Amity Campus

Uttar Pradesh
India 201303

ASSIGNMENTS
PROGRAM: MFC
SEMESTER-II
Subject Name
Study COUNTRY
Roll Number (Reg.No.)
Student Name

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:
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INSTRUCTIONS
a) Students are required to submit all three assignment sets.
ASSIGNMENT
Assignment A
Assignment B
Assignment C

DETAILS
Five Subjective Questions
Three Subjective Questions + Case Study
Objective or one line Questions

MARKS
10
10
10

b)
c)
d)
e)

Total weightage given to these assignments is 30%. OR 30 Marks

All assignments are to be completed as typed in word/pdf.
All questions are required to be attempted.
All the three assignments are to be completed by due dates and need to be submitted for
evaluation by Amity University.
f) The students have to attached a scan signature in the form.

Signature :
Date
:

_________________________________
_________________________________

( ) Tick mark in front of the assignments submitted

Assignment A
Assignment B
Assignment C

Financial Management
Assignment A
1.What is stock split, What are its advantages?
2. Discuss the techniques of inventory control.
3. Examine risk adjusted discount rate as a technique of incorporating risk factor in capital budgeting.
4.Critically examine the pay back period as a technique of approval of projects.
5.Examine the relationship of financial management with other functional areas of finance
Assignment B
1. What are the assumptions of MM(Modigliani Miller) approach?
2. Summaries the features of DCF(Discounted cash flow) technique.
3. Examine the type and sources of risk in capital budgeting.
4.(a) Deepak steel has issued non convertible debentures for Rs.5 Cr. Each debenture is of par value of
Rs.100, carrying a coupon rate of 14%, interest is payable annually and they are redeemable after 7yrs at
a premium of 5 %. The company issued the Non convertible debentures at a discount of 3 %. What is the
cost of debenture to the company? Tax rate is 40%.
(b) Supersonic Industries Ltd. has entered into an agreement with Indian Overseas bank for a loan of
Rs.10Cr. with an interest rate of 10%. What is the cost of loan if the tax rate is 45%?

Assignment 3 (40 MCQs)

1. We all live under conditions of ____________ and _______________.
a) Risk, return
b) Risk, uncertainty
c) Return, premium
d) Uncertainty, premium
2. Find the present value of Rs.1,00,000 receivable after 10 yrs.if 10% is time preference for money.
a)
38400
b)
38500
c)
38600
d)
38700
3 What is the future value of a regular annuity of Re.1 earning a rate of 12% interest p.a. for 5 Years?
a)
5.353
b)
6.353
c)
7.353
d)
7.153
4.If a borrower promises to pay Rs.20000 eight years from now in return for a loan of Rs.12550 today,
what is the annual interest being offered?
a)
6% approx
b)
7% approx
c)
8% approx

d)

9% approx

5.A loan of Rs.5,00,000 is to be repaid in 10 equal installments. If the loan carries

12% interest p.a.. What is the value of one installment?
a)
68492
b)
78492
c)
88492
d)
98492
6 If you deposit Rs.10,000 today in a bank that offers 8% interest, in how many years will this amount
double by 72 rule?
a)
9
b)
8
c)
7
d)
6
7 An employee of a bank deposits Rs.30,000 into his FD A/c at the end of each year for 20 yrs. What is
the amount he will accumulate in his FD at the end of 20 years, if the rate of interest is 9%.
a) 1534800
b) 1535000
c) 1535200
d) 1535400
8 ____________ decisions could be grouped into two categories.
a) Make or buy
b) Capital budgeting
c) Fixed capital
d) Working capital
9._____________ and revenue generation are the two important categories of capital budgeting.
a) Cost reduction
b) Production
c) Investment
d) Dividend
10._________ appraisal examines the project from the social point of view.
a) Financial
b) Cost
c) Economic
d) Technical
11. All technical aspects of the implementation of the project are considered in ______ appraisal.
a) Financial
b) Cost
c) Economic
d) Technical
12.__________ of a project is examined by financial appraisal.
a) Financial viability
b) Cost viability
c) Economic viability
d) Technical viability

13.Among the elements that are to be examined under commercial appraisal, the most crucial one is the
__________.
a) Supply of the product
b) Demand for the product
c) Cost of the product
d) Elements of cost
14. Formulating is the third step in the evaluation of investment proposal.
a) No
b) Yes
15. A __________ is not a relevant cost for the project decision.
a) Sunk cost
b) Direct cost
c) Indirect cost
d) Works cost
16. Effect of a project on the working of other parts of a firm is known as __________.
a) Separation principal
b) Formulation
c) Externalities
d) After effects
17.The essence of separation principal is the necessity to treat __________elements of a project
separately from that of ___________ elements.
a) Production, operations
b) Financing, production
c) Investment, financing
d) Investment, production
18. Payback period ______________ time vlue of money.
a) Ignores
b) Considers
c) None of the above
19. IRR gives a rate of return that reflects the ______________ of the project.
a) Cost
b) Profitability
c) Cash inflows
d) Cash outflows
20. The methods of appraising an investment proposal can be grouped into _____ methods and
___________ methods.
a) Traditional, modern
b) Primary, secondary
c) First, second
d) old, new
21.The time gap between acquisition of resources from suppliers and collection of
customers is known as ________.
a) Financial year
b) Calendar year
c) Operating cycle
d) Current cycle
22.__________ is the average length of time required to produce and sell the
product .

cash from

a) Inventory period
b) Stock cycle
c) Inventory conversion period
d) None of the above
23. __________ is the average length of time required to convert the firms receivables into cash.
a) Receivables period
b) Receivables cycle
c) Receivables conversion period
d) None of the above
24. ______________ is length of time between firms actual cash expenditure and
its own receipt.
a) Cash conversion period
b) Cash cycle
c) Cash period
d) Cash and bank cycle
25. Capital intensive industries require ____________ amount of working capital.
a) Lower
b) Medium
c) Higher
d) None of the above
26. There is a ______________ between volume of sales and the size of working
capital of a firm.
a) Positive direct correlation
b) Negative direct correlation
c) Negative indirect correlation
d) Positive indirect correlation
27. Under inflation conditions same level of inventory will require ____________ investment in
working capital.
a) Decreased
b) Increased
c) Same
d) zero
28. Longer the manufacturing cycle ______ the investment in working capital.
a) Larger
b) smaller
29. ____________ is used to estimate working capital requirement of a firm.
a) Trend analysis
b) Risk analysis
c) Capital rationing
d) Operating cycle
30. Operating cycle approach is based on the assumption that production and sales occur on
____________.
a) Continuous basis
b) Alternate basis
c) Alternate & Continuous basis
d) None of the above
31. ____________ is considered to be superior to RADR.
a) IRR
b) NPV
c) CE
D) PI

32. ____________ analyse the changes in the project NPV on account of a given change in one of the
input variables of the project.
a) Sensitivity analysis
b) Profitability Index
c) Project evaluation
d) Risk analysis
33.Examining and defining the mathematical relation between the variable of the NPV is one of the
steps of _____________.
a) Sensitivity analysis
b) Profitability Index
c) Project evaluation
d) Risk analysis
34.Forecasts under Sensitivity analysis are made under different ____________.
a) Political conditions
b) Economic conditions
c) Industry conditions
d) Regional conditions
35. Receiving a required inventory item at the exact time needed.
a) ABC
b) JIT
c) FOB
d) PERT
36. Post completion audit is ____________ in the phases of capital budgeting decisions.
a) First Step
b) Last step
c) Middle step
d) None of the above
37. Why is a discount rate used to calculate net present value?
a) Money has value
b) Money has enhancing value
c) Money has diminishing value
d) Money has constant value
38. What does net present value give?
a) future values of present cash flows
b) present value of present cash flow
c) present value of future cash flows
d) future values of future cash flows
39.Of what is sinking fund an example of ?
a) Perpetuity
b) Annuity
c) Gratuity
d) None of the above
40. What stream of cash flows continues indefinitely?
a) Perpetuity,
b) Annuity
c) Futurity
d) None of the above