BCom Environmental Management SEM III 2022 2023 Oct 2023 EME FINANCIAL MANAGEMENT Question Paper - Mumbai University | munotes

Questions asked in this paper

1. Q1 A) Fill in the blanks. Attempt any 8. 8 marks
   • 1. NPV considers of money 2; helps the investors to decide the return on investment
   • 3. The Cost of loan is considered tax
   • 4. Higher the tax rate, the the after tax cost of debt financing
   • 5. Credit sales are as cash payment remains unreceived
   • 6. Receivables may be represented by bills receivables or balance
   • 7. Business Restructuring focuses on '
   • 8. improving efficiency and profitability A company's working capital is made up of its minus its current liabilities — 10. are any obligations due within the following 12
2. Q1 B) State true or false. Attempt any 7. 7 marks
   • 1. Capital Budgeting decisions are long term decisions
   • 2. Investment decisions and capital budgeting are same
   • 3. Equity Investers are high risk bearers
   • 4. Cost of capital is used in Capital Budgeting decisions
   • 5. In a competitive market, higher volume of sales is made on credit
   • 6. The working capital ratio or current ratio is calculated as current assets divided vy current liabilities. 7. Ordering costs do not impact the maintenance of receivables
   • 8. Mergers and acquisitions helps to increase market share
   • 9. The efficiency of working capital management can be quantified using ratio analysis
   • 10. Restructuring is a method of changing the organizational structure in order to achieve the goals of the organization
3. Q2 ABC Ltd provides on Income statement as given below Income statement for the year ended “ 121922 SYEME. FINANCIAL MANAGEMENT 2% HRS. MARKS 75 Qz. A) A Company issues 40,000 12% Redeemable Preference shares Rs 100 each at a premium of Rs 5 each, redeemable after 10 years at a premium of Rs 10 each. The Flotation Cost of each share is Rs 2. You are required to calculate cost of preference share. (8)
4. Q2 B) A compary offers equity shares of Rs10 each for Public Subscription at a premium of 5% Company pays 2% of issue price as under writing commission. The rate of dividend expected by Equity Shareholders is 30%. You are required to compute the cost of equity capital. (7)
5. Q3 BJK Ltd. is preparing its cash budget for the year 2017-18. An extract from its budget for the same year shows the following values: (15) ’ Month Sales Purchase of Wages | Material
   • (a) 40% of its sales are expected to be for cash. Of its credit sales, 50% are expected to pay in the month after the month of sales and 50% are expected to pay in the second month after the of
   • (b) The company has estimated to pay 50% of total materials in cash and rest amount will be paid in the following month
   • (c) Wages are paid on the 2nd day of the following month
   • (d) The opening balance of cash as on Ist May is 30,000 Prepare the cash budget for the period May to July 2017
6. Q3 Determine the (a) Pay Back Period and (b) A.R.R. from the following information of a proposed Annual Profits after Tax and Depreciation
7. Q4 In order to increase sales from the normal level of Rs. 2,40,000 per annum, the marketing manager submits a proposal for liberalising credit policy as under: Proposed increase in credit period beyond Relevant increase over normal sales SYEME. FINANCIAL MANAGEMENT HRS. MARKS 75 The P.V. ratio of the company is 33-33 per cent. The company expects a pre-tax return of 20% on investment. Evaluate the above four alternatives and advise the management (assume 360 days a
8. Q4 Prepare Cash Budget for three months ended in December 2017, from the following
   • (a) The estimated sales expenses are as follows: Wages and Salaries 9,000 9,006 10,000 11,000 Sale of Shares
   • (b) 20% of the sales is on cash
   • (c) 1% of the credit sales are returned by customers and bad debts for October, November and December 2017 are 800, 760 and 740 respectively
   • (d) 50% of the good accounts are collected in the month of sale and the rest in the next month
   • (e) Time lag in the payment of Miscellaneous expenses and purchases in one month
   • (1) Wages and salaries are paid 50% in the same month and balance in next month
   • (g) The opening cash balance is 25,000
9. Q5 A) Explain the term Working Capital Management. 8 marks
10. Q5 B) List the Functions of Financial Management. Shoit Notes. Attempt Any three. (15) of Working Capital 7 marks
    • 3.Importance of Business Restructuring
    • 5.Objectives of Financial Management

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