MCO 07 Financial
Management
Solved
Assignment 2020-21
Maximum Marks: 100
Attempt all the questions:
1. (a) What is financial management? What are its basic functions?.
(b) Discuss the concept of ‘risk’ and return’’.
2. (a) Discuss the features of an appropriate capital structure of a company.
(b) Explain the various factors that influence the working capital requirements of a business.
3. (a) What is money market? What are its characteristics?
(b) Discuss the ‘Capital Asset Price Model’.
4. A company is considering the purchase of a machine. There are two machines ‘X’ and ‘Y’. The cost of these machines is Rs. 40,000 each. The earnings after tax are as given below :
Year |
Machine ‘X’ (Rs.) |
Machine ‘Y’ (Rs.) |
1 |
12,000 |
4,000 |
2 |
16,000 |
12,000 |
3 |
20,000 |
16,000 |
4 |
12,000 |
24,000 |
5 |
8,000 |
16,000 |
Calculate :
(a) Payback period method
(b) Net present value method
Evaluate the alternatives ‘X’ or ‘Y’ according to these methods. The rate of discount is 10%.
5. A firm has a sales of Rs. 60,00,000, variable cost is 20% on sales, fixed cost is Rs. 20,50,000 and debentures of Rs. 8,00,000 at 10% rate of interest. Calculate Operating leverage, financial leverage and combined leverage.