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    This document contains 8 questions for an MBA II-Semester Supplementary Examination in Financial Management. The questions cover topics such as the ultimate goal of financial management, net present value analysis of a proposed project, weighted average cost of capital, earnings before interest and taxes analysis, the informational content of dividend payments, working capital and sources of working capital funds, analysis of extending credit terms, and short notes on finance function, profitability index, acid test ratio, and operating leverage.

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    This document contains 8 questions for an MBA II-Semester Supplementary Examination in Financial Management. The questions cover topics such as the ultimate goal of financial management, net present value analysis of a proposed project, weighted average cost of capital, earnings before interest and taxes analysis, the informational content of dividend payments, working capital and sources of working capital funds, analysis of extending credit terms, and short notes on finance function, profitability index, acid test ratio, and operating leverage.

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    11 views2 pages

    Financialmanagement 100113192927 Phpapp01

    Uploaded by

    priyasajith
    This document contains 8 questions for an MBA II-Semester Supplementary Examination in Financial Management. The questions cover topics such as the ultimate goal of financial management, net present value analysis of a proposed project, weighted average cost of capital, earnings before interest and taxes analysis, the informational content of dividend payments, working capital and sources of working capital funds, analysis of extending credit terms, and short notes on finance function, profitability index, acid test ratio, and operating leverage.

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    of 2

    www.studentyogi.com www.studentyogi.

    com
    R5-R7
    MBA II-Semester Supplementary Examinations, January 2009

    FINANCIAL MANAGEMENT
    www.prsolutions.in
    Time: 3 Hours Max. Marks: 60

    Answer any FIVE questions.

    omom
    All questions carry equal marks

    1. “The ultimate goal of financial management is to increase the market value of


    the firm”. Discuss.

    i.cgi.c
    2. Following are the details of a proposed project:
    Initial outlay Rs. 80,000
    Initial working capitalRs. 20,000
    Cash flow before depreciation:
    ogyo
    Year 1 2 3 4

    Rs 35,000 35,000 30,000 30,000


    t
    Salvage value Rs. 20,000
    nteyn

    Tax rate assumed to be 50%.


    The project is depreciated on SLM. If the required rate of return is 10%.
    dteud

    Is the project acceptable order the NPV method?


    3. What is weighted average cost of capital? Discuss the steps in computation of
    weighted average cost of capital.
    stu.s

    4. What do you understand by indifference point of EBIT? Explain with the help
    of EBIT-EPT analysis.
    ww. w

    5. What is an informational content of dividend payment? How does it affect the


    value of the share?

    6. What do you understand by working capital? Discuss the various sources of


    working capital funds.
    www

    www.prsolutions.in

    www.studentyogi.com www.studentyogi.com
    www.studentyogi.com www.studentyogi.com

    7. Kakinada Chemicals presently gives credit terms of net 30 days. It has Rs. 90
    million in sales and its average collection period is 45 days. To stimulate
    demand, the company may give terms of net 60 days. If it accepts these
    terms, sales are expected to increase by 15%. After the change, the
    average collection period is expected to be 75 days, with no difference in
    payment habit between old and new customers. Variable costs Rs. 80 for every

    m
    Rs. 100 of sales and the company required rate of return on investment in
    receivables is 20% should the company extends its credit period?
    8. Write short notes on:

    co
    (a) Finance Function (b) Profitability index
    (c) Acid test ratio (d) Operating leverage

    gi.
    ************

    tyo
    en
    st ud
    w.
    ww

    www.studentyogi.com www.studentyogi.com

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