Download JNTUK (JNTU-Kakinada) MBA New folder R16MBA201 Financial Management Question Paper.
Subjt Code: R16MBA201
MBA - II Semester Regular and Supplementary Examinations, April-2018.
FINANCIAL MANAGEMENT
Time: 3 hours Max Marks: 60
Question Paper Consists of Part-A and Part-B.
Answering the question in Part-A is Compulsory & Four Questions should be answered from Part-B
All questions carry equal marks of 12.
PART-A (CASE STUDY)
1 X 12=12M
1. Fitwell Company is capitalised with Rs.50,00,000 consisting of 10,000 ordinary shares of Rs500
each. Additional finance of Rs.50,00,000 is required for an expansion programme launched by
the company. The following four possible financing plans are under consideration:
Plan A: Entirely through share capital, issuing 10,000 shares at Rs500 each
Plan B: Entirely through debt capital at 13% per annum.
Plan C: Rs 25, 00,000 through ordinary share capital and Rs. 25, 00,000 through debt capital at
12 % per annum.
Plan D: Rs 25, 00,000 through ordinary share capital and Rs 25.00.000 through 10% preference
Shares, by issuing 5,000 preference shares of Rs. 500 each.
The company's existing EBIT amounted to Rs.6,00,000. By virtue of the increase in
capitalisation, the EBIT are expted to be double the present level. Examine the impact of
financial leverage of these four plans and calculate the EPS for the shareholders. In each case,
assume 50% tax rate.
PART-B
4X 12 = 48
2. (a) Describe the evolution of Financial Management. 6M
(b) Discuss briefly the functions of financial management. 6M
3. (a) Explain the investment dision process. 4M
(b) A company is considering a new projt which requires a capital outlay of Rs.2,00,000. The
tax rate is 50% and the forasted annual income before depriation and taxes are as follows:
Year EBDIT(in RS) ,
1 1,00,000
2 1,00,000
3 80,000
4 80,000
5 40,000
Calculate a) Payback period b) Accounting Rate of Return c) Net present Value of the projt at
10% . Depriation calculated on straight line basis. 8M
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A
Subjt Code: R16MBA201
MBA - II Semester Regular and Supplementary Examinations, April-2018.
FINANCIAL MANAGEMENT
Time: 3 hours Max Marks: 60
Question Paper Consists of Part-A and Part-B.
Answering the question in Part-A is Compulsory & Four Questions should be answered from Part-B
All questions carry equal marks of 12.
PART-A (CASE STUDY)
1 X 12=12M
1. Fitwell Company is capitalised with Rs.50,00,000 consisting of 10,000 ordinary shares of Rs500
each. Additional finance of Rs.50,00,000 is required for an expansion programme launched by
the company. The following four possible financing plans are under consideration:
Plan A: Entirely through share capital, issuing 10,000 shares at Rs500 each
Plan B: Entirely through debt capital at 13% per annum.
Plan C: Rs 25, 00,000 through ordinary share capital and Rs. 25, 00,000 through debt capital at
12 % per annum.
Plan D: Rs 25, 00,000 through ordinary share capital and Rs 25.00.000 through 10% preference
Shares, by issuing 5,000 preference shares of Rs. 500 each.
The company's existing EBIT amounted to Rs.6,00,000. By virtue of the increase in
capitalisation, the EBIT are expted to be double the present level. Examine the impact of
financial leverage of these four plans and calculate the EPS for the shareholders. In each case,
assume 50% tax rate.
PART-B
4X 12 = 48
2. (a) Describe the evolution of Financial Management. 6M
(b) Discuss briefly the functions of financial management. 6M
3. (a) Explain the investment dision process. 4M
(b) A company is considering a new projt which requires a capital outlay of Rs.2,00,000. The
tax rate is 50% and the forasted annual income before depriation and taxes are as follows:
Year EBDIT(in RS) ,
1 1,00,000
2 1,00,000
3 80,000
4 80,000
5 40,000
Calculate a) Payback period b) Accounting Rate of Return c) Net present Value of the projt at
10% . Depriation calculated on straight line basis. 8M
Page 1 of 2
4. (a) What do you mean by Break even analysis of financial leverage? How is it calculated? 6M
(b) Explain importance and significance of operating leverage. 6M
5. (a) The following information is available from the balance sheet of a company:
Equity capital( 20,000
shares @Rs10
Rs. 2,00,000
Reserves and Surplus Rs 1,30,000
8% Debentures Rs. 1,70,000
The tax rate for the company is 50%. Cost of equity is 12%. Calculate the weighted average cost
of capital. 8M
(b) How can you determine cost of equity capital in a growth firm? 4M
6. (a) Explain the factors that determine the working capital requirements of a firm. GM
(b) What is the need for holding inventory? Why inventory management is important? 6M
7. (a) What are the essentials of Walter's dividend model? Explain its shortcomings. 8M
(b) Define i) Bonus Share ii) Share split 4M
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This post was last modified on 18 November 2019