B.Com In Investment Management SEM III 2023 2024 2024 FINANCIAL MANAGEMENT I Question Paper - Mumbai University | munotes

Questions asked in this paper

1. Q1 a) State whether following statements are true or false. (Any 8). 8 marks
   • 1. Over capitalisation does not have any adverse effect
   • 2.Financial forecasting is followed by financial planning
   • 3. Investments are shown on the liability side of the balance sheet
   • 4. Borrowed fund is ownership capital Bonus shares are issued to preference sharcholders
   • 6. EVA is not mandatorily reported in annual reports in India
   • 7. Depreciation is a non cash expense
   • 8. Dividends are the cash flows returned to the shareholders
   • 9. Gross profit and net profit both gives the same amount of Profit
   • 10. Interest on debentures is a tax deductible expenditure Match the Column (Any 7). (7)
   • 3) Investment in inventory c) Price Earning Ratio
   • T)NPV g) Internal source of Finance Aakash Limited has equity share capital of Rs divided into shares of Rs. 100 cach. Reach 9,00,000 for expansion of business. (15) The company plans the following financing alternatives
   • 1. By issuing equity shares only
   • 2. Rs 300000 by issuing equity shares and Rs through term loan at 10% per annum
   • 3. BY raising term loan only at 10% per annum
   • 4. Rs 3,00000 by issuing equity shares and rupees by issuing 8% preference shares You are required to suggest the best alternatives by giving your comments assuming that the operating profit after expansion is Rs.450000 and corporate tax rate is 25%
2. Q2 A) Sawrg Ltd.Company issued 5000, 10% redemable debentures of Rs.100 each, which are issued at 5% discount ,where flotation cost occurs Rs. 15000. The maturity period is of 5 years The company is in 50% tax bracket Calculate cost of debt. (Before as well as After) VCD FINANCIAL MANAGEMENT 2hrs.30min. MARKS- 75
   • B) Calculate EVA from the following data for the year ended 31st March 2023 Cost of Debt (Post Tax) Cost of Equity 16.54% 7
3. Q3 Narayan Ltd. Presents you the following information Estimated Life in Years 5 Years Note : Expected Rate of Return @ 10% You are required to calculate: Pay-back Period and 15 marks
   • 2. Profitability Index
4. Q3 The following data is relates to the Abhay limited. Rate of return is 12% Earning per share is Rs 60 Find out the market price for share in the following cases using Gordon's model Dividend | Retention Ratio Cost of SYIM SEMI FINANCIAL MANAGEMENT 2hrs.30min. MARKS- 75 15 marks
5. Q4 Details regarding the capital structure of Regal reform company limited. Your requested to determine the better cost of capital using 15 marks
   • 1) Book value weights and 2) Market value weights
6. Q4 SP Ltd. is considering of purchasing a new machine. The details of the machine is as follows: Cost of Machinery Rs. 17,00,000 Life of Machine 10 Years Method of Straight line method Net Profit before Depreciation and Tax Rs. 5,95,000 Rate of Income Tax 50% Show the calculation of annual cash inflow and then calculate:
   • 3) Average rate of Return
   • A. Explain Financial Management and the scope of financial management 8
   • B. Discuss need and importance of corporate Finance. 7
7. Q5 Write short notes (Any 3). 15 marks
   • 1. Cash Credit
   • 2. Profit Maximisation
   • 3. Controller
   • 4. Sources of long term Finances

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