Download JNTUH (Jawaharlal Nehru Technological University Hyderabad) MBA (Master of Business Administration) 2nd Semester (Second Semester) R15 2018 Jan 721CM Financial Management Previous Question Paper
Code No: 721CM
JAWAHARLAL NEHRU TECHNOLOGICAL UNIVERSITY HYDERABAD
MBA II Semester Examinations, January-2018
FINANCIAL MANAGEMENT
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 the importance of financial management? [5]
b) Explain the similarities and differences of results under NPV and IRR? [5]
c) Explain operating leverage with the help of an example and the formula in detail? [5]
d) Explain various steps involved in designing the dividend policy of a company? [5]
e) Explain EOQ Model with the help of an example? [5]
PART ? B 5 ? 10 Marks = 50
2. What do you understand by financial management? Discuss the functional areas of
financial management? [10]
OR
3. What do you mean by Discounting or Present Value Technique? Explain the relationship
of finance with other business functions or disciplines? [10]
4. From the following information calculate the NPV of the two projects and suggest which
of the two projects should be accepted assuming a discount rate of 10%
ProjectX ProjectY
Initial Investment ?20,000 ?30,000
Estimated Life 5 Years 5 Years
Scrap Value ?1,000 ?2,000
The profits before depreciation and after taxes (cash flows) are as follows: [10]
Year 1 Year 2 Year 3 Year 4 Year 5
Project X 5,000 10,000 10,000 3,000 2,000
Project Y 20,000 10,000 5,000 3,000 2,000
OR
5. Explain the advantages and limitations of these terms:-
a) NPV
b) IRR [5+5]
6. ABC Ltd has sales of ? 25, 00,000. The Fixed costs are ? 4, 00,000 and variable costs
are ? 17, 00,000. The company uses a debt of ? 10, 00,000@ 12% p.a.
From the available data calculate the operating, financial and combined leverages. [10]
R15
FirstRanker.com - FirstRanker's Choice
Code No: 721CM
JAWAHARLAL NEHRU TECHNOLOGICAL UNIVERSITY HYDERABAD
MBA II Semester Examinations, January-2018
FINANCIAL MANAGEMENT
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 the importance of financial management? [5]
b) Explain the similarities and differences of results under NPV and IRR? [5]
c) Explain operating leverage with the help of an example and the formula in detail? [5]
d) Explain various steps involved in designing the dividend policy of a company? [5]
e) Explain EOQ Model with the help of an example? [5]
PART ? B 5 ? 10 Marks = 50
2. What do you understand by financial management? Discuss the functional areas of
financial management? [10]
OR
3. What do you mean by Discounting or Present Value Technique? Explain the relationship
of finance with other business functions or disciplines? [10]
4. From the following information calculate the NPV of the two projects and suggest which
of the two projects should be accepted assuming a discount rate of 10%
ProjectX ProjectY
Initial Investment ?20,000 ?30,000
Estimated Life 5 Years 5 Years
Scrap Value ?1,000 ?2,000
The profits before depreciation and after taxes (cash flows) are as follows: [10]
Year 1 Year 2 Year 3 Year 4 Year 5
Project X 5,000 10,000 10,000 3,000 2,000
Project Y 20,000 10,000 5,000 3,000 2,000
OR
5. Explain the advantages and limitations of these terms:-
a) NPV
b) IRR [5+5]
6. ABC Ltd has sales of ? 25, 00,000. The Fixed costs are ? 4, 00,000 and variable costs
are ? 17, 00,000. The company uses a debt of ? 10, 00,000@ 12% p.a.
From the available data calculate the operating, financial and combined leverages. [10]
R15
OR
7. ABC ltd. has a share a capital of ?10, 00,000 divided into 1, 00,000 equity shares of
?10 each, fully paid. It has a major expansion program requiring an investment of
another ? 5, 00,000. The management is considering the following alternatives for
raising this amount:
a) Issue of 50,000 equity shares of ?10 each.
b) Issue of 50,000, 12% preference shares of ?10 each.
c) Issue of 10% debentures of ? 5, 00,000.
The company?s present earnings before interest and taxes (EBIT) are ? 4, 00,000 p.a
you required to calculate the effect of each of the above modes of financing on the EPS
(earnings per share), and suggest the best alternative. Assume tax rate at 50%. [10]
8.a) What do you mean by Dividend Policy? Explain the different types of dividend policies.
b) What do you mean by the term dividend? Explain Linter?s Model in the context of
dividend policy. [5+5]
OR
9. The following information is available in respect of a firm:
Capitalisation rate = 10%
Earnings per share = ?50
Assumed rate of return on investments:
a) 12%
b) 8%
c) 10%
Show the effect of dividend policy on market price of shares applying Walter?s formula
when dividend payout ratio is (i) 0% (ii) 20% (iii) 40% (iv) 80% and (v) 100%
[10]
10. Write short notes on the followings:
a) Cash Management in Business Organisation
b) Cash Management Process. [5+5]
OR
11. What do you mean by the term Inventory Management? Explain the techniques of
managing the inventory? [10]
--ooOoo--
FirstRanker.com - FirstRanker's Choice
This post was last modified on 23 October 2020