B.B.A. (Semester VI) Examination Oct/Nov-2017
FINANCIAL MANAGEMENT- II
Day Date: Wednesday, 15-11-2017 Max. Marks: 80
Time: 10.30 AM to 01.30 PM
Instructions: All questions are compulsory.
Figures to the right indicate full marks.
Use of Calculator is allowed.
Q.1 Choose the correct alternatives: 08
If average inventory is Rs. 55000 and value of closing stock is Rs. 4000
more than opening stock then value of closing stock is Rs.
57000 52500
57500 50000
If current ratio is 2.25 and working capital is Rs. 320000 then the value of
current liabilities are Rs.
300000 200000
500000 256000
A document which advertises the sales of a company is known as
Journal Prospectus
Trust Deed Debenture Certificate
Acid Test ratio is also called as ratio.
Liquid Current
Working Capital Debt Equity
The accounting equation is
Capital Assets Liabilities Capital Liabilities Assets
Both of them None of them
Sales minus Cost of Goods Sold
Net Profit Gross Profit
Operating Profit Net operating Profit
If credit sales are Rs. 560000 and Debtors are Rs. 120000 then average
collection period of debtors is
78 73
71 72
Which of the following attracts a fixed rate of dividend?
Debenture Equity Shares
Preference Shares Loan
Page 2 of 2
SLR-CB-44
Q.1 Fill in the Blanks: 08
In a trading concern, opening stock purchases closing stock is equal to

determines the number of years required to recover initial
investment outlay.
Capital markets are a sub-part of the system.
ratios relate profit to sales and investments.
NPV stands for
If working capital Rs.29000, Current Liabilities Rs.19000, then Current
Assets
Profitability index is the ratio of the present value of to the initial
cash outflows.
is a payment of additional shares to shareholders in lieu of cash.
Q.2 Solve the following Questions: 16
Calculate the cost of Debentures
13% Debentures Rs.100 each issued at par and redeemable after 3 years at
5 premium. Floatation Cost is of issue price. Corporate tax rate 35%
Calculate the cost of Preference Shares
Preference Share of Rs. 100 each issued at par and redeemable after 4
year at premium.
Floatation Cost is 2.5% of issue price.
Q.3 Solve the following Questions: 16
Opening Stock Rs. 20000 Purchases Rs. 400000
Sales Rs. 500000 Gross Profit 20% on sales
Calculate Stock Turnover Ratio
Capital Employed Rs. 80000 Net Fixed Assets Rs. 60000
Cost of Goods Sold Rs. 200000 Gross Profit Rs.40000
Calculate Working Capital Turnover Ratio
Q.4 Attempt any one question: 16
Compute the Pay Back Period and ARR from the information given below:
Purchase price of Machine Rs. 7500000
Useful Life of Machine 5 years
Tax Rate 35%
Earnings before depreciation and tax Rs. 2050000 p.a.
State the various factors determining dividend policy.
Q.5 Attempt any one question: 16
Prepare Trading Account, Profit Loss Account and Balance Sheet.
Gross Profit Ratio 20%
Net Profit Ratio 10%
Stock Velocity 1.5 month
Retained Earnings/Proprietors Funds 1/5
Proprietors Funds/ Total Funds 5/6
Fixed Assets/ Proprietors Funds 2/3
Fixed Assets/ Total Current Assets 8/5
Fixed Assets Rs. 3600000
Closing Stock Rs.100000
Average Stock Rs. 200000
What is Stock Market? Explain the different functions of stock market.