BCom In Accounting & Finance (BCAF) SEM I 2022 2023 Nov 2023 FINANCIAL MANAGEMENT Question Paper - Mumbai University | munotes

Questions asked in this paper

1. Q1 (a) State whether the following sentences are true or false. (Any 8) 8 marks
   • 1. Book Value & Market Value weights are always different
   • 2. Every source of fund has an explicit cost of capital
   • 3. Bill Discounting is a good source of short-term finance to all firms
   • 4. commercial papers can be issued for any amount and for any duration
   • 5. Financial Leverage depends upon the operating leverage
   • 6. Operating Leverage may be defined as Contribution
   • 7. Present Value tables for annuity can be directly applied to mixed stream of cash flows
   • 8. Financing decisions involve the most appropriate mix of current and fixed assets
   • 9. Dividend on Pref. shares is a factor of operating leverage
   • 10. Cost of debt is the same as the rate of interest
2. Q1 (b) Match the following. (Any 7 7 marks
   • 1. Loan fund a. life blood of an organisation
   • 2. Consider time value of money | b. FV/(1+r)'
   • 8. Cost of equity h. Future Cost
   • 10. Finance j. Debentures
3. Q2 Calculate the operating leverage, financial leverage and the combined leverage forthe Production (in units) 17,500 6,700 31,800 Interest on Loan (Rs.) 1,25,000 75,000 Nil 15 marks
4. Q2 The data related to two companies are as given below: You are required to calculate operating leverage, financial leverage and combined leverage of \ 15 marks
5. Q3 (a) If you deposit today in a bank which pays 12% interest compounded annually, how much will the deposit grow to after 8 years and 12 years? (08)
   • (b) A fixed deposit has a maturity value of Rs. 1,30,000. It is initially purchased for Rs. 1,00,000 for 3years. Calculate simple interest rate per year. (07)
6. Q3 (a) Find out the present value of the following cash flows. Discounted rate 8 marks
   • (b) Determine the P.V. of annuity of Rs.2,00,000 receivable for 5 years semi annually at 12% p.a Ltd. issued Rs.100 lakhs 14% debentures of Rs.100 each. Tax rate is 40%. Calculate cost of debt if:
   • a) Debentures issued at par
   • b) Debentures issued at par with 15% flotation cost
   • c) Debentures issued at 10% premium with 5% flotation cost
   • d) Debentures issued at 10% discount with 5% flotation cost. 15
7. Q4 From the following capital structure of a Ltd., company you are required to calculate over all cost of capital using: 1. Book value weights. 2. Market value weights The after-Tax cost of different sources is as follows: QS. (a) What are the qualities of a good finance manager? (08) QS. (b) Distinguish between Operating Leverage and Financial Leverage. (07)
8. Q5 Write short notes. (Any 3) / 1. Importance of financial management 15 marks
   • 2. Short term financing
   • 3. Cost of Debt
   • 4. Limitation of financial management
   • 5. Wealth-Maximisation and Financial Decisions

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