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MP-202 M.B.A. (Semester II) EXAMINATION, June, 2011 j

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MP-202 M.B.A. (Semester II) EXAMINATION, June, 2011 j
each. Earnings after taxes but before depreciation are
expected as follows :
A
Year
1
Cash inflows
Machine A
Machine B
j
j
25,000
MP-202
M.B.A. (Semester II) EXAMINATION,
June, 2011
10,000
FINANCIAL MANAGEMENT
2
20,000
15,000
3
15,000
25,000
(Financial Management)
4
10,000
20,000
Time allowed : Three hours
5
10,000
20,000
Maximum marks : 80
Paper-MP-202
Attempt any five questions. Each
question carries equal marks.
Evaluate the two alternaives by using :
9.
(i)
Pay-Back Period Method
(ii)
Post Pay-Back Period Profitability Method
1.
8+8
Explain the meaning of the term 'Dividend Policy'
and critically examine the essentials of a sound dividend
policy.
How can it be estimated from historical data ?
800
scope of financial management.
2.
4
3.
16
"The profit maximisation is not an operationally feasible
criterion." Do you agree ? Illustrate your views.
8+8
10. What is a risk-free security and what is risk premium ?
Define Financial Management. Discuss the nature and
16
You are required to prepare for the Board of Directors of
XYZ Ltd., a statement showing the working capital need
6+6+4
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to finance a level of activity of 5,200 units of output. You
are given the following information :
Elements of cost
Amount per unit
j
Raw materials
8
Direct labour
2
Overheads
6
Total cost
(vi)
Lag in payment of wages is 1½ weeks.
(vii)
Cash in hand and at bank is expected to be j 7,300.
(viii)
Production is carried on evenly during the year
(ix)
4.
Assume 52 weeks in a year and 4 weeks in a
month.
16
What do you mean by 'cost of capital' ? How will
you determine the cost of capital from different
sources ?
8+8
4
Selling price
Credit allowed to debtors is two months.
and wages and overheads accrue similarly.
16
Profit
(v)
20
5.
Illustrate EBIT-EPS Analysis.
16
6.
The profit-volume ratio of a firm dealing in Drugs Mfg. is
Additional informations :
(i)
50% and the margin of safety is 40%. Calculate the breakeven point and the net profit if the sales are j 30,00,000.
Raw materials are in stock on an average of one
month.
Also find out sales to earn a profit of j 7,50,000.
(ii)
Materials are in process, on an average of half a
5+6+5
month.
(iii)
7.
Highlight the various sources of long term finance for a
corporate organisation.
16
8.
XYZ Ltd. is considering the purchase of a machine. Two
machines A and B are available at the cost of Rs. 60,000
Finish goods are in stock on an average of six
weeks.
(iv)
800
Credit allowed by creditors is one month.
2
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3
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