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    32 Financial Management 44 Sep Oct 2022

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    32 Financial Management 44 Sep Oct 2022

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    sathyachandana7
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    32FinancialManagement44SepOct2022

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    32 Financial Management 44 Sep Oct 2022

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    ItffiililIililtililililltililt uG - 359

    IV Semester B.B.A. Examinr#3n, September/Octob er 2A22


    (Repeaters) (CBGS)
    (2015 - 16 and Onwards)
    BUSI NESS ADM INISTRATION
    Paper - 4.4: Financial Management
    Time : 3 Hours Max. Marks : 70

    lnstruction : Answers should be completely wrffien in English only.

    SEGTION -A
    1. Answer any five sub-questions of the following. Each question carries
    two marks. (2x5=10)

    a) Define financial management.

    b) Give the equation for EPS.

    c) Fixed cost is Rs. 2,50,000, Profit is 1,75,000, Sales is Rs. 7,45,000.


    Calculate contribution.

    d) EBIT = 5,00,000, EBT = 3,00,000, calculate financial leverage.

    e) Mention any four functions of financial management.


    f) Give the meaniftg of time value of money.

    g) Give the meaning of cash dividend.

    sEcroN - B

    Answer any three questions of the following. Each question carries six marks. (3x6=18)

    2. Briefly explain the prime objectives of financial management.

    3. Explain briefly the characteristics of a sound financial plan.

    P.T.O.
    uG - 359 -z- llllll llillil llllllllllllll lll llll

    4. Compare the two companies in terms of operating leverage and financial


    Ieverage.
    FirmX Firm Y
    Sales 30,00,000 45,00,000
    Variable cost 35% on sales 45/" on sales
    Fixed cost 8,00,000 9,00,000
    lnterest 2,00,000 3,00,000

    lnterpret the results of the firm.

    5. Mr. Anil deposits Rs. 4,000 at the end of every year for 5 years and the deposits
    earn a compound interest @ 10% p.a. Determine how much money he will
    have at the end of five years ? Given (1.10)s = 6.105.

    6. Discuss the salient features of NPV method. r'

    ..'::-,".',.,,'.' ,.
    -
    SECTION -C
    ..
    Answer any three questions ftom tfre fullowing. Each queslion carries
    14 marks. (14x3=42)

    7. What do you understand by dividend policy ? Enumerate the factors that


    determine the dividend policy.

    8. Give the meaning of working capital. Explain the dangers of excessive and
    inadequate working capital.

    9. A firm's cost of capitat is 10%. lt is considering two mutually exclusive projects


    X and Y. The details are given below : 1

    Particulars 't1 Proiect X Proiect Y

    I
    tt
    lnvestment 15,00,000 15,00,000
    Net annual cash flows :

    1 2,00,000 8,00,000
    2 4,00,000 8,00,000
    3 6,00,000 4,00,000
    4 , 9,00,000 2,00,000
    5 12,00,000 2,00,000
    Iil]ttililtililililt]fltilllll -3- uG - 3s9
    Compute :

    A) Payback period
    B) NPV

    P.V. factor at 1 2/o for 5 years.

    Year 1 2 3 4 5
    P.V. factor @ 12% 0.893 4.797 0.712 0.636 0.567

    10. ABC Ltd. is capitalised with Rs. 7,00,000 divided into 70,000 equity shares
    . of Rs. 10 each. The management plans to raise another Fls. 5,00,000 to
    finance some expansion programme.
    The following are the four possible plans :
    t'

    1) All equity shares.


    2) Rs. 2,50,000 in equity shares and the balance in debentures carrying
    : - 10o/o interest.
    ' , carrying 10% dividend.
    4) All debentures carrying 8% interest.
    The existing EBIT amounts to Rs. 60,000 p.a. Calculate EPS in all the
    above four plans

    11. Discuss the factors affecting capital budgeting decisions of a firm.

    &'t

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