MCom MCom Accountancy SEM IV M.COM SEM IV DEC.18 (CHOICE BASE)FIN.MGT FIN. MGT (P.D 18 DEC.18) (P.C 21853) Question Paper - Mumbai University | munotes

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1. Q1 The Expenses budgeted for production of 15,000 units in a factory are furnished as Prepare a budget for production of 10,000 Units, 12,000 Units and 15,000 Units showing Variable Cost, Fixed Cost in amount and Cost Per Unit at each level of production
2. Q1 The AB Company is planning to relax its credit policy to motivate customers to buy on new credit terms. It is expected that the Variable Costs will remain 75% of Sales. The Incremental Sales are expected to be sold on credit. For the perceived increase in risk in liberalising the credit terms, the company requires higher return. If the following is the projected information, which credit policy should the company pursue? (Assume 360 days in Q,2) Beeta Ltd. Has given the forecast sales for January 2017 to July 2017 and actual sales for November 2016 and December 2016. With the other particulars given, prepare a cash budget for the months 1.e from January to May 2017 Code: Group A: Advanced Accounting, Corporate Accounting and Financial Management: Financial M
   • 1) Sales information from November 2016 to July 2017
   • 2. Sales 20% cash and 80% credit, credit period two months
   • 3.Variable expenses 5% on turnover, time lag of half month
   • 4. Commission 5% on credit sale payable in two months
   • 5. Purchases are 60% of the sales , payment will be made in month of purchases
   • 7. Computer purchased on February for in March for Rs. 1,00,000
   • 9. Tax paid in April Rs. 55,000
3. Q2 Evaluate a project by 1) NPV (Net. present value ) 2) PI ( Profitability index ) methods which requires an initial outlay of Rs.1,00,000 and generates revenue of Rs.60,000, Rs.30,000, Rs.20,000, Rs.50,000 and Rs.50,000 from the end of first year to the end of fifth year. The required rate of return is 10% and income tax rate is 50%. The present value of at 10% Discounting factor: Code: Group A: Advanced Accounting, Corporate Accounting and Financial Management: Financial M
4. Q3 Ltd. provides you the following information: Life of Machine 5 Years Actual salvage value realised at the end of life Rs.3,40,000 Method of depreciation Straight Line Cost of capital 10% Purchase price of each machine Rs.13,00,000 Earnings before depreciation and tax: Calculate Net Present Value and select the most profitable machine
5. Q3 Shri Ram Ltd. Gives you the following cost details for Manufacture of Product “S” at capacity level of 20,000 Units Nature of Variability Prepare a production cost budget for production of 12,000 Units and 16,000 Units, showing total cost and unit cost at each level Code: Group A: Advanced Accounting, Corporate Accounting and Financial Management: Financial M
6. Q4 A) Select the most appropriate alternative and rewrite the sentence. 8 marks
   • 1. A budget that gives a summary of all the functional budget is known as
   • 2.The basic objectives of strategic financial management is
   • 1) Maximisation of profits Maximisation of shareholders wealth
   • 3) Ensuring financial discipline in the organisation 4) none of the above
   • 3. EOQ is the quantity that minimizes
   • 4.ABC Analysis is used in
   • 4) Corporate governance
   • 5. Which of the following is not.an element of credit policy?
   • 4) Sales price
   • 6. Miller model deals with
   • 4) All of the above
   • 7. The total Current Assets without deducting the Current Liabilities
   • 8. Capital Budgeting Decisions are based on
   • 4) Incremental Capital
7. Q4 B) State whether the following statements are True or False and rewrite the sentence ( reason not required. )
   • 1. Credit purchase can be a good source of short-term finance
   • 2. Depreciation is added back to annual income while Computing Average Rate of Return
   • 3. Capital expenditure benefits accrue only in the current period Code: Group A: Advanced Accounting, Corporate Accounting and Financial Management: Financial M
   • 5. Receivable management deals only with the collection of cash from the debtors
   • 6. Average inventory in EOQ model is 4 of EOQ
   • 7. Fixed budget refers to budget for fixed assets
8. Q4 Write Short note. (Any three) 15 marks
   • 1. Long term sources of finance
   • 2. Types of working capital
   • 4. Objectives of Cash Management
   • 5. ABC classification

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