Bharathiar University 2009 B.Com FINANCIAL MANAGEMENT -university exam paper

B.Com (C.A) DEGREE EXAMINAION, APRIL 2009.

Sixth semester
Part III – Commerce with Computer Applications

FINANCIAL MANAGEMENT
Time: three hours maximum: 75marks

SECTION-A (10X1=10)


ans ALL the ques.

select the accurate ans

1.Basic objective of FINANCIAL Management is
(a)maximization of profits
(b)maximization of shareholder’s wealth
(c)ensuring financial discipline in the organization
(d)all the above

2.In case of RISK, chance of future loss
(a)can be foreseen
(b)cannot be foreseen
(c)cannot be foreseen better than under uncertainty
(d)none of these

3.while evaluating capital investment proposals, the time value of money is considered in case of
(a)Pay-back method
(b)Discounted cash flow method
(c)Accounting rate of return method
(d)None of these

4.The return after the pay-off period is not considered in case of
(a)Payback method
(b)IRR method
(c)Present value index method
(d)None of these

5.The operating cycle means
(a)the accounting period of the business
(b)the time gap ranging from the sales and their true realization in cash
(c)the period for which business expenses have been incurred
(d)none of these

SAY actual OR FALSE

6.The cost of capital is the minimum rate of return that will maintain the value of a firm’s equity shares.

7. Operating leverage indicates the effect on residual net income on account of
long term funds bearing fixed charges.

8. Networking capital is that portion of a firm’s current assets which is financed
by long term funds.

FILL IN THE BLANKS

9. The policy concerning quantum of profits to be distributed as dividends is termed
as ______________

10. The declaration of bonus problem in lieu of ____________ should not be made.

SECTION-B-------- (5X5=25 marks)

ans ALL THE ques.

11. (a) elaborate the aims of finance function?

(or)

Mr. Ram deposits Rs. 10,000 for three years at 10% . What is the compound value of his deposit?

12. (a) discuss the importance of cost of capital.

(or)

(b) Sri.ganesh industries ltd. problems 5,000, 12% debentures of Rs. 100 every at par. The tax rate is 40% . compute before tax cost of debt.

13. (a) what is composite leverage? State the significance of combined leverage.

(or)

(b) A company needs Rs. 6,00,000 for construction of a new plant. The subsequent 3 financial plans are feasible:

The company may problem 60,000 equity shares of Rs. 10 every.
The company may problem 30,000 equity shares of Rs. 10 every and 3,000 debentures of Rs. 100 every bearing 8% coupon rate of interest.
The company may problem 30,000 equity shares of Rs.10 every an 3,000 preference shares of Rs.100 every bearing 8% rate of dividend.

The profit before interest and taxes (PBIT) is expected to be Rs.1,50,000. corporate tax rate is 50%. compute the earnings per share under the 3 plans. Which plan would you recommend?

14. (a) discuss the need for holding inventories.

(or)

from the subsequent particulars, calculate

Net operating cycle period
Number of operating cycles in a year
The amount of working capital:
Period covered – 360 days
avg. period allowed by suppliers –30 days.
avg. period allowed debtors – 45 days

Raw materials consumed during the year Rs.6,00,000
avg. stock of raw materials Rs. 50,000
Work in progress inventory Rs.5,00,000
avg. W.I.P inventory Rs. 30,000
Finished goods inventory Rs.8,00,000
avg. Finished goods stock holds Rs. 40,000
Total cost of sales Rs.8, 40,000


15. (a) elaborate the various forms of dividends?

(Or)
define the different forms of stable dividends and its advantages.


SECTION-C------ (5X8=40marks)

ans ALL THE ques.

16. (a) discuss the functions of finance manager.
(Or)
(b) discuss the different approaches for measurement of business return.

17. (a) discuss the different methods of evaluating capital expenditure proposals.

(Or)
(b) explain the various methods of calculating the cost of equity capital.

18. (a) discuss the term leverage. What’re its types?

(Or)

(b) explain in detail the factor which determines the capital structure of a firm.

19. (a) explain the importance of working capital for a manufacturing CONCERN.

(OR)
(b) elaborate the different factors influencing the size of receivables?

20. (a)discuss the determinants of dividend policy of corporate enterprises.

(Or)
(b) discuss M.M.s dividend irrelevances hypothesis

Earning:   Approval pending.