Download JNTUH (Jawaharlal Nehru Technological University Hyderabad) MBA (Master of Business Administration) 4th Semester (Fourth Semester) R15 2018 June 724AF Strategic Investment And Financing Decisions Previous Question Paper
Code No: 724AF
JAWAHARLAL NEHRU TECHNOLOGICAL UNIVERSITY HYDERABAD
MBA IV Semester Examinations, June/July-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 role of Risk in Investment. [5]
b) Why is Net Present Value considered as important? Explain. [5]
c) Explain the Features of Post Pay Back in practice. [5]
d) Under what circumstances leasing can be preferred? [5]
e) Define merger and state basic issues in merger. [5]
PART - B 5 ? 10 marks = 50
2. Differentiate Risk and Uncertainty with respect to Strategic Investments? [10]
OR
3.a) A machine costs Rs 10,00,000 and is expected to yield net cash returns as per current
prices are given below:
Year Rs
1 Rs. 5,00.000
2 Rs. 8,00.000
3 Rs. 6,00,000
The expected rate of inflation is 5% p.a and cost of capital as 12% p.a. Advise whether
the investment is acceptable or not?
b) How can investment decisions be taken under capital constraints? [5+5]
4. What is Multiple & Modified IRR? How these are different from Quadratic Expression
of Dual Rates of Return on investments? [10]
OR
5. What are different types of Investments? What is the rationale behind choosing each of
them? [10]
R15
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Code No: 724AF
JAWAHARLAL NEHRU TECHNOLOGICAL UNIVERSITY HYDERABAD
MBA IV Semester Examinations, June/July-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 role of Risk in Investment. [5]
b) Why is Net Present Value considered as important? Explain. [5]
c) Explain the Features of Post Pay Back in practice. [5]
d) Under what circumstances leasing can be preferred? [5]
e) Define merger and state basic issues in merger. [5]
PART - B 5 ? 10 marks = 50
2. Differentiate Risk and Uncertainty with respect to Strategic Investments? [10]
OR
3.a) A machine costs Rs 10,00,000 and is expected to yield net cash returns as per current
prices are given below:
Year Rs
1 Rs. 5,00.000
2 Rs. 8,00.000
3 Rs. 6,00,000
The expected rate of inflation is 5% p.a and cost of capital as 12% p.a. Advise whether
the investment is acceptable or not?
b) How can investment decisions be taken under capital constraints? [5+5]
4. What is Multiple & Modified IRR? How these are different from Quadratic Expression
of Dual Rates of Return on investments? [10]
OR
5. What are different types of Investments? What is the rationale behind choosing each of
them? [10]
R15
6. An investment project involves a current outlay of Rs. 10,000. The mean and standard
deviations of cash flows that are correlated are given below. The risk free rate of interest
is 6%.
Year Expected Cash
Flow (Rs)
Standard deviation
of cash flows
1 5,000 1500
2 3.000 1000
3 4,000 2000
4 3,000 1200
Calculate expected NPV and standard deviation of NPVs using the Hiller model. [10]
OR
7. Examine in detail the significance of information and Data Bank in project selections.
[10]
8. Define a lease. How does it differ from hire purchase and Installment Sale? What are the
cash flow consequences of a lease? Illustrate. [10]
OR
9. Write short notes on:
a) Borrowing vs. procuring.
b) Advantages of leasing. [10]
10.a) ABC Textiles has a value of Rs 250 crores and PQR Textiles has a value of Rs 100
crores. If the PQR two companies merge, cost savings with a present value of Rs. 40
crores would occur, ABC offers Rs 150 crores cash compensation to acquire PQR. What
is the net present value of the merger to the two firms?
b) Explain different types of mergers. [5+5]
OR
11. Explain different types of Diversification Strategies and state the government guidelines
for takeover of a company. [10]
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This post was last modified on 23 October 2020