DISTANCE EDUCATION
M.B.A. DEGREE EXAMINATION, DECEMBER 2017.
Third Semester
FINANCIAL MANAGEMENT
(Upto 2012-13 Academic Year and 2013 Calendar Year)
Time Three hours Maximum 100 marks
SECTION A — × 8 40 marks)
Answer any FIVE questions.
1. What are the function of finance?
2. What are the steps involved in financial planning?
3. Explain about over and under capitalization.
4. Enumerate about factor influencing working capital
requirements.
5. Briefly explain the meaning and limitations of cash flow
statements.
6. What are the limitations of capital budgeting?
7. What do you mean by marginal costing and how it will
help for decision making purpose?
8. Explain briefly about factors that determining cash
needs.
Sub. Code
31
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SECTION B — × 15 60 marks)
Answer any FOUR questions.
9. What are the objectives of financial planning? Does it
suffer from certain constraints?
10. Following financial data are given
Sales for the year Rs. 4,00,000
Stock Rs. 2,00,000
Credit sales Rs. 3,00,000
Debtors Rs. 1,50,000
Total Assets Rs. 6,00,000
Share capital
(20000 shares of Rs. 10 each) Rs. 2,00,000
Net profit after tax Rs. 1,00,000
Market price per share Rs. 20
From the above information compute.
Stock turnover ratio
Creditors turnover ratio
Net profit to total assets ratio
Earning per share
Price earning ratio.
11. What is capital Budgeting? Define and also explain the
capital budgeting methods commonly used to evaluate
fixed assets under a formal capital budgeting system?
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12. There are two similar plants under the same
management. The management desires to merge these
two plants. The following particulars are given
Capacity operation Factory I
100%
(Rs. Lacs)
Factory II
60%
(Rs. Lacs)
Sales 600 240
Variable costs 440 180
Fixed Costs 80 40
You are required to calculate the capacity of the
merged plant to be operated for the purpose of breakeven,
and the profitability on working at 75% of the
merged capacity.
13. What were the main issues studied by Tandon committee
to exercise control over working capital?
14. Calculate payback periods of the following project each
requiring a cash outlay of Rs. 1,00,000. Suggest which
projects are acceptable if the standard pay back period is
5 years.
Year Project A Project B Project C
1 30,000 30,000 10,000
2 30,000 40,000 20,000
3 30,000 20,000 30,000
4 30,000 10,000 40,000
5 30,000 5,000
15. Calculate the operating, financial and combined beverage
from the following information:
Rs.
Interest 5,000
Sales 50,000
Variables cost 25,000
Fixed costs 15,000
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