ISBM UNIVERSITY

SEMESTER EXAMINATION, APRIL-20

Program: BBA Semester - 4 Paper - 4 Roll No.

Subject: 12404 - Financial Management
Maximum Marks: 70 Time: 3 Hours
Instructions for candidates
1. Write your roll number on the question paper at the space specified for it.
2. Ensure that you have entered details on the answer sheet and have obtained Invigilator signature.
3. Do not write/ mark anything on question paper.
4. Do not use question paper for rough work.
Section -A
Objective type questions (1-10)
(Answer all questions. Each question carries 1 marks)
1. The main objective of financial management is .
a. To arrange fund from cheaper source
b. Effective utilization of fund
c. Both (a) & (b)
d. None of the above
2. The most appropriate objective of financial management is ?
a. Wealth maximisation
b. Profit maximisation
c. Working capital
d. Asset maximisation
3. Which one is the most liquid asset?
a. Cash in hand
b. Cash at bank
c. Cash equivalent
d. None of the above
4. Which one is not a current asset?
a. Creditors
b. Debtors
c. Cash
d. Building
5. Operating leverage exists if there is ?
a. Fixed cost
b. Fixed financial charges
c. Variable cost
d. None of these
6. Capital budgeting is technique for creation of .
a. Short term asset
b. Selection of long-term asset
c. Both (a) & (b)
d. Noe of these
7. Which one is not a technique of capital budgeting?
a. NPV
b. IRR
c. Payback period
d. Current ratio
8. Net income approach supports the view that capital structure is .
a. relevant
b. irrelevant
c. (a) & (b)
d. Noe of the above
9. Current asset – current liability is equal to ?
a. Net working capital
b. Gross working capital
c. Fixed capital
d. None of the above
10. Combined leverage measures the ?
a. Operating risk
b. Financial risk
c. (a) & (b)
d. None of these
Section-B
Answer in 300-40 words (Brief Answer type)
(Answer any 5 questions. Each question Carries 6 Mark)
11. Discuss in brief the working capital cycle?
12. what is leverage? explain the concept of operating leverage.
13. What is net operating income approach? Explain with diagram.
14. Distinguish between NPV & IRR technique?
15. Discuss the merits of payback period technique of evaluating the profit?
16. Discuss the concept of Profit Vs. Liquid?
17. What is benefit cost ratio? Discuss its relevance.
18. Discuss the concept of social cost benefit?
Section-C
Answer in 500-700 words (long answer type)
(Answer any 2 question. Each question carries 15 marks)
19. Define financial management? Discuss it importance, objective & advantages.
20. What do you mean by working capital? Discuss the various determinants of working capital.
21. What is dividend policy? What are the determinants of dividend policy?
22. Explain the concept of capital structure. Discuss the factors to be considered while designing the
capital structure?