Solapur University Question Paper
M.B.A. (Semester – II) Examination, 2014
FINANCIAL MANAGEMENT (Paper – X)
Day and Date : Saturday, 10-5-2014 Total Marks : 70
Time : 3.00 p.m. to 6.00 p.m.
Instructions : 1) Question No. 1 is compulsory.
2) Solve any two questions from Q. No. 2, 3 and 4.
3) Solve any two questions from Q. No. 5, 6 and 7.
1. Raj Cements Pvt. Ltd. sells its products on a gross profit of 20% of sales the
following information is extracted from its annual accounts for the year ended
31st March 2012.
Particulars Rs.
Sales at 3 months credit 40,00,000
Raw Materials 12,00,000
Finished Goods 24,00,000
Wages paid : 15 days in arrears 9,60,000
Manufacturing expenses paid : 1 month in arrear 12,00,000
Administrative expenses paid : 1 month in arrear 4,80,000
Sales promotion expenses payable ½ yearly in advance 2,00,000
Income tax payable quarterly 4,00,000
Raw Materials in stock for on an average for 2 months and finished goods are in
stock for 1 month. The company enjoys 1 month credit from suppliers. Cash
balance is maintained at Rs. 50,000. Assuming a 10% margin for contigencies,
find out the working capital requirement for Raj Cements Pvt. Ltd. 14
Seat
No.
SLR-XY – 18 -2-
2. Write short notes (any two) :
a) Objectives of Financial Management
b) Operating Cycle of Working Capital
c) Bonus Share. 14
3. Write short notes (any two) :
a) Emerging Role of Finance Manager in India
b) Foreign Exchange Market
c) Stock split. 14
4. Attempt any two from following :
a) Ankur Corporation has prepared the following budget estimates for the year
2013-14.
Sales in units Rs. 15,000 Sales in Rs. 1,50,000
Fixed Cost Rs. 34,000 Variable cost per unit Rs. 6
You are required to calculate
a) PV ratio
b) Break Even Point
c) Margin of Safety.
b) Calculate the revised PV Ratio and Break Even Point in each of the following
cases (Note : All other variables remain as per original data and you have to
make only change in the variable mentioned in the question).
i) Decrease of 10% selling price
ii) Increase of 10% in variable cost
iii) Decrease of Rs. 6,000 in Fixed cost
c) Assumptions and Advantages of CVP Analysis.
d) GDR/ADR. 14
-3- SLR-XY – 18
5. The management of a firm is considering an investment project costing
Rs. 2,00,000 and it will have a scrap value of Rs. 25,000 at the end of its 5 year
life. Installation charges are expected to be Rs. 10,000.
Project need additional working capital of Rs. 20,000. Annual revenue from the
project is expected to be Rs. 1,50,000 and annual expenses are estimated to be
Rs. 50,000. The depreciation and taxes for each of the five year will be as under –
Year Depreciation Taxes
1 Rs. 82,000 Rs. 11,200
2 Rs. 53,200 Rs. 22,720
3 Rs. 42,400 Rs. 27,040
4 Rs. 21,500 Rs. 31,600
5 Rs. 10,800 Rs. 36,180
Calculate the cost of the project and CFAT.
Evaluate the project at 12% rate of interest on the basis of NPV and PI.
The discounting factor @ 12% are – 1y-0.9, 2y-0.8, 3y – 0.7, 4y-0.6, 5y-0.5 14
6. The following data is supplied you to calculate the ratios –
Sales-Rs. 25,20,000, Cost of sales Rs. 19,20,000, Net profit Rs. 3,60,000
Capital Rs. 5,00,000 Reserves Rs. 10,00,000 Long term debt Rs. 9,00,000
Creditors Rs. 5,00,000 Bank Overdraft Rs. 1,00,000 Fixed Assets Rs. 18,40,000
Inventory Rs. 5,00,000 Debtors Rs. 6,00,000 Cash Rs. 1,00,000
Purchases Rs. 15,00,000 No. of shares 1,00,000 Market price of Share Rs. 50
Calculate following ratios –
1) Gross Profit Ratio
2) Net Profit Ratio
3) Return on Fixed Assets Ratio
4) Current Ratio
5) Quick Ratio
6) Inventory Turnover Ratio
7) Debtors Turnover Ratio
8) Creditors Turnover Ratio
9) Return on Total Asset Ratio
10) Leverage Ratio
11) EPS
12) PE Ratio
13) Return on Capital Ratio
14) Turnover to asset ratio. 14
7. What are the long term sources of funds for a company in India ? 14
—
M.B.A. (Semester – II) Examination, 2014
FINANCIAL MANAGEMENT (Paper – X)
Day and Date : Saturday, 10-5-2014 Total Marks : 70
Time : 3.00 p.m. to 6.00 p.m.
Instructions : 1) Question No. 1 is compulsory.
2) Solve any two questions from Q. No. 2, 3 and 4.
3) Solve any two questions from Q. No. 5, 6 and 7.
1. Raj Cements Pvt. Ltd. sells its products on a gross profit of 20% of sales the
following information is extracted from its annual accounts for the year ended
31st March 2012.
Particulars Rs.
Sales at 3 months credit 40,00,000
Raw Materials 12,00,000
Finished Goods 24,00,000
Wages paid : 15 days in arrears 9,60,000
Manufacturing expenses paid : 1 month in arrear 12,00,000
Administrative expenses paid : 1 month in arrear 4,80,000
Sales promotion expenses payable ½ yearly in advance 2,00,000
Income tax payable quarterly 4,00,000
Raw Materials in stock for on an average for 2 months and finished goods are in
stock for 1 month. The company enjoys 1 month credit from suppliers. Cash
balance is maintained at Rs. 50,000. Assuming a 10% margin for contigencies,
find out the working capital requirement for Raj Cements Pvt. Ltd. 14
Seat
No.
SLR-XY – 18 -2-
2. Write short notes (any two) :
a) Objectives of Financial Management
b) Operating Cycle of Working Capital
c) Bonus Share. 14
3. Write short notes (any two) :
a) Emerging Role of Finance Manager in India
b) Foreign Exchange Market
c) Stock split. 14
4. Attempt any two from following :
a) Ankur Corporation has prepared the following budget estimates for the year
2013-14.
Sales in units Rs. 15,000 Sales in Rs. 1,50,000
Fixed Cost Rs. 34,000 Variable cost per unit Rs. 6
You are required to calculate
a) PV ratio
b) Break Even Point
c) Margin of Safety.
b) Calculate the revised PV Ratio and Break Even Point in each of the following
cases (Note : All other variables remain as per original data and you have to
make only change in the variable mentioned in the question).
i) Decrease of 10% selling price
ii) Increase of 10% in variable cost
iii) Decrease of Rs. 6,000 in Fixed cost
c) Assumptions and Advantages of CVP Analysis.
d) GDR/ADR. 14
-3- SLR-XY – 18
5. The management of a firm is considering an investment project costing
Rs. 2,00,000 and it will have a scrap value of Rs. 25,000 at the end of its 5 year
life. Installation charges are expected to be Rs. 10,000.
Project need additional working capital of Rs. 20,000. Annual revenue from the
project is expected to be Rs. 1,50,000 and annual expenses are estimated to be
Rs. 50,000. The depreciation and taxes for each of the five year will be as under –
Year Depreciation Taxes
1 Rs. 82,000 Rs. 11,200
2 Rs. 53,200 Rs. 22,720
3 Rs. 42,400 Rs. 27,040
4 Rs. 21,500 Rs. 31,600
5 Rs. 10,800 Rs. 36,180
Calculate the cost of the project and CFAT.
Evaluate the project at 12% rate of interest on the basis of NPV and PI.
The discounting factor @ 12% are – 1y-0.9, 2y-0.8, 3y – 0.7, 4y-0.6, 5y-0.5 14
6. The following data is supplied you to calculate the ratios –
Sales-Rs. 25,20,000, Cost of sales Rs. 19,20,000, Net profit Rs. 3,60,000
Capital Rs. 5,00,000 Reserves Rs. 10,00,000 Long term debt Rs. 9,00,000
Creditors Rs. 5,00,000 Bank Overdraft Rs. 1,00,000 Fixed Assets Rs. 18,40,000
Inventory Rs. 5,00,000 Debtors Rs. 6,00,000 Cash Rs. 1,00,000
Purchases Rs. 15,00,000 No. of shares 1,00,000 Market price of Share Rs. 50
Calculate following ratios –
1) Gross Profit Ratio
2) Net Profit Ratio
3) Return on Fixed Assets Ratio
4) Current Ratio
5) Quick Ratio
6) Inventory Turnover Ratio
7) Debtors Turnover Ratio
8) Creditors Turnover Ratio
9) Return on Total Asset Ratio
10) Leverage Ratio
11) EPS
12) PE Ratio
13) Return on Capital Ratio
14) Turnover to asset ratio. 14
7. What are the long term sources of funds for a company in India ? 14
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