{AONE SN - 467 Ill Semester B.Com. Examination, November/December 2017 (CBCS) (Semester Scheme) (2015-16 and Onwards) (F + R) COMMERCE 3.4 : Financial Management Time : 3 Hours Max. Marks : 70 Instruction : Answer should be written completely either in English or inKannada. SECTION-A ‘Answerany five sub-questions. Each sub-question carries two marks. (5x2=10) 1. a) Give the meaning of Finance. b) Define Financial Management. c) Whatis time value of money ? d) Expand EAT, EBIT and PAT. e) What do you mean by investment decision ? f) Whatis dividend decision ? ) Calculate the future value of a sum of & 1,000 if itis invested at 8% interest for a period of one year. SECTION-B Answerany three questions. Each question carries six marks. (3x6=18) 2. Explain the steps in Financial Planning. 3. Explain the need for time value of money. 4. Calculate the future value at the end of five years of the following series of payments at 10% rate of interest % 4,000 at the end of 1Styear % 5,000 at the end of 2"4 year 6,000 at the end of 34 year 27,000 at the end of 4" year % 8,000 at the end of 5" year P.T.O.SN-467 oa {AN 5. Calculate operating leverage and financial leverage from the following : Sales —% 1,00,000 at? 5 per unit Variable cost -2 1 per unit Fixed cost - 1,00,000 Interest expenditure —% 20,000. 6. Rajesh and Co. is considering the purchase of a machine. Two machines A and B each costing 50,000 are available. Cash inflows are expected to be as under. Calculate payback period : Years Machine A Machine B 1 15,000 5,000 2 20,000 15,000 3 25,000 20,000 4 15,000 30,000 5 10,000 20,000 SECTION-—C Answer any three questions. Each question carries fourteen marks. (3x14=42) 7. Explain the factors influencing capital structure. 8. Whatare the principles of sound financial planning ? 9. Compare two companies in terms of its financial, operating and combined leverages : Particulars Firm ‘A’ Firm ‘B’ Sales %20,00,000 —%80,00,000 Variable cost 40% of sales 30% of sales Fixed cost %5,00,000 %7,00,000 Interest 2 1,00,000 2 1,25,000 Interpret the results of the firms.-3- SN-467 10. A firm whose cost of capital is 10% is considering two Projects X and Y, the details of which are Invesiment Cash inflow: lyear Ilyear Wl year IVyear Vyear Total Project ‘X’ in 1,00,000 20,000 30,000. 40,000 50,000 60,000 2,00,000 Project ‘Y’ in 1,00,000 45,000 40,000 30,000 10,000 8,000 1,33,000 Compute the internal rate of return for the two projects separatly. Project X by 20% and 29% and Project Y by 9% and 15%. Use the following discount for calculating IRR. Project X Project Y Years 20% 29% 9% 15% 1 0.833 O75 0917 0.870 2 0.694 0.601 0842 0.760 3 0.579 0.466 0772 0.688 4 0.483 0.361 0708 ©0572 5 0.402 0.280 0650 0.497 . Cash flow of X project are given below : Year Cashflow PV factor at 10% 1 20,000 0.909 2 30,000 0.826 3 60,000 0.751 4 80,000 0.683 5 30,000 0621 The salvage value at the end of St year is 40,000. Calculate the Net Present Value.SN-467 4 {AMO oinammaidea nao eum-weenen engor. Bagg aca woare, (8x2=10) 1. a) Srmadegraay ee b) Beomasaairarioiay my s0,0%. 0) weed Aatatb ate, nocidead? d) EAT, EBIT stoz3 PATago%. e) Anodmen aror ocbway, Head werk ern? f) oowecd dear ot aonten 7 Q) % 1,000 day deeed 8 B wtmotdod word ate menor adoinenaad edd Bas BPysay tordsto@eno. ayer- 0 eed oingimdide mat Barer ergor. BIasT cd eoenv. (8x6=18) 2. wromrs oSmensododygih stosride anton. 3. sadam args wale SSreay DROA, 4, sitund xosSmnmtothay, G8 duro dado, See 10 wamaleacd, acd aaiere menaigabd, ead Boa, Pe siay SordsbeBoN09. % 4,000 ateniodod Barc wos, 0, 75,000 additod xara ecg nO, % 6,000 shaddod akird vega, %7,000 meso Bard eog39, 78,000 nekdcn aisles e090,‘OA 5 SN-467 5. Bdindriocd maine dds Saves she) wramoadd Oxideesrrieaty docdotoeacnyo : Anois -F 100,000 ais aise TS emosdvera desde - xe Pues U1 49 ded" F1,00,000 0, edF -% 20,000. 8. cancer ahey dostdaw word obey) sdocaren woriedaech Odo A bay Ctbeg B aca adbosirie ede % 50,000. aricds eBoy ss EeNaos DOegSeDNG, Lomas eahodray, dorss’ol000, Bair zie odes, A obog, B z z 1 15,000. 5,000 2 20,000 15,000 3 25,000 20,000 4 15,000 30,000 5 10,000 20,000 Aypr- 2 canaicpaida sath alérien eugon. a3 geyiainmey votre, (3x14=42) 7. wodane cedar dees wecbscos wosrieat, DBO, 8. RR BeowoAd odoewsord: S28 reese 2 9. adc somtarieay ward soodver wddes aise) docineess Onder shosnedd Bate Bre: ascnv ok, a FoR Ro %20,00,000 %30,00,000 A ox mq} Dedveried amovtes40% — amonit30% ag auberido %5,00,000 _€7,00,000 a %1,00,000 %1,25,000 24 Rorine Bosceriday dzOA, ctSN-467 6 ‘A eA 10. womb Aod, 3, adedo cece X mayy BBS10 Drorend apn Rortedgs. eartd andes 33 O83 33: asdn obaces’ osc Y” z z daosaen, 1,00,000 1,00,000 arich weatos): lane 20,000 45,000 Wate 30,000 40,000 MW abate 40,000 30,000 IV aie 50,000 10,000 Vac 60,000 8,000 tn, 2,00,000 1,33,000 dete olnenciny wosee Sealed ddstsy sfdeeann docbbaactoo. ofeenad X Sed 20 adap Sets 29 amarin odeensd ¥ Beets 9 isa Seded 15, s1 dens Doses eodsich,whdnot ose oeuatr ddsiay dorbtomacwo cdwews X nes ¥ Barn 20% 29% 9% 15% + 0.833 0.775 0.917 0.870 0.694 0.601 0.842 0.750 0.579 0.466 0.772 0.658 0.483 0.361 0.708 0.572 0.402 0.280 0.650 0.497NE 7 ‘SN-467 11. oSmeessd X Carch wos s Beri dodeand: Saenw Sitch Box, &. D. BABDe Fewes 10 os. z z a 20,000 0.909 2 30,000 0.826 3 60,000 0.751 4 80,000 0,683 5 30,000 0.621 Soe Rar og Se, OB Pe € 40,000ceh Aaj dabsatPeyah docswacio,