B.Com In Banking & Insurance (BCBI) Sem IV 2018 19 May 2018-19 FINANCIAL MGT II Question Paper - Mumbai University | munotes

Questions asked in this paper

• 2) Figures to the right hand side indicate full marks

1. Q3 Suitable assumptions if any and working notes should form the part of your answer
2. Q1 A. State whether following statements are true or false. Any8 8 marks
3. Q1 The volume of credit sales is the first factor which increases or decreases the size of receivables
4. Q2 function of inventory management is to keep a detailed record of each new or returned product as it enters or leaves a warehouse or point of sale
5. Q3 Zero Based Budgeting saves time and effort
6. Q4 Thechief financial is the by the government that has primary responsibility for managing the company's finances in private limited company
7. Q5 Optimum level of investment in receivables is achieved at a point where there is a trade-off between cost, profitability and liquidity
8. Q6 Stock review involves analysis of stock on hand versus projected future needs at the end of year
9. Q7 The master budget is the starting point in preparing the sales budget
10. Q8 The working capital cycle is the amount of time it takes to turn the net current assets and current liabilities into cash
11. Q9 Higher the proportion of fixed operating cost as compared to variable cost, higher is the operating
12. Q10 The most direct evidence of wealth maximization is changes in the price of a company's shares
13. Q1 B. Match the Column (any 7) 7 marks
14. Q2 A. Apple Ltd. is considering the revision of its credit policy with a view to increase its sales and profit. Currently all its sales are on credit and the customers are given one month’s time to settle the dues. It has a contribution of 35% on sales. It can raise funds at a cost of 15% p.a. The marketing manager of the company has given the following options along with estimates for considerations: Investment in Debtors is to be taken at sales value. You are required to advise the company for the best option 15 marks
15. Q2 B. On March , 2019 , following was the Balance sheet of Mango Pvt Ltd. The company is developing a system of forward planning 2019 submits the following On Ist April, 2019 the machinery will be replaced at a cost of Rs.1,50,000, Rs.90,000 will be allowed in exchange for the old equipment and a net payment of Rs.60,000 will be made. Depreciation is to be provided at the rate of 10 % per annum The proposed dividend will be paid in June 2019 The following expenses will be paid: You are required to prepare a cash budget for the period between April — June 2019 15 marks
16. Q3 A. Find out all the 3 leverages from the following data and provide your comments on same. 10 marks
17. Q3 B. Calculate EOQ level from the data. Demand for the Child Cycle at Best Buy is 250 units per month. Best Buy incurs a fixed order placement, transportation, and receiving cost of Rs. 1,000 each time an order is placed. Each cycle costs Rs. 400 and the retailer has a holding cost of 20 percent. ( Round off to nearest unit) 5 marks
18. Q3 C. Orange Ltd gives you the following information: For production of 20000 kgs of a finished product, budgeted expenses are as under: Administration expenses (rigid at all levels) 05 Prepare a flexible budget for production of 15000 kgs, 30000 kgs and 25000 kgs. (15)
19. Q4 A. Strawberry Ltd. has Equity Share Capital of Rs 15,00,000 divided into shares of Rs 100 each. It wishes to raise further Rs 5,00,000 for expansion — cum- moderation scheme The Company plans the following financing alternatives: 15 marks
    • (i) By raising Term Loan only at 15% per annum Rs 2,00,000 by issuing Equity shares and Rs 3,00,000 by issuing 9% preferences shares
    • (iv) 2,00,000 by issuing Equity shares and Rs 3,00,000 through Debentures or Term Loan @ 12% You are required to suggest the best alternative giving your comments assuming that the estimated operating profit after expansion is Rs and corporate tax rate is 25%
20. Q4 B. Hi-tech Ltd. plans to sell 60,000 units next year. The expected cost of goods sold is as follows: Selling, administration and financial expenses 40 The duration at various stages of the operating cycle is expected to be as follows : Work-in-progress stage - 1 month Finished stage - 1/2 month [comprises of Raw material and manufacturing expenses only.] Assuming the monthly sales level of 5,000 units, estimate the gross working capital requirement. Desired cash balance is 5% of the gross working capital requirement, and working- progress is 25% complete with respect to manufacturing expenses Discuss in brief the functions of strategic financial management. (08)
    • B. Discuss the basic strategies for cash management. 7
21. Q5 Write Short notes on any 3 15 marks
22. Q1 Commercial Papers
23. Q2 Objectives of Inventory Management
24. Q3 Master Budget
25. Q4 Trading on Equity
26. Q5 Operating cycle

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