Punjab Technical University 2008-3rd Sem M.B.A (&4) CAPITAL BUDGETING - Question Paper

Roll No .
Total No. of ques. : 131

[Total No. of Pages: 02
J-3231 [S-1087]
[2037] MBA (Semester - 3&4) CAPITAL BUDGETING

Time: 03 Hours
Maximum Marks :75
Instruction to Candidates:
part - A is compulsory.
Attempt any 9 ques. from part - B.
part - A
(15 x two = 30)
a)What is meant by mutually exclusive inVestment proposals?
b) Mention 2 objectives of capital expenditure decisions.
c)Explain 2 objectives of project estimation.
d)Define discount rate.
e)Why cost of capital is important?
f)How accounting rate of return is calculated?
g)Mention 2 limitations of pay back period.
h)Accept or reject criteria under NPV
i)When multiple internal rate of return occurs?
j)How independent investment proposals evaluated under risky situations?
k)Mention 2 objectives of sensitivity analysis
l)What is capital asset pricing model'?"
m) Differentiate operating and financial lease.
n)Mention 2 steps in project abandonment analysis.
0)Define the concept of option investment.

part - B
(9 x five = 45)

Q2) Why investment decisions are so important'?
Q3) elaborate the main objectives of capital budgetit1g decisions?
Q4) Us cost of equity free of cost capital. Do you agree with this statement?
Q5) Compare and contrast IRR method and NPV method of evaluating investment proposals ..
Q6) Why capital rationing is done? explain critical factors while doing capital
rationing.
Q7) explain the issues of identification and estimating new projects.
Q8) Enumerate the different techniques used for incorporating risk factor in capital budgeting decisions.
Q9) discuss in detail certainty equivalent coefficient.,.
QIO) Under what circumstances might the Ctesiphon on tree technique in capital budgeting analysis is useful.
Ql1) Distinguish ranging from leveraged lease and sale and lease back lease.
QI2) elaborate the advantages and disadvantages of the arbitrage pricing theory over the capital asset pricing model?
QI3) What is meant by project abandonment :1nalvlsis? explain behavioral problems in project abandonment analysis

Earning:   Approval pending.