(9002I63

SOMAIYYA
VDYAVDAR UNVCRSTY

Trimester: July 2022

Examination: End Term Examination

code:01 Trimester: 11
Programme Class: FY
Programme: MBA A,B,C,D (SVU 2021)
Name of the
Name of the Constituent College:
department/Section/Center:
K.J. Somaiya Institute of Management
Management
Course Code:117PO1C304 Nameof the Course: Financial Management
Marks S0 Duration 3 hrs Date: 07th July 2022
Question
No. Ma
X.

Ma
rks

Instructions

1. Write your assumptions wherever necessary..

2. Students are allowed to use calculators.

3. ANSWER TO ALL 5 QUESTIONS IS cOMPULSORY

Q.1) ABC LTD furnishes the following information of its companyfor the year 2018.Estimate
10
the working capital needs of the companyon regular as well as cash cost basis.

Sales (2 Months Credit) 80,00,000

Materials consumed(suppliers give 2 month credit) 26,00,000

in 14,40,000
Wages paid (monthly arrear)

1 month in arrear) 8,00,000

Total manufacturing expenses(paid

in advance) 12,00,000
Sales promotion expenses(Quartely

70% of current liabilities

Cash balance

Rate of Gross profit

20%

The company keeps stock of Raw Material and Finished goodsfor 1 month,

into account the safety margin of

Estimate the working capital for the company, taking

20%.
 Ss-
ST

Q.2)

note on Weighted Average Cost

of Capital (WACc).
Explain
(a) Write a short
What are the assumptions of
the steps involved in of WACC.
computation
WACC. to
information and requested you
(6) XYZcompany supplied the following
book values and market values
compute the cost of capital based on

Source of finance Book value(Rs.) Market After tax cost(%)

value(Rs.)

13,00,000 1500,000 12
Equity capital

Long term debt 900,000 950,000

Short term debt 200,000 200,000

Q.3) Akshay Ltd., is considering the purchase of one of the following machines
whose relevant data is as follows: 10

Particulars MachineX Machine Y

Estimated life (Years) 3
Capital cost Rs.180,000 Rs.180,000
Earnings afterTax
Year 1
Rs
90,000 80,000
Rs.

Year 2 50,000 90,000

Year 3 50,000 60,000

of depreciation;the estimated salvage

The company followsa straight line method
both the machines is zero. Assume 10% cost of capital
value of
Show the most profitable investment based on:

(1)Net Present Value (NPV)

(2) Profitability index

Q.4) From the financial statements of Z Ltd Calculate ratios under the

following heads

and Profitability Ratios and write your analysis for the 10

Liquidity Ratios,
same.

BALANCE SHEET (Rs in Lakhs)

liabilities 2018 2019 Assets 2018 201
9
EquityShare 500 600 Fixed Assets 600 650
capital

Preferencecapital 100 100 Investments 100 150

Debentures 200 300 Debtors 5 200

Creditors 150 200 Bills Receivable 100 150

Bills Payable 300 250 stock 150 180

Bank overdraft 125 100 Cash in hand 100 120

Outstanding 80 100 Bank balance 155 200

expenses

TOTAL 1455 1650 TOTAL 1455 165

INCOME STATEMENT (Rs in lakhs)

201 2019
800 1000
Sales
coGS 500 600

Gross Profit 300 400

expenses 125 225

-operating

NPBT 175 175

-tax 52 45

NPAT 123 130

Q.5) Write Short notes

on any Two of the following

1) Turnover Ratios
10

2) Explain WACC with the help of an example.

3) Differentfactors influencing working Capital.

4)Different techniques of Capital Budgeting