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5+
v semester B.com. Examination, November/December 201g
(CBCS) (Repeaters) (201 6-17 Onty)
COMMERCE
5.5 : Elective Paper - I : Advanced Financial Management
Time : 3 Hours Max. Marks : 70
lnstruction : Answer should be completety written either in English or
in Kannada.

SECTION .A
Answer any 5 sub-questions. Each sub-question carries 2 marks
(5x2=10)
1. a) Mention any two forms of dividend.
b) Name any two types of working capital.
c) What is optional capital structure ? l
d) What is risk analysis ?
e) What is risk adjusted discount rate ?
f) Expand EBT and EPS.
g) Profit after tax { OO,OOO, number of equity shares 6000. finO out EPS.

SECTION _ B
Answer any 3 questions. Each question carries 6 marks each. (3x6=18)
2. Briefly explain the sources of working capital.

3. Write a brief note on the motives for holding cash.

4. Briefly explain about M.M. approach.

5. Nakul and company requires 25,000 units of certain articles per year the
purchase price of per article is t 20. Carrying cost 1 Oo/o at inventory value and
the fixed cost per order is t 200.
a) Determine EOQ.
b) How many times per year will inventory be ordered, if size is equal to the
EOQ ?

6. Sahana Ltd. has Net Operating lncome of T 100 million. lt employed t 400
million of debt capital earrying 15% interest, the equity capitalized rate is ZQoh.
What is the market value under Nl method ?
P.T,O.
ss - 501 -2- llilllilltiltilllllilililililffir

SECTION _ C
Answer any 3 questions. Each question carries 14 marks. (3x14=42)
7. Explain the assumptions and implications of the Nl approach and the NOI
approach.
8. What is sensitivity analysis ? What are its advantages and disadvantages ?
9. What is working capital ? What are the determinants of working capital ?
10. A firms cost of capital is 10%, it is considering two mutually exclusive projects
'X'and 'Y'. The details are given below :
Year Proiect X Profect Y
(T) (()
lnvestment Net cash flow 70.000 70.000
1 10,000 60,000
2 20,000 40,000
3 30,000 20,000
4 45,000 10,000
5 60,000 10,000
1,65,000 1,40,000
Gompute :

Taxback period and net prevent value method.

PV factor @ 10o/" for 5 years :
Year 12345
PV lactor @ 10Yo 0.909 0.826 0.751 0.683 0.621
11. From the information given below, prepare cash budget of Nakul Fashions for
the month of May, Juie, July.
May June July
(r) (r) (T)
Sales 12,00,000 12,00,000 16,00,000
Purchases 11,40,000 10,90,000 11,25,000
Flent paid . 25,000 25,000 25,000
Drawings for personal use 12,500 12,500 12,500
Salaries and other exps. 75,000 60,000 90,000
Furniture purchased 1,05,900
Other information :
a) The present cash balance is T 27,000, their target cash balance t 32,500.
b) All sales will be in cash basis
c) Payments for purchases will be made after a lag of one month. Outstanding
on account of purchases in April is t 10,50,000.
What will be surplus/deficit of cash in relation to their target cash bdlance ?
Iil]iltililtil ililililtilillll -3- ss - 501

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C>Qaaddra 5 e,Dd-€,-d4r19rl eru$Otu. {,8otood: erud-{d4ri 2 eo8rl$). (5x2=10)

1 . a) oqloo$d otadcrrddra add) Adri$dr4 e9tu.

b) c$ad:rd uodoro$d o$adc;addro Dddt edrt$di e9tu.
' c) o%94, uodaro$ dais aoddtnb ?

d) rlomodd ad_(dd aodded> ''t

e) rloaaodd doccaolJis[i doeG dd aodded> ?

f) EBT d:dj EPSTiSdI aio.r, udos:o.

g) dorl ddd doddd mdd dJo. 60,000, xadnd, de&ri$ Bord, 6000. EPS $4
dod;bEolrO.

A?f,od - u)

odndenddra dlJo& €,d4r19d erodOPr. €,e d,d4ri 6 etodrl$. (3x6=18)

2. d:aCJJd uodaro$d aad Croe.trl$d.: doa*dann DdoRr.

3. oea baeuDiiJosta erooegilg

e.ieOnc^trr un SoEdd"R adotu.

4. dnanlo$of tu%cf {Bdr laaodd dra#o$ u{adon.

5. d$ef drq dod&ob aieadCr {,e ddr$ fDdrEcb 25,000 d$rle&qd. udd
do$:d LJeJoJr: r-od.: dBreri dro. 20 "ad:. doadrrtsd: de$OBu: doS,:d aJejod))
?ro'ctv
se . 10da&6d. r,od: $oee egdedd tud daJdr drD. 20OriqroRdrdd.
eJrAr
a) sQFd erded {dnea (EOO)dd1.doC>&Go):o.
b) ddrdo adgmo d^s1>F udeddso doda3ead:dd, erdd mgd) EOQrI ndbasDnoaJrl ?

6. idd dod&o$, p{9 edrdraa eJcrro$d (NOl) dro. 100, tuOo$or soel d,add
ulodaag dr?. 400 tueo$tf, uqdd$ 15"/", uodaa$aaR erDdoloeAxbd ddd
2Ao/o, Nl s6add 6rad $odo$ d$orddl dodrbBog:D,
ss - 501 -4- Il!il|flil]rilriltililrflillr
aqJDrl - :)
olndoaddra dlJa$ 4,d",rt9ri erudOtsr. d,e -'q1d4ri 14 eeodrl$c. (3x14=42)
7. Nl a@drl$ dfrdl NOI aWadrld enodrl$ d:* dro?3dr19 a;{BcsdarA Odol.
8. fu{rrDdJdd aodded: ? .qdd erdldoe.tdrl$r d:$ eucd:dee.rdr'(Sdtr z.t?3rxr.
9. &aoJ>d uoduoddoddedl ? draCDd z^lodao$ddlCmrogJ$d &maro$drlvad;d ?

10. de. 1Odod uodaad ddd$ dooadld z"oub ioto$ ddid dod&daiododd 'X'
at * 'Y' aou add> or,f*oSLrrdldooad. erdrifadddd3 di dddodoed.
ddr olaeegd X oloerd Y
(d.o.) (dra.)
droad ddc: z"ddodl 70,0QQ 70.000
1 10,000 60,000
2 20,000 40,000
3 30,000 20,000
4 45,000 10,000
5 60,000 10,000
1,65,000 1,40,000
€r add: oSoeadrlgri uodans a3rdraads udQ d.rd.l &dd$ {,,Sld d$ord$o
Eod>bGolro.
5 ddrrleri de. 1Odod 619g d$e.:rd erod :

ddr12345
de. 1Odod dtd dPerrd uod 0.909 0.826 0.751 0.683 0.621

11. "dd:er F?ddrf"ddd I Eodd.: dleog:od rceJrddnd ddd eo6?wo dtdo$dldq$aol.

-?rn
e^]J\ XAOO
9j\/9lv- 9...Q
*-a,

(d.ro.) (d,0.) (d".)

dncntg 12,00,000 12,00,000 16,00,000
drad*d)cb ($oeax,d>J 1 1 ,40,000 10,80,000 1 1,25,000

zroGri $e Aorid: 25,000 25,000 25,000

{od $a$rridc 12,500 12,500
\
12,500
ioud af:{ "add $zd:r 75,000 60,000 90,000
aednedddea $oeo 1,05,000
edd dnbg:
a) abe Eorid a3dorpd drl* $o* do. 27 ,OOO, edad dcuerb $e Sodvf: do. 32,500.
b) aen_dnolrrd drld droddo_ddad.
c) a)oeo uuimdo$ uocb gorld aepdQo$O_ddoJDEd. erddod Dgef dej)oeoo$
doue.:rb do. t 0,50,000 rot "add dzd:,.d0 (Surplus) abQ drDdd (def icit)d1Orlad
do u0ri do eopv dod:aaor:0.