Total No. of Questions 10] [Total No. of Pages 02
P.G. DIPLOMA DEGREE EXAMINATION, MAY 2017
BUSINESS MANAGEMENT
Financial Management
Time 3 Hours Maximum Marks: 70
Answer any Five questions
All questions carry equal marks
Q1) Define finance. Explain the objectives of Financial Management.
Q2) Write a brief account on financial intermediaries.
Q3) What is capital budgeting? Discuss different types of Capital Budgeting.
Q4) Define financial leverage and discuss the Degree of financial leverages.
Q5) The following is an extract from the financial statement of XYZ Ltd.
Particulars (Rs. Lakhs)
Operating Profit 180
Less: Interest on Debenture 48
132
Less: Income Tax 66
Net Profit 66
Equity Share Capital
(share of Rs. 10 each) 300
Reserve and surplus 150
16% Non-convertible debentures 300
750
The Market price per equity share is 11 and per debenture Rs. 95.
What is the earning per share?
What is percentage cost of capital to the company for the equity share and
debenture fund?
Q6) Explain any two theories of capital structure.
Q7) Discuss the problems in Determination of Cost of capital.
Q8) Explain Working capital policy in detail.
Q9) Discuss different techniques of Inventory Management.
Q10) The following information has been submitted by a borrower:
Expected level of production 1,20,000 units
Raw material to remain in stock on an average 2 months
Processing period for each unit of production 1 month
Finished goods remain in stock on an average 3 months
Credit allowed to the customer from the date of dispatch 3 months
Expected ratio of cost of selling price
raw material 60%
ii) direct wage 10%
iii) overheads 20%
Selling price per unit Rs. 10
Expected margin on sales 10%
You are required to estimate the working capital requirement of the
borrower.