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Questions:

1. State the concept of Finance Function.
2. Finance is the lifeblood of industry. Explain.
3. What is financial management?
4. What is Investment Decision?
5. Compare between Net Present Value Method and Internal Rate of Return.
6. What is Profitability Index? Why is it used?
7. What are sources of short-term financing? State.
8. What are the assumptions of capital structure?
9. How does Net Operating Income approach differ from Net Income approach?
10. What is the rationale behind the use of Weighted Average Cost of Capital?
11. Distinguish between relevance and irrelevance theory of dividend decisions.
12. How is the cost of equity financing determined by using the Capital Asset Pricing Model?
13. What types of goals can a firm consider? Which one appears to be most viable? Why?
14. What do you mean by Capital Budgeting? Discuss the characteristics and relative merits and demerits of the different methods of appraising capital investment proposals. Which method would you prefer and why?
15. Calculate the Net Present Value of two projects and, assuming a discount rate of 10%, suggest on the basis of (i) Net Present Value and (ii) Profitability Index Method which of the two projects should be accepted and why.
16. Explain the Modigliani-Miller approach to capital structure. What are the limitations of this approach?
17. What is leverage? Explain its types, effects, and limitations.
18. Explain the meaning of the term "Dividend Policy." Critically examine the essentials of a sound dividend policy.
19. A company is willing to issue 1,000 irredeemable debentures of 100 each at 7% interest. Calculate the cost of capital considering underwriting commission, brokerage, and printing expenses. Assume a tax rate of 50%.