Exam Details
| Subject | financial management | |
| Paper | ||
| Exam / Course | mba | |
| Department | ||
| Organization | solapur university | |
| Position | ||
| Exam Date | November, 2016 | |
| City, State | maharashtra, solapur |
Question Paper
M.B.A. (Part (Semester II) Examination, 2016
FINANCIAL MANAGEMENT (Paper
Day and Date Wednesday, 30-11-2016 Total Marks 70
Time 2.30 p.m. to 5.30 p.m.
Instructions Q. No. 1 is compulsory.
Attempt any two questions from Q. No. 2 to Q. No. 4.
Attempt any two questions from Q. No. 5 to Q. No. 7.
Figures at right indicate marks.
1. The following is the financial information of Brilliant Products Ltd. For the year
ending 31st March 2016. 14
Profit and Loss A/c
For the year ending 31st March 2016
Particulars Rs. Particulars Rs.
To Opening stock 30,000 By Sales 19,50,000
To Purchases 12,00,000
To Wages 70,000
To Gross Profit 7,00,000 By Closing Stock 50,000
20,00,000 20,00,000
To Administration Exp. 1,50,000 BY Gross Profit 7,00,000
To Selling and By Dividend on Investment 1,00,000
Distribution Exp. 2,00,000
To Loss on sales of assets 50,000
To Net Profit 4,00,000
8,00,000 8,00,000
Seat
No.
SLR-T 18
Balance Sheet as on 31st March 2016
Liabilities Rs. Assets Rs.
Equity share capital 30,00,000 Land 10,00,000
(Rs. 100 each) Buildings 20,00,000
Reserve and Surplus 5,00,000 Plant and Machinery 31,00,000
Profit and Loss A/c 7,00,000 Stock in Trade 50,000
Loan 12,00,000 Sundry Debtors 5,00,000
Debentures 8,00,000 Cash and Bank balances 3,50,000
Creditors 4,00,000
Bills Payable 3,00,000
Bank Overdraft 1,00,000
70,00,000 70,00,000
From the above statement you are required to compute the following ratios and
state the purpose they serve.
Gross Profit Ratio
Net Profit Ratio
Current Ratio
Operating Ratio
Stock Turnover Ratio
Fixed Assets Turnover Ratio
Debt-equity Ratio
Liquidity Ratio.
2. Write short notes (any two). 14
Scope of financial management.
CVP Analysis.
Debentures/Bonds.
3. Write short notes (any two). 14
Trend analysis.
Foreign exchange market.
Bonus shares.
SLR-T 18
4. Attempt any two. 14
Following data is available from the books of X Company Ltd.
Sales 24000 units per year
Variable cost Rs. 25 per unit
Fixed cost Rs. 2,40,000
Selling price Rs. 40 per unit
You are required to
Calculate the break even point.
Calculate margin of safety.
Calculate sales volume if company wants to earn profit of Rs. 75,000.
Calculate profit if sales is expected to increase by 6000 units.
Venture Capital
Operating cycle of working capital.
5. Determine the working capital required to finance a level of 180000 units of output
for a year. The cost structure is as under.
Elements of cost Rs. (per unit)
Raw materials 20
Direct labor 5
Overheads 10
Total cost 35
Profit 10
Selling price 45
Additional information
Minimum desired cash balance is Rs. 20,000.
Raw Materials are kept in stock, on an average for two months.
Work-in-process will approximate to half months period.
Finished goods remain in warehouse on an average of one month.
Suppliers of materials extend a months credit period.
Debtors are provided two months credit period. (The cash sales are 25% of total
sales)
There is a time lag in payment of wages of a month and half a month in the case of
overheads.
There is need to provide 10 percent contingency. 14
SLR-T 18
6. Green Ltd. is to make a choice between three possible investments Project B
and C. The immediate capital outlays for each being Rs. 1,10,000. Each will
continue for 5 years and it has been decided that a discount rate of 12 percent is
acceptable for all the proposals. The cash flows for the three projects are as
follows
Year
A
Rs.
B
Rs.
C
Rs.
1 10,000 20,000 30,000
2 20,000 30,000 40,000
3 30,000 50,000 35,000
4 40,000 30,000 25,000
5 50,000 20,000 20,000
Evaluate and comment on all these projects under.
Pay back period method
ii) NPV method
iii) PI method.
The net present values of Rs. 1 12% are as under
Year 1 2 3 4 5
D.F. 0.8929 0.7972 0.7118 0.6355 0.5674
14
7. Briefly discuss about determinants of dividend policy. 14
FINANCIAL MANAGEMENT (Paper
Day and Date Wednesday, 30-11-2016 Total Marks 70
Time 2.30 p.m. to 5.30 p.m.
Instructions Q. No. 1 is compulsory.
Attempt any two questions from Q. No. 2 to Q. No. 4.
Attempt any two questions from Q. No. 5 to Q. No. 7.
Figures at right indicate marks.
1. The following is the financial information of Brilliant Products Ltd. For the year
ending 31st March 2016. 14
Profit and Loss A/c
For the year ending 31st March 2016
Particulars Rs. Particulars Rs.
To Opening stock 30,000 By Sales 19,50,000
To Purchases 12,00,000
To Wages 70,000
To Gross Profit 7,00,000 By Closing Stock 50,000
20,00,000 20,00,000
To Administration Exp. 1,50,000 BY Gross Profit 7,00,000
To Selling and By Dividend on Investment 1,00,000
Distribution Exp. 2,00,000
To Loss on sales of assets 50,000
To Net Profit 4,00,000
8,00,000 8,00,000
Seat
No.
SLR-T 18
Balance Sheet as on 31st March 2016
Liabilities Rs. Assets Rs.
Equity share capital 30,00,000 Land 10,00,000
(Rs. 100 each) Buildings 20,00,000
Reserve and Surplus 5,00,000 Plant and Machinery 31,00,000
Profit and Loss A/c 7,00,000 Stock in Trade 50,000
Loan 12,00,000 Sundry Debtors 5,00,000
Debentures 8,00,000 Cash and Bank balances 3,50,000
Creditors 4,00,000
Bills Payable 3,00,000
Bank Overdraft 1,00,000
70,00,000 70,00,000
From the above statement you are required to compute the following ratios and
state the purpose they serve.
Gross Profit Ratio
Net Profit Ratio
Current Ratio
Operating Ratio
Stock Turnover Ratio
Fixed Assets Turnover Ratio
Debt-equity Ratio
Liquidity Ratio.
2. Write short notes (any two). 14
Scope of financial management.
CVP Analysis.
Debentures/Bonds.
3. Write short notes (any two). 14
Trend analysis.
Foreign exchange market.
Bonus shares.
SLR-T 18
4. Attempt any two. 14
Following data is available from the books of X Company Ltd.
Sales 24000 units per year
Variable cost Rs. 25 per unit
Fixed cost Rs. 2,40,000
Selling price Rs. 40 per unit
You are required to
Calculate the break even point.
Calculate margin of safety.
Calculate sales volume if company wants to earn profit of Rs. 75,000.
Calculate profit if sales is expected to increase by 6000 units.
Venture Capital
Operating cycle of working capital.
5. Determine the working capital required to finance a level of 180000 units of output
for a year. The cost structure is as under.
Elements of cost Rs. (per unit)
Raw materials 20
Direct labor 5
Overheads 10
Total cost 35
Profit 10
Selling price 45
Additional information
Minimum desired cash balance is Rs. 20,000.
Raw Materials are kept in stock, on an average for two months.
Work-in-process will approximate to half months period.
Finished goods remain in warehouse on an average of one month.
Suppliers of materials extend a months credit period.
Debtors are provided two months credit period. (The cash sales are 25% of total
sales)
There is a time lag in payment of wages of a month and half a month in the case of
overheads.
There is need to provide 10 percent contingency. 14
SLR-T 18
6. Green Ltd. is to make a choice between three possible investments Project B
and C. The immediate capital outlays for each being Rs. 1,10,000. Each will
continue for 5 years and it has been decided that a discount rate of 12 percent is
acceptable for all the proposals. The cash flows for the three projects are as
follows
Year
A
Rs.
B
Rs.
C
Rs.
1 10,000 20,000 30,000
2 20,000 30,000 40,000
3 30,000 50,000 35,000
4 40,000 30,000 25,000
5 50,000 20,000 20,000
Evaluate and comment on all these projects under.
Pay back period method
ii) NPV method
iii) PI method.
The net present values of Rs. 1 12% are as under
Year 1 2 3 4 5
D.F. 0.8929 0.7972 0.7118 0.6355 0.5674
14
7. Briefly discuss about determinants of dividend policy. 14
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