MCO-07 QUESTION PAPER DEC 2017

No. of Printed Pages : 6 MCO-07 QUESTION PAPER DEC 2017
MASTER OF COMMERCE
Term-End Examination
DEC, 2017 00500
MCO-07 QUESTION PAPER DEC 2017

MC0-07 : FINANCIAL MANAGEMENT

Time : 3 hours Maximum Marks : 100
Weightage 70%

Note : Attempt any five questions. All questions carry equal
marks.
1. (a) What are basic financial decisions ? How
do they involve risk-return trade off ? 10, 10
(b) What role should the financial manager play
in a modern organisation ?
2. (a) Explain the method of calculating present
value of cash flows. 10, 10
(b) Explain the concept of valuation of
securities. Why is the valuation concept
relevant for financial – decision making
purposes ?
3. (a) What is payback period method ? Despite
its weakness, it is a very popular method.
What are advantages and disadvantages of
the same ? 10, 10
(b) Find payback period of the following
machines :
(i) Machine ‘A’ costs Z 50,000 and
generates a cash flow of Z 18,000 per
year for four years.
Machine ‘B’ costs Z 75,000 and
generates Z 20,000 per year for six
years.
Suggest which machine is better and
why ?
4. (a) A company issued a 10% perpetual debt for
Z 15,00,000. The company is in the 40%
tax bracket. Find the cost of debt after tax
(i) at par (ii) at a discount of 15% and (iii) at
10% premium. 15, 5
(b) Distinguish between explicit cost and
implicit cost.
5. Discuss the concept of financial leverage, 20
operating leverage and combined leverage. How
are they calculated ? Explain their significance
in the planning of a firm.
6 a)  What is Optimum capital structure ?
Discuss.
b) Critically examine the Net Income and Net
operating Income approach to capital
structure decisions.
7. (a) What are the main determinants of a
dividend payout ? 10, 10
b) Why do firms follow a policy of stable
dividend ?
8. (a) What is an operating cycle ? How is it
important for the management of working
capital ? 10, 10
(b) Explain the risk-return trade off in working
capital management.
9. Write short notes on any two of the following : 10, 10
(a) Techniques of inventory management.
(b) Venture Capital
(c) Corporate finance Vs. Project finance
(d) Lease financing

You may also like...

1 Response

Leave a Reply

This site uses Akismet to reduce spam. Learn how your comment data is processed.

error: Content is protected !!