BCom In Accounting & Finance (BCAF) SEM V 2018 19 May 2018-19 Financial Management II Question Paper - Mumbai University | munotes

Questions asked in this paper

1. Q1 ---------------- determines the number of years required to recover initial investment outlay
2. Q2 Risk and ---------------- always goes hand in hand
3. Q3 Capital rationing helps in --------------- shareholders wealth
4. Q4 ----------------- costs are irrelevant in determining the cash flows of a project
5. Q5 In case sales are subject to wide fluctuations. a firm should employ more
6. Q6 The type of expenses that can be charged to a fund and the limit is decided by
7. Q7 Bonds which has an issue price equal to its face value is known as issued at
8. Q8 Dividend declared between two Annual General Meetings is termed as
9. Q9 Shareholder wealth in a firm is represented by ----------- of firms common stock
10. Q10 An improper analysis leads to ------------- of project
11. Q1 B] State Whether following statements are true or false . [Any 7] 7 marks
12. Q1 Default Costs are caused due to failure of customers to pay on time
13. Q2 IRR method ignores the time value of money
14. Q3 Overcapitalization does not have any adverse effects
15. Q4 Dividends paid to the shareholders are always reinvested by all the shareholders further, to get
16. Q5 An aging scheduled is an accounting table that shows the relationship between a company bills and invoices and their respective due date
17. Q6 Units of Mutual Fund have a similar connotation as shares of a company
18. Q7 Unsystematic risk reduces with the diversification of investment
19. Q8 Bad debts are not accounted for under recourse factoring
20. Q9 Corporate Strategy is hierarchically the highest strategic plan of the organisation
21. Q10 When interest rate rise bond price also increases appointed Sales Manager has ambitious plan to increase the sales and also the profitability of the At present the sales price per unit is Rs. 20 and present age of account Receivable is a one month and variable cost is @50% and net profit is @20% Mr. Patel has put forward the following two proposals before the management Proposals I :- increase the credit period to debtors from one month to 3 months. The expected sales will be Rs 30 lakhs .chances of bad debts @2% of the credit sales Proposals :- Reduced the selling price by 5% per unit. The expected sales would be Rs. 28.50 lakhs. All cash sales no credit sales Assuming that the cost of funds is 12 % and other conditions remaining same which would you
22. Q2 B] Calculate the market price of share as per Walter model Cost of Capital consisting of 25000 shares of Rs.100 each . the Management is planning to raise another Rs 20 lakhs to finance major programme of expansion through one of four possible financing the plans Rs.10 lakhs through ordinary shares and Rs. 10 lakhs through long term borrowing at 8% Rs.5 lakhs through ordinary shares and Rs. 15 lakhs through long term borrowing at 9% 5 marks
23. Q4 Rs.10 lakhs through ordinary shares and Rs. 10 lakhs through Preference shares with 5% The company expected earning before interest and taxes [EBIT] will be Rs 8 lakhs .Assuming corporate tax of 50 %. Determining EPS in each alternative and comment on the financial implication of Financial Leverages
24. Q3 A] Based on the following information, determine the NAV of a regular income schemes on Current realizable value of fixed income securities of face | 106.5 Value of listed bonds and debenture at NAVdate There has been a diminution of 20% in unlisted bonds and debentures .other fixed interest securities are at cost
25. Q3 B] A Bond of Rs 1000 has a coupon rate of 8%per annum and Maturity period of 3 years. The bond is currently selling at Rs 910 .what is the yield to maturity in the investment of this bond
26. Q3 Hero is considering a purchase a machine X and Y are the 2 machine available from the following information, suggested which of the two is recommended under
27. Q1 profit is calculated after deducting straight line depreciation and tax Il] The Cost of Capital is 10 % III] PVIF factor at 10%
28. Q4 Depreciation for both the machine X and Y Rs 80000 per annum respectively
29. Q4 A] Preet ltd has Rs 500000 allocated for capital budgeting purposes. The following proposals and associated profitability index have been determined . [8] Which of the above investment should be undertaken in order to maximize NPV assume that the project are [a] indivisible [b] divisible
30. Q4 B] Calculate the duration of Bond from the following details. Years to Maturity = 5 years Yield To Maturity = 12% 7 marks
31. Q4 C] Raza Ltd. has capital of Rs 100000 in equity shares of Rs 10 Each .the shares are currently quoted at par. The company proposes declaration of dividend of Rs 10 per share at the end of financial year. The capitalization rate for the same class of company is 12% [8] What will be market price of the share at the end of year if Dividend is not declared?
32. Q2 Dividend is declared? Assuming that the company pays the dividend and has net profits of Rs 500,000 and makes new investment of Rs 10,00,000 during the project , how many new shares must be issued ?
33. Q4 D] Construct the decision tree for the following problem and choose the best alternative for the purchase of a machine. [7] Market being poor, fair and good at a chance 20%, 50% and 30% respectively Explain in brief Responsibility of a Chief Financial Officer [8]
    • B] Explain the Relevance of capital rationing in capital budgeting of a firm . 7
34. Q5 C] Write a short note [Any 3 ] 15 marks
35. Q1 EVA
36. Q4 Analysis

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