INDIAN INSTITUTE OF MATERIALS MANAGEMENT
Post Graduate Diploma in Materials Management
Graduate Diploma in Materials Management
PAPER No. 3
BUSINESS ECONOMICS FINANCIAL ACCOUNTING.
Date 12.06.2017 Max. Marks :100
Time 2.00 p.m to 5.00 pm Duration 3 Hrs.
Instructions
1. From Part A answer all questions (compulsory). Total: 32 Marks
2. From Part B Answer any 3 questions out of 5 questions. Each question carries 16 marks Total: 48 Marks
3.Part C is a case study (compulsory). Read the case study carefully and answer the questions Total: 20 Marks
PART A (compulsory). 32 x1= 32 marks)
Q1. Expand the following
a. EXIM Bank
b. IBRD
c. NAFTA
d. EEC
e. NHB
f. WIPO
g. GIC
h. ICRA
Q2. Match the following
A B
a. Regulatory Body a. Retail
b. Tertiary Sector b. Investment Activity
c. Asian Tiger c. Assumptions
d. Purchase of Apartment d. SEBI
e. Loss on issue of Share e. Singapore
f. Sensitivity analysis f. Debt ratio
g. Total Debt divided by Total Assets g. RBI
h. FEMA h. Fictitious assets
June 2017
Q3. State True or False
a. Debenture is a long term promissory note
b. In IRR, unknown factor is interest rate
c. Pre-Investment study reports is part of master plan report
d. RBI issue Treasury Bills
e. Scheduled commercial banks are part of first schedule of RBI
f. Lease cannot be cancelled at short notice in an operating lease
g. Working capital is short term fund requirements
h. RBI manages Foreign exchange in International Trade
Q4. Fill in the blanks
a. There are only two kinds of funds used by a company i,e debt and
b. Financial Institutions are allowed to issue certificate of Deposits between 1 and years.
c. Company bonds have high risk of compound to Government bonds
d. Dividend payout ratio is dividend per share divided by per share
e. Financial leverage ratio is called ratio
f. Escrow Account is a account
g. There are 3 types of mergers Horizontal, Vertical and
h. Overheads cost is cost.
PART B
(Answer any three) 3x16 48 marks
Q5. Write short notes on any four
a. Transfer pricing d. Human Development Index
b. Debentures e. Types of unemployment
c. Financial Market f. Convertible bonds
Q6. Explain laissez faire economy
Q7. What are the roles of Financial institutions in India?
Q8. What are the sources of information for financial analysis?
Q9. What are the differences between book keeping and accounting?
PART C
Q10. Case Study compulsory) 20 Marks
A Company is planning to have the most desirable capital structure. The following estimate of the debt and equity capital have been made at various levels of debt-equity mix.
Decide the optimum debt-equity ratio mix for the company by calculating of the cost of capital
Debt as percentage of Total Capital Employed
Cost of debt
Cost of Equity
0
6
13
10
6
13
20
6
13.5
30
6.5
14
40
7
15
50
7.5
17