2012 (November)
Commerce (Speciality)
(Financial Management)
Course: 302
Full Marks: 80
Time: 3 Hours
1. Write
‘True’ or ‘False’:
(a)
Financial decision includes financial planning
and capital structure decisions.
(b)
Profit maximization is a capitalistic approach.
(c)
Debentures do not carry any voting right.
(d)
A firm should always keep a large balance of
cash so as to meet the contingencies
2. Fill in
the blanks:
(a) The time required to process and execute an order is
called___ time.
(b) Payment of dividend involves legal as well as___
considerations.
(c) ‘Ploughing back of profit’ is also known as ___
earnings.
(d) Leasing benefits both the lessee as well as the ___.
3. Write
short notes on:
(a) Trading on Equity
(b) Lease Financing
(c) Stable Dividend Policy
(d) Inventory Management
4. (a)
“Finance is lifeblood of an organization and financial management is the
network which facilitates its flow and availability to all organs of an
organization.” Explain.
Or
(b) What is
financial management? What are the objectives of financial management? Discuss
its scope.
5. (a) What
do you mean by Investment Decisions? What are its characteristics? Discuss any
one technique of investment decisions.
Or
(b) What is
financial Leverage? What are its important features? Calculate the degree of
financial leverage from the following capital structure of a company:
Equity Share Capital 1000000
10% preference Share Capital 1000000
8% Debentures
1250000
The Earning
Before Interest and Tax (EBIT) are Rs. 500000. The rate of income tax is 50%
6. (a) What
are the main sources of finance available to industries for meeting long-term
financial requirements? Discuss these sources.
Or
(b) What is
Capital Market? What are the main components of a capital market? Distinguish
between Capital Market and Money Market.
7. (a) Discuss the M-M Theory of dividend distribution. What are the major
criticisms of this theory of irrelevance?
Or
(b) What do you mean by Ploughing Back of profit? What are the purposes of
Ploughing back? Discuss different factors that influence the Ploughing back of
profits.
8. (a) What
is Receivable Management? Discuss the factors which influence the size of
receivables.
Or
(b) A
proforma Cost Sheet of a company provided the following particulars:
Elements of
Cost:
Raw Material 40%
Direct Labour 10%
Overheads 30%
Following
further particulars are also available:
(i)
Raw materials are to remain in stores on an
average of 6 weeks
(ii)
Processing time is 4 weeks
(iii)
Finished goods are required to be in stock on an
average period of 8 weeks
(iv) Credit
period allowed to debtors on an average
of 10 weeks
(v)
Credit period
allowed by creditors is 4 weeks
(vi) Lag-in
payment of wages is 2 weeks
(vii) Selling
price per unit is Rs. 50
You are
required to be preparing an Estimate of Working Capital Requirements adding 10%
margin for contingencies for a level of activity of 130000 unites of
production.