B.B.A. (Semester VI) (CGPA) Examination, 2017
FINANCIAL MANAGEMENT-II
Day Date: Tuesday, 18-04-2017 Max. Marks: 70
Time: 10.30 AM to 01.00 PM
N.B. All questions are compulsory.
Use of calculator is allowed.
Q.1 Multiple Choice Questions: 07
Which of the following capital budgeting techniques may
potentially ignore part of a project's relevant cash flows?
NPV IRR
Payback Period Profitability index
The Payback period is the
Length of time over which the investment will provide cash
inflows.
Shortest length of time over which an investment may be
depreciated.
Shortest length of time over which the net present value
will be positive.
Length of time over which the initial investment is
recovered.
You have three mutually exclusive projects: and C.
They have NPVs of Rs.50000, -Rs.20000 and +Rs.100000,
respectively. What should you do?
Accept A Accept B
Accept C Accept A and C
What are gilt-edged securities in India?
Securities issued by the government
Securities issued by the private sector
Securities issued by the multinationals
Securities issued by companies
The National Stock Exchange is located in
New Delhi Mumbai
Nagpur Kolkata
Bull market and Bear market are associated with which
branch of commercial activity?
Foreign Trade Banking
Manufacturing Share Market
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SLR-SINA 44
In Capital Market, SRO stands for
Self Regulatory Organizations
Small Revenue Operations
Securities Roll-back operations
Securities Regulatory Organizations
Q.1 Fill in the blanks. 07
Fixed Assets Capital Employed
COGS= Gross Profit
Operating Cost Operating Expenses
If Current Ratio 2.8 and Current Assets Rs.252000 then
Current Liabilities= Rs.
Assume that a project consist of an initial cash outlay of
Rs.100000 followed by equal annual cash inflow of Rs.
40000 for 4 years. Pay Back Period
market deals with long term securities.
Capital Structure is mix of and equity.
Q.2 Solve any two: 14
Compute the Proprietors Fund and Capital Gearing Ratio
15% Long Term Debts-
Rs.800000
18% Preference Share Capital
Rs.100000
Equity Share
Capital-Rs.200000
Reserves Surplus-Rs.150000
Preliminary Expenses-Rs.50000
X Ltd. Has a Current Ratio of Quick Ratio of 3:1 and Stock
Rs.36000. Calculate the Current Assets and Current Liabilities.
Write Note on- Functions of Stock Market
Q.3 Write short notes (Any two) 14
A company issued Rs.1Crore, 11% Debentures of Rs.100 each.
Corporate Tax Rate is 25%. What would be the Cost of
Debentures in case they are issued at par with Floatation
Cost?
A company issued Rs.1Crore, 12% preference shares of Rs.100
each. Dividend Tax Rate is 20%. What would be the cost of
preference shares in case they are issued at 10% premium with
Floating Cost?
Write note on- Forms of Dividend Payment
Q.4 Solve any one: 14
A Company is considering three mutually exclusive investments
Project Project Q and project R. The expected cash outflow for
all projects is Rs.2000000 each. The expected cash inflows are
given below:
Year Project P Project Q Project R
1 1400000 500000 500000
2 600000 1100000 500000
3 400000 900000 1600000
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SLR-SINA 44
Calculate the Net Present Value and advise the management of
company to choose the best project if the cost of capital is 10%.
For calculation of Discounting Factor of Re.1 consider a decimal
number with two decimal places.
Explain the features of Money Market.
Q.5 Solve any one: 14
Prepare Balance Sheet Showing the details of working.
Net Worth Turnover Ratio (on Cost of Sales)=2
Fixed Assets Turnover Ratio (on Cost of Sales)=4
Gross Profit Ratio=20%
Creditors Velocity=73 Days
Debtors Velocity=2 Months
Stock Velocity 6
Reserves and Surplus Rs.10000
Closing stock was Rs.5000 in excess of opening stock.
Gross Profit=Rs.60000
Explain the Capital Budgeting Techniques in detail.