TUTOR MARKED ASSIGNMENT
Course Code : MCO – 07
Course Title : Financial Management
Assignment Code : MCO - 07 /TMA/2013-14
Coverage : All Blocks
Maximum Marks: 100
Attempt all the questions
1. (a) What is Capital Budgeting? Explain in
brief the various techniques of appraisal of an investment project.
(b) Consider
the project with the following cash flows. Compute the net present value of the project of the project. The rate
of discount is 20%?
Rs. in Lakhs Year
|
0
|
1
|
2
|
3
|
4
|
5
|
Cash flows
|
(-)150
|
50
|
60
|
55
|
60
|
75
|
2. (a) Explain the meaning and importance of
cost of capital.
(b) Discuss the
concept of ‘Risk’ and ‘Return’. (10+10)
3. (a) What are the methods of estimating
working capital requirement?
(b) Describe
the motives for holding cash. (10+10)
4. (a) A company buys 1, 00,000 units of
material called ‘M’ every month. Order costs are Rs. 200 per order and carrying costs are 10
paisa per unit per month. Find out EOQ.
(b) A firm has
a sale of 2000 units. It expects to increase its sale to 2800 units. The fixed
cost is Rs. 4,00,000. Calculate the degree of operating leverage of the firm if
the selling price is Rs. 400 per unit and variable cost is Rs. 75 unit. (10+10)
5. (a) What is capital structure? What are the
factors that affect the choice of debt in a capital structure?
(b) What is
share buyback? Why do companies go for share buyback? (10+10)
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