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Regulations: 2019 M.B.A Degree Examination: Apr/May 2021 Internal Test - I Semester - II

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Govind Govind
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28 views2 pages

Regulations: 2019 M.B.A Degree Examination: Apr/May 2021 Internal Test - I Semester - II

Uploaded by

Govind Govind
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Download as DOCX, PDF, TXT or read online on Scribd
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REG ULATI O NS : 2 01 9

M. B. A DE G RE E E X AMI NATI O N : Apr/ Ma y 2 02 1


Internal Test - I
Semester - II
Da te : 21 /0 5 /2 02 1 Ma x. Ma rks: 10 0
Time / Se ssion : 9 .3 0a . m. to 1 2. 3 0p . m. / F. N. Du ra t io n : 3 Hrs.
19BAT203 - FINANCIAL MANAGEMENT
ANSWER ALL QUESTIONS
PART - A (10 X 2 = 20 MARKS)
1 Define financial management.
2 What is time value of money? Why does money has time value?
3 What is risk premium?
4 What are the goals of financial management?
5 What is yield to maturity?
6 What is capital rationing? State the principles of capital rationing.
7 What is cost of capital?
8 What is Capital budgeting?
9 What do you mean by weighted average cost of capital?
1
Define NPV and IRR.
0
PART – B (5 X 13 = 65 MARKS)
1 a Explain the functions of financial management detail. (OR)
13
1
b Explain the concept and significance of risk and return of a portfolio.
13
1 a (i) Explain the role of a Finance manager.
(ii) Determine the value of a share for which the current dividend is Rs. 3 and the annual growth 6
2
rate is 5%. Assume a required rate of return of 10%. What will be the value of the share if the
annual growth is 8%. (OR) 7

b Explain the goal of financial management. Discuss how wealth maximization is always superior to 13
that of profit maximization.
1 a (i) What is payback period method? List the two important advantages and limitations of this
3 approach. 7
(ii) What is profitability index (Benefit – cost ratio)? (OR) 6
b Critically examine the various methods of evaluating capital budgeting proposals. Discuss their
advantages and disadvantages. 13

1 a Capital Expenditure decisions are by far the most important decisions in the field of management- 13
4 illustrate. (OR)
b Explain the concept of time value of money. Discuss its techniques 13
1 a Discuss the scope of Financial Management in an organization (OR) 13
b Explain the Controller’s and Treasurer’s functions in Indian Context. 13
5
PART – C (Compulsory Question) ( 1 X 15 = 15 MARKS)
1 a A company is considering two mutually exclusive projects A and B. project A involves an outlay of 15
Rs10,00,000 which will generate an expected cash inflow of Rs 2,00,000 per year for 6 years.
6
Project B has an outlay of a Rs 5,00,000 which will produce an expected cash inflows of

Form No. SEC-IE 09: Dt. 09.10.2015; Rev 00: Rev Dt.
page 1 of 2
Rs.1,30,000 per year for 6 years. The company cost of capital is 12%.Calculate the NPV and
IRR of each project. Which method is better and why? (OR)
b ABC Co. is considering two machines, only one of which can be purchased. The available data
on the two machines is given below.
Machine A Machine B
Cost (Rs) 48000 85000
Life of the machine 5 years 5 years
Annual savings (after taxation)
Years Machine A Machine B
1 8000 18000
15
2 10000 25000
3 15000 30000
4 22000 40000
5 30000 20000
Neither machine will have any salvage value. The cost of capital is 10%. Compute the
NPV, IRR and profitability index, which machine should be purchased? Which method is most
suitable in this case? Justify your answer.

Form No. SEC-IE 09: Dt. 09.10.2015; Rev 00: Rev Dt.
page 2 of 2

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