BCom In Accounting & Finance (BCAF) SEM V 2023 2024 Dec 2024 FINANCIAL MANAGEMENT Question Paper - Mumbai University | munotes

Questions asked in this paper

1. Q2 Round off upto 2 decimals unless specified in the question Select the correct option and complete the sentence: (Any8) (8)
2. Q1 One of the objectives of Financial Management is
   • a) decrease in profits b) reduction of EPS
   • c) decrease in shareholder wealth d) minimize risk
3. Q2 Capital Budgeting decision does not include
   • a) purchase of assets b) replacement of assets
   • c) recovery of bad debts d) expansion activities
4. Q3 The cost of an asset is Rs.5,00,000 and has estimated life of 5 years. The salvage value at the end of 5 years will be Rs. 20,000. The depreciation p.a. under Straight Line Method will
5. Q4 The following method of Capital budgeting does not take into consideration the time value of
   • a) Profitability Index b) Net Present Value c) Payback Period d) Internal Rate of Return
6. Q5 Under the ____ Dividend Policy, the Dividend paid is less
7. Q6 According to Dividend Theory, Dividend is not relevant for shareholder’s
8. Q7 Mutual Funds invest in liquid instruments
9. Q8 The value which a bond holder will receive at the time of maturity is called value 9)Ageing schedule classifies Debtors on the basis of
10. Q10 is an internal factor affecting a company’s Dividend Policy
    • a) Government Regulations b) State of the Economy
11. Q1 B. Match the column (Any 7) 3 | Benefit Cost Ratio | Credit Investigation and 7 marks
12. Q2 A. Rajshree products want to introduce a new product with estimated sales life of 5 years The manufacturing equipment will cost Rs 25,00,000 with scrap value of 1,50,000 at the end of 5 years. The working capital requirement is Rs 2,00,000 which will be realized after 5 years The profit before depreciation and tax is given below The PV factor applicable is 8% and tax rate is 50%. Calculate payback period and net present value of the project 15 marks
13. Q2 B. PQR ltd is considering a project for which the following estimates are available. Calculate the sensitivity of the project with project cost, annual cash flow and state which is the 8 marks
14. Q2 C. The total available budget for a company is 20 Lacs . Which projects should be undertaken by the company in order to maximize the Net Present Value under Capital Rationing assuming that each Project is indivisible? 7 marks
15. Q3 A. Speed Up International has Equity Share Capital of Rs.5 crores, each share having a Face value of Rs.100 each. It wants to raise further Rs.3 crores for its expansion purpose. The company has the following alternatives for financing its expansion: 15 marks
16. Q1 By issuing Equity shares only
17. Q2 Rs.1 crore through equity shares and Rs.2 crores through 10% Debentures
18. Q3 By using Term loan at 10% Interest p.a
19. Q4 Rs.1 crore through Equity Shares and Rs.2 crores through 8% Preference Shares The estimated Earnings before Interest and Tax (EBIT) after expansion is Rs.1.5 crores. Tax rate is 35%. You are required to suggest the best financing alternative
20. Q3 B. Neon Ltd has paid up Equity capital of Rs.80, 00,000 in shares of Rs.100 each. The earnings of the company was Rs.8,00,000. The company paid Dividend of Rs.6,40,000. Required Rate of retun 10% and Cost of capital is 8%. Using Walter’s formula, calculate the Market Price of the
21. Q3 C. Forex Ltd paid a dividend of Rs.5 per share last year. It is expected to grow at 15% for next two years and then at 8% indefinitely. The required rate of return on Equity is 15%. Calculate the price per share using Gordon Dividend Growth Valuation Model. The Present Value factor at 15% for Year 1 = 0.8696 and Year 2= 0.7561 (07)
22. Q4 A. A trader whose current sales is Rs. 10 Lakh p.a and has an average collection period of 30 days and wants to place a more liberal credit policy to improve sales. Selling price p.u is Rs 10, average cost p.u is Rs. 6 and variable cost p.u is Rs. 4. Current Bad Debts loss is 1%. The company expects pre — tax return on investment @ 25%. Suggest which credit policy should be adopted. Assume 360 days in a year. (15) Credit Period | Increase in Collection Increase in Sales Default Anticipated What is YTM of each Bond? Which Bond would you recommend for investment? Q A bond of Rs. 100 face value carrying an annual interest rate of 7% is redeemable after 5 years at a premium of 20 % if the required rate of return is 12% what is the present value of the Bond and should the investor buy the bond if the current market price of the bond is Rs. 95?
23. Q5 A What are the steps in the evaluation of credit policies? B Explain the objective of strategic financial management (7) 8 marks
24. Q5 C. Write short notes on (any 3) 15 marks
    • b. Various parties in Mutual fund
    • c. Credit evaluation
    • d. Indifference analysis
    • e. Wealth Maximation

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