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The document provides information on various business administration courses offered by MB0044, MB0045, MB0046, MB0047, and MB0048 in the winter/November 2011 semester. It includes sample questions, case studies, and examples that will be covered in the courses related to financial management, operations research, and other business topics. The courses cover concepts like financial planning, capital budgeting, replacement decisions, transportation problems, and sequencing problems to minimize costs.

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Chourasia Harish
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33 views

Assignment

The document provides information on various business administration courses offered by MB0044, MB0045, MB0046, MB0047, and MB0048 in the winter/November 2011 semester. It includes sample questions, case studies, and examples that will be covered in the courses related to financial management, operations research, and other business topics. The courses cover concepts like financial planning, capital budgeting, replacement decisions, transportation problems, and sequencing problems to minimize costs.

Uploaded by

Chourasia Harish
Copyright
© Attribution Non-Commercial (BY-NC)
Available Formats
Download as RTF, PDF, TXT or read online on Scribd
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Winter / November 2011

MB0044 SET1, SET2; 14, 15; MB0045 SET1, SET2; MB0046 SET1, SET2; 7, 8; MB0047 SET1, SET2; 10, 11; MB0048 SET1; SET2; 14, 12+; MB0049 SET1, SET2; 9, 8; MB0045 Financial Management Set- 1

1.Explain the steps involved in Financial Planning 0.A company is considering a capital project with the following information: The cost of the project is Rs.200 million, which consists of Rs. 150 million in plant a machinery and Rs.50 million on net working capital. The entire outlay will be incurred in the beginning. The life of the project is expected to be 5 years. At the end of 5 years, the fixed assets will fetch a net salvage value of Rs. 48 million ad the net working capital will be liquidated at par. The project will increase revenues of the firm by Rs. 250 million per year. The increase in costs will be Rs.100 million per year. The depreciation rate applicable will be 25% as per written down value method. The tax rate is 30%. If the cost of capital is 10% what is the net present value of the project. 2.Discuss the relevance and factors that influence the determination of stock level. 3.There was a replacement of its existing machine by a new machine. The new machine will cost Rs 2,00,000 and have a life of five years. The new machine will yield annual cash revenue of Rs 2,50,000 and incur annual cash expenses of Rs 1,30,000. The estimated salvage of the new machine at the end of its economic life is Rs 8,000. The existing machine has a book value of Rs 40,000 and can be sold for Rs 20,000. The existing machine, if used for the next five years is expected to generate annual cash revenue of Rs 2,00,000 and to involve annual cash expenses of Rs 1,40,000. If sold after five years, the salvage value of the existing machine will be negligible. The company pays tax at 40%. It writes off depreciation at 30% on the written down value. The companys cost of capital is 20% Compute the incremental cash flows of replacement decisions. Hint : unit 8 solved problem 5.Explicit cost and Implicit cost are the two dimensions of cost. What role does cost play in financial decisions 6.The following details have been extracted from the books of Ashraya Ltd Income Statement (Rs. In millions) 2010 1000 520 120 45

2009 Sales less returns Gross Profit Selling Expenses Administration 1200 300 100 40

Deprecation Operating Profit Non operating income EBIT (Earnings before interest & Tax Interest Profit before tax Tax Profit after tax Dividend Retained earnings

60 100 20 120 15 105 30 75 38 37

75 280 40 320 18 302 100 202 100 102

Master of Business Administration MB0045 Financial Management -

Semester II Set- 2

Q1. Examine the importance of capital budgeting Q2 Considering the following information, what is the price of the share as per Gordons Model? Net sales Rs. 120 lakhs Net profit margin 12.5% Outstanding preference shares Rs. 50 lakhs @ 12% dividend No. of equity shares 250000 Cost of equity shares 12% Retention ratio 40% ROI 16% Hint: Apply the Gordon formula 3.Internal capital rationing is uses by firms for exercising financial control How does a firm achieve this ? 4.A company has two mutually exclusive projects under consideration viz project A & project B. Each project requires an initial cash outlay of Rs. 3,00,000 and has an effective life of 10 years. The companys cost of capital is 12%. The following fore cast of cash flows are made by the management.
Economic Project A Project B

Environment Pessimistic Expected

Annual cash inflows 65,000 75,000

Annual cash in flows 25,000 75,000

1,00,000 Optimistic 90,000 What is the NPV of the project? Which project should the management consider? Given PVIFA = 5.650 Unit 9 worked example 5.Explain various types of bonds.
0.Given the following information, what will be the price per share using the Walter model.

Winter / November 2011

Earnings per share Rs. 40 Rate of return on investments 18% Rate of return required by shareholders 12% Payout ratio being 40%, 50%, or 60%.

Master of Business Administration MB0048 Operation Research4. b. What is meant by graphing in Network Analysis? 5. Consider the following transportation problem: Godowns Factory 1 2 3 4 A B C D Demand 7 9 11 9 60 5 11 10 10 20 7 6 6 9 40 7 11 2 6 20

Semester II Assignment Set- 2


[5 Marks]

5 5 2 9 40

6 3 5 8 12 40

Stock available 60 20 90 50

It is not possible to transport any quantity from factory B to Godown 5. Determine: a)Initial solution by Vogels approximation method. b) Optimum basic feasible solution. 6. A machine operator processes five types of items on his machine each week, and must choose a sequence for them. The set-up cost per change depends on the item presently on the machine and the set-up to be made according to the following table: From Item To item E A B C D 4 A 4 7 3 4 B 4 6 3 5 C 7 6 7 7 D 3 3 7 E 4 4 5 7 If he processes each type of item once and only once each week, how should he sequence the items on his machine in order to minimize the total set-up cost? (Hint: A-> E -> C-> B-> D-> A Cost: 20)

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