SMU MBA 2 SEMESTER MB0045 FINANCIAL MANAGEMENT FALL 2015-2016
SMU MBA FALL 2015 -2016
Dear Students,
SMU MBA FALL 2015-2016 Assignments are available. For Booking ,Kindly mail us on kvsude@gmail.com OR call us to +91 9995105420 or S M S your “ Email ID ” us in the following Format “ On +91 9995105420 we will reach back you with in 24H ”
ASSIGNMENT
| DRIVE | Fall 2015 |
| PROGRAM | MBA/ MBADS/ MBAFLEX/ MBAHCSN3/ PGDBAN2 |
| SEMESTER | II |
| SUBJECT CODE & NAME | MB0045
FINANCIAL MANAGEMENT |
| BK ID | B1628 |
| CREDITS | 4 |
| MARKS | 60 |
Note: Answer all questions. Kindly note that answers for 10 marks questions should be approximately of 400 words. Each question is followed by evaluation scheme.
| Q.No | Questions | Marks | Total Marks | |||||||||||||||||
| 1 | Explain the liquidity decisions and its important elements. Write complete information on dividend decisions. | |||||||||||||||||||
| Explanation of liquidity decisions with its important elements Explanation of dividend decisions | 5
5 |
10 | ||||||||||||||||||
| 2 | Explain about the doubling period and present value. Solve the below given problem:
Under the ABC Bank’s Cash Multiplier Scheme, deposits can be made for periods ranging from 3 months to 5 years and for every quarter, interest is added to the principal. The applicable rate of interest is 9% for deposits less than 23 months and 10% for periods more than 24 months. What will be the amount of Rs. 1000 after 2 years? |
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| Explanation of doubling period Solving the problem Explanation of present value | 2
3 5 |
10 |
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| 3 | Write short notes on:
a) Operating Leverageb) Financial leverage c) Combined leverage |
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| Explanation of operating leverage Explanation of financial leverage Explanation of combined leverage | 4
4 2 |
10 | ||||||||||||||||||
4 |
Explain the factors affecting Capital Structure. Solve the below given problem:
Given below are two firms, A and B, which are identical in all aspects except the degree of leverage employed by them. What is the average cost of capital of both firms?
Details of Firms A and B |
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| Firm A | Firm B | |||||||||||||||||||
| Net operating income EBIT | Rs. 1, 00, 000 | Rs. 1, 00, 000 | ||||||||||||||||||
| Interest on debentures I | Nil | Rs. 25, 000 | ||||||||||||||||||
| Equity earnings E | Rs. 1, 00, 000 | Rs. 75, 000 | ||||||||||||||||||
| Cost of equity Ke | 15% | 15% | ||||||||||||||||||
| Cost of debentures Kd | 10% | 10% | ||||||||||||||||||
| Market value of equity S = E/Ke | Rs. 6, 66, 667 | Rs. 5,00, 000 | ||||||||||||||||||
| Market value of debt B | Nil | Rs. 2, 50, 000 | ||||||||||||||||||
| Total value of firm V | Rs. 6, 66, 667 | Rs. 7, 50, 000 | ||||||||||||||||||
| Explanation of factors affecting capital structure Solution for the problem
Interpretation |
6
3 1 |
10 | ||||||||||||||||||
| 5 | Explain all the sources of risk in capital budgeting with examples. Solve the below given problem:
An investment will have an initial outlay of Rs 100,000. It is expected to generate cash inflows. Cash inflow for four years.
If the risk free rate and the risk premium is 10%,
a) Compute the NPV using the risk free rate b) Compute NPV using risk-adjusted discount rate |
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| Explanation of risk in capital budgeting with examples Solution for the problem with interpretation | 5
5 |
10 | ||||||||||||||||||
| 6 | Explain the objectives of Cash Management. Write about the Baumol model with their assumptions. | |||||||||||||||||||
| Explanation of objectives of cash management Explanation of Baumol model with assumptions | 5
5 |
10 | ||||||||||||||||||
SMU MBA FALL 2015 -2016
Dear Students,
SMU MBA FALL 2015-2016 Assignments are available. For Booking ,Kindly mail us on kvsude@gmail.com OR call us to +91 9995105420 or S M S your “ Email ID ” us in the following Format “ On +91 9995105420 we will reach back you with in 24H ”
