DNYANSAGAR INSTITUTE OF MANAGEMENT & RESEARCH

MBA – I SEM - II
ASSIGNMENT FOR FINANCIAL MANAGEMENT (202 / 232)

Submission Date: 14th April 2018

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Note for writing the answer:

All answers need to be written on assignment sheets which are available in stationary book
store.
First page write your name, cell no, mail id and our Institute name, Semester and your
subject name & code.
All assignments should be written nicely and
cleanly. All questions are compulsory.
Refer the books for answers
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Q1) “Finance function is concerned with allocating funds to specific assets and obtaining the
best mix of financing in relation to the overall valuation of the firm”. Discuss.

Q2) In what ways is the wealth maximization objective superior to the profit maximization
objective? Explain.

Q3) “Investment, financing and dividend decisions are all inter –related.” Comment.

Q4)”Finance function of a business is closely related to its other functions.” Discuss.

Q5) What are the important factors to be considered in planning the capital structure of a
company?

Q6) Critically examine the „Net income and Net operating income approaches‟ to capital
structure?

Q7) Define Financial Management and discuss in detail what are the key strategies of Financial
Management?

Q8) Describe the functions of Finance Manager in detail & elaborate the relationship of Financial
Management with other functional disciplines ?

Q9) What is fund Flow statement? State its advantages & disadvantages.
Q 10.)X ltd has the following Capital structure
Rs.
Equity share capital [20,000 shares] 4,00,000
6% Preference shares 1,00,000
8% Debentures 3,00,000
The market price of equity share is Rs.20. It is expected that the company will pay a current
dividend of Rs 2 per share which will grow @7% forever. Rate of tax is 40%. Calculate the
weighted average cost of capital.

Q11) A Company issues 1,000 7% Preference Shares of Rs. 100 each at a premium of 10%
Redeemable after 5 years at par. Compute the cost of Preference Capital.

Q12) A company issues 1000 equity shares of Rs 100 each at a premium of 10%. The company
has been paying 20% dividend to equity shareholders for the past five years and expect to
maintain the same in the future also. Compute the cost of equity capital. Will it make any
difference if the market price of equity share is Rs 160?
Q13) From the following information ,Calculate:

i)Operating ratio ii)Quick ratio iii)Working capital Turnover ratio

Equity Share capital Rs 1,00,000; 12% Preference Share capital Rs 80,000; 12% Debentures Rs
60,000; General reserve Rs 40,000; Revenue from operations 3,00,000;Opening Inventory Rs
10,000; Purchases Rs 1,20,000; Wages Rs 30,000; Closing Inventory Rs 30,000; Selling and
distribution Expenses Rs 10,000;Quick assets Rs 2,00,000 and current liabilities Rs 1,20,000

Q14) Calculate Return on investment and debt to equity ratio from the following information:

Net profit after Interest and Tax Rs 3,00,000

10%Debentures Rs5,00,000

Tax rate 40%

Capital Employed 40,00,000

Q15) Current Assets of a company are Rs 9,00,000. Its current Ratio is 3 and Liquid Ratio is 1.2.
Calculate Current Liabilities, Liquid Assets and Inventory.
Q16) From the following Balance sheet of X ltd ,prepare Cash Flow statement.

31st March,
Particulars Note No. 31st March,2016 2015
I. EQUITY AND LIABILITIES
1.Shareholder's Funds
(a) Share Capital 1 6,30,000 5,60,000
(b)Reserves and Surplus
Surplus i.e Balance in Statement of Profit and
Loss 3,08,000 1,82,000
2.Current Liabilities
(a)Trade payables 2,80,000 1,82,000
(b)Other Current Liabilities 14,000 28,000
Total 12,32,000 9,52,000
II Assets
1.Non- Current Assets
Fixed Assets: Plant and Machinery 3,92,000 2,80,000
2.Current Assets
(a)Inventories 1,26,000 1,82,000
(b)Trade Receivables 6,30,000 4,20,000
(c)Cash and Cash Equivalents 84,000 70,000
Total 12,32,000 9,52,000

Notes to Accounts

Particulars 31st March,2016 31st March ,2015

1Share Capital
Equity Share Capital 4,30,000 3,60,000
8%Preference Share Capital 2,00,000 2,00,000
6,30,000 5,60,000
Additional Information:

1.An old machinery having book value of Rs.42,000 was sold for Rs

56,000. 2.Depriciation provided on machinery during the year Rs 28,000.

3.Dividend paid (included preference dividend) during the year Rs. 56,000.
Q17) Following are the Balance Sheets of Krishec Ltd. For the years ended 31st March, 2012
and 2011:

Particulars Note no. 31st March 2012 31st March 2011

I EQUITY AND LIABILITIES
1. Shareholder's Funds
(a)Share Capital 12,00,000 8,00,000
(b)Reserves and Surplus (Surplus, i.e Balance in statement
of Profit and loss 3,50,000 4,00,000
2.Non-Current Liabilities
Long term Borrowings 4,40,000 3,50,000
3. Current Liabilities
Trade Payables 60,000 50,000
Total 20,50,000 16,00,000
II Assets
1.Non-Current Assets
Fixed Assets:
Tangible Assets 12,00,000 9,00,000
2.Current Assets
(a)Inventories 2,00,000 1,00,000
(b)Trade Receivables 3,10,000 2,30,000
(c)Cash and Cash Equivalents 3,40,000 3,70,000
Total 20,50,000 16,00,000
Prepare a Cash Flow Statement after taking into account the following adjustments:

(a) The company paid interest Rs 36,000 on its long term borrowings.

(b) Depreciation charged on tangible fixed assets was Rs 1,20,000.

Q18) From the following information, Calculate Cash Flow from Investing Activities:

Particulars Closing Balance Opening Balance

Machinery(at cost) 4,20,000 4,00,000
Accumulated depreciation 1,10,000 1,00,000
Patents 1,60,000 2,80,000
Additional Information:

1) During the year, a machine costing Rs 40,000 with its accumulated depreciation of Rs.24,000
was sold for Rs 20,000.

2) Patents were written off to the extent of Rs 40,000 and some patents were sold at a profit of
Rs 20,000.
Q19)From the following balance sheets as on 31st March 2013 and 31st March 2014 of
Mahanand Ltd. You are required to prepare Fund Flow statement.
Balance sheet
Amount Amount
Liabilities 31/03/2013 31/03/2014 Assets 31/03/2013 031/03/2014
Equity Capital 3,00,000 4,00,000 Goodwill 1,15,000 90,000
Land &
8% Redeemable pref. Shares 1,50,000 1,00,000 Building 2,00,000 1,70,000
General reserve 40,000 70,000 Plant 80,000 2,00,000
Profit &Loss A/C 30,000 48,000 Debtors 1,60,000 2,00,000
Proposed dividend 42,000 50,000 Stock 77,000 1,09,000
Bills
Creditors 55,000 83,000 receivables 20,000 30,000
Bills Payable 20,000 16,000 Cash in hand 15,000 10,000
Taxation Provision 40,000 50,000 Cash at bank 10,000 8,000
Total 6,77,000 8,17,000 Total 6,77,000 8,17,000

Following additional information is provided:

a)Interim dividend of Rs 20,000 has been paid in 2013-2014.

b)Income Tax paid during the year 2013-2014 is Rs 35,000

Q20) Following are the summarized Balance sheet of Abhijit ltd as on 31st March, 2014 and
2015. You are required to prepare a Fund Flow Statement for the year ended 31st March, 2015.
Balance sheet

Amount Amount
Liabilities 31/03/2014 31/03/2015 Assets 31/03/2014 31/03/2015
Share Capital 1,00,000 1,25,000 Goodwill - 2,500
Land and
General reserve 25,000 30,000 Building 1,00,000 95,000
Plant &
Profit and loss A/c 15,250 15,300 Machinery 75,000 84,500
Long term Bank loan 35,000 67,600 Stock 50,000 37,000
Creditors 75,000 ........ Debtors 40,000 32,100
Provision for tax 15,000 17,500 Cash in hand 250 4,300
Total 2,65,250 2,55,400 Total 2,65,250 2,55,400
Additional information
i)Depreciation Written off on plant and machinery Rs 7,000 and on Land and Building Rs
5,000. ii)Provision for Tax was made during the year Rs 16,500
iii)Dividend of Rs 11,500 was paid.
Q21)A project cost Rs 5,00,000 and yields annually a profit of Rs 80,000 after depreciation
@12%p.a but before tax of 50%.Calculate the pay- back period.

Q22)A Company has an investment opportunity costing Rs 40,000 with the following expected
net cash flow after taxes and before depreciation.

Year Net Cash Flow

Rs.
1 7,000
2 7,000
3 7,000
4 7,000
5 7,000
6 8,000
7 10,000
8 15,000
9 10,000
10 4,000

Using 10% as the cost of capital , determine the following:

a)Pay-back period

b)Net present value at 10% discount factor

c)Profitability index at 10% discount factor

d)Internal rate of return with the help of 10% and 15% discount factor.

Q23)X ltd is considering the purchase of a machine . Two machines are available , E and F. The
cost of each machine is Rs 60,000. Each machine has an expected life of 5 years . Net profits
before tax (after depreciation) during the expected life of the machine are given below:

Year Machine E Machine F

Rs. Rs.
1 15,000 5,000
2 20,000 15,000
3 25,000 20,000
4 15,000 30,000
5 10,000 20,000
Total 85,000 90,000
Following the method of return on investment ascertain which of the alternatives will be more
profitable. The average rate of tax may be taken at 50%
Q24)An enterprise can make either of two investments at the beginning of 2012. Assuming
required rate of return of 10%p.a. evaluate the investment proposals as under:

a)Return on investment

b)Payback Period

c)Discounted pay – back period

d)Profitability index

The forecast particulars are given below:

Proposal A Proposal B
Cost of investment Rs.20,000 Rs 28,000
Life 4years 5years
Scrap value Nil Nil

Net income(After depreciation Rs. Rs.

and tax)

End of 2012 500 Nil

End of 2013 2,000 3,400
End of 2014 3,500 3,400
End of 2015 2,500 3,400
End of 2016 - 3,400

Q25) A Proforma Cost sheet of a company provides the following particulars:

Element of cost Cost per sheet (Rs)

Raw Material 80
Direct labour 30
Overheads 60
Total cost of production 170
Profit 30
Selling Price 200
Following further particulars are available:

i)Raw materials are in stock for one month.

ii)Credit allowed by suppliers is one month.

iii)Credit allowed to customers is two months.

iv)Lag in payment of wages 1.5 months.

v)Lag in payment of overheads one month.

vi)Materials are in process for an average of half a month.

vii)Finished goods are in stock for an average of one month.

viii)1/4th of output is sold against cash.

ix)Cash in hand and bank is expected to be Rs.25,000.

You are required to prepare a statement showing the working capital needed to finance a level of
activity of 60,000 units of production annually. The production is carried out evenly throughout
the year.

Q26)A Client of yours Swift Ltd. is about to commence a new business and finance has been
provided in respect of fixed assets. They ask your advice about the working capital requirements
of the company. The following information is available for your information.

Particulars Average credit period Estimate for first year (Rs)

Purchase of materials 6 weeks 26,00,000
Wages 11/2 weeks 19,50,000
Overheads:
Rent 6 months 1,00,000
Directors and Manager‟s 1 month 3,60,000
salaries
Office salaries 2 weeks 4,55,000
Traveler‟s commission 3 months 2,00,000
Other overheads 2 months 6,00,000
Cash sales - 1,40,000
Credit sales 7 weeks 65,00,000
Average amount of stock & - 3,00,000
W.I.P
Average amount of undrawn - 3,10,000
profits
Sales were made at an even rates throughout the year.

Calculate the working capital requirements for the company.

Q27) Kiran Gold Ltd. Is a leading manufacturing industry. Following activity ratios are
calculated by the finance manager of the company. You are required to analyze the ratios and
interpret the asset management efficiency position of the company.

Particulars 2015(Rs) 2016(Rs)

Debtors Turnover ratio 12 times 8 times
Creditors Turnover ratio 7 times 7 times
Inventory Turnover Ratio 9 times 11 times
Working Capital Turnover 3 times 4 times
Ratio
Fixed Asset Turnover Ratio 2.5 times 1.5 times

Q28) Under which major sub- headings the following items will be placed in the Balance sheet
of a company as per revised Schedule VI, Part I of the Companies Act, 1956 (Schedule III, Part I
of the Companies Act, 2013)
i) Accrued incomes ii)Loose tools iii)Provision for employees Benefits
iv) Unpaid Dividend v)Short term Loans vi)Long term loans

Q 29)From the following given below calculate i)Current ratio ii)Debt to equity ratio

Net profit of the year Rs 80,000; Fixed assets Rs 2,00,000;Closing Inventory Rs 10,000;Other
Current Assets Rs 1,00,000; Current liabilities Rs 30,000; Equity Share Capital Rs 1,00,000;
10% Preference Share Capital Rs 70,000; 12%Debentures Rs 60,000 and Revenue from
operations ,i.e, Net Sales during the year Rs 5,00,000.

Q 30.) Assume that a firm has owner‟s equity of Rs. 100000. The ratios of the firm are:
Short term debt to total debt = 0.4
Total Debt to Owner‟s equity = 0.6
Fixed Assets to owner‟s equity = 0.6
Total assets turnover ratio = 2 times
Inventory Turnover ratio = 8 times
Compute the following Balance sheet:

Q31. Following details are made available to you:

Particulars Project X(Rs.) Project Y(Rs.)

Project Cost 700 700
Cash Inflows :
Year1 100 500
Year2 200 400
Year3 300 200
Year4 450 100
Year5 600 100
Total 1650 1300

Assume no residual values at the end of the fifth year. The firms cost of capital is 10%. Required in
respect of each of the two projects.
1) Payback period 2) Net present Value, using 10% as discounting factor
3) Internal rate of return 4) Profitability Index

Q32. Following are the details of three projects A, B and C.

Particulars A B C
Cost 50,000 70,000 70,000
Life 1 0 years 12 years 14 years
Estimated Scrap (Rs.) 5,000 10,000 7,000
Annual Profit
Less Taxation (Rs.) 5,000 6,000 5,500
Select the best one using: -
a) Payback period b) Surplus life over payback period c) Surplus cash flow as the decision
criteria.
Q33. A Performa Cost Sheet of a Company is given below:
Particulars Cost per unit Rs.
a) Raw Material 52 b) Direct Labor 26 c) Overheads 32
Total Cost 110
Profit 20
Selling Price 130
Additional Information:
(1) Average Raw Material in stock is one month.
(2) Average Material in process half a month.
(3) Average finished goods for a month.
(4) Credit allowed by suppliers one month.
(5) Credit allowed to debtors two months.
(6) Time lag in payment of wages one and half weeks, overheads one month.
(7) 1/4th of the sales are on cash basis.
(8) Expected Cash Balance Rs. 1,20,000.
Prepare a Statement showing Working Capital requirements to finance of activity of 45,000 units at
Output.

Q 34. ABC Ltd sells its products on a gross profit of 20 % on sales. Prepare an estimate of working
capital requirements from the following information of the trading concern.
Sales at 3 months credit 40,00,000
Raw materials 12,00,000
Wages paid- average time lag15 days 9,60,000
Manufacturing expenses paid one month in arrears 12,00,000
Administrative expenses paid one month in arrears 4,80,000
Sales Promotion expenses payable half year in advance 2,00,000

The company enjoys 1 month credit from suppliers of raw materials & maintains a 2 months stock of raw
materials & 1.5 months stock of finished goods. The cash balance is maintained at Rs. 1,00,000 as a
precautionary measure. Consider 10% contingencies in your estimate.

Q 35. Explain Modigliani and Miller theory (MM approach).

 Q 36. A limited company is considering different methods to finance its investment proposal. It is
estimated that initially Rs. 40,00,000 will be needed. Two alternative methods are available for raising of
funds:
i. To raise Rs. 20,00,000 be sale of equity shares of Rs. 100 each and balance at 18% term loan.
ii. To raise the entire amount by sale of equity share of Rs. 100 each
The existing capital structure consists of:
a) 50000 equity shares of Rs. 100 each and b) 17% term loan of Rs. 20,00,000
The expected EBIT is Rs. 15,00,000. Advice the company on the basis of EPS in each alternative.

Q11. Mr. True Development wishes to develop a kiosk model for banking sector. The estimated cost of
development will be Rs. 4250000/-. salvage value at the end of the project will be 25%. The Expected
Cash Flow are as follows.

Year Cash Flows Depreciation

1 8,25,650 1,25,650
2 9,25,000 1,75,000
3 10,50,000 2,25,000
4 11,35,000 3,34,500
5 15,00,000 4,50,000
Evaluate project using NPV Method, assuming Tax Rate @ 30% and Discounting Rate of 10%.

Q 37. Sweet Sugar Ltd. wishes to build new factory whose initial cost will be Rs. 4500000/-. Following
are the cash flow after depreciation but before tax.

Year 1: Rs. 1500000, Year 2: Rs. 1845000 , Year 3:- 2050000, Year 4:- 2275000, Year 5:- 1000000.

Depreciation is calculated on WDV Method @ 15%. Tax Rate @30% and cess @3%.

Evaluate project through NPV and PI Model.

Q 38. Following are the summarized balance sheet of ABC Ltd. as on 31st December 2014 & 15. You are
required to prepare a fund flow statement for the year ended 31st December 2015
Liabilities 2014 (Rs.) 2015 (Rs.) Assets 2014 (Rs.) 2015 (Rs.)
Share Capital 1,00,000 1,25,000 Goodwill - 2,500
General 25,000 30,000 Building 1,00,000 95,000
Reserve
Profit and 15,250 15,300 Plant 75,000 84,500
Loss Account
Bank Loan 35,000 27,600 Stock 50,000 37,000
(Long Term)
Creditors 75,000 40,000 Debtors 40,000 32,100
Provision for 15,000 17,500 Bank - 4,000
Tax
Cash 250 300
2,65,250 2,55,400 2,65,250 2,55,400
Additional information:

  Dividend of Rs. 11,500 was paid. 

 Depreciation written off on plant Rs. 7000 and on building Rs. 5000 
Q39. Krishna Gold Ltd. is a leading manufacturing industry. Following activity ratios are calculated by
the finance manager of the company. You are required to analyze the ratios and interpret the asset
management efficiency position of the company.

Particulars 2014 (Rs.) 2015 (Rs.)

Debtors Turnover Ratio 12 times 8 times
Creditors Turnover Ratio 7 time 7 timess
Inventory Turnover Ratio 9 times 11 times
WorkingCapitalTurnover 3 times 4 times
Ratio
Fixed Asset Turnover Ratio 2.5 times 1.5 times

Q40) Calculate WACC using the following data, under the following methods :
a)Book value weights
b) Market value weights
Equity shares(Rs. 100 per share) 10,00,000
Debentures (Rs 100 per Debenture) 5,00,000
Preference shares(Rs 100 per share) 5,00,000

Market price of the above mentioned securities are:

Equity shares 24
Debentures 105
Preference Shares 110

Additional information:
1.Rs 100 per debenture, redeemable at par ,10% coupon rate , 4% floatation cost, 10 year
maturity.
2.Rs 100 per preference share , redeemable at par, 5% coupon rate , 2% floatation cost, 10 year
maturity.
3.Equity share has Rs 4 floatation cost and market price Rs 24 per share.
4. Expected dividend for the next year is Rs. 10 with annual growth of 5%. The firm has practice
of paying all earnings in the form of dividends.
5. Corporate tax rate is 50%.

Q41. a. .Explain various factors affecting capital structure of the organization ?

b. State the importance of capital structure decision in details ?

c. Calculate Weighted Average cost of capital (WACC) from the following. Data of PIL
Industries.
Sources Rs. in Lakh

Equity share capital (20000 shares) 50

18%preference share capital 20
15% Debentures 30

Total 100

The company pays dividend at 10%.Compute weighted Average Cost of capital (WACC) based
of existing capital structure.

Q.42. Shalini Pvt. Ltd. has following Capital Structure

Sources Rs. in Lakh

Equity Capital (Expected dividend 12%) 1000000

10% Preference capital 500000

8% Loan 1500000

Calculate weighted average cost of capital assuming tax rate of 50% before & after tax

Q.43. From the following capital structure of a company, calculate the overall cost of capital
using.

a. Book Value weights

b. Market Value weights

Source Book Value Market Value

Equity share capital 50000 80000
Retained Earnings 20000 -
Preference Share capital 15000 20000
Debentures 40000 45000

The after tax cost of different source of finance is as follows

Equity sh. capital 15% Retained earnings 13%

Pref. sh. capital 10% Debentures 5%

Q.44. Assume that a firm has owner's equity of rs. 2,00,000.The ratio for the firm are

Short term debt to total debt 0.5

Total debt to owner's equity 0.8

Fixed assets to owners‟ equity 0.6

Total assets turnover 2 times

Inventory turnover 6 times

compute the following ratio

short term debt ratio

owners‟ equity ratio

Long term debt ratio

Value of inventory , Cash

Fixed Asset

Q.45.The standard ratios for the industry and the ratios of Pratibha ltd. are given below.
comment on the financial position of the company compared to industry standards and give
suggestions for improvement

Ratio Industry Standard Ratio Ratio of Pratibha Ltd.

Current Ratio 2.4 2.55

Quick ratio 1.5 1.10
Inventory turnover Ratio 8 5
Average Collection period 36 42
Debt Equity Ratio 2:1 1.40:1
Net Profit Ratio 17% 17.7%
Price to earnings Ratio 16 5.88
Q.46.Calculate the following ratio

Gross Profit Ratio

Net Profit Ratio

Current Ratio

Liquid Ratio

Proprietary ratio

Particular Amount Particular Amount

Sales 30,00,000 Fixed Assets 15,40,000

Cost of sales 20,00,000 Net Worth 15,00,000

Net Profit 4,00,000 Debts (Long term) 9,00,000

Average inventory 8,00,000 Current liabilities 5,00,000

Other current asset 7,00,000 Net profit before tax 8,00,000

Q.47. Following are the summarized balance sheet of Prakash Ltd.as on 31st March 2015 and
2016. You are required to prepare a fund flow statement for the year ended 31st March 2016

Balance Sheet

Liabilities 2015 2016 Asset 2015 2016

Share capital 20000 25000 Good will - 500
General Reserve 5000 6000 Land &Building 20000 19000
Profit and loss a/c 3050 3060 Plant and 15000 16900
Machinery
Long term Bank 7000 13520 Stock 10000 7400
loan
Creditors 15000 - Debtors 8000 6420
Provision for tax 3000 3500 Cash 50 860
Total 53050 51080 Total 53050 51080

Additional Information

1. Depreciation written-off on Plant and Machinery Rs.1,400 and on Land and Building Rs.
1,000
2.Provision for Tax was made during the year Rs. 3,300

3.Dividend of RS.2,300 was paid.

Q.48. From the following balance sheets as on 31st March 2013 and 31st March 2014 of
Mahanand Ltd. You are required to prepare Fund flow statement

Liabilities 2015 2016 Asset 2015 2016

Equity Capital 300000 400000 Good Will 115000 90000
8% redeemable 150000 100000 Land & 200000 170000
Pre Building
General Reserve 40000 70000 Plant & 80000 200000
Machinery
Profit & Loss 30000 48000 Debtors 160000 200000
Proposed 42000 50000 Stock 77000 109000
dividend
Creditors 55000 83000 Bills Receivable 20000 30000
Bills Payable 20000 16000 Cash in hand 15000 10000
Taxation 40000 50000 Cash at bank 10000 8000
Provision
Total 677000 817000 Total 677000 817000

Following additional information is provided

a. Interim Dividend of Rs. 20,000 has been paid in 2013-14

b. Income Tax paid during the year 2013-14 is Rs. 35,000

Q.49. Shlok Ltd. is considering an investment proposal to install a new machine. The project will
cost Rs. 50,000 and will have a life of 5 years and no salvage value. The company's tax rate is
35% and no investment allowance is allowed. This firm uses straight line method of depreciation
. The estimated net income before depreciation and tax from the proposed investment proposal
are as follows:

Year Net Income before Depreciation & tax (Rs.)

1 10,000

2 11,000

3 14,000

4 15,000

5 25,000
Compute the following

1. Pay Back period

2. NPV

3. Profitability Index

Q.50. A Proforma cost-sheet of a company provides the following particulars:

Element of cost Cost per unit

Raw Material 80

Direct Labour 30

Overheads 60

Total Cost of production 170

Profit 30

Selling Price 200

Following further particulars are available

1. raw materials are in stock for 1 month

2. Credit allowed by suppliers is 1 month

3. Credit allowed to customer is 2 month

4.Lag in payment of wages 1.5 months

5. Lag in payment of overheads 1- month

6. Materials are in process for an average of half a month

7. Finished goods are in stock for an average of one month

8. 1/4th of output is sold against cash

9. cash in hand and bank is expected to be rs. 25,000

You are required to prepare a statement showing the working capital needed to finance a
level of activity of 60,000 units of production annually.

The Production is carried out evenly throughout the year.