DISTANCE EDUCATION
M.B.A. DEGREE EXAMINATION, MAY 2018.
Third Semester
FINANCIAL MANAGEMENT
(Upto 2012-13 Academic Year and 2013 Calendar Year)
Time Three hours Maximum 100 marks
SECTION A — x 8 40 marks)
Answer any FIVE questions.
1. Describe in brief the aims of finance function.
2. What are the main decisions a financial manager usually
take?
3. What are the financial ratios? Explain.
4. Enlist various factors affecting requirements of fixed
assets in a large business.
5. Explain briefly about limitations of capital budgeting.
6. Differentiate operating leverage and financial leverage.
7. What is working capital? Factors to be consider for
working capital requirements.
8. Briefly explain the main motives for holding cash.
Sub. Code
31
DE-3769
2
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SECTION B — × 15 60 marks)
Answer any FOUR questions.
9. "Finance function of a business is closely related to its
other functions". Discuss.
10. Calculate the average rate of return for projects A and B
from the following
Projected Net Income (after interest, depreciation and
taxes)
Years Project Project
Rs. Rs.
1 2,000 3,000
2 1,500 3,000
3 1,500 2,000
4 1,000 1,000
5 1,000

6,000 10,000

If the required rate of return is 12% which project should
be undertaken?
11. Explain the factors affecting cost of capital along with
significance.
12. Following are the figures related to PQR to sales
Rs. 10,00,000, variable costs 40% of sales, fixed cost
Rs. 2,00000, interest Rs. 15,000.
Calculate
Operating leverage, financial leverage, combined
leverage. Also state charge in the above leverages if
selling price is increased by 15%.
13. Explain details about kinds of working capital and also
factors affecting working capital requirements.
14. Explain about chore committee and Nayak committee
report.
15. What is inventory management? Explain its objectives
and techniques.