Bba 4 Sem Financial Management 77425 Dec 2022
Bba 4 Sem Financial Management 77425 Dec 2022
Bba 4 Sem Financial Management 77425 Dec 2022
of Pages: 03
BBA (Sem. – 4)
FINANCIAL MANAGEMENT
Subject Code: BBA-403-18
M Code: 77425
Date of Examination: 17-12-2022
Time: 3 Hrs. Max. Marks: 60
INSTRUCTIONS TO CANDIDATES:
1. SECTION-A is COMPULSORY consisting of TEN questions carrying TWO marks each.
2. SECTIONS-B consists of FOUR Sub-sections : UNITS-I, II, III & IV. Each Sub-section
contains TWO questions each, carrying TEN marks each.
3. Students have to attempt any ONE question from each Sub-section.
SECTION-A
a) Liquidity decision
b) Annuity
c) Retained earnings
d) Capital structure
e) Operating leverage
f) Capital budgeting
g) Payback period
h) Treasury bills
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SECTION-B
UNIT-I
3. "A rational human being has a time preference for money." What are the reasons for such
preference and illustrate with suitable examples?
UNIT-II
4. What do you understand by the term 'Leverage'? How does it affect the profits of a firm?
Compare the nature of financial leverage with operating leverage.
UNIT-III
6. A company is considering an investment proposal that has the following cash flows:
Projects YEAR PV PV
A −10,000 10,000 (10%) (30%)
B −10,000 17,500 7,500 1 . 909 . 769
C −10,000 2,000 4,000 12,000 2 . 826 . 592
D −10,000 10,000 3,000 13,000 3 . 751 . 455
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7. Discuss the following two methods of capital budgeting:
a) Profitability Index
b) Accounting rate of return.
UNIT-IV
8. What is the significance of working capital? What are the different approaches to working
capital management?
9. Critically evaluate the theories of relevance of dividends.
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