. Which source of funding is most appropriate for scaling clinical trials where regulatory risk is high but commercial upside is significant?

• Seed capital from friends and family
• Grant funding with non-dilutive terms
• Venture capital or strategic corporate investors
• Short-term trade credit

Correct Answer: Venture capital or strategic corporate investors

Q7. What is the primary regulatory consideration when qualifying a new API supplier for oral solid dosage production?

• Supplier’s marketing capabilities
• Certificate of Analysis (CoA), GMP compliance and audit trail
• Lowest bid price irrespective of documentation
• Supplier’s location proximity to finished dose plant only

Correct Answer: Certificate of Analysis (CoA), GMP compliance and audit trail

Q8. Which financial ratio would best help assess a pharma company’s ability to meet short-term obligations tied to raw material purchases?

• Debt-to-equity ratio
• Current ratio (current assets/current liabilities)
• Return on equity (ROE)
• Gross profit margin

Correct Answer: Current ratio (current assets/current liabilities)

Q9. When planning CAPEX for sterile manufacturing equipment, what non‑financial factor is critical to technology selection?

• Equipment color and aesthetics
• Compatibility with regulatory requirements and validation capability
• Shortest lead time regardless of compliance
• Supplier’s willingness to offer extended credit only

Correct Answer: Compatibility with regulatory requirements and validation capability

Q10. Which procurement strategy reduces risk from a single supplier for a key excipient while balancing cost?

• Exclusive long-term contract with one low-cost supplier
• Dual or multiple sourcing with preferred supplier agreements
• Spot purchases only from lowest bidder
• In-house synthesis without feasibility study

Correct Answer: Dual or multiple sourcing with preferred supplier agreements

Q11. In project finance for a greenfield API plant, what is the role of debt service coverage ratio (DSCR)?

• Measures stock turnover speed
• Indicates the company’s profitability margins
• Shows the ability of project cash flows to service debt obligations
• Calculates grant eligibility from government

Correct Answer: Shows the ability of project cash flows to service debt obligations

Q12. Which technology acquisition route minimizes upfront cash outflow but may restrict downstream commercialization freedom?

• Outright purchase of patents
• Exclusive licensing with high royalty rates
• Open-source adoption without licensing
• Internal in‑house development from scratch

Correct Answer: Exclusive licensing with high royalty rates

Q13. For cost control in a multi-product formulation facility, which costing approach provides product-level profitability insight?

• Absorption costing only at plant level
• Activity-based costing (ABC)
• Top-line revenue reporting without cost allocation
• Only direct material costing ignoring overheads

Correct Answer: Activity-based costing (ABC)

Q14. Which funding source is most suitable for early-stage biotech-pharma research with high technical risk and long horizon?

• Commercial bank overdraft
• Government R&D grants and public research funds
• Invoice factoring
• Short-term supplier credit

Correct Answer: Government R&D grants and public research funds

Q15. In supplier qualification for sterile components, which documentation is least likely to be sufficient on its own?

• Supplier’s GMP certificates and audit reports
• Certificate of Analysis and material traceability
• Signed purchase order without technical specifications
• Validated sampling and testing results

Correct Answer: Signed purchase order without technical specifications

Q16. What is the main advantage of using leasing to acquire high-value pharmaceutical equipment?

• Complete ownership with no future payments
• Reduces initial capital outlay and preserves working capital
• Eliminates need for validation and qualification
• Automatically transfers all regulatory approvals

Correct Answer: Reduces initial capital outlay and preserves working capital

Q17. Which cost element is typically treated as operating expenditure (OPEX) rather than capital expenditure (CAPEX) in a formulation plant?

• Purchase of a tablet press machine
• Construction of a new production block
• Routine maintenance and utilities
• Installation and commissioning costs

Correct Answer: Routine maintenance and utilities

Q18. When conducting a financial valuation of a drug product line, which factor significantly affects projected revenues?

• Number of laboratory technicians only
• Market exclusivity period and patent protection
• Office interior design costs
• Supplier invoice payment terms only

Correct Answer: Market exclusivity period and patent protection

Q19. For mitigating foreign exchange risk when importing APIs, which strategy is most appropriate?

• Ignoring currency fluctuations and paying spot only
• Hedging via forward contracts or currency options
• Switching to cheapest unqualified supplier abroad
• Storing unlimited extra inventory without cost analysis

Correct Answer: Hedging via forward contracts or currency options

Q20. Which criterion is most critical when evaluating government incentives for setting up a pharma manufacturing unit in a special economic zone?

• Distance from the founder’s residence
• Compliance with regulatory exemptions, tax holidays, and ease of customs clearance
• Number of marketing events allowed
• Local entertainment facilities

Correct Answer: Compliance with regulatory exemptions, tax holidays, and ease of customs clearance

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