M.B.A. I (Semester II) New CBCS Examination, 2016
Paper X FINANCIAL MANAGEMENT
Day and Date Wednesday, 30-11-2016 Total Marks 70
Time 2.30 p.m. to 5.00 p.m.
Instructions Question No. one is compulsory.
Attempt any two from Question No. two to four.
Attempt any two from Question No. five to seven.
Figures to the right indicate full marks.
1. A company is considering an investment proposal to install new milling controls
at a cost of Rs. 50,000. The facility as a life expectancy of 5 years and no
salvage value. The rate is 35 percent. Assume the firm usage strength line
depreciation and same is allowed for tax purpose.
The estimated cash flows before depreciation and tax (CFBT) from the investment
proposal are as follows 14
Year CFBT
1 10,000
2 10,692
3 12,769
4 13,462
5 20,385
Compute the following
1. Payback period.
2. Average rate of return.
3. Net Present Value at 10 percent discount rate.
4. Profitability index at 10 percent discount rate.
(PV 0.909, 0.826, 0.751, 0.683, 0.621)
P.T.O.
Seat
No.
SLR-T 10
2. Write note on (any two) 14
Domestic Vs. International Financial Management.
Bonus Share.
You are required to calculate
P/V Ratio
Fixed cost
Sales volume to earn a profit of Rs. 50,000
Sales Rs. 2,00,00
Profit Rs. 20,000
Variable Cost 60%
3. Write note on (any two) 14
Stock Spilt.
Foreign exchange dealings.
Role of finance manager in India.
4. Write note on (any two) 14
Objectives of financial management.
Financing of working capital.
Angle of Incidence.
5. While preparing a project report on behalf of a client you have collected the
following facts. Estimate the net working capital required for that project. Add 10
percent to your compute figures to allow contingencies. 14
Particulars Amount per Unit
Estimated cost per unit production Rs.
Raw material 80
Direct labour 30
Overheads (exclusive of depreciation, Rs 10 per unit) 60
Total cash cost 170
SLR-T 10
Additional information
Selling price, Rs. 200 per unit.
Level of activity 1,04,000 units of the production per annum.
Raw materials in stock, average 4 week.
Work in progress (assume 50 percent completion stage in respect of conversion
costs and 100 percent completion of materials), average 2 weeks.
Finished goods in stock, average 4 weeks.
Credit allowed by suppliers, average 4 weeks.
Credit allowed to debtors, average 8 weeks.
Lag in payment of wages, average 1.5 weeks.
Cash at bank is expected to be Rs. 25,000.
You may assume that production is carried on evenly throughout the year
(52 weeks) and wages and overheads accrue similarly. All sales are on credit
basis only.
6. From the following profit and loss Account and Balance Sheet relating to Madhav
and Company presented as on 31st March, 2014 14
Dr. Profit and Loss Account Cr.
Particulars Rs. Particulars Rs.
To Opening Stock 3,000 By Gross Sales Rs. 2,00,000
" Purchase 1,20,000 Less Sales Return Rs. 5,000 1,95,000
" Wages (Direct) 7,000 By Closing Stock 5,000
" Gross Profit c/d 70,000
2,00,000 2,00,000
" Administrative Expn. 15,000 By Gross Profit b/d 70,000
" Selling and Distribution 20,000 By Dividend Received 10,000
expenses
" Loss on sale of 5,000
Fixed Assets
" Net Profit 40,000
80,000 80,000
Balance Sheet as on 31st March 2014
Liabilities Rs. Assets Rs.
Equity Share Capital 5,00,000 Land 1,50,000
(5000 Equity Share of 100 each) Building 2,00,000
General Reserve 50,000 Plant and Machinery 2,00,000
Profit and Loss A/c 70,000 Stock 80,000
Sundry Creditors 80,000 Debtors 50,000
Bank Balance 20,000
7,00,000 7,00,000
From the above information, you are required to calculate
Gross Profit Ratio.
Operating Ratio.
Net Profit to capital employed Ratio.
Current Ratio.
Liquid Ratio.
Stock Turnover Ratio.
Debtors Turnover Ratio.
7. What do you mean by long term financing Discuss various sources of long
term financing. 14M.B.A. I (Semester II) New CBCS Examination, 2016
Paper X FINANCIAL MANAGEMENT
Day and Date Wednesday, 30-11-2016 Total Marks 70
Time 2.30 p.m. to 5.00 p.m.
Instructions Question No. one is compulsory.
Attempt any two from Question No. two to four.
Attempt any two from Question No. five to seven.
Figures to the right indicate full marks.
1. A company is considering an investment proposal to install new milling controls
at a cost of Rs. 50,000. The facility as a life expectancy of 5 years and no
salvage value. The rate is 35 percent. Assume the firm usage strength line
depreciation and same is allowed for tax purpose.
The estimated cash flows before depreciation and tax (CFBT) from the investment
proposal are as follows 14
Year CFBT
1 10,000
2 10,692
3 12,769
4 13,462
5 20,385
Compute the following
1. Payback period.
2. Average rate of return.
3. Net Present Value at 10 percent discount rate.
4. Profitability index at 10 percent discount rate.
(PV 0.909, 0.826, 0.751, 0.683, 0.621)
P.T.O.
Seat
No.
SLR-T 10
2. Write note on (any two) 14
Domestic Vs. International Financial Management.
Bonus Share.
You are required to calculate
P/V Ratio
Fixed cost
Sales volume to earn a profit of Rs. 50,000
Sales Rs. 2,00,00
Profit Rs. 20,000
Variable Cost 60%
3. Write note on (any two) 14
Stock Spilt.
Foreign exchange dealings.
Role of finance manager in India.
4. Write note on (any two) 14
Objectives of financial management.
Financing of working capital.
Angle of Incidence.
5. While preparing a project report on behalf of a client you have collected the
following facts. Estimate the net working capital required for that project. Add 10
percent to your compute figures to allow contingencies. 14
Particulars Amount per Unit
Estimated cost per unit production Rs.
Raw material 80
Direct labour 30
Overheads (exclusive of depreciation, Rs 10 per unit) 60
Total cash cost 170
SLR-T 10
Additional information
Selling price, Rs. 200 per unit.
Level of activity 1,04,000 units of the production per annum.
Raw materials in stock, average 4 week.
Work in progress (assume 50 percent completion stage in respect of conversion
costs and 100 percent completion of materials), average 2 weeks.
Finished goods in stock, average 4 weeks.
Credit allowed by suppliers, average 4 weeks.
Credit allowed to debtors, average 8 weeks.
Lag in payment of wages, average 1.5 weeks.
Cash at bank is expected to be Rs. 25,000.
You may assume that production is carried on evenly throughout the year
(52 weeks) and wages and overheads accrue similarly. All sales are on credit
basis only.
6. From the following profit and loss Account and Balance Sheet relating to Madhav
and Company presented as on 31st March, 2014 14
Dr. Profit and Loss Account Cr.
Particulars Rs. Particulars Rs.
To Opening Stock 3,000 By Gross Sales Rs. 2,00,000
" Purchase 1,20,000 Less Sales Return Rs. 5,000 1,95,000
" Wages (Direct) 7,000 By Closing Stock 5,000
" Gross Profit c/d 70,000
2,00,000 2,00,000
" Administrative Expn. 15,000 By Gross Profit b/d 70,000
" Selling and Distribution 20,000 By Dividend Received 10,000
expenses
" Loss on sale of 5,000
Fixed Assets
" Net Profit 40,000
80,000 80,000
Balance Sheet as on 31st March 2014
Liabilities Rs. Assets Rs.
Equity Share Capital 5,00,000 Land 1,50,000
(5000 Equity Share of 100 each) Building 2,00,000
General Reserve 50,000 Plant and Machinery 2,00,000
Profit and Loss A/c 70,000 Stock 80,000
Sundry Creditors 80,000 Debtors 50,000
Bank Balance 20,000
7,00,000 7,00,000
From the above information, you are required to calculate
Gross Profit Ratio.
Operating Ratio.
Net Profit to capital employed Ratio.
Current Ratio.
Liquid Ratio.
Stock Turnover Ratio.
Debtors Turnover Ratio.
7. What do you mean by long term financing Discuss various sources of long
term financing. 14