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    Assignment: Approximately of 400 Words. Each Question Is Followed by Evaluation Scheme

    Uploaded by

    Puja Kumari
    This document provides details of an assignment for a Financial Management course. It includes 6 questions related to topics like investment decisions, cost theory, operating leverage, capital structure, project appraisal, and costs of maintaining receivables. Students are asked to explain concepts, calculate average cost of capital for two firms, compute NPV and profitability index to rank projects, and explain costs associated with receivables. The assignment is out of a total of 60 marks and includes questions ranging from 4 to 10 marks each.

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    Assignment: Approximately of 400 Words. Each Question Is Followed by Evaluation Scheme

    Uploaded by

    Puja Kumari
    30 views2 pages
    This document provides details of an assignment for a Financial Management course. It includes 6 questions related to topics like investment decisions, cost theory, operating leverage, capital structure, project appraisal, and costs of maintaining receivables. Students are asked to explain concepts, calculate average cost of capital for two firms, compute NPV and profitability index to rank projects, and explain costs associated with receivables. The assignment is out of a total of 60 marks and includes questions ranging from 4 to 10 marks each.

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    Mb0045 Financial Management

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    This document provides details of an assignment for a Financial Management course. It includes 6 questions related to topics like investment decisions, cost theory, operating leverage, capital structure, project appraisal, and costs of maintaining receivables. Students are asked to explain concepts, calculate average cost of capital for two firms, compute NPV and profitability index to rank projects, and explain costs associated with receivables. The assignment is out of a total of 60 marks and includes questions ranging from 4 to 10 marks each.

    Copyright:

    © All Rights Reserved
    Download as PDF, TXT or read online from Scribd
    Download as pdf or txt
    30 views2 pages

    Assignment: Approximately of 400 Words. Each Question Is Followed by Evaluation Scheme

    Uploaded by

    Puja Kumari
    This document provides details of an assignment for a Financial Management course. It includes 6 questions related to topics like investment decisions, cost theory, operating leverage, capital structure, project appraisal, and costs of maintaining receivables. Students are asked to explain concepts, calculate average cost of capital for two firms, compute NPV and profitability index to rank projects, and explain costs associated with receivables. The assignment is out of a total of 60 marks and includes questions ranging from 4 to 10 marks each.

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    ASSIGNMENT

    DRIVE SPRING 2017


    PROGRAM MASTER OF BUSINESS ADMINISTRATION (MBA)
    SEMESTER II
    SUBJECT CODE & NAME MB0045 – FINANCIAL MANAGEMENT
    BOOK 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. Questions Marks Total


    No Marks
    1. Explain Investment Decision and Liquidity Decisions.
    Explanation of Investment Decision 5 10
    Explanation of Liquidity Decisions. 5
    2. Explain Cost Theory and Earnings theory. Also, the merits and demerits of both theories.
    Explanation of Cost theory, merits and demerits 5 10
    Explanation of Earnings theory, merits and demerits 5
    3. Explain Operating Leverage and its classifications
    Explanation of Operating Leverage 4 10
    Explanation of Classifications of Operating Costs 6
    4. There are two firms, A and B, similar in all aspects except in the degree of leverage employed
    by them. Financial data for these firms are given below: Calculate average cost of capital for
    both the firms. Details of Firms A and B

    Amount (in Rs.) Firm A Firm B


    Net operating income 10,000 10,000
    Interest on debt 0 3,000
    Equity earnings 10,000 7,000
    Cost of equity capital 10% 10%
    Cost of debt capital 6% 6%
    Market value of equity 100,000 70,000
    Market value of debt 0 50,000
    Total value of firm 100,000 120,000
    Average cost of capital for Firm A 5 10
    Average cost of capital for Firm A 5
    5. The below table describes the cash inflows of three projects. Compute the NPV and profitability
    index of all the three projects and rank them on the basis of capital rationing. Cost of Capital is
    15 %

    Details of the Projects


    Cash Inflows
    Project Initial Cash Year 1 Year 2 Year 3
    outlay
    A 1,00,000 60,000 50,000 40,000
    B 50,000 20,000 40,000 20,000
    C 50,000 20,000 30,000 30,000
    Solution for the problem 10
    6. Explain the costs associated with maintaining receivables

    Explanation of the different varieties of costs associated with maintaining 10


    receivables

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