Important MBA (BU) Question

(CP-203) Financial Management

II Sem, MBA (Regular, EX, ATKT)

Common for All Branches of MBA

Unit I

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Q.1 Explain, how is Financial Management a decision-making function ? (BU 2024)

Q.2 Describe the objectives of Financial Management. (BU 2024)

Q.3 What is Financial Management Process ? Explain various functions of finance manager in modern era. (BU 2024)

Q.4 Wal-Mart (WMT) for the fiscal year ending Jan. 31,2021, the company reported: (BU 2023)

• Net income over the trailing 12 months (TTM) of 4.75 billion
• Revenue of 559.2 billion
• Assets of 252.5 billion
• Shareholders’ equity of 80.9 billion

So from these figures, calculate ROE in’Du Pont analysis.

Q.5 “The responsibilities of finance manager are now regarded as much more than procurement of funds” What do you think are the responsibilities of a finance manager?  (BU 2023)

Q.6 What is the modern approach of finance function? (BU 2022)

Q.7 Define the capitalisation. Explain the two main principles of capitalisation. (BU 2022)

Unit II

Q.1 Explain the meaning and concept of Capital Budgeting. (BU 2024)

Q.2 Explain various techniques of capital budgeting and its application. (BU 2024)

Q.3 Define (1) Capital Budgeting & (2) Capital Rationing. List Traditional &. Modern Methods of Capital Budgeting. (BU 2023)

Q.4 Compare and Contrast NPV and IRR methods of Capital Budgeting in detail; Also Explain which of Above Method is Chosen in case of Mutually Exclusive Investment Proposals and Why? (BU 2023)

Q.5 Explain the term ‘Capitalisation”. (BU 2022)

Q.6 What do you mean by ‘Capital Budgeting’? Discuss the pur-pose of such budgeting from the point of view of an industrial concern. (BU 2022)

Unit III

Q.1 Explain any two instruments of long-term finance. (BU 2024)

Q.2 What is Venture Capital ? (BU 2024)

Q.3 Calculate cost of debentures with the help of the following data: (BU 2024)

Debenture value 6%, Debenture 1000 @ Rs. 100 each, Issue price Rs. 105 each.

Q.4 What are the factors affecting financing decision ? Write in brief the sources of long-term finance. (BU 2024)

Q.5 Explain Venture Capital and List Features of Venture Capital financing. (BU 2023)

Q.6 Explain the Following Hybrid Instruments and their Features: (BU 2023)

(a) Convertible Bonds

(b) Warrants.

Q.7 Write a note on ‘Control of capital expenditure. (BU 2022)

Q.8 What is the cost of preference share capital? (BU 2022)

Unit IV

Q.1 Describe the merits and demerits of standard costing. (BU 2024)

Q.2 XYZ Ltd. issues 1000 equity shares of Rs. 100 each at a premium of 10%. The company has paid 20% dividend to equity shareholders. Compute the cost of equity for the enterprise. (BU 2024)

Q.3 Define Capital structure and explain characteristics of Optimum Capital structure. (BU 2023)

Q.4 Explain in detail the dangers of High Operating and High Financial Leverage for any Business Organization. (BU 2023)

Q.5 ABC Limited has the following Capital Structure (in the table) and after tax cost of funds is given as below. Calculate Weighted Average Cost of Capital (WACC). (BU 2023)

Q.6 Company X has Sales of 1,00,000 (One Lakh) Rs. Variable cost of Rs. 70,000 (Seventy Thousand) and Fixed Cost of Rs. 20,000 (Twenty Thousand). It also has a debt of Rs. 50,000 (Fifty Thousand) at 10% rate of Interest. Calculate the (a) Operating Leverage (b) Financial Leverage (c) Combined Leverage for Company X.  (BU 2023)

Q.7 Explain the importance of Cost of capital. (BU 2022)

Q.8 Explain the importance of leverage. (BU 2022)

Q.9 What are the effects of capital gearing in Trade Cycles’? (BU 2022)

Q.10 Define Cost of Capital. How will you determine the cost of capital from different sources? (BU 2022)

Q.11 What is leverage? Explain clearly the various types of lever ages. (BU 2022)

Unit V

Q.1 Define Working Capital. Explain the various types of working capital. (BU 2024)

Q.2 Define Dividend Policy of Firm and Explain any One Theory of Dividend Policy. (BU 2023)

Q.3 Elaborate on: (BU 2023)

(a) Meaning of Working Capital

(b) Factors Affecting Working Capital.

Q.4 Define Relevance of EOQ for Inventory Management. Write and Explain its Formulae. (BU 2023)

Q.5 XYZ Limited produces a product which has a monthly demand of Rs. 4,000 Units. Product Requires a Component X. which is purchased at Rs. 20. For Every Finished Product, One Unit of Component X is required. The Ordering Cost is Rs. 120 Per Order and the Carrying Cost is 10% of Purchase Price. Calculate EOQ for this X component. (BU 2023)

Q.6 What are the long-term sources of Financing of working capital? (BU 2022)

Q.7 What is operating cycle? How does it explain the working capital concept? (BU 2022)

Extra Questions

Q.1 On the basis of appropriate calculation indicate which one of the following cars should be purchased by a taxi driver: (BU 2024)

The prevailing rate of interest is 9%. P.V.F. at 9% are 0.917, 0.842 and 0.722.

Q.2 Calculate Future value of Rs 1,000 deposited in a saving ac-count for 3 years earning 6% Also, calculate simple interest, the interest on interest, and compound interest. Given That Future Value Interest Factor (FVIF) for Period of Three Years and Interest of 6% is equal to 1.191. (BU 2023)

Q.3 XYZ Company is looking to i invest in some new machinery to replace its current malfunctioning one. The new machine, which costs Rs. 420,000, would increase annual revenue by Rs. 200,000 and annual expenses by Rs. 50,000. The machine is estimated to have a useful life of 12 years and zero salvage value. Calculate ARR. (BU 2023)

— Best of Luck for Exam —