B.Com. (Financial Management) SEM V 2018 19 May 2018-19 Financial Management I Question Paper - Mumbai University | munotes

Questions asked in this paper

1. Q1 (A) Select the appropriate alternative and rewrite. (Any Eight) 8 marks
2. Q1 The most important goal of financial management is
   • (a) Corporate social responsibility (b) Matching income and expense
3. Q2 The return obtained by a shareholder is better known as
   • (a) Dividend (b) Money
   • (c) Interest (d) All of these
4. Q3 A/an is a stream of regular periodic payments made or received for a specified period of time
   • (a) Value (b) Overdraft
   • (c) Annuity (d) Capital
5. Q4 For future value calculations, factor is used
   • (a) Logical (b) Discounting
   • (c) Compounding (d) Reasoning
6. Q5 stands for
7. Q6 is a decision-making process for making investment decisions in
   • (c) Economic Value Added (d) None of these
   • (a) PBDT (b) Depreciation
   • (c) CFAT (d) PAT 8). Which of the following has the highest cost of capital?
   • (a) Equity (b) Debenture or bonds
8. Q9 The interest rate on debentures is also known as
   • (c) Semi-fixed rate (d) None of these
9. Q10 Calculate the present value of Rs. 1,000 to be received at the end of 8 years Assume an interest rate of 7 per cent per annum,
10. Q1 (B) Match the following items of Column with Column II suitably. (Any Seven) 7 marks
11. Q1 Retained Earnings (i) . Period of 6 months
12. Q2 Working capital financing (ii) Market value of shares
13. Q4 Pay back period (iv) Unsecured source of finance
14. Q6 Bonus Shares (vi) Overall cost of capital
15. Q8 Profitability Index (vili) Redeemable value of a bond
16. Q9 Wealth maximisation (ix) Short-term source of finance
17. Q2 (A) Four equal annual payments of are made into a deposit account that pays 8 per. cent interest per year. What is the future value of this annuity at the endof4 8
    • (B) A bank promises to give you Rs. 10,00,000 after 2 years at the rate of 12% interest, compounded quarterly. How much should you deposit today? 7
18. Q2 PANKTI. FINANCE Ltd. has offered a scheme of investment where a person investing Rs. 1,00,000 presently, is entitled to returns of Rs. 18,000; Rs. 25,000; 10 Rs. 30,000; Rs. 32,000 and Rs. 35,000 in the next five years. The indicated rate of return @ 10% and the discount factor is as follows: Advise whether the above investment is profitable or not
19. Q2 (D) Find the present value of an annuity of Rs. 30,000 over three years at 10% discount
20. Q3 (A) A company can make either of two investments at period to. Assuming a required rate of 10%, determine the discounted pay-back period for each of the following Cost of investment (Rs.) Expected life (in years) 5 5 Projected net income (after depreciation, interest and The company charges depreciation on straight-line basis The present value factor of Re. 1 @ 10% is given below:
21. Q3 (B) The cash flow streams for two alternative investments TATA and BATA are given below (along with the discount factor) : 15 Calculate the profitability index for the two alternatives and suggest which alternative is better
22. Q4 (A). Acompany offers equity shares of Rs. 10 each for public subscription at a premium of 5%. The company pays 2% of the issue price as underwriting commission. The 8 rate of dividend expected by equity shareholders is 30%. You are required to compute the cost of equity capital
    • (B) Ltd. issued 15,000, 12% debentures of Rs. 100 each at a discount of 10% The debentures are redeemable after 10 years at a premium of 10%. Calculate the 7 cost of debt before tax and after tax, if the tax rate is 40%
23. Q4 (C) JABALRAM Ltd. has the following book-value capital structure as on March 11.5% Preference Shares 10,00,000 The equity share of the company sells for Rs. 20. It is expected that the company will pay next year a dividend of Rs. 2 per share, which is expected to grow at 5% Compute the weighted average cost of capital (WACC) of the company based on the existing capital structure
24. Q5 (A) What do you mean by Financial Management? Explain the importance of financial
    • (B) Distinguish between debentures and equity shares. 7
25. Q5 (C) Write explanatory notes on (Any Three) : 15 marks
    • (i) Objectives of financial management
    • (ii) Future value of annuity
    • (iii) Cost of capital
    • (iv) Internal Rate of Return (IRR)
    • (v) Capital Budgeting

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