BCom In Accounting & Finance (BCAF) Sem VI 2019 20 Oct 2019-20 FINANCIAL MANAGEMENT III Question Paper - Mumbai University | munotes

Questions asked in this paper

1. Q1 A_ the Blanks with appropriate option (ANY 8) 1 EVA is calculated to find out contribution of the organisation to wealth of 2 Anew company is formed under 8 marks
   • a. Absorption b. Reconstruction c. Amalgamation d. All of the above Restructuring is the process of changing
   • a. Capital structure b. Staffing c. Organisation of business d. All of the above 4 ownership of lease assets remain with
   • a. Leasee b. Leasor c. Seller d. None of the above Accounting standard Issued by ICAI deals with 'Lease' 6 Capital reduction is implemented as per Section of Companies Act 7 takeover is takeover of one company by another company in same industry 8 In valuation method , valuation of assets is derived from pricing of comparable 9 In lease all risk attached to the assets ownership is transfer to leasee border lease the parties to lease are domiciled in
   • a. Same countries b. Different countries c. Same state d. None of the above
2. Q1 B_ State whether the following statement are True or False (ANY 7 ) 1 Negative EVA means company is generating value from the funds invested in it 2 Combination of two or more company result into synergy purchase ownership of assets is transfer immediately to hire purchaser 4 value can be ascertained for unlisted company only 5 MPBF refers to Minimum permissible bank finance 6 In Recourse Factoring risk of bad debts is born by the factor 7 rent reduce the tax liability of the leasee 8 One of objective of Take over is to reduce cost 9 private is form of restructuring 10 EVA is decided on NOPAT of the company 7 marks
3. Q2 A_ The following is the summarized Balance Sheet of V Ltd. as on 31st March 2019 50,000 Equity Shares of Machinery Rs. 20 each fully paid up | Furniture Profit & Loss A/c 3,14,000 | Cash in Hand 6,000 Sundry Creditors at Bank 8,68 Provision for Taxation The company transfers 20% of its profits after tax to General Reserve. Net profits before taxation for the last three years as follows: For the year ended 31st March 2017 Rs. 5,44,000 For the year ended 31st March 2018 Rs. 7,32,000 For the year ended 31st March 2019 Rs. 7,85 000 Machinery is valued at Rs. 6,37,200 Average yield in the type of business is 20%. The rate of tax is 50%. Use simple average Calculate the value of the Equity Share on the basis of Mr. Ramesh has purchase the commercial paper of Tata company for 90 days in the market for 05 Rs 9,61,000. The Face value is Rs 10,00,000. Find out the return on commercial paper The turnover of Zenith Ltd is Rs 100 lakhs of which 72% is on credit. Debtors are allowed one 08 month to clear off the dues. A factoring company is willing to advance 80% of the bill raised on credit for a fee of 1% a month plus a commission of 5% on the total amount of debt. Zenith Ltd as a result of this arrangement is likely to save Rs 48,000 annually in management costs and avoid bad debts at 1% on the credit sales A bank has come forward to make an advance equal to 80% of the debts at an annual interest rate of 15%. However its processing fee will be at 1% on the debt Which option company should accept? 10 marks
4. Q2 Q Amar Finance Ltd offers a H. P proposal for a machine costing Rs 20,00,000 on the following 7 marks
5. Q1 Flat rate of interest 15%
6. Q2 Period of H.P 3 years
7. Q3 Cost of debt aftertax 12%
8. Q4 Tax rate 30%
9. Q6 Depreciation as per Straight Line Method
10. Q7 P.Vof Rs | at 12% as follows Find out the present value of cash outflow
11. Q3 A_ The Balance sheet of Ajay Itd as on 31st December 2019 given as follows. 8000, Equity shares of | Fixed Assets 14,30,000 Rs 100 each Inventory 80,000 The company being in a bad way, an arrangement on the following lines has been mutually 10 marks
12. Q1 The equity shares are prepared to have their claims reduced to 5% of their present holding
13. Q2 The debenture holders are agree to have their claims reduced to 50% which is to be satisfied half by the issue of 7% mortgage debentures and half by the issue of 8% preference shares of
14. Q3 Creditors are prepared to forgo 20% of their dues in exchange for equity shares of like
15. Q4 The assets are to be reduced to the revalued figure as follows Give the journal entire for the completion of the scheme, prepare Capital reduction account and
16. Q3 B_ Calculate EVA from following information Cost of equity 18% Cost of debt 15% 5 marks
17. Q3 P You have been provided the following financial statement of two companies. Number of shares A ltd is intending to acquire B Exchanging its share on one for one basic for company B Itd share. The exchange ratio is based on market price of share of two companies 15 marks
18. Q1 What is existing EPS of both the companies?
19. Q2 What will be EPS after merger?
20. Q3 What is the change in EPS for the shareholder of A Itd and B
21. Q4 Determine the market value of share after merger?
22. Q5 Ascertain the gain accruing to the shareholders of both the firm?
23. Q4 A_ Following is the Estimated Balance Sheet of XYZ Ltd as on 31“ March 2019 Reserve & surplus 125 | Plant and machinery 150 Other current liabilities 5 Cash in hand 5 From the above balance sheet calculated the MPBF as per first and second method of lending recommended by Tandon committee 5 marks
24. Q4 B XYZ ltd is engaged in textile business. The income statement is given below Income statement for year ended 31*t March 2019 Amount in lakhs Cost of production 4500 Interest on loan 10 Balance sheet as on 31/03/2019 Reserve & surplus 150 Plant and Machinery 200 Cast at bank 25 The weighted average cost of capital is 15% and has P/E ratio of 6 times 10 marks
25. Q1 The value of firm 2.EVA 3.MVA
26. Q4 P ABLItd is planning to have an access to a machine for a period of five years. The company either acquire the machine to the leasing arrangement or it can borrow money at 12 % to buy the machine. The company is in 40% tax bracket In case of purchasing the machine which cost Rs 3,60,477 .The company would have to repay 12 % five year loan where installment are same. Each installment becoming due at the end of each year . Machine would be depreciate on straight line basic with no salvage value. Lease rent of Rs 1,10,000 is to be paid at the end of the year Advise the company which option should go for if internal rate of return is 12% Answer the following
27. Q1 What are the benefits of merger & acquisition? 8 marks
28. Q2 What is difference between Hire purchase and Lease? 7 marks
29. Q5 B_ Write Short Notes (Any Three) 15 marks
30. Q1 Types of factoring
31. Q2 Types of takeover
32. Q3 Feature of lease financing
33. Q4 EVA
34. Q5 Sources of working capital finance

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