Thursday 29 July 2021

530 - FINANCIAL MANAGEMENT - ANNAMALAI UNIVERSITY EXAM ANSWER SHEETS PROVIDED WHATSAPP OR TELEGRAM 91 9924764558

530 - FINANCIAL MANAGEMENT - ANNAMALAI UNIVERSITY EXAM ANSWER SHEETS PROVIDED WHATSAPP OR TELEGRAM 91 9924764558 

CONTACT

DR. PRASANTH BE MBA PH.D. MOBILE / WHATSAPP: +91 9924764558 OR +91 9447965521 EMAIL: prasanththampi1975@gmail.com WEBSITE: www.casestudyandprojectreports.com

(HUMAN RESOURCE MANAGEMENT)

(FIRST YEAR)

530: FINANCIAL MANAGEMENT

(New Regulations)

(Common with MBA Marketing Mgt. and MBA Financial Mgt.)

Time: Three hours

Maximum: 75 marks

SECTION-A

(53=15)

Answer any FIVE questions

1.

What are the goals of finance function?

2.

Define working capital.

3.

State the hedging approach.

4.

What is preferred stock?

5.

Define retained earnings.

6.

Write a short notes on leverages.

7.

What is merger?

8.

What do you meant by EVA?

SECTION-B

(3×10=30)

Answer any THREE questions

9.

Explain the objectives of cash management.

10.

Bring out the various sources of long-term finance for corporate entry in India.

11.

A firm’s return available to shareholders is 15%. The average tax rate of share holders in 40% and it is expected that 2% is brokerage cost that shareholders will have to pay while investing their dividends in alternative securities. What is the cost of retained earnings?

12.

Explain the factors that influence dividend policy of a firm.

13.

Videsh limited is keen on reporting an earnings per share Rs. 6.00 after acquiring Swadesh limited. The following financial data are given.

Videsh limited

Swadesh limited

Earning per share

Rs.5.00

Rs.500

Market price per share

Rs.60.00

Rs.50.00

Number of shares

10,00,000

8,00,000

There is an expected synergy gain of 5 percent what exchange ratio will result in a post merger earnings per share of Rs.6.00 for videsh limited?

SECTION-C

(1×15=15)

Answer any ONE question

14.

Following information have been furnished by Prakash ltd.

i) Orders must be placed in multiple of 100 units.

ii) Requirement for the year are 3,00,000 units

iii) The purchase price per units is Rs.3

iv) Carrying cost is 25% of the purchase price of the goods

2 4970

1 0

v) Cost per order places in Rs.20

vi) Desired safety stock is 10,000 units, this amount is on hand initially,

vii) Three days are required for delivery

Calculate:

a) EOQ

b) How many orders should the company placed each year

c) At what inventory level should an order placed?

15.

A company has a choice of the following three financial plans. You are required to calculate the financial leverage in each case and interpret it.

X

Rs.

Y

Rs.

Z

Rs.

Equity Capital

2,000

1,000

3,000

Debt

2,000

3,000

1,000

Operating profit(EBIT)

400

400

400

Interest @10% on debt in all cases.

16.

Explain the operating cycle in financial management.

SECTION-D

(1×15=15)

(Compulsory)

17.

A newly formed company ABC Ltd. has applied for a short term loan to a commercial bank for financing its working capital requirements. You are required by the bank to prepare an estimate of the requirements of the working capital for that company. Add 10% to your estimate to cover unforeseen contingencies. The information about the project profit and loss a/c of the ABC co is under:

Amount

Sales

21,00,000

Cost of goods sold:

15,30,000

Gross profit:

5,70,000

Administrative expenses

1,40,000

Selling expenses

1,30,000

2,70,000

Profit before Tax

3,00,000

Provision for tax

1,00,000

Cost of goods sold has been derived as follows:

Materials used

8,40,000

Wages and manufacturing expenses

6,25,000

Depreciation

2,35,000

17,00,000

Less: Stock of finished goods(10% produced not get sold)

1,70,000

15,30,000

The figure given above relate only to the goods that have been finished and not to work in progress; goods equal to 15% of the year’s production (in terms of physical units) are in progress in an average, requiring full material but not only 40% of the other expenses.

The company believes in keeping two months consumption of material in stock. All expenses are paid one month in arrear, suppliers of material extend 1½ months credit, sales are 20% cash, rest are two months credit, 70% of the income tax has to be paid in advance in quarterly instalments. You can make such other assumption as you think necessary for estimating working capital requirements.

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