Download JNTUA MBA 2018 May-June Supply 2nd Sem 9E00202 Financial Management Question Paper

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Code: 9E00202

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MBA & MBA (Finance) II Semester Supplementary Examinations June/July 2018

FINANCIAL MANAGEMENT

(For students admitted in 2013 (LC), 2014, 2015 & 2016 only)

Time: 3 hours Max. Marks: 60

Answer any FIVE questions

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All questions carry equal marks

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1. Elaborate the nature and scope of financial management.
2. The expected cash flows of a project are as follows:

   Year	0	1	2	3	4	5
   Cash flow	-1,00,000	20,000	30,000	40,000	50,000	30,000

   The cost of capital is 12%. Calculate the following:

   1. Net present value (NPV).

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   2. Internal rate of return (IRR).
3. Discuss the ways and means used in practice to manage risk.
4. The capital structure of Adams Ltd., in book value terms is as follows:

   Equity capital (20 million shares ?10 par)	200 million
   Preference capital 12% (5,00,000 shares ?100 par)	50 million
   Retained Earnings	350 million
   Debentures 14% (12,00,000 debentures ?100 par)	120 million
   Term loans 13%	80 million
   	800 million

   The next expected dividend per share is ?2.00. The dividend per share is expected to grow at the rate of 12%. The market price per share is ?50. Preference stock, redeemable after 10 years, is currently selling for ?85 per share. Debentures, redeemable after 5 years, are selling for ?90 per debenture. The tax rate for the company is 30%. Calculate average cost of capital.

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5. Describe the dividend policies of Indian companies.
6. The finance department of Prasanth textile co., gathered the following:

   Carrying costs per unit of inventory are ?10.

   The fixed costs per order are ?20.

   The number of units required is 30,000 per year.

   The variable costs per unit ordered are ?2.

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   The purchase cost price per unit is ?30.

   1. Determine EOQ.
   2. Compute total number of orders in a year.
7. What are the different forms of mergers and acquisitions?

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8. Discuss corporate governance in India in detail.

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