Pondicherry University 2009-3rd Sem M.B.A Finance , ,ester, - Question Paper
Attaching the subsequent for Dec-2009 third Semester exam ques. Papers.
Management Accounting - 4 Pages
Management of Financial Services - 4 Pages
Project Financing and Management - 4 Pages
Strategic Financial Management - 6 Pages
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PART B (5 x 10 = 50 marks)
Answer any FIVE of the following.
9y Explain the causes of delay in Project Management.
Explain the classifications of projects.
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11. > Describe the components of project feasibility
study.
12. Explain the techniques of project evaluation.
13. Describe the methods of risk analysis.
14. Explain the methodology for project evaluation.
15./ Explain the techniques of network analysis.
16. , Describe the estimates of PERT.
PART C (1 x 20 = 20 marks)
Case Study - Compulsory
17. Instron Manufacturing Company designs and manufactures machine tools that are required for various manufacturing operations. Originally established in a small village on the outskirts of Southern Delhi, the firm was established its own units in several states in North India. The companys success was mainly attributed to its comprehensive idea generation and strategic selection process. Vishwanath Chopra, the CEO of
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Instron manufacturing was very happy about the companys success. He always encouraged his financial managers to contribute neWproject ideas that were worthy to be taken up by the company. Part of the companys success was attributed to the innovative and marketable ideas given by the functional managers.
Chopra studied all the project ideas and analysed them on the basis of the firms objectives and the environment in which it operated. Later he would screen the project ideas and implement some of them.
Recently, Chopra understood that his managers were under-estimating the resources and time required to complete a project. This made the firm unable to complete the proposed projects within the available resources. Hence, Chopra decided to select only a limited number of projects for which the firm could assign resources.
In 2002, the functional managers of Instron suggested several new project ideas. Chopra found it difficult to screen the new project. Finally, he identified six project ideas that were relevant to the firms strategy for the current fiscal year and rejected the rest. These six projects were related to the areas of new product development, modifications of existing products, research and clevelopment7 computerizing Ihe accounts
department;, manufacturing___process
improvements, and reorganisation of the marketing and sales department.
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Chopra then asked each functional manager to prepare a complete analysis of the project idea suggested by them within a week. He said that the analysis should indicate how the proposed project would help the firm fulfill its objectives. At the end oFlihe week, the functional managers submitted their analysis describing the contribution of each of their projects towards fulfilling the firms objectives. Chopra noticed that each of them had used different criterion to analyse and evaluate their projects.
He asked Venkata Anand, the senior manager of the firm, who was experienced in handling different project, to select the projects that were worth implementing and to prioritize them. He also mentioned that he wanted a consensus from , all managers regarding the projects that would proceed to the implementation stage.
Questions for discussion :
(a) What are the possible ways in which the functional managers can project the libely contributions of their projects toward achieving the firms strategic objectives?
(b) Chopra has consulted Anand to suggest a good selection model that would suited the firms needs. Discuss the characteristics that a good selection model should have.
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M.B.A. DEGREE EXAMINATION, DECEMBER 2009. Third Semester Finance
Paper XI STRATEGIC FINANCIAL MANAGEMENT
Time : Three hours Maximum : 100 marks
SECTION A (5 x 6 = 30 marks)
. Answer any FIVE of the following.
1. What are the various components of Financial Strategy?
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2. Explain briefly the pros & cons of Simulation.
3. What are the plausible and dubious reasons for merger?
4. Discuss the common motives for divestitures.
5. Distinguish between the lease option and the Purchase option of lease Financing.
6. Highlight the various fiscal incentives.
>/ What are the key differences between forwards and futures? \ *
y Discuss the factors that have induced Swaps.
SECTION B (5 x 10 = 50 marks)
Answer any FIVE of the following.
Elucidate the legal procedure involved in a merger
/ and Explain how two Companies can financially merge with a suitable example.
'.y Suggest a procedure that may be followed by a leasing Company to determine lease rates.
. What is deep discount bond? How can an investor in bonds immunize himself against interest rate risk?
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!. Discuss the rationale for Spin offs and Split-ups in
Corporate restructuring.
!. Explain the decision tree approach of investment decision with risk analysis.
t. Describe the procedure for valuing options embedded in real life projects.
.5. Bring out and explain the differences between corporate and home-made leverage. Discuss leveraged buy outs
L6. Examine the various measures of risky j
investments? Explain with an example.
SECTION C (20 marks)
L7. Case Study on Lease or Buy : Compulsory
A machinery costs Rs. 3,43,300. The Company has got two options. Under the leasing Option, the lease rent of Rs. 1,20,000 is to be paid every year for 5 years. In case of purchase option through bank the interest rate of 14% and the firm is in
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50% tax bracket. Assuming the depreciation to be at straight line basis, the loan is to he repaid with in 5 years. The company has to pay equal instalments of Rs. 1,00,000 every year to the bank.
In case of Leasing Option :
The lease rental is Rs. 1,20,000
Tax Advantage is 50%
The cash outflow is Rs. 60,000
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| Earning: Approval pending. |
