Punjab Technical University 2007 B.B.A FINANCIAL MANAGEMENT - Question Paper

Roll No. ......................
Total No. of ques. : 13] [Total No. of Pages : 02
Paper ID [B0119]
(Please fill this Paper ID in OMR Sheet)
BBA (402)(Old/S05) (Sem. - 4th)

FINANCIAL MANAGEMENT
Time : 03 Hours Maximum Marks : 75
Instruction to Candidates:
1) part -A is Compulsory.
2) Attempt any 9 ques. from part - B.

part - A
(15 × two = 30)
Q1)
a) What do you understand by business finance?
b) What is financial management process?
c) Name the areas of finance function.
d) Name any 2 limitations of profit maximization.
e) discuss financial risk.
f) Mention 2 limitations of pay back period.
g) How cost of redeemable debt is calculated?
h) explain utility of market value weights.
i) Mention 2 similarities of NPV and IRR methods.
j) discuss dividend approach.
k) discuss objective of calculating operating leverage.
l) What is optimal capital structure?
m) What is trade credit?
n) discuss gross working capital concept.
o) Mention 2 assumptions of net income approach.
J-8625[S-9700629] P.T.O.

part - B
(9 × five = 45)
Q2) explain the importance of financial leverage with the help of suitable
examples.
Q3) discuss a few important factors affecting working capital requirements.
Q4) Why commercial paper is an important instrument in working capital finance?
Q5) explain MM approach regarding optimal capital structure.
Q6) How net terminal value is calculated? Why it is useful?
Q7) discuss the concept of cash flows and accounting profits with the help of
an example.
Q8) Justify why debt is considered as cheaper source of fund?
Q9) Original investment Rs 100000.
Economic life of an asset five years.
Net annual cash inflow Rs 25000.
compute internal rate of return.
Q10) How investment, financing and dividend decisions are interrelated with every
other?
Q11) explain the utility of wealth maximization as an objective of financial
management.
Q12) discuss nature and scope of financial management.
Q13) On what grounds profit maximization objective is criticized.
b b b b
J-8625[S-9700629] 2

Earning:   Approval pending.