MITTAL COMMERCE CLASSES INTERMEDIATE – MOCK TEST

(GI-7, VI-VDI-SI-3)
DATE: 17.03.2022 MAXIMUM MARKS: 100 TIMING: 3¼ Hours

FINANCIAL MANAGEMENT
SECTION - A
Q. No. 1 is compulsory.
Candidates are also required to answer any four questions
from the remaining five questions.
In case, any candidate answers extra question(s)/sub-question(s) over and above
the required number, then only the requisite number of questions top answered in
the answer book shall be valued and subsequent extra question(s) answered shall
be ignored.
Working Notes should form part of the respective answer.

Question 1:
(a) From the following details of X Ltd., PREPARE the Income Statement for the year
ended 31st March, 20X8:
Financial Leverage 2
Interest Rs. 5,000
Operating Leverage 3
Variable cost as a percentage of sales 75%
Income tax rate 30%
(5 Marks)
(b) Mr. Mehra had purchased a share of Alpha Limited for Rs. 1,000. He received dividend
for a period of five years at the rate of 10 percent. At the end of the fifth year, he sold
the share of Alpha Limited for Rs. 1,128. You are required to compute the cost of
equity as per realised yield approach.
(5 Marks)
(c) Probabilities for net cash flows for 3 years of a project of Ganesh Ltd are as follows:
Year 1 Year 2 Year 3
Cash Flow Probability Cash Flow Probability Cash Flow Probability
(Rs.) (Rs.) (Rs.)
2,000 0.1 2,000 0.2 2,000 0.3
4,000 0.2 4,000 0.3 4,000 0.4
6,000 0.3 6,000 0.4 6,000 0.2
8,000 0.4 8,000 0.1 8,000 0.1
CALCULATE the expected net cash flows and the present value of the expected cash
flow, using 10 per cent discount rate. Initial Investment is Rs. 10,000.
(5 Marks)

(d) Shahji Steels Limited requires Rs. 25,00,000 for a new plant. This plant is expected to
yield earnings before interest and taxes of Rs. 5,00,000. While deciding about the
financial plan, the company considers the objective of maximizing earnings per share.
It has three alternatives to finance the project – by raising debt of Rs. 2,50,000 or
Rs. 10,00,000 or Rs. 15,00,000 and the balance, in each case, by issuing equity
shares. The company’s share is currently selling at Rs. 150, but is expected to decline
to Rs. 125 in case the funds are borrowed in excess of Rs. 10,00,000. The funds can
be borrowed at the rate of 10 percent upto Rs. 2,50,000, at 15 percent over Rs.
2,50,000 and upto Rs. 10,00,000 and at 20 percent over Rs. 10,00,000. The tax rate
applicable to the company is 50 percent. ANALYSE which form of financing should the
company choose?
(5 Marks)

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MITTAL COMMERCE CLASSES INTERMEDIATE – MOCK TEST

Question 2:
Slide Ltd. is preparing a cash flow forecast for the three months period from January to the
end of March. The following sales volumes have been forecasted:
Months December January February March April
Sales (units) 1,800 1,875 1,950 2,100 2,250

Selling price per unit is Rs. 600. Sales are all on one month credit. Production of goods for
sale takes place one month before sales. Each unit produced requires two units of raw
materials costing Rs. 150 per unit. No raw material inventory is held. Raw materials
purchases are on one month credit. Variable overheads and wages equal to Rs. 100 per
unit are incurred during production and paid in the month of production. The opening cash
balance on 1st January is expected to be Rs. 35,000. A long term loan of Rs. 2,00,000 is
expected to be received in the month of March. A machine costing Rs. 3,00,000 will be
purchased in March.
(a) Prepare a cash budget for the months of January, February and March and calculate
the cash balance at the end of each month in the three months period.
(b) Calculate the forecast current ratio at the end of the three months period.
(10 Marks)

Question 3:
Following is the abridged Balance Sheet of Alpha Ltd. :-
Liabilities Rs. Assets Rs. Rs.
Share Capital 1,00,000 Land and Buildings 80,000
Profit and Loss Account 17,000 Plant and Machineries 50,000
Current Liabilities 40,000 Less: Depreciation 15,000 35,000
1,15,000
Stock 21,000
Receivables 20,000
Bank 1,000 42,000
Total 1,57,000 Total 1,57,000

With the help of the additional information furnished below, you are required to prepare
Trading and Profit & Loss Account and a Balance Sheet as at 31st March, 2017:
(i) The company went in for reorganisation of capital structure, with share capital
remaining the same as follows:
Share capital 50%
Other Shareholders’ funds 15%
5% Debentures 10%
Payables 25%
Debentures were issued on 1st April, interest being paid annually on 31st March.
(ii) Land and Buildings remained unchanged. Additional plant and machinery has been
bought and a further Rs. 5,000 depreciation written off.
(The total fixed assets then constituted 60% of total fixed and current assets.)
(iii) Working capital ratio was 8 : 5.
(iv) Quick assets ratio was 1 : 1.
(v) The receivables (four-fifth of the quick assets) to sales ratio revealed a credit period
of 2 months. There were no cash sales.
(vi) Return on net worth was 10%.
(vii) Gross profit was at the rate of 15% of selling price.
(viii) Stock turnover was eight times for the year.
Ignore Taxation
(10 Marks)

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MITTAL COMMERCE CLASSES INTERMEDIATE – MOCK TEST

Question 4:
The following information has been extracted from the records of a Company:
Product Cost Sheet Rs./unit
Raw materials 45
Direct labour 20
Overheads 40
Total 105
Profit 15
Selling price 120
 Raw materials are in stock on an average of two months.
 The materials are in process on an average for 4 weeks. The degree of completion is
50%.
 Finished goods stock on an average is for one month.
 Time lag in payment of wages and overheads is 1½ weeks.
 Time lag in receipt of proceeds from debtors is 2 months.
 Credit allowed by suppliers is one month.
 20% of the output is sold against cash.
 The company expects to keep a Cash balance of Rs. 1,00,000.
 Take 52 weeks per annum.
The Company is poised for a manufacture of 1,44,000 units in the year.
You are required to prepare a statement showing the Working Capital requirements of the
Company.
(10 Marks)
Question 5:
(a) Company X is forced to choose between two machines A and B. The two machines are
designed differently, but have identical capacity and do exactly the same job. Machine
A costs Rs. 1,50,000 and will last for 3 years. It costs Rs. 40,000 per year to run.
Machine B is an ‘economy’ model costing only Rs. 1,00,000, but will last only for 2
years, and costs Rs. 60,000 per year to run. These are real cash flows. The costs are
forecasted in rupees of constant purchasing power. Ignore tax. Opportunity cost of
capital is 10 per cent. Which machine company X should buy?
(6 Marks)

(b) The following information pertains to SD Ltd.

Earnings of the Company Rs. 50,00,000
Dividend Payout ratio 60%
No. of shares outstanding 10,00,000
Equity capitalization rate 12%
Rate of return on investment 15%
(i) COMPUTE the market value per share as per Walter’s model?
(ii) COMPUTE the optimum dividend payout ratio according to Walter’s model
and the market value of Company’s share at that payout ratio?
(4 Marks)
Question 6:
(i) fuEufyf[kr dh O;k[;k dhft;s%
(a) fczt foRrh;u
(b) py nj ckaMl
(c) iSfadax dzsfMV
(6 Marks)
(ii) ^^foRrh; mRrksyd ,d nks/kkjh ryokj gS** O;k[;k dhft;sA
(4 Marks)

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MITTAL COMMERCE CLASSES INTERMEDIATE – MOCK TEST

ECONOMICS FOR FINANCE

SECTION - B
Q. No. 7 is compulsory.
Answer any three from the rest.
In case, any candidate answers extra question(s)/sub-question(s) over and above
the required number, then only the requisite number of equestions first answered
in the answer book shall be valued and subsequent extra question(s) answered
shall be ignored.
Working Notes should form part of the respective answer.

Question 7:
(a) fo’o O;kikj laLFkk (WTO) dk izeq[k dk;Z D;k gS\ vki 'kCn ^lokZf/kd lgk;qDr jk"Vª* (MFN) ls
D;k le>rs gS\
(3 Mark)

(b) fons’k lh/kk fuos’k (FDI) dks ifjHkkf"kr djsaA Hkkjr tSlh fodkl’khy vFkZO;oLFkk esa fons’k lh/kk fuos’k
(FDI) ds i{k esa nks rdZ nsosaA
(3 Mark)

(c) eanh rFkk volkn ds nkSjku D;k dj uhfr gksuh pkfg,\ ijh{k.k djsaA
(2 Mark)

(d) ijh{k.k djsa /ku xq.kd dk D;k izHkko gksxk ;fn cSad vkf/kD; udn dks /kkfjr djrs gSa \
(2 Mark)

Question 8:
(a) (i) ewY; Lrj esa fLFkjrk lqfuf'pr djus ds fy, ljdkj dSls gLr{ksi djrh gS\
(2 Marks)

(ii) vkjchvkbZ us 31 ekpZ] 2018 dks fuEufyf[kr vkadM+s çdkf'kr fd,A vkidks M4 dh x.kuk
djuk vko';d gS%
(Rs. in crores)
turk ds ikl eqæk 1,12,206.6
cSadksa ds ikl fMekaM fMi‚ftV 1,93,300.4
cSadksa ds ikl 'kq) le; tek 2,67,310.2
RBI ds ikl vU; tek,sa 614.8
Mkd?kj cpr tek,sa 277.5
Mkd?kj jk"Vªh; cpr i= (NSCs) 110.5
(3 Marks)

(b) fo'o O;kikj laxBu (WTO) dh dqN fparkvksa dk mYys[k djsAa

(3 Marks)

(c) DOHA ROUND ij ,d laf{kIr uksV fy[ksaA

(2 Marks)

Question 9:
(a) izfrdwy p;u dh vo/kkj.kk dks Li"V djsaA izfrdwy p;u dk laHko ifj.kke D;k gS\
(3 Marks)

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MITTAL COMMERCE CLASSES INTERMEDIATE – MOCK TEST

(b) izokfgr fofue; nj iz’kklu ds vUrxZr fdl izdkj fofue; nj fu/kkZfjr fd;k tkrk gS\
(2 Marks)

(c) O;kikj folaxfr ls D;k vFkZ gS\

(3 Marks)

(d) lwpuk foQyrk dks ifjHkkf"kr djsAa

(2 Marks)

Question 10:
(a) iSls ds fy, lêk ekax dh O;k[;k djsAa
(3 Marks)

(b) nh?kZdkyhu vkfFkZd fodkl ds fy, jktdks"kh; uhfr D;k gksuh pkfg,A
(2 Marks)
(c) Lopkfyr LVscykbtlZ dh O;k[;k djsAa
(3 Marks)

(d) fixksfo;u dj dh O;k[;k djsaA

(2 Marks)

Question 11:
(a) fo'o O;kikj laxBu dh lajpuk ij ,d laf{kIr uksV fy[ksaA
(3 Marks)

(b) Countervailing Duties dh O;k[;k djsAa

(2 Marks)

(c) rduhdh ck/kkvksa dks O;kikj ck/kkvksa ds :i esa le>kb,A

(3 Marks)

(d) varjkZ"Vªh; O;kikj ds edsaZfVfyLV –f"Vdks.k dks Li"V djsaA

(2 Marks)

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