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MASTER OF COMMERCETerm-End Examination
June,2OO8
Mco'07 : FINANC|AL MANAGEMENTTime : 3 hours Maximum Marks : 100
Note : Attempt any fiue quesffons. AII questions carryequal marks.
1- Define the scope of financial management. What roleshould the financial manager play in a modern enterprise ? 20
2- (a) Find the present value of following cash flows,assuming 5o/o interest rate . 70
Year Cash flows
1 Rs. 2,000
2 Rs. 4,000
3 Rs. 5,000
(b) Explain YTM (Yreld to Maturity) method withexample. rc
MCO -O7 P , T . O .
3. (a)
(b)
4. (a)
{b}
5. (a)
(b)
6. (a)
(b)
How is the cost of debt eomputed ? How doesdiffer from the cost of preference capital ?
What is the CAPM {Capita} -Asset Pricing Model}approach for calculating the cost of equity ?
Explain the concept of risk. How can risk be
measured ?
Discuss different Capital Budgeting Methods-
How has the company managed its working capital
in the past ?
What is the role of credit terms and credit standards
in the credit policy of a firm ?
it1 2
7 0
1 0
What is Economic Order Quantity ? Whatassumptions are made in determination of EOQ ?
Suppose a TV manufacturer plans to manufacture25,000 CTVs for the year 2006, It purchases colourpicture tubes from other manufacturers. Its annualrequirement of calour picture tubes is 25,000 units.The purchase cost is Rs. 3,500 per colour picturetube. The ordering cost is Rs. 530 per order andcarrying cost per annum is 10%0. Determine the EOQ.
10+10
1 0
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1 0
7 . Calculate the Working CaPitalfollowing information :
(i) Raw Materials(ii) Direct Labour(iiil Overheads
(excluding DePreciation)Total cost
Additionsl lnf ormation
Selling Price
OutPut
Raw Material in stock
Work-in-progressConsume 50% comPletionstage with full materialconsumPtion
= Finished goods in stock
Credit allowed bY creditors
Credit allowed bY debtors
Cash at bank exPected to beproduction is sustained at an52 weeks of the Year. All sales
any other assumPtion that Youcomputing.
Requirement using the
Cost Per unit
Rs. 400
Rs. 150
Rs. 300
R s . 8 5 0
Rs. 1,000 Per unit
52,000 units Per annum
Averag e 4 weeks
Averag e 2 weeks
Averag e 4 weeks
Averag e 4 weeks
Averag e 8 weeks
Rs. 50,000. Assume thateven Pace during the
are on credit basis. Statemight have made while
20
P . T . o .MCO-07
8' (a) Explain the three principal motives for holding cash . j0(b) Discuss the sources of long term finance. j0
9' Write explanatcry notes on any twoof the following : ;.0+j0{i} Projeet financing{ii} Capital strueture{iii} Operating leveragetiv) Foreign exchange market
MCO-A74,OOO