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    Bangalore University Previous Year Question Paper AFM 2020

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    Ramakrishna Nagaraja
    This document contains questions from an Advanced Financial Management exam. It includes multiple choice and long answer questions on topics such as: - Calculating the cost of capital for projects with different risk levels - Determining the weighted average cost of capital using both book and market values - Preparing a cash budget and calculating working capital requirements - Factors that influence a firm's dividend decision

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    Bangalore University Previous Year Question Paper AFM 2020

    Uploaded by

    Ramakrishna Nagaraja
    1K views3 pages
    This document contains questions from an Advanced Financial Management exam. It includes multiple choice and long answer questions on topics such as: - Calculating the cost of capital for projects with different risk levels - Determining the weighted average cost of capital using both book and market values - Preparing a cash budget and calculating working capital requirements - Factors that influence a firm's dividend decision

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    This document contains questions from an Advanced Financial Management exam. It includes multiple choice and long answer questions on topics such as: - Calculating the cost of capital for projects with different risk levels - Determining the weighted average cost of capital using both book and market values - Preparing a cash budget and calculating working capital requirements - Factors that influence a firm's dividend decision

    Copyright:

    © All Rights Reserved
    Download as PDF, TXT or read online from Scribd
    Flag for inappropriate content
    Download as pdf or txt
    1K views3 pages

    Bangalore University Previous Year Question Paper AFM 2020

    Uploaded by

    Ramakrishna Nagaraja
    This document contains questions from an Advanced Financial Management exam. It includes multiple choice and long answer questions on topics such as: - Calculating the cost of capital for projects with different risk levels - Determining the weighted average cost of capital using both book and market values - Preparing a cash budget and calculating working capital requirements - Factors that influence a firm's dividend decision

    Copyright:

    © All Rights Reserved
    Download as PDF, TXT or read online from Scribd
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    of 3

    UG-220

    V Semester B.B.A. Examination, March/April 2021


    (CBCS) (F+R)(2016- 17 &Onwards)
    BUSINESS ADMINISTRATION
    5.5: Elective Paper I: Advanced Financial Management
    Time 3 Hours Max. Marks 70
    instruction: Answers should be written in
    English only.
    SECTION - A

    Answer any five


    sub-questions. Each sub-question carries 2 marks. (5x2-10)
    1. a) What is Co-efficient of variation ?
    b) Give the meaning of composite cost of
    capital. C L A R A

    c) What is dividend ?
    d) State any two internal sources of finance.
    e) What is working capital?
    1) State any two benefits of holding inventories.
    g) Give the meaning of Corporate valuation.
    SECTION - B

    Answer any three questions. Each question carries six marks.


    (3x6=18)
    2. Briefly explain the various forms of dividend.
    3. Briefly explain the guidelines for Corporate valuation.
    4. AM Company Ltd., has two projects X and Y, costing
    Rs. 5,00,000 each.
    The expected cash inflows and the certainty co-efficient are as
    under

    Year ProjectX Project YY


    Cash inflow Co-efficient Cash inflow Co-efficient|
    1 3,00,000 0.8 2,00,000 0.9
    2 2 4,00,000 |0.7 3,00,000 0.8
    3 4,50,000 0.9 3,00,000 0.7
    Risk free cut-off rate is 10%, suggest which of the two
    projects should be
    preferred

    P.T.O.
    UG-220 2
    5. A Company issues 10,000, 15% preference shares of Rs. 100 each, cost
    issue is Rs. 5 per share. Calculate the cost of preference capital, if the snares

    are issued
    a) at par
    b) at a premium of 20%
    c) at a discount of 5%.
    . Prepare an estimate of working capital requirement from the followin9
    information of a trading concern.
    a) Projected annual sales 1,20,000 units.
    b) Selling price per unit Rs. 10.
    c) Profit percentage on sales - 30%.
    ) Average credit period allowed to customers-10 weeks.
    eAverage credit period allowed by suppliers -5 weeks.
    t) Average stock holding in terms of sales requirements 5 weeks.
    g Allow 15% for contingencies.
    SECTION-C
    Answer any three questions. Each question carries fourteen marks. (3x14-42)
    7. From the following information, ascertain which project is more risky on the
    basis of standard deviation and co-efficient of variation.
    Project X Project Y

    Cash inflowProbability | Cash inflow Probability_


    3,000 0.1 3,000 0.2
    6,000 0.4 6,000 0.3
    12,000 0.4 12,000 0.3
    L15,000 0.1 15,000 |0.2
    8. Following are the details regarding the capital structure of generation next

    Company.
    Sources of Capital| Book Value Market Specific Cost|
    Rs. Value (7)
    Rs.

    Equity 8,00,000 10,00,000 20


    Preference 4,00.000 6,00,000 16
    Debt 3,00,0000 4,00,000 12
    Retained Earnings 3,00,000 14
    UG-220
    You aro roqulrod to dotermine the wolghted avorage cost of capital using
    1) Book valuo as wolghts
    2) Market valuo as weights.

    9. A company's oxpected annual net operating Income is Rs. 2,00,000 and it has
    6,00,000, 10% dobentures. The equity capltallizatlon rate is 12%.
    a) Calculato the value of the firm and overall capitalization rate under Net
    Income (NI) approach
    b) What is the impact if the debt ls
    ) Increased to Rs. 8,00,000.
    I) Decreased to Rs. 4,00,000.
    10. A company is expected to have Rs. 20,000 cash in hand on O1/04/2019 and
    roquests you to prepare cash budget for three months from April to June 2019.
    The following information is supplied to you.
    MonthSalesPurchases Wages Expenses
    February 40,000 25,0004,000 3,000
    March 50,000 35,000 5,000 4,000
    April 60,000 40,000 6,000 4,500
    May 80,000 50,000 6,000 5,000
    June I 70,000 45,0005,000L 4,000
    Additional Information
    a) Period of credit allowed by suppliers is two months.
    b) 25% of sales are for cash and the period of credit allowed to customers for
    credit sales is one month
    c) Delay in payment of wages and expenses is one month.
    d) Income tax of Rs. 15,000 is to be paid in June 2019

    11. Explain the factors which influence the dividend decision of a firm.

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