D.B.M. (Semester II) (Examination Oct/Nov-2017
FINANCIAL MANAGEMENT
Day Date: Monday, 20-11-2017 Max. Marks: 80
Time: 02.30 PM to 05.30 PM
Instructions: Q. No. 1 is compulsory.
Figures to the right indicate full marks.
Use of calculators is allowed.
Q.1 Choose the correct alternative. 08
If current Ratio is 2 working capital is 100000 then the value of current
liability is
100000 50000
200000 300000
Prepaid Expenses is
Fixed Asset Current Assets
Current Liability Fixed Liability
Liquid ratio is also called as
Acid Test Current
Working Capital Debt Equity
is a payment of additional shares to shareholders in lieu of cash.
Stock Spilt Bonus share
Extra dividend Regular Dividend
ratios related to capital structure of the company.
Liquidity Leverage
Activity Profitability
is non discounted technique of Capital Budgeting.
Pay Back Period PI
NPV None of these
The scope of finance function is concerned with
Financing Decisions Dividend Decisions
Investment Decision All of these
is a internal source of capital for the company.
Equity shares Retained earnings
Debentures Preference Shares
Q.1 Fill in the blanks: 08
ARR Stands
NPV stands for
PI Stands
SEBI Stands for
Reserves Surplus to capital =0.5. If Capital Rs. 100000, then R S

Shareholders are paid dividend at fluctuating rate.
is paid to debenture holders for supply of capital.
Wealth Maximization refers to Maximizing wealth of
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SLR-CE-15
Q.2 A steel Ltd. Is considering projects, requiring initial cash outlay of Rs.
each and have a life of five years. The companies required rate of
return is 10% and pays 50% tax. The project will be depreciated on a SLM
basis. The profit before depreciated and taxes are as follows.
08
Year 1 2 3 4 5
EBDT 6,000 3,000 2,000 5,000 5,000
You are required to calculate following:
Payback period of each project
NPV and Profitability index
Objectives of financial Management. 08
Q.3 Functions of Finance Manager 08
Current Ratio: 2.4
Liquid Ratio: 1.6
Net Working Capital: 2,80,000
Calculate:
Current Assets,
Current Liability,
Liquid Asset and stock.
08
Q.4 Prepare an estimate of working capital requirement from the following information
of a trading concern:
16
Project annual sales 1,00,000 units.
Selling Price Rs. 8 Per Unit.
Percentage net profit on sales 25%.
Average credit period allowed to customers-8 weeks.
Average credit period allowed by suppliers-4 weeks.
Average stock holding in terms of sales requrirement-12 weeks.
Allow for 10% for contingencies.
OR
Explain the different discounted and non discounted techniques of capital
budgeting.
Q.5 Explain dividend policy. Also explain the determinants of dividend policy. 16
OR
Explain the different Long terms Sources of finance in detail.