M.B.A. II (Semester IV) Examination, 2016
FINANCIAL MANAGEMENT (Paper III) (Group
Project Planning and Working Capital Management
Day and Date Friday, 2-12-2016 Total Marks 70
Time 10.30 a.m. to 1.30 p.m.
Instructions Question 1 is compulsory.
Attempt any two questions from Q.No. 3 and 4.
Attempt any two questions from Q. 6 and 7.
1. A firm has an investment proposal, requiring an outlay of Rs. The
investment proposal is expected to have 2 years economic life with no salvage
value. In year there is 0.4 probability that cash inflow after tax will be
Rs. and 0.6 probabilities that cash inflow after tax will be Rs. 30,000/-.
The probabilities assigned to cash inflows after tax for the year are as
follows
Cash inflow Year 1 25,000 30,000
Cash inflow Year 2 Probability Probability
12,000 0.2 20,000 0.4
16,000 0.3 25,000 0.5
22,000 0.5 30,000 0.1
The firm uses a 10% discount rate for this type of investment.
Required
Construct a decision tree for the proposed investment project.
Will the project be accepted. 7
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A company has to select one of the following projects.
Particulars Project A Project B
Cost 1,10,000 1,00,000
Cash inflows (Years)
1 60,000 10,000
2 20,000 10,000
3 10,000 20,000
4 50,000 1,00,000
The present value of Rs.1 at 12% and 15% discount rate is as follows
Year 1 2 3 4
PVF 10% 0.909 0.826 0.751 0.683
PVF 12% 0.893 0.797 0.712 0.636
PVF 15% 0.870 0.756 0.658 0.572
Compute the internal rate of return and comment on the project if the opportunity
cost is 10%. 7
2. Write short notes on (any two) 14
Market and demand analysis.
Export Import Bank of India.
Explain working capital financing.
3. Attempt any two of the following 14
What are the early and later stage of venture capital financing
Factors determining cash needs.
From the following details, draw a plan of ABC Selective Control.
Items 1 2 3 4 5 6 7 8 9 10 11 12
Units 7,000 24,000 1,500 600 38,000 40,000 60,000 3,000 300 29,000 11,500 4,100
Unit
cost

5.00 3.00 10.00 22.00 1.50 0.50 0.20 3.50 8.00 0.40 7.10 6.20
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4. Solve any two from the following 14
Benefits and cost of holding inventories.
Technical analysis in relation to project planning.
Prepare a cash budget of XYZ Ltd. on the basis of the following information
for three months commencing July 2014.
A firm maintains minimum cash balance of Rs. 4,00,000.
Cash sales are 25% of the total sales and balance 75% will be credit sales.
60% of credit sales are collected in the month following the sales, balance
30% and 10% in the two following months thereafter.
Sales forecasts are as follows
Month April May June July August September
Amount 6,00,000 8,00,000 8,00,000 12,00,000 10,00,000 8,00,000
Anticipated purchases and wages for the year 2014 are as follows
Month July August September
Purchases 8,00,000 6,40,000 9,60,000
Wages 2,00,000 1,60,000 1,40,000
Quarterly interest payable Rs. 30,000 Rent payable Rs. 8,000 per month.
Capital expenditure expected in September is Rs. 1,20,000.
5. ABC Ltd. has currently annual sales of Rs. 50 Lac and an average collection
period of 30 days. The company is considering of liberalizing its credit policy. If
the collection period is extended, sales and bad debts are expected to increase
in the following way
Proposed
credit policy
Increase in
collection
period (days)
Expected increase
in annual sales
(Rs. Lac)
Per cent of
Bad debts
losses
I 15 4.0 1.5
II 30 4.5 1.7
III 45 5.5 2.0
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The firm sells its product for Rs.10 per unit. Average cost at current level of
sales is 90 per cent for sales and variable cost is 80 per cent of sales. If the
current bad debts loss is 1 per cent of sales and the required return is 20 per
cent, which credit policy should be pursued (Assume a 360 day year). State
your assumptions. 14
6. The Board of Directors of Aman Company Private Ltd. requests you to prepare a
statement showing the working capital requirements forecast for a level of activity
of 1,44,000 units of production per annum.
The following information is available for your calculation
Particulars Cost per unit
Raw materials 90
Direct Labor 40
Overheads 75
Total cost 205
Profit 60
Selling price 265
Raw materials are in stock on average one month.
ii) The materials are in process on an average for one month.
iii) Finished goods are in stock on average one month.
iv) Credit allowed by suppliers one month.
Time lag in payment of debtors 2 months.
vi) Lag in payment of wages 1½ month.
vii) Lag in payment of overheads one month.
20% of the output is sold against cash. Cash in hand and at bank is expected
to be Rs. 60,000. It is to be assumed that production is carried on evenly
throughout the year. 14
7. Explain the term sick units. What are the causes of industrial sickness What
are the usual components of revival programme of a sick unit 14

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M.B.A. II (Semester IV) Examination, 2016
Group E Production and Material Management
Paper III INDUSTRIAL ENGINEERING
Day and Date Friday, 2-12-2016 Total Marks 70
Time 10.30 a.m. to 1.30 p.m.
Instructions Question No. 1 is compulsory.
Attempt any two questions from Q. Q. 3 and Q. 4.
Attempt any two questions from Q. Q. 6 and Q. 7.
1. Study the following case carefully and answer the question given at the end.
In a manufacturing company 15 workers were responsible for assembling water
heating geysers. A number of different models with different capacities were
being manufactured. With appropriate small tools, each worker assembled a part
of the geyser. The partially completed geyser was transferred from one workstation
to another. When the geyser was completed an inspector would check it over to
ensure that it was working properly. The geyser was then placed for proper
packing in different containers.
The assembly line was properly balanced by industrial engineers who had used
time and motion study to break jobs into subassembly tasks. The time required
for each subassembly had also been balanced so that the task performed by
each worker was supposed to take exactly the same amount of time. The workers
were paid on an hourly basis.
The inspector observed that morale amongst workers was low and there were a
percentage of badly assembled geysers. Rejects caused by the workers rather
than faculty materials were about 25%. After discussing the issue with
management it was decided to have meeting geysers individually. The workers
agreed with an option of going back to the old program if the new one did not
work well. After several days of training each workers began to assemble the
entire geyser.
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The workers were ably supported and motivated by the Inspector. Productivity
increased considerably. Controllable rejects caused by workers had dropped
from 25% to in 6 months. The workers had responded positively and their
moral was high and the workers did all the routine inspection by themselves. The
inspector was transferred to another job in the organization.
Questions
Analyze the case. 5
Identify the problem. 2
Find out alternative solution. 5
Give the best solution. 2
2. Short notes (any 14
Flow Chart Process.
Production System.
BPR in Productivity Improvement.
3. Short notes (any 14
Performance System.
Multiple Activity Chart.
Types of Allowances.
4. Short notes (any 14
Objectives of Work Study.
Productivity Measures.
Need of Method Study.
5. Define Work Study and state its objectives. Explain various steps involved in
Work Study. 14
6. Distinguish between normal and working areas. Discuss their relation to work
place arrangement. 14
7. What is Ergonomics Explain various factors considered in ergonomics. 14