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Allama Iqbal Open University Islamabad Warning: (Department of Commerce)

The document outlines assignment guidelines for the 'Introduction to Business Finance' course at Allama Iqbal Open University, emphasizing the importance of originality and adherence to submission formats. It includes specific instructions for assignments, such as compulsory questions, submission deadlines, and penalties for plagiarism. Additionally, it provides detailed questions for two assignments covering various financial concepts and calculations.

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170 views3 pages

Allama Iqbal Open University Islamabad Warning: (Department of Commerce)

The document outlines assignment guidelines for the 'Introduction to Business Finance' course at Allama Iqbal Open University, emphasizing the importance of originality and adherence to submission formats. It includes specific instructions for assignments, such as compulsory questions, submission deadlines, and penalties for plagiarism. Additionally, it provides detailed questions for two assignments covering various financial concepts and calculations.

Uploaded by

gdc450cs
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as DOC, PDF, TXT or read online on Scribd
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ALLAMA IQBAL OPEN UNIVERSITY ISLAMABAD

(Department of Commerce)
WARNING
1. PLAGIARISM OR HIRING OF GHOST WRITER(S) FOR SOLVING
THE ASSIGNMENT(S) WILL DEBAR THE STUDENT FROM AWARD
OF DEGREE/CERTIFICATE, IF FOUND AT ANY STAGE.
2. SUBMITTING ASSIGNMENT(S) BORROWED OR STOLEN FROM
OTHER(S) AS ONE’S OWN WILL BE PENALIZED AS DEFINED IN
“AIOU PLAGIARISM POLICY”.

Course: Introduction to Business Finance (8594) Semester: Autumn, 2024


Level: BS(A&F) ADC
Please read the following instructions for writing your assignments. (AD, BS, B. Ed,
MA/MSc, MEd) (ODL Mode).
1. All questions are compulsory and carry equal marks but within a question the
marks are distributed according to its requirements.
2. Read the question carefully and then answer it according to the requirements of the
questions.
3. Avoid irrelevant discussion/information and reproducing from books, study guide
or allied material.
4. Handwritten scanned assignments are not acceptable.
5. Upload your typed (in Word or PDF format) assignments on or before the due date.
6. Your own analysis and synthesis will be appreciated.
7. Late assignments can’t be uploaded at LMS.
8. The students who attempt their assignments in Urdu/Arabic may upload a scanned
copy of their handwritten assignments (in PDF format) on University LMS. The
size of the file should not exceed 5MB.

Total Marks: 100 Pass Marks:50


Assignment No. 1
(Unit 1-4)
Note: Attempt all questions.

Q.1 a. What are main functions of a present-day finance manager? (20)


b. What are major financial decisions. Explain each financial decision with the help
of examples?

Q.2 Discuss the statement “A rupee today is worth more than a rupee tomorrow”
Explain with a suitable example. (20)

Q.3 A multinational company had sales totaling Rs. 40,000,000 in the fiscal year 2023.
Some rations for the company are listed below. Use this information to determine
the dollar values of income statement and balance sheet accounts as requested. (20)
Year Ended December 31, 2023

Sales Rs. 40,000,000


Gross profit margin 80%
Operating profit margin 35%
Net profit margin 8%
Return on total assets 16%
Return on common equity 20%
Total asset turnover 2
Average collection period 62.2 days
Calculate values for the following:
a. Gross profit
b. Cost of goods sold.
c. Operating profits
d. Operating expenses
e. Earning available for common stockholders
f. Total assets
g. Total common stock equity
h. Accounts receivable

Q.4 a. If you invest Rs. 20,000 every year for the next 15 years starting 1 year from today
and you earn an interest rate of 10% per year. How much will you have at the end
of 10 years? (20)
b.What is the present value of following cash flows at the interest rate of 8% per
year?
i. Rs 150,000 received 5 years from now.
ii. Rs. 200,000 received 20 years from now.
iii. Rs. 100,000 received every year, beginning one year from now and ending
10 years from now.

Q.5 Discuss the motives for keeping cash in hand by company. Which of the motives
do you consider the most important and why? (20)

2
Total Marks: 100 Pass Marks:50

ASSIGNMENT No. 2
(Units: 5–9)
Note: Attempt all questions.

Q.1 A successful capital mix cannot be translated from one company to another to
produce similar results. Do you agree with this statement? Give reasons to support
your answer. (20)

Q. 2 Why would company like to retain its earning instead of paying out cash
dividends? How would you differentiate between temporary and permanent
retention of earnings? (20)

Q.3 a. How does valuation of pure discount bonds differ from valuation of perpetual
bond? Also explain the difference between coupon rate and current yield.
b. What is meant by a company’s beta? What does a beta of 1; more than 1or less
than 1 denote? (20)

Q.4 Future value of an annuity for each case in the accompanying table, answer the
questions that follow. (20)

Case Amount of annuity Interest rate Deposit period


A Rs.2500 8% 10
B 500 12 6
C 30,000 20 5
D 11,500 9 8
E 6,000 14 30

Calculate the future value of the annuity assuming that it is


a. An ordinary annuity
b. An annuity due.

Q.5 What are the capital budgeting techniques? Explain each method with the help of
examples? (20)

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