Question

Module 4
A project will cost Rs.2,00,000/- and will generate annual cash flows of Rs. 70,000/- What is the project’s
payback period?
List three key inputs that are typically considered when making Capital Budgeting decisions.
Enlist factors that can affect an entity's working capital needs.
What do you mean by capital rationing type of capital budgeting decision?
Enlist some issues and concerns related to capital budgeting decisions
Explain the concept of working capital
Explain the meaning of capital budgeting.
Explain the concept of Modified Internal Rate of Return (MIRR) and how it addresses some limitations of the
traditional IRR.
Suppose that a firm considers investing in a project that requires an initial investment of $10,000. The project is
expected to yield a cash flow of $5,000 each year for next three years. If the discounting rate is 12%, calculate
Profitability Index (PI)
Assume that Project X costs Rs 2,500 now and is expected to generate year-end cash inflows of Rs 900, Rs 800,
Rs 700, Rs 600 and Rs 500 in years 1 through 5. The opportunity cost of the capital may be assumed to be 10
per cent. Calculate NPV & comment on projects economic viability.
What is the primary objectives of inventory management within the context of working capital management?
What are cash equivalents and marketable securities, and how do they contribute to working capital
management?
Discuss the importance of efficient receivables management in working capital management.
Define Working Capital and explain its significance in the context of business operations.
Suppose that a company wishes to invest Rs. 20,00,000 in a 5-year long project that has a projected sales
revenue and cash operating expenses as given below. The project requires a straight-line method of
depreciation, with no salvage value at the end. Prevailing tax rate is 40%. Calculate Average Accounting Rate of
Return (ARR)
A machine will cost Rs. 500,000 and will provide annual net cash inflow of Rs. 150,000 for six years. The cost of
capital is 15 per cent. Calculate the machine’s net present value, profitability index. Should the machine be
purchased? Also comment on Payback period & discounted payback period
What methods do you suggest for estimating working capital needs? Illustrate your answer.
Briefly explain factors that determine the working capital needs of a firm
What is the importance of working capital for a manufacturing firm? What shall be the repercussions if a firm
has (a) insufficiency of working capital, (b) excess working capital?
Define Capital Budgeting and explain its importance in financial decision-making
Module 5
Explain the difference between internal and external sources of finance.
Provide examples of internal sources of finance that a company can utilize.
Define long-term finance and give examples of long-term financial instruments.
What is short-term finance, and why is it essential for businesses?
Discuss the advantages and disadvantages of using short-term loans for financing working capital needs.
What is project finance, and how does it differ from traditional corporate finance?
Why is project finance often used for large infrastructure and capital-intensive projects?
Discuss the merits and demerits of equity shares
Discuss the symbols and their implications used by CRISIL India for rating debentures.
Define credit rating. What is its function?
What are the features of trade credit as a short-term source of working capital finance?
Discuss briefly commercial papers as source of working capital finance.
How would you compute the cost of commercial papers?
Discuss Relation between Capital Structure and Corporate Value
Discuss briefly the features of equity shares as sources of long-term finance
What are the main attributes of debentures/bonds? What are their merits and demerits?
Briefly outline the main elements of the emerging system of bank financing of industry.
Briefly Factors Affecting an Entity ‘s Capital Structure
Explain Concept of Optimal Capital Structure
Explain following approach of capital structure theory
a) Net Operating Income
b) Traditional Approach
Explain following approach of capital structure theory
a) Modigliani-Miller Approach
b) Traditional Approach

Module 6
List four factors that can influence an entity's dividend decision
Explain importance of Dividend Policy in corporate finance.
Why do companies pay dividends to their shareholders?
What is a dividend yield, and how is it calculated?
Define the concept of dividend pay-out ratio?
How does the tax treatment of dividends differ for individual investors compared to capital gains?
What are the potential implications of a company increasing its dividend payments?
Provide an overview of the Gordon's Approach to dividend policy. How does this approach determine the
relationship between dividend pay-out and the cost of equity?
Describe Walter's Approach to dividend policy. What is the central idea behind this approach, and how does it
guide a company's dividend decision-making process?
How these factors affect dividend decision of business?
 Stability of dividends
 Legal, contractual and internal constraints and restrictions
 Dividend pay-out (D/P) ratio
 Owner’s considerations
Discuss the Modigliani-Miller Approach to dividend policy. What are the assumptions and implications of this
approach for a company's value and dividend pay-out?
What is the meaning of Dividend Policy in a corporate context? Why is it important for shareholders and the
company itself? How can a well-designed dividend policy contribute to a company's long-term financial stability
and growth?
Discuss how following Factors has impact on the dividend policy of a firm
 Dividend pay-out (D/P) ratio
 Capital market considerations
 Inflation
 Clientele effect