Download PTU BBA 2020 Dec 4th Sem 77425 Financial Management Question Paper

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Roll No.

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Total No. of Questions : 18

Total No. of Pages : 03

BBA (2018 Batch) (Sem.-4)

FINANCIAL MANAGEMENT

Subject Code : BBA-403-18

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M.Code : 77425

Time : 3 Hrs.

Max. Marks : 60

INSTRUCTIONS TO CANDIDATES :

1. SECTION-A is COMPULSORY consisting of TEN questions carrying TWO marks each.

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2. SECTION-B consists of FOUR Sub-sections : Units-I, II, III & IV.
3. Each Sub-section contains TWO questions each, carrying TEN marks each.
4. Students have to attempt any ONE question from each Sub-section.

SECTION-A

Write short notes on :

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1. Commercial bills
2. Time value of money
3. Cost of capital
4. Arbitrage
5. Financial leverage

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6. Investment decisions
7. Profitability index
8. Permanent working capital
9. Bonus shares
10. Irrelevance of dividends

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SECTION-B

UNIT-I

11. Critically compare profit maximization and wealth maximization. Which one serves as a better goal of financial management and why?
12. Which are the short term sources from where a business firm can raise money?

UNIT-II

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13. What are the important determinants of capital structure? Discuss the MM Approach as theory of capital structure.
14. The following information has been given in respect of a company :

    Particulars Rs.

    1. Equity share capital (dividend into shares of Rs. 10 each) 10,00,000
    2. Debentures (14%) 30,00,000
    3. Selling price per unit 50

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    4. Variable cost per unit 30
    5. Fixed costs 12,00,000

    The company is producing, at present. 1,00,000 units. Now, the management of the company plans to increase output by 25%. The tax rate for the company is 40%.

    On the basis of the above information, you are required to make out the following calculations for the existing as well as the planned level of output.

    1. Operating Leverage

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    2. Financial Leverage
    3. Earnings per share

    Analyse and interpret the results.

UNIT-III

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15. Why are investment decisions important in a firm? Which are the different non-discounted cash flow techniques for investment decision making?
16. From the following information, calculate the net present value of the two project and suggest which of the two projects should be accepted at a discount rate of the two :

    Project X Project Y

    Initial Investment Rs. 20,000 Rs. 30,000

    Estimated Life 5 Years 5 years

    Scrap Value Rs. 1,000 Rs. 2,000

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    The profits before depreciation and after taxation (cash flows) are as follows :

    Year	1	2	3	4	5
    	Rs.	Rs.	Rs.	Rs.	Rs.
    Project x	5,000	10,000	10,000	3,000	2,000
    Project y	20,000	10,000	5,000	3,000	2,000

    Note: The following are the present value factors @ 10% p.a.

    Year	1	2	3	5	6
    Factor	0.909	0.826	0.751	0.683	0.621	0.564

UNIT-IV

17. What do you mean by working capital and its different types? What factors affect the working capital needs of a firm and how?

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18. What are the different forms in which dividend can be offered to shareholders? What do you mean by irrelevance of dividends?

NOTE : Disclosure of Identity by writing Mobile No. or Making of passing request on any page of Answer Sheet will lead to UMC against the Student.