Need Answer Sheet of this Question paper, contact
www.mbacasestudyanswers.com
ARAVIND – 09901366442 – 09902787224
Financial Management
Part one:
Multiple choices:
1. The approach focused mainly on the financial problems of
corporate enterprise
a. Ignored non-corporate enterprise
b. Ignored working capital financing
c. External approach
d. Ignored routine problems
2. These are those shares, which can be redeemed or repaid
to the holders after a lapse of the stipulated period
a. Cumulative preference shares
b. Non-cumulative preference shares
c. Redeemable preference shares
d. Perpetual shares
3. This type of risk arise from changes in environmental
regulations, zoning requirements, fees,licenses and most frequently taxes
a. Political risk
b. Domestic risk
c. International risk
d. Industry risk
4. It is the cost of capital that is expected to raise funds
to finance a capital budget or investment proposal
a. Future cost
b. Specific cost
c. Spot cost
d. Book cost
5. This concept is helpful in formulating a sound &
economical capital structure for a firm
a. Financial performance appraisal
b. Investment evaluation
c. Designing optimal corporate capital structure
d. None
6. It is the minimum required rate of return needed to
justify the use of capital
a. From investors
b. Firms point
c. Capital expenditure point
d. Cost of capital
7. It arises when there is a conflict of interest among
owners, debenture holders and the management
a. Seasonal variation
b. Degree of competition
c. Industry life cycle
d. Agency costs
8. Some guidelines on shares & debentures issued by the
government that are very important for the constitution of the capital
structure are
a. Legal requirement
b. Purpose of finance
c. Period of finance
d. Requirement of investors
9. It is that portion of an investments total risk that
results from change in the financial integrity of the investment
a. Bull- bear market risk
b. Default risk
c. International risk
d. Liquidity risk
10. _____________ measure the systematic risk of a security
that cannot be avoided through diversification
a. Beta
b. Gamma
c. Probability distribution
d. Alpha
Part Two:
1. What is Annuity kind of cash flow?
2. What do understand by Portfolio risk?
3. What do you understand by ‘Loan Amortization’?
4. What is the Difference between NPV and IRR?
Section B: Case lets
(40 marks)
Case let 1
Question:
1. Which type of financing is
appropriate to each firm?
2. What types of securities must
be issued by a firm which is on the growing stage in order to meet the
financial requirements?
Case let 2
Question:
1. How would you judge the
potential profit of Bajaj Electronics on the first year of sales to Booth
Plastics and give your views to increase the profit.
2. Suggestion regarding Credit
limit. Should it be approved or not, what should be the amount of credit limit
that electronics give to Booth Plastics.
Section C: Applied
Theory (30 marks)
1. Honey Well Company is
contemplating to liberalize its collection effort. Its present sales are Rs. 10
lakh, its average collection period is 30 days, its expected variable cost to
sales ratio is 85 per cent and its bad debt ratio is 5 per cent. The Company’s
cost of capital is 10 per cent and tax are is 40 per cent. He proposed
liberalization in collection effort increase sales to Rs. 12 lakh increases
average collection period by 15 days, and increases the bad debt ratio to 7
percent. Determine the change in net profit.
2. Explain the concept of working
capital. What are the factors which influence the working capital?
Need Answer Sheet of this Question paper, contact
ARAVIND – 09901366442 – 09902787224
No comments:
Post a Comment