D.B.M. (Semester (CBCS) Examination, 2017
FINANCIAL MANAGEMENT
Day Date: Monday, 08-05-2017 Max. Marks: 70
Time: 02.30 PM to 05.00 PM
N.B.: Question .No. 1 is compulsory.
Figures to the right indicate full marks.
Use of calculators is allowed.
Q.1 Select correct alternatives: 07
Excess of current assets over current liabilities is called as
Net Current Assets Gross Working Capital
Gross Current Assets Net assets
working capital is permanently locked up in the business.
Fluctuating Seasonal Fixed Variable
If current Ratio is 2 working capital is 100000 then the value
of current liability is
100000 50000 200000 300000
refers to that portion of company's net earnings that are
paid out to the equity shareholders.
Authorized Capital Dividend
Stock Split Paid up Value
is discounted technique of capital budgeting.
Pay Back Period Net Present Value
ARR None of these
debentures are those debentures that are not
transferable by mere delivery.
Bearer Registered
Mortgaged Convertible
Acid test ratio is also called is
Liquid Current Working Capital Debt Equity
Q.1 Fill in the blanks with appropriate word: 07
Working Capital
Gross Working Capital refers to
is the capital required to spent on day to day business
activities.
Equity shareholders are the of the company.
Page 1 of 2
SLR-S 16
preference shares are not converted into equity shares
after specific time period.
shareholders have voting rights.
Equity shareholders get dividend at rate.
Q.2 Attempt (Any 14
Discuss Equity Shares in detail.
Objectives of Financial Management.
Discounted techniques of capital Budgeting.
Q.3 Attempt (Any 14
Prepare an estimate of working capital requirement from the
following information of a trading concern:
Project annual sales- 1,20,000 units
Selling Price Rs. 10 per unit
Percentage net profit as sales 30%
Average credit period allowed to customers-10 weeks
Average credit period allowed by suppliers- 5 weeks
Average stock holding in terms of sales requirement
weeks
Allow for 10% for contingencies
Current Ratio 2.5
Liquid Ratio: 1.5
Net Working Capital 67,500
Prepaid Expenses: 2500
Calculate: Current Assets, Current Liability, Liquid Assets
Factors affecting dividend policy.
Q.4 A Co. is considering an investment proposal to install new machine at
a cost of Rs. The machine has a life expectancy of 5 years
and has no salvage value. The tax rate is 50%. Assume that the firm
use straight line depreciation. The estimated Cash flows before
depreciation and tax (CFBT) from the investment is as follows:
14
Year 1 2 3 4 5
CFBT 20,000 22,000 24,500 21,300 29,000
Calculate:
Pay Back Period
ARR
NPV 10% Discount Rate
Profitability Index
OR
Define working capital. Explain the various determinants of
working capital requirement.
Q.5 Define debentures. Explain in detail features of debentures. 14
OR
Explain the Meaning of Financial Management. Also explain
functions of finance manager.