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Fundamental of Financial Management [File size : 52 kb | Download]
Level: Bachelor Semester Spring Year : 2017
Programme: BHM/BCIS Full Marks: 100
Course: Fundamental of Financial Management Pass Marks: 45 Time : 3hrs.
Candidates are required to give their answers in their own words as far as practicable.
T he figures in the margin indicate full marks.
Very Short Answer Questions
Attempt all the questions. 10X2
- What is stock split?
- What do you mean by business risk?
- Write some disadvantages of Treasury Stock.
- What do you mean by DFL?
- How CCC can be reduced?
- List out the advantages of PBP?
- List out the features of Annuity.
- Calculate expected return on stock if risk free rate is 6 percent, market risk premium is 5 percent and beta is 1.5.
- XYZ Enterprises has weekly credit sales of Rs 20,000 and the average collection period is 35 days. The cost of goods sold is 80 percent of selling price. What is the firm’s investment in average accounts receivable?
- What is Do-pont idendtity?
Section “B” 6X10
Descriptive Answer Questions
Attempt any six questions
- What is the goal of financial management? How does value maximization goal overcome the drawbacks of profit minimization goal? Explain.
- On the basis of the following information, complete the balance sheet that follows; (Assume 360 days in a year)
Long term debt to net worth 0.5 to 1
Total assets turnover 2.5 times
Days Sales Outstanding 18days
Inventory Turnover 9 times
Gross profit Margin 10%
Acid-test ratio 1:1
Plant & equipment
Long term debt
|Total Assets||Total liabilities and equity|
- You deposit Rs.100,000 in your bank account. If the bank pay 4 percent interest, how much will you accumulate in your account after 5 years? If bank pays semi-annual interest how much will you have at the end of 8 years? If interest rate is 10% and compounded quarterly what should be the effective annual rate?
- Describe about the method of selling security.
- Hotel Aryal Ltd. was recently formed. It has the following capital structure in market value terms:
Debentures Rs. 6,000,000
Preferred stock 2,000,000
Common stock (320,000 shares) 8,000,000
The Hotel has a marginal tax rate of 34 percent. A study of publicly held companies in this line of business suggests that the required return on equity is about 17 percent. The Company’s debt is currently yielding 13 percent, and its preferred stock is yielding 12 percent. Compute the Aryal’s present weighted average cost of capital.
- Om Shanti Noodles Corporation has its inventory turnover 8 times in a year, a receivable collection period of 38 days, and a payables deferral period of 30 days.
a) What is the length of the firm’s cash conversion cycle?
b) If Gandaki’s annual sales are Rs.3, 421,875 and all sales are on credit, what is the
firm’s investment in accounts receivable?
- Explain about types of dividends and dividend payment procedure.
- Read the case situation given below and answer the questions that 20 follow:
Following are the cash flow of Mutually exclusive projects
- Which project(s) would you choose if the NPV 75 the decision criterion and the opportunity cost of capital is 10 percent?
- Which project(s) would you choose if the IR is the decision criterion and the opportunity cost of capital is 11 percent?
- Which project(s) would you choose if the Discounted PBP is the decision criterion?