KANPUR INSTITUTE OF TECHNOLOGY, KANPUR QUESTION BANK-1 CLASS: MBA IInd Semeste S!"#e$t: F%n&n$%&' M&n&(ement )MBA *+,1.

What do you mean by business finance? Discuss various approaches to finance function. 2. Finance function is concerned with allocating funds to specific assets and obtaining the best mix of financing in relation to the overall valuation of the firm. Discuss. !. What do you understand by "usiness finance? #. What is financial management process? $. What is finance function? What are its ob%ectives? &. What is financial management? What ma%or decisions are re'uired to be ta(en in finance? ). *aximi+ation of profits is regarded as the proper ob%ective of investment decision, but it is not as exclusive as maximi+ing shareholders- wealth. .omment. /. 0xplain the ob%ective of financial management. 1. Finance function of a business is closely related to its other functions. Discuss. 12. Why is maximi+ing wealth a better goal than maximi+ing profits? 11. 3ow should the finance of an enterprise be organi+ed? 12. .ritically analy+es the functions of financial manager in a modern business organi+ation. 1!. What is the concept of 4time value-? 5ame the techni'ues of 6ime value of money. 1#. What is time preference for money? 1$. Define the following7 8a9 :nnuity, 8b9 Discount rate, 8c9 Future value,8d9 :nnuity discount factor, 1&. : rational human being has a time preference for money. What are the reasons for such a preference? 1). 0xplain the mechanics of calculating present value of cash flows giving suitable examples. 1/. What is ;is(? 3ow can ris( of an asset be calculated? 0xplain. 11. What are the types of ris( involved in an investment? :naly+e the ris( and return relationship in ta(ing <nvestment decisions. 22. 3igher the return, higher will be the ris(. <n this context, discuss the various ris( associated with an asset.

QUESTION BANK-+ CLASS: MBA IInd Semste S!"#e$t: F%n&n$%&' M&n&(ement )MBA *+,1. 2. !. #. $. &. What do mean by appraisal of pro%ects? 0xplain the various considerations involved in such appraisal. Discuss the problems of identification, formulation, appraisal and implementation of new pro%ects. Discuss in detail the various stages involved in the execution and management of a pro%ect. Define capital budgeting. What is the need of capital budgeting? 0xplain the concept of capital budgeting and what is it-s practical utility? What do you understand capital budgeting process? 0numerate briefly the ma%or steps involved in capital budgeting. ). .apital "udgeting is long term planning for ma(ing and financial proposed capital outlays 0xplain. What are the limitations of its. /. Write short notes on 7 8a9 profitability index,8b9 time ad%usted rate of return, 8c9 .apital rationing, 8d9 5=> vs <;;,8e9 .apital expenditure,8f9=ay bac( period method,8g9 accounting rate of return. 1. What is meant by financial leverage? 3ow does it magnify the revenue available for e'uity shareholders? 12. Discuss the relation between debt financing and financial leverage. 11. Distinguish between operating leverage and financial leverage. Do you thin( that they are related to capital structure?

QUESTION BANK-. CLASS: MBA IInd Semeste S!"#e$t: F%n&n$%&' M&n&(ement )MBA *+,1. .ritically examine the advantages and disadvantages of raising funds by issuing shares of different types. 2. What are debentures? What type of debentures can a %oint stoc( company issue? 0valuate debentures as a source of funds. !. "etween e'uity shares and debentures which is profitable for raising additional long term capital for a manufacturing company and why? #. What is factoring? $. Write a brief note on commercial paper as a source of finance. &. Write short notes on7 8a9 .onvertible debentures,8b9 =reference share,8c9 0'uity shares,8d9 ?ease financing, 8e9 @elf financing, ). .ommercial "an( provides only short term finance. Do you agree? 0xplain the various forms of ban( finance. /. ?easing is beneficial to both, the lessee as well as the lessor . 0xamine. 1. What are the main sources of finance available to industries for meeting shortAterm as well as longAterm financial re'uirements? Discuss. 12. What do you understand by capital structure? What are the ma%or determinants of capital structure? 11. Bsing imaginary figure show how to determined the value of firm under 8a9 6he 5etA<ncome85<9 approach, 8b9 6he 5et Cperating <ncome 85C<9 approach. 12. What is weighted average cost of capital? 0xamine the rational behind the use of W:... 1!. What is cost of capital? 0xplain the significance of cost of capital. 1#. What is relevance cost of capital in capital budgeting and capital structure planning decisions? 1$. Dive a critical appraisal of the traditional approach and the *odiglianiA*illers approach to the problem of capital structure.

QUESTION BANK-/ CLASS: MBA Ist Semeste S!"#e$t: F%n&n$%&' M&n&(ement )MBA *+,1. What do you understand by management of earnings? Discuss its scope. 2. What do understand by retained 4retained earnings-? Discuss the merits and demerits of ploughing bac( of profits. !. ;etained earnings do not involve any cost . Do you agree? #. 3ow far do you agree that dividends are irrelevant? $. 0xplain the theories of dividend. &. 3ow do dividends affect the value of a share? ). @tate the various advantages of stability of dividends? /. Why stable dividend policy is dangerous? 1. ?ist the various constraints on =aying Dividends? 12. What are the preferences of shareholders? Do they want dividend income or capital gains? 11. What are the financial needs of the company? 12. 3ow much should be paid out as dividends? What are the constraints on paying dividends? 1!. @hould the company follow a stable dividend policy? 1#. What should be the form of dividends? 1$. What are the options available for Dividend decision? 1&. ?ist the various models available for ta(ing dividend decisions? 1). What do you mean by traditional approach to the dividend policy and what are its limitations? 1/. 3ow Walter *odel is different from Dordon-s Dividend .apitali+ation *odel? 11. 0xplain in detail about Dordon-s Dividend .apitali+ation *odel? 22. :naly+e critically of the :ssumptions of ** model in dividend decision? 21. What are the critical assumptions of *iller E *odigliani *odel? 22. <n Walter-s approach, the dividend policy of a firm depends on availability of investment opportunity and the relationship between the firm-s internal rate of return and its cost of capital. 2!. What are the sources of bonus issue? Write detailed note on the issue of bonus shares. 2#. Define the term wor(ing capital. What factors would you ta(e into consideration in estimating the wor(ing capital needs of concern? 2$. 0xplain factors influencing the wor(ing capital. 2&. Discuss the wor(ing capital cycle. 2). What do you understand by cash management? 3ow can it be underta(en? 2/. 0fficient cash management will aim at maximi+ing the cash inflows and showing cash outflows. 21. What is meant by inventory management? Why is it essential to a business concern? !2. What is :A"A. analysis? 3ow is it useful as tool of inventory management? !1. What are the assumptions of ** hypothesis? !2. 4Wor(ing capital management deals with decisions regarding the appropriate mix and level of current assets and current liabilities-. 0lucidate the statement. !!. ?ength of operating cycle is the ma%or determinant of wor(ing capital needs of a business firm. 0xplain. !#. Describe in brief the various factors, which are ta(en into account in determining the wor(ing capital needs of a firm. !$. What is receivables management? 3ow is it useful for business concerns? !&. What should be the considerations in forming a credit policy? !). ;eceivables forecasting is important for the proper management of receivables forecasting. !/. .an a firm have an optimal capital structure? What do you mean by flexibility of capital structure? !1. Discuss any five factors relevant in determining the capital structure. #2. <f debt is cheaper source of finance, then why every firm is not a 11F debt firm? 0numerate the legal provisions in this respect. #1. 3ow the consideration of control affects the composition of capital structure? #2. 0xplain the feature of 0"<6 A0=@ analysis, cash flow analysis and valuation models approach to determinations of capital structure. #!. <n addition to wealth considerations, what other factors might a firm consider while ma(ing capital structure decisions? ##. 0xplain the capital structure decision from the point of view of minimi+ation of ris(.