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3B
Ill Semester B.Com. Examination, November/December 2018
(F+R) (CBCS) (Semester Scheme)
(2015 - 16 & Onwards)
COMMERCE
3.4 : Financial Management

Time : 3 Hours Max. Marks : 70

lnstruction : Answer should be written completely either in Kannada or

English.

SECTION _ A

Answer any five sub-question. Each sub-question carries;pggrq,ks' (5x2=10)

? 6tr"q
1. a) what is financial leverage
b) What is wealth maximization ?
Ihi *\\
\,\-Y
c) What do you mean by stock dividend ? \fu#/
d) Calculate the present value of { 40,000 received after 5 years, if the discount
rate is 1O%.

e) State four components of working capital-

f) lnitial investment of { 10,00,000, residual value { 2,00,000, working life is
5 years, additional working capital T 1,00,000. Calculate average investment.

g) Name the two models used for valuing equity shares' .

SECTION _ B

Answer any three questions. Each question carries six Snarks. (3x6=18)

Briefly explain the various forms of dividend.

3. Mention the functions of financial management.

P.T.O.
 ss - 471 -2-
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4. The folrowing information is avairabre in respect of a product :

Units sold - 60,000
Sales price per unit _ T 12
Fixedcost-T60,000
Variable cost - { 6 per unit
10% debt capital of T 1 ,20,000
Calculate all the types of leverages.
5. A bank manager offers a scheme in which
T 3,000, T 4,000, { s,o0o aitne
Mr. Mailesh gets T 1,000, T 2,ooo,
eno,of eicn
discount rate of g"/" tor a lump sum igqrrqra period of 5 years at the
depo;ii oiil2,000. ls it advisabre to invest
T 12,000 to Mr. Maltesh ? Aivise him.
6' The initial cas[91^l1y3f-? project
is T-1,00,000 and it generates cash
r so,'ooo ,no r zo,oi a-ioxrate-or inflows
;lJt?flff;|3l.ooo, JiilIunt. carcurate
Years 1 2 3 4
Discount 0.909 0.826 0.751 0.683
factors at 10o/o

SECTION -C
Answer any three questions. Each question
carries fourteen marks. (3x14=42)
7' Briefly exprain the factors inftuencing
the amount of working capitar.
B' Explain the meaning, scope and importance
of financiar management.
9' Sonu Ltd', company equity share capital for T_10,00,000
t
of 100 each' lt wishesfras divided
t,i idir" rurtrieli o,ob,ooo for expansion into shares
company plans the following financing prans. The
scne;Js :
a) All equity shares.
b) t 2,00,000 in equity shares and T 4,00,000
in debt @ 10% p.a.
c) All debt at 10% p.a.
O and T 4,00,000 in preference share
I"At"?,3R,?o:flX,rJ,;U*. capitat with
The company hg! EBlr at t 3,00,000. The corporate rate of
Eps-estimated
in .*". Give r;;"i;;tas
tax is
fl'J;;,3s,|!uraie "r.n to which capitar structure
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-3- ss - 471

are
10. A company is considering purchasing a machine. Two alternative machines
available machine * A and B each costing { 1 ,00,000. Earnings after depreciation
and taxation are expected to be as follows :
Years Estimated net cash flows
Machlne-A (Rs.) Machine- B (Rs.)
1 30,000 10,000

2 40,000 30,000
3 50,000 40,000
4 30,000 60,000
5 20,000 40,000

Calculate :

a) Payback Period
b) Net present value, al9oh.
Assume straight line method of depreciation'
The discount factor is as under :

Year12345
DF@9%0.9710.8420.7720'7080.650
11. Following. information is given to you, evaluate the projects by using return on
investment and NPV methods.
Project Proiect X
Proiect Z Y
tT{
lnvestment 70,000 80,000 90,000

Return at the end of 1't Year 40,000 50,000 55,000

Return at the end of 2"d Year 30,000 25,000 40,000

Return at the end of 3'd Year 20,000 25,000 20,000

NPV may be calculated at 20% discount factor"

Year123
DF @ 20"/o 0.833 0"694 0'578
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ddd €t-o

Aqrorl -a

(5x2=10)
Cnd;oaddn ecutr ddferi w$o:u. -'9s -grrf adC: ecr.

1. a) deaac,qrd dts codde$ ?

b) iodd: do.:geddm aodde& ?

c) rag e>zpod aodded> ?

d) de. 10 OCDC)8 ddaan{Or 5 d-.,,rrdd dodd deio.::== { 40,000 rlgri d&d

dPe.:, eJd*o46.

e) d>acf::d uodaadd Cndloadde 4 e,'odddd: eg:,

0 d.:aOrd uodesad t =::.i- aeDdQ

10,00,000, dem{d dfle;, T 2,00'000,

5 ddrrid;, dz,3:,.do d:aol>d zlodrcd t 1,00,000 ==j- i=;: =.Fdc$cjl

dod>baar:0.

g) sodnd, de&dd dFe)oeddeod odd: dndod#d: ,c+i.

tqnrl - ar

Ednd d>dorddra dlJa& dd/erl wQo,l. -,,g.9 dd$ erd) eicd. (3x6='!8)

2. DDd enzpod draddddl iotSaan edo&.

3. dearozud DdF d#c) uac:rrlddg dio,t.

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4. ?"od) erD#F dnbeo3r: dddodoEd:

d,t;ddd dnuoo^l - 60,000

r-od: +$dd d:amu.i dd -- { 12

ruJ
d4* { 60,000
-
rz<a:X-:-
q(&'WVPI
Vd
='= = i L-z;ii - t
4--
l:J ' ;
6

d:. 10 d ao z:oCo.j -{ 'l

,20,000

aerr urlc: dffd$" (Leverages) eJd*oaa.

5. uoc> anro&d {dxgdd uoej: oSoexdo$ $ryddod t 12,000 ,idq de. 9 d oc1Dc1>s
ddde- ge *eleds { 1,000, T 2,000, { 3,000, { 4,000 $d; t 5,000 rlddl de
ddrd eodrdo- 5 dirddddri ddC)Bd. t 12,000 rld dnadobr -alogde ? dsd
lph
iJ\ w.

6. z-oC: o3ner*dC: a3dezpd dd& dod dodr { 1,00,000 tb* 'add ddeb z^,ddo{
t 40,000, T 30,000, { 50,000 dJ4 t 20,000 ,{dqde. 10 d oo:no*e ddde}
we oiDgd. "add enqnodd doz,orodddl Od*ae*.

Years (ddrddl) 1 234

6e. 10 d ooJno$.9 0"909 0.826 0.751 0.683
oa^C

a?f,ad - ,tu

odndtoaddro 3 ddfed erugo&. ds -gd$ 14 erod. (3x14=42)

7. d>Eoll:d uodrodd drodd c>eeJ d4od sledrd uodrlddl doffiaan adoft.

B. dearatud &drdda$ sdr, Dr* c:4 $dddll-Jq cdoxr.

l:
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ss - 471

f.ioe$OoJ)e)ddodpclFDdDddde&*^cd-l1'o0d&)$?'ldd{10'00'000
dvon&$d.dodoc::d{a{ddo3roer;SreRi6,00,000iidd}du:jw?tfiilgd
o3oexiC'
er& dddodod deoaoad dqlo$d1
a) ao..{P mdnd, decbrldc'
{ 4'00'000'
2,00'000 #:Q de' 10 rJ $igCO-
:e
b) FDdDdd deosJe-t

c) aeJdP dt. 10 d saer

dgd0".'

d) x,udJadrded:rldO-t2,00'OOO*qa3d'r'5de&r(do-{4'OO'OO0de'Sdenzpaod
dddo"d
dorl dd de' 50 add {e deod dedc)d} (EPs)
dodpoj: EBIT { 3,OO,OOO. dodoo$
aod: iea EeG'
-r--r- d>dl o1nd uodoad dt3d dolaahd
B. o$o$d
doricd-roed cj:od:o dg
10. uod: dodpojr: uoc> o3lo$dd:o$oeaiQ .)p
dolfdr dodd do*poSi€d $ d$dcdod
Ooet$ennd'
dd { 1,00,000 ddde $*
JJ-*)e|
s)eilE I rtv eo6au3) 0*c ddd) doc
o$09 - A (t) o$o9 - B (T)
30,000 10,000
1

40,000 30,000
2

50,000 40,000
3
30,000 60,000
4
6 20,000 40,000

a) boaade erdQ
de' 9 d{aas' ded idds aeddo- rua&tu'
b) cddd -B-€d dfae-:, (NPv)

ooJtro$g elodddo:
).,e123 45
cJcilf

0'971 0'842 0'.772 o.7OB 0.650

DoJno$g srod
(@ e%)
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11.dddod*)b.3cJ))&eGdod,dJaado$&eejrigdd)td&de4ddjEc,(NPV)
opddd$* eroidro ntu oSoerdo$q# O, edol'
e

Coezrd X o3.oerd Y aloerd Z

tT t
docd
7O,O0o 80,000 90,000

dodode ddrd eodrd ried

40,000 50,000 55,000

3O,OOO 25,000 40,000

addde ddrd erodrd de8

drodde ddrd erodrd ded 2o,0oo 25,000 20,000

(NPV) ddlde' 20 d ooiDc$'3 eodd0-

d{aaE'
digd e*d aJPe-:,

))-123
cDC,ll

oCtoo$g egod @ 2}o/o 0'833 0'694 0'578