Download JNTUH (Jawaharlal Nehru Technological University Hyderabad) MBA (Master of Business Administration) 4th Semester (Fourth Semester) R15 2018 Jan 724AF Strategic Investment And Financing Decisions Previous Question Paper
JAWAHARLAL NEHRU TECHNOLOGICAL UNIVERSITY HYDERABAD
MBA IV Semester Examinations, January-2018
STRATEGIC INVESTMENT AND FINANCING DECISIONS
Time: 3hours Max.Marks:75
Note: This question paper contains two parts A and B.
Part A is compulsory which carries 25 marks. Answer all questions in Part A.
Part B consists of 5 Units. Answer any one full question from each unit. Each question
carries 10 marks and may have a, b, c as sub questions.
PART - A 5 ? 5 marks = 25
1.a) Explain various techniques of investment decisions under conditions of risk and
Uncertainty? [5]
b) How can inflation influence capital budgeting decisions? [5]
c) Discuss on single period constraints and multi period capital constraint. [5]
d) Explain how leasing considered as a source of finance? [5]
e) What are the probable reasons for mergers and acquisition? [5]
PART - B 5 ? 10 marks = 50
2. Explain in brief Monte Carle approach to simulation. [10]
OR
3. An investment project will cost Rs.50, 000 initially and it is expected to generate cash
flows in four years Rs.25, 000, Rs.20, 000, Rs.10, 000 and Rs.10, 000. What is the
project?s NPV. Assume a 10 percent risk ?free rate. [10]
4. What is Lorie savage paradox? Explains in detail? [10]
OR
5. A company proposes to undertake one of two mutually exclusive projects namely, AXE
and BXE. The initial capital outlay and annual cash inflows are as under:
AXE BXE
Initial capital outlay Rs. 22,50,000 Rs. 30,00,000
Salvage value at the end of the life 0 0
Economic life (years) 4 7
After tax annual cash inflows Year 1 Rs. 6,00,000 Rs.5,00,000
2 12,50,000 7,50,000
3 10,00,000 7,50,000
4 7,50,000 12,00,000
5 - 12,50,000
6 - 10,00,000
7 - 8,00,000
The company?s cost of capital is 16%
Calculate for each project IRR and suggest. [10]
R15
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Code No: 724AF
JAWAHARLAL NEHRU TECHNOLOGICAL UNIVERSITY HYDERABAD
MBA IV Semester Examinations, January-2018
STRATEGIC INVESTMENT AND FINANCING DECISIONS
Time: 3hours Max.Marks:75
Note: This question paper contains two parts A and B.
Part A is compulsory which carries 25 marks. Answer all questions in Part A.
Part B consists of 5 Units. Answer any one full question from each unit. Each question
carries 10 marks and may have a, b, c as sub questions.
PART - A 5 ? 5 marks = 25
1.a) Explain various techniques of investment decisions under conditions of risk and
Uncertainty? [5]
b) How can inflation influence capital budgeting decisions? [5]
c) Discuss on single period constraints and multi period capital constraint. [5]
d) Explain how leasing considered as a source of finance? [5]
e) What are the probable reasons for mergers and acquisition? [5]
PART - B 5 ? 10 marks = 50
2. Explain in brief Monte Carle approach to simulation. [10]
OR
3. An investment project will cost Rs.50, 000 initially and it is expected to generate cash
flows in four years Rs.25, 000, Rs.20, 000, Rs.10, 000 and Rs.10, 000. What is the
project?s NPV. Assume a 10 percent risk ?free rate. [10]
4. What is Lorie savage paradox? Explains in detail? [10]
OR
5. A company proposes to undertake one of two mutually exclusive projects namely, AXE
and BXE. The initial capital outlay and annual cash inflows are as under:
AXE BXE
Initial capital outlay Rs. 22,50,000 Rs. 30,00,000
Salvage value at the end of the life 0 0
Economic life (years) 4 7
After tax annual cash inflows Year 1 Rs. 6,00,000 Rs.5,00,000
2 12,50,000 7,50,000
3 10,00,000 7,50,000
4 7,50,000 12,00,000
5 - 12,50,000
6 - 10,00,000
7 - 8,00,000
The company?s cost of capital is 16%
Calculate for each project IRR and suggest. [10]
R15
6. Discuss the Hillier approach in analysis and appraisal of project. [10]
OR
7. Write a short note on:
a) Equivalent annual cost.
b) Terminal value.
c) Significance of information on project selection. [10]
8. Write short notes on:
a) leasing vs. hire purchase
b) leasing vs. operating risk.
c) Borrowing Vs. procuring. [10]
OR
9. Alfa LTD is thinking of installing a computer. Decide whether the computer is to be
purchased outright (through 14 percent borrowing) or to be acquired on lease rentel
basis. The company is in the 50 percent tax bracket. The other data available are:
a) Purchase of computer:
Purchase price: Rs 20, 00,000
Annual maintenance, (to be paid in advance), Rs 50,000 per year
Expected economic useful life, 6 years
Depreciation (for tax purposes), straight line method
Salvage value: Rs 2, 00,000
b) Leasing of computer:
Leasing charges (to be paid in advance): Rs 4,50,000
Maintenance expense to be borne by lessor
Payment of loan: 6 year ?end equal installments of Rs. 5, 14, 271 [10]
10. Define takeover. Explain the government guidelines for takeover? [10]
OR
11. Alpha company has a value of Rs. 25 million and Beta Company has a value of Rs.10
million. If the two companies merge, cost savings with a present value of Rs. 4 million
would occur. Alpha propose to offer Rs. 100 million cash compensation to acquire
Beta. What is the net present value of the merger to the two firms? [10]
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This post was last modified on 23 October 2020