Andhra University 2007 B.B.A FINANCIAL MANAGEMENT - Question Paper

ANDHRA UNIVERSITY
SCHOOL OF DISTANCE EDUCATION
MASTER OF BUSINESS ADMINISTRATION
II YEAR ASSIGNMENT ques. PAPER 2007 – 2008
(Applicable to Admitted Batches from 1998 to 2006)

FINANCIAL MANAGEMENT

Assignment No. 1

ans all ques. five x five = 25 Marks

1. explain the 3 broad areas of Financial decision making.

2. What do you understand by budgeting ? Mention the kinds of budgets that
the management of a big industrial concern would normally prepare.

3. A project needs an investment of Rs. 1,38,500. The cost of capital is 12%.
The net cash inflows are as follows :

Year Cash inflows
1 30,000
2 40,000
3 60,000
4 30,000
5 20,000

compute the internal rate of return. Suggest whether the project should be
accepted or not and why ?

4. Critically evaluate the goals of maximization of profit and maximization of
returns on equity.

5. elaborate the various kinds of financial ratios ? discuss the significance and
limitations of the ratio analysis.

Assignment No. 2

ans all ques. five x five = 25 Marks

1. explain the importance and uses of financial forecasting for an enterprise.

2. What is Weighted avg. Cost of Capital (WACC) ? elaborate the steps
involved in calculating a firm’s WACC ?

3. What is statement of modifications in financial position ? How does it differ from
Funds Flow or Cash Flow Statement ?

4. discuss the theories of dividend with examples.

5. The subsequent info is available for Sortex International :
Selling price per unit = Rs. 20
Variable cost per unit = Rs. 12
Total Fixed costs = Rs. 5,60,000
a) What is the break-even output ?
b) What is the profit earned when the output is 1,00,000 units ?
c) What should be the output to achieve a target profit of Rs. 4,00,000 ?
d) What is the break-even sales in rupees.

Earning:   Approval pending.