File Details:

Questions:

1. What do you understand by business finance? Discuss the functions of the financial manager of a large organisation.
2. Compare Internal rate of return with net present value as methods of project evaluation.
3. The following information relates to a project: Cost Rs. 1,00,000, Economic Life 10 years, Annual savings Rs. 20,000, Salvage value at the end of first year Rs. 70,000, Annual decrease in the cost of investment from the second year onward Rs. 10,000. Find out the Bail-out pay back period.
4. Define Cost of capital. How will you determine the cost of capital from different sources?
5. A company wishes to raise a total capital of Rs. 2,00,000. It has three plans: (A) No debts, All equity shares; (B) 50% debt (10%), 30% preference shares (12%) and 20% equity shares; (C) 80% debt (10%) and 20% equity shares. The face value of equity shares is Rs. 10. The rates in brackets indicate the fixed return on debt and preference shares. The company estimates its earnings before interest and tax to be Rs. 50,000 annually. Which plan would be profitable?
6. What is dividend policy? Explain the various factors determining the dividend policy of a company.
7. What are the various sources of working capital financing? Describe the owned sources under long-term sources of financing.
8. X Ltd. has presented the following Balance sheet as on 31st March 2004: Sundry Assets Rs. 4,00,000; Share capital Rs. 2,00,000 (10,000 shares of Rs. 20 each); Reserve and Surplus Rs. 1,50,000; Current obligations Rs. 50,000. If the average profit of X Ltd. is Rs. 40,000 and current rate of capitalisation is 8%, What is the situation of capitalisation?
9. Explain the following with example: (i) Economic Order Quantity, (ii) Re-Order Point, (iii) Safety Stock.
10. Write short notes on the following: (i) Current Assets, (ii) Liquid Ratio, (iii) Fund Statement.