Total No. of Questions 08] [Total No. of Pages 02
EXECUTIVE M.B.A. DEGREE EXAMINATION, MAY 2018
First and Second Years
FINANCIAL MANAGEMENT
Time 3 Hours Maximum Marks :70
SECTION A
Answer any three questions. x 5 15)
Q1) Profit maximization.
Money market.
Capital budgeting process.
EBIT-EPS analysis.
Optimum level of current assets.
True values and liquidation values.
SECTION B
Answer any three questions. x 15 45)
Q2) What is wealth maximization? How is it superior profit maximization.
Q3) Explain various types of techniques used for investment appraisal.
Q4) What do you mean by capital structure? Explain Modigliani-miller hypothesis to
capital structure.
Q5) Explain Walter's model of dividend.
Q6) Explain factors effecting working capital requirement of an organization.
Q7) What is cash management? Explain cash management techniques.
(DEMB7)
SECTION C
(Compulsory) (10 Marks)
Q8) Case Study:
From the following information of VSGR Company Ltd., estimate the working
capital needed to finance a level of activity of 1,10,000 units of production after
adding a 10% safety contingency.
Particulars Cost Per Unit
Raw Materials 78
Direct Labour 29
Overheads (Excluding depreciation) 58
Total Cost 165
Profit 24
Selling Price 189
Additional Information:
Average raw materials in stock: one month
Average materials-in-process completion stage): Half a month
Average finished goods in stock: one month
Credit allowed by supplier: one month
Credit allowed to customer: two months
Time lag in payment of wages: one and half weeks
Overheads expenses: one month
One fourth of the sales is on cash basis. Cash balances is expected to be
Rs.2,15,000. You may assume that production is carried on evenly throughout
the year and wages and overhead expenses accrue similarly.