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Questions:

1. What do you understand by financial management? What is the relationship of finance functions to other business functions?
2. Compute time adjusted rate of return and state which of the two projects is better.
3. What do you understand by capital budgeting? State the factors affecting capital expenditures decisions.
4. Calculate weighted average cost of capital using book value weights and market value weights.
5. What is meant by weighted average cost of capital? Explain this method with suitable illustration.
6. Calculate operating leverage, financial leverage, and earning per share for the existing as well as planned level of output.
7. Examine the alternatives for expansion programme using different methods of raising additional capital.
8. Calculate capital gearing ratio and show its effects on earnings of equity shares.
9. What do you mean by working capital analysis? Discuss the role and limitations of various ratios used in such analysis.
10. Write short notes on any three of the following: Financial break-even point, Affect of issue of equity capital on income of equity shareholders, Projected Balance Sheet, Stock dividend, Present value method.