hrm

© All Rights Reserved

Als DOC, PDF, TXT **herunterladen** oder online auf Scribd lesen

16 Aufrufe

hrm

© All Rights Reserved

Als DOC, PDF, TXT **herunterladen** oder online auf Scribd lesen

- Managerial Finance- Final Exam
- Phuket Beach Hotel (2)
- Final Term Papers MGT201 ---- Solved Master File
- 142-0105
- Principels of Capital Investment -
- Company structure analysis
- Feasib Financial
- Magnum Financial Final
- JUN-2015-A
- Definition
- Capital Bud Getting
- Accounting FM Notes
- FORMULAE
- Corporate finance Q2 March 2006
- FINAL_Fall2008_ACC501_01
- 2010-06-08_011844_jtrip
- Unit -5 Cost of Capital and Capital Budgeting
- Risks and Government Policies on Investment
- Financial Management MB0045
- Corporate Finance Case Final1

Sie sind auf Seite 1von 11

From the information given below, suggest the management as to which project is preferable

based on pay-back period. Two projects A and B, each project needs an investment of Rs. 30,000.

The standard cut off period for the company is 5 years.

Year

1

2

3

Project A (Rs)

10000

10000

4000

6000

8000

Project B (Rs)

8000

8000

12000

6000

7000

The initial investment required for Project A is Rs. 32400. It is expected to generate cash inflows

of Rs. 16000, Rs. 14000 and Rs. 12000 through its three years life period. Compute the Internal

Rate of Return of the Project A.

According to Walters Model the optimum Payout Ratio can be either Zero or 100%.. Explain

the circumstances when it is true.

Three firms A, B and C has EPS to be Rs. 100. The Capitalization rate or cost of equity is given to

be 10%. The Rate of Return (r) for Firm A, B and C are 17%, 10, and 7% respectively. Show the

affect of dividend policy on the market price of shares, using Gordons model when dividend

payout ratio is 0%, 40%, 80% and 100% .

In the income Statement of Income of Aura Cycles the sales are 10, 50,000, Variable Cost of 7,

67,000 and Fixed Cost of 75000. EBIT is given to be 2, 08,000. The amount of Interest is 1,

10,000 and the Tax rate applicable is 30%. Calculate the:

(A) Operating Leverage (B) Financial Leverage (C) Combined Leverage

Itemize the relationship between debt and value of the firm apropos of a related form of Leverage.

An investment with expenditure of Rs. 10, 00,000 is expected to produce the following profits (after deducting

depreciation)

Year

1

2

3

4

Profits (after deducting depreciation)

80000

160000

180000

60000

An investment project costs Rs. 25000 and it creates cash inflows through a period of five years. The cash flows are

Rs. 9000, Rs. 8000, Rs. 7000, Rs. 6000 and Rs. 5000 from first year to fifth year. The required rate of return is

assumed to be 10 Percent. Find out the

(A) Net Present Value

(B) Profitability Index

In the income Statement of Income of Aura Cycles the sales are 20, 50,000, Variable Cost of 17, 67,000 and Fixed

Cost of 55000. EBIT is given to be 1, 80,000. The amount of Interest is 1, 20,000 and the Tax rate applicable is 40%.

Calculate the:

(A) Operating Leverage (B) Financial Leverage (C) Combined Leverage

The contention that dividends have an impact on the share price has been characterized as the Bird in hand

argument. Elucidate the essentials of this argument. Why this argument is considered Fallacious?

Three firms A, B and C has EPS to be Rs. 100. The Capitalization rate or cost of equity is given to be 10%. The Rate

of Return (r) for Firm A, B and C are 17%, 10, and 7% respectively. Show the affect of dividend policy on the

market price of shares, using Walters model when dividend payout ratio is 0%, 40%, 80% and 100% .

The existence of Financial and Operating Leverage is always complementary. Do you agree? Vindicate your

views with suitable examples.

Rita, who is 30 years old is planning for her government investment. She invested in government scheme

which promise to pay interest @ 9% pa compounded annually on the payment of yearly installment of Rs.

10000. Calculate the amount payable by government at the end of 10 years.

Write a short note

A. Factoring

B. Lease financing

An asset has following possible returns with associated possibilities. Calculate a) variance b) Standard variation

YEAR

RETURN

PROBABILITY

2008

30

0.10

2009

20

0.20

2010

10

0.40

2011

0.20

2012

-10

0.10

You have Rs.80,000 available today for investment. You want to invest it for 5 years. Bank of India is offering

Interest @7.25%p.a compounded annually. Axis Bank is offering Interest @7%p.a compounded semi-annually.

Punjab National Bank is offering interest @8% pa compounded annually. Which bank you will choose to invest

in and Why?

The following table gives dividend and share price data for Hind Manufacturing Company.

Calculate his A.)Annual rate of return B.) Average rate of return

Year

1994

2.50

12.25

1995

2.50

14.20

1996

2.50

17.50

1997

3.00

16.75

1998

3.00

18.45

1999

3.25

22.25

2000

3.50

23.50

Mr. Sharma is appointed as a financial manager of JCT Ltd Being CEO of the company you have to advice Mr.

Sharma regarding what financial decisions he has to take for the company.

Enumerate the various methods to calculate cost of equity. Also mention its formulas

A company has an expansion proposal and wishes to raise 15,00,000 for it . The company

decided to raise 8,00,000 through debt , 1,00,000 through preference share and balance

through reserves . The cost of preference is 14% debenture is 8% and reserve is 14% .

Find out weighted average cost of capital?

What is the cost of debenture whose face value is Rs.100 and is redeemed at par after 10

years .The coupon rate is 6% ,Floatation cost is 4 %

Find out the cost of equity whose expected dividend is Rs.3.5 and which is likely to grow

at 7% and market price is Rs.140

ABC Ltd is selling 8% debenture at 10% discount on face value (Rs.100) and 12%

preference share is sold at par (Rs.100) . ABC Ltd is growing at 15% p.a and had paid

dividend of Rs.3 per share in the previous year and the equity share has face value of Rs.

20 and is now traded at Rs. 80. Find the overall cost of capital?

Source

Amount

Debenture

3,00,000

Preference

1,50,000

Equity

3,50,000

Question 1.The initial investment in a project is Rs. 200,000. The project has an

expected life of 5 years and zero salvage value. The company uses straight line

method for depreciation. Tax rate is 40%. The estimated earnings before

depreciation and before tax from the project are as below. Calculate NPV .

year

Earnings

before Dep.

And Tax

70000

80000

120000

90000

60000

Discount

Rate=10%

Question 2.A Co. has an investment opportunity costing Rs. 40000 with the

following expected net cash flows after taxes and before depreciation.

Year

Net Cash

Flow

7000

7000

7000

7000

7000

8000

10000

15000

10000

10

4000

Calculate:

A firm is considering two mutually exclusive projects X and Y, the details are as:

Project X

Project Y

Investment

43,500

36,000

Cash flows in years

1

10,000

15,000

2

12,000

13,000

3

13,000

12,000

4

14,000

10,000

5

16,000

10,000

Compute for both the projects and give decision which project is beneficial:

1. Payback period.

2. NPV at 10% discount rate.

3. Profitability Index at 10% discount rate.

Find the ARR for a project having a life of 5 years will cost Rs.4,00,000. Its stream of income before

depreciation (straight line method)is expected to be Rs.1,00,000; Rs.1,20,000; Rs.1,60,000;

Rs.1,70,000;Rs.2,00,000 during the life of the project and applicable tax rate is 40%.

Find the market value of the firm and average cost of capital from the following information

NOI

Rs.3.5 lacs

Total investment

Rs.15 lacs

Equity capitalization rate is 10% and firm not uses any debts.

What is dividend? Explain the Walters Model based on dividend.

What is optimum capital structure? Why is it important for any firm?

A company is considering an investment proposal to purchase a machine costing Rs.50,000 with a life

of 5 years and no salvage value. Applicable tax rate is 35% and straight line method is used for

providing depreciation. The estimated cash flows before depreciation and tax from the machine are as

follows:

Year

1

2

3

4

5

CFBT 10,000

10,692

12,769

13,462

20,385

Compute and comment about the decision of the proposal:

1. Average rate of return

2. NPV at 10% discount rate

A companys EBIT is Rs.1.5 lacs and having 8% debentures of Rs.8 lacs. Overall capitalization rate is

12%. Find value of the firm and Equity capitalisation rate.

X Ltd. Has 20% debt and 80% equity in its capital structure. The cost of debt is 10% and cost of

equity is 15%. Find overall cost of capital of the firm.

How does Gordons Model differ from Walters Model in valuation of the firm based on Dividend?

Earnings per share- Rs.4

Rate of return --

18 %

Cost of Capital-

15%

What will be price per share as per Walter model if dividend payout ratio is 40%? 50%? 60%.

The Indage products limited capital structure consists of 12000 equity share of 10 each and 160000 debentures of 10% with sales of 120

Its fixed cost is 200000 and variable cost ratio to sales is 40%.The income tax rate is 50%.Calculate all three leverage.

.A company is considering purchasing a machine .Three machines are available X, Y AND Z.The details are:

Cost

50000

60000

70000

Estimated scrap

5000

7500

10000

Life in years

12

10

13

Average profit

before tax and

depreciation

10000

14000

18000

An investment of 10000(having a scrap value of 500) yields the following return:

Year

Cash flow

1st

4000

2nd

4000

3rd

3000

4th

3000

5th

2000

Is the investment desirable? Discuss according to NPV assuming PV factor for first-five year are.909,.826,.751,.683,.621 respectively.

Critically Analyse Walter and Gordon Model of Dividend Theories?

Write a short note on

(A)Financial Leverage v/s operating Leverage (B)Net v/s Gross Working Capital

Consider the following information about Sagar Cements:

EBIT

Rs 1000 lakhs

PBT

Rs 400 lakhs

Fixed cost

Rs 300 lakhs

Find out the operating leverage and financial leverage of the firm ?

Find out the percentage change in earning per share for Sagar Cements , if sales increased by 6 percent ?

A company is considering two mutually exclusive investments, Project X and Project Y. The expected cash flows of these projects

are as follows :

Year

Project X

Project Y

-3000

-4000

1000

1500

1200

2500

2000

5000

4000

6000

What is the NPV of each project if the cost of capital is 10 percent? Which project would you choose in this case?

Find out the payback period for each of the above mentioned projects?

ABC Ltd. has been earning Rs 10 per share. The firm is in the business where it can use these earnings in projects that provide a

return of 15%. The firms cost of capital is 10%.What is the price of the share of ABC Ltd under Walters model if it

follows payout of (a) 0% (b) 40% ?

under the scope of Financial Management?

How is profit maximization different from shareholders wealth maximization?

Explain which goal should be adopted by modern business entities and why?

Explain the rationale of Finance in the success of the organization. Enumerate

the various role to be performed by Finance Manger.

Explain various sources of Finance, which could be used by an organization to

raise funds for its projects with a duration ranging from short run to long run.

Mr. Gautam is recently appointed as Finance manager of ABC Ltd. Being CEO

of the company advice Mr. Gautam what financial decisions he has to take for

the company.

Mr. Sameer has joined a firm dealing into Seasonal products as Chief Financial

Manager. The firm is having a small market share. Enlist various financial

challenges which Mr. Sameer may confront along with the major decisions to

be taken by him.

Explain the concept of Time value of money? Why the value of the money

changes over the period of time?

Explain in detail, the various factors that affect the value of the money in due

course of time.

Define the concept of Risk and Return. In the case of Single Asset, how is it

measured?

Explain the role of Compounding in the estimation of time value of money

with a suitable example.

Explain the role of Discounting in the estimation of time value of money with

a suitable example.

statement apropos of Net Operating Income Approach.

The achievement of Optimal Capital Structure is a day dreaming as it is just

a baseless claim and alien phenomenon. Explain the statement in the light

of a capital structure theory that justifies it.

What do you understand by Cost of Capital? How the cost of different sources

of Finance could be measured?

Explain the concept of Weighted Average Cost of Capital along with its

measurement.

What is the significance of the Cost of Capital? Enumerate the various factors

affecting cost of capital of Firm?

Q2. What is the difference between discounted and non discounted methods which is

better and why?

Q3. Explain the difference between financial risk and operating risk.

Q4. Explain the degree of operating leverage and its significance.

Q5. Explain the Walters model of dividend theory.

Q6. Critically evaluate the MM hypothesis of dividend irrelevance..

Q2. In what circumstances NPV and IRR give conflicting results, which method should

be preferred at that time and why?

Q3. Explain the relation between EPS and Financial leverage.

Q4. Explain the degree of combined leverage.

Q5. Explain the Gordons model of dividend policy.

answer.

Illustrate the effect of Dividend policy of a firm on Market price of its shares using Walter model

taking hypothetical example.

Volga is a large manufacturing and marketing company in the private sector. In 2014, the company

had a gross sales of Rs. 982.2 crores. Other financial data if the company is given below:

Net Worth- Rs. 152.31 crores

Borrowing- Rs.165.47 crores

EBIT- Rs. 43.17 crores

Interest- Rs. 34.39 crores

Fixed cost (excluding interest) Rs. 118.23 crores

Calculate: a) Operating leverage, b)Financial leverage, Combined leverage and interpret the results

Explain the meaning of Working capital and also explain the determinants of working capital.

A machine will cost Rs.5,00,000 and will provide annual cash inflow of Rs. 1,50,000 for a period of 6

years. Calculate:

a) Payback Period

b) Accounting rate of return

Should company invest in this machine? Justify your answer.

A project will cost Rs.5,00,000. Its stream of earnings before depreciation, interest and taxes during

the first year through 5 years is expected to be Rs.1,90,000, Rs.1,70,000, Rs.1,60,000, Rs. 1,20,000

and Rs.2,00,000 respectively. Assume 40% tax rate and depreciation on straight line basis. Calculate:

a) Net Present Value

b) Profitability Index

- Managerial Finance- Final ExamHochgeladen voniqbal78651
- Phuket Beach Hotel (2)Hochgeladen vonapi-3719687
- Final Term Papers MGT201 ---- Solved Master FileHochgeladen vonzahidwahla1
- 142-0105Hochgeladen vonapi-27548664
- Principels of Capital Investment -Hochgeladen vonUmbreen Siddiqui
- Company structure analysisHochgeladen vonIraz89
- Feasib FinancialHochgeladen vonapi-3838281
- Magnum Financial FinalHochgeladen vonapi-3838281
- JUN-2015-AHochgeladen vonAURANGZEB JAMAL
- DefinitionHochgeladen vonShishir Jain
- Capital Bud GettingHochgeladen vonSekhar Soma
- Accounting FM NotesHochgeladen vonsapbuwa
- FORMULAEHochgeladen vonmikaenon
- Corporate finance Q2 March 2006Hochgeladen vonadnanjee
- FINAL_Fall2008_ACC501_01Hochgeladen vonSyed Shariq Muhammad
- 2010-06-08_011844_jtripHochgeladen vonJulius Tangonan
- Unit -5 Cost of Capital and Capital BudgetingHochgeladen vonSuman R Suman R
- Risks and Government Policies on InvestmentHochgeladen vonDhvanit Pathak
- Financial Management MB0045Hochgeladen vonNitin Sanil
- Corporate Finance Case Final1Hochgeladen vonIsmat Jerin Chetona
- may 16Hochgeladen vonshrikant
- Finance Basic 101.pdfHochgeladen vonNavneet Priye
- 35200 Cheatsheet MTHochgeladen von01dynamic
- Lecture 1Hochgeladen vonsarvinpsg
- Capital BudgetingHochgeladen vonnani_nagendra123
- Group assignHochgeladen vonEzzeldin Elkhashab
- Iiiiii Ggggg Ff Fff MmmmHochgeladen vonBasavaraj
- Model Revision QuestionsHochgeladen vonManish Gupta
- Corporate Finance PDF Final (1)Hochgeladen vonbunny
- Pre-Feasibility Report - Cement Plant.pdfHochgeladen vonYax Teczone

- Rappel JavaHochgeladen vonGoblen
- Bance Notes on Property Relations Art. 88 - Art. 136Hochgeladen vonMaria Stella Tirona Hilomen
- 117EE - LINUX PROGRAMMING.pdfHochgeladen vonvenkiscribd444
- Functions Problems347summerHochgeladen vonVera Pavlova
- Nalla Cheruvu Tender document -Part B Head works.docxHochgeladen vonSrikar Dangeti
- The Tragedy of the CommonsHochgeladen vonniza_253
- Decca TreeHochgeladen voniuridicaprima4
- 118 W Kelso MLS SheetHochgeladen vonDerrick Ruiz
- presentation_tariff determination generation & transmission_1[1]Hochgeladen vonAnkur Pathak
- Manual 3Hochgeladen vonMelquisedeth Tinjaca
- Jeffrey Martin Ryder v. Secretary, Department of Corrections, 11th Cir. (2013)Hochgeladen vonScribd Government Docs
- Social Psychology IntroductionsHochgeladen vonJeremy
- Hoja Personaje HidaHochgeladen vonJavier Tena
- References - International student studiesHochgeladen vonJournal of International Students (http://jistudents.org/)
- WLAN Cc Extricom 8AL90478USAA 1 en.pdfHochgeladen vonCamrick
- (Nutrition in exercise and sport) Judy A. Driskell, Ira Wolinsky - Nutritional Assessment of Athletes-CRC Press (2002).pdfHochgeladen vonImam Ramdhan
- STA630 Online Quiz No1Hochgeladen vonKamran Haider
- P2P Content DeliveryHochgeladen vonsorin birou
- Department of Public Prosecutions Budget Brief 2015 - Head 75Hochgeladen vonPatricia b
- Writing_Competition_Packet_2010Hochgeladen vonStephen Shafer
- Works of Alexender Pope vol. 1Hochgeladen vonsamkv1fbd
- Article Bower e Christensen - FichamentoHochgeladen vonDiego de Araújo
- State MachineHochgeladen vonUriel Cruz Medel
- my teaching philosophy cche688Hochgeladen vonapi-248817343
- DBP v Ariel SantosHochgeladen vonJosef Macanas
- InfoHochgeladen vonwael
- vinyu veeray angkur-19022009Hochgeladen vonAkansha Lal Srivastava
- exalogic-wp-173449Hochgeladen vonMaverick Mayur
- Pragmatics and Critical Discourse AnalysisHochgeladen vontanjasamja
- Niels Bohr’s Interpretation and the Copenhagen Interpretation—Are the Two Incompatible.pdfHochgeladen vonIgor Vogel

## Viel mehr als nur Dokumente.

Entdecken, was Scribd alles zu bieten hat, inklusive Bücher und Hörbücher von großen Verlagen.

Jederzeit kündbar.