B.C.A. (Semester III) (CGPA) Examination Mar/Apr-2018
FINANCIAL MANAGEMENT
Time: 2½ Hours
Max. Marks: 70
Instructions: Q.1 and Q.7 are compulsory. Attempt any two questions from Q. 2 to Q. 4. Solve any one questions from Q.5 and Q.6. Figures to the right indicate full marks.
Q.1

Choose the correct alternatives.
07
As an objectives of financial management maximization is better than profit maximization.
Money
Assets
Wealth
Profit after tax
assets are defined as those assets which in normal course of business are convertible into cash usually within one year.
Fixed
Current
Fictitious
None of these
Financial decision involves
Investment, Financial and Dividend decisions.
Sales decisions.
Profit Decisions
None of these
When a corporation is earning an extraordinarily large return on its outstanding stocks it is said to be
Working capital management.
Over capitalization
Under capitalization
All of the above
Short term assets which in the normal course of business are convertible into cash within
2 year
1 year
4 year
3 year
Holder receives a fixed rate of interest irrespective of profits made by the company.
Debenture
Equity
Preference
None of these
The leverage of a firm is essentially related to measures.
Assets
Profit
Expenses
Cost
Q.1

State True or False.
07
The financial manager takes key decisions on the allocation and use of funds by various departments.
Working capital is considered to be the life blood of business.
Operating cycle starts with cash and end with profit.
The formula for computation of operating leverage contribution/operating profit.
The combined leverage is a measure of total risks of the firm.
Financial planning is incomplete without cash budgets.
EBIT is also known as operating profits.
Page 2 of 2
SLR-CV-5
Q.2
Write a short note:- (Any two)
14
Define capitalization and Explain over capitalization.
Explain steps of financial planning.
Define business finance.
Q.3
Write a short note:- (Any two)
14
Define financial management and Explain objectives of financial management.
Define working capital and Explain types of working capital.
Explain operating cycle of working capital.
Q.4
Write a short note:- (Any two)
14
Define working capital and explain the Determinant/Factor affecting working capital.
Explain the Degree of combined leverage.
Discuss the role of financial manager.
Q.5
Write a short note:- (Any two)
14
Define finance. Explain function of financial manager.
Banking committee computation of working capital.
Merit and demerits of wealth maximization.
Q.6
While preparing a project report on behalf of a client you have collected the following facts. Estimate the net working capital required for that project. Add 10 per cent to you computed figure to allow contingences.
Particular
Amount per unit
Raw Material
80
Direct labour
30
Overheads
60
Total cash cost
170
14
Additional Information:
Selling price Rs. 200 per unit.
Level of activity 1,04,000 units of production per annum.
Raw material in stock average 4 weeks.
Work in progress (assume 50 per cent completion stage in respect of conversion costs and 100 per cent completion in respect of materials) average 2 weeks.
Finished goods in stock, average 4 weeks.
Credit allowed b supplier, average 4 weeks.
Credit allowed to debtors, average 8 weeks.
Lag in payment of wages, average 1.5 weeks.
Cash at bank is expected to be Rs. 25,000.
You may assume that production is carried on evenly through the year (52 weeks) and wages and overheads accrue similarly all sales are on credit basis only.
Q.7
Explain Operating, Financial and Combined leverage with suitable example.
07
Define capitalization and Explain theories of capitalization.