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DRIVE-
SUMMER 2015
PROGRAM
BBA
SEMESTER-
V
SUBJECT
CODE & NAME
BBA502
&
FINANCIAL
MANAGEMENT
Qus:1
“SWM (shareholders’ wealth maximization) provides an unambiguous measure of
what financial management should seek to maximize in making investment and
financing decisions on behalf of the shareholders”. Elaborate.
·
Maximizing
wealth of shareholders and firm value –risk return trade- off
Answer:
Maximizing
wealth of shareholders and firm value –risk return trade- off:
What is meant by
Shareholders’ Wealth Maximization (SWM)? SWM means maximizing the net present
value of shareholders. Net Present Value (NPV) or wealth is the difference
between the
Qus:2
“Responsibility accounting is a system of accumulating and reporting both
actual and budgeted costs (also revenues) by individual responsible persons is
called responsibility accounting”. Do you agree ? Justify your
agreement/disagreement.
·
Objectives
and principles of responsibility accounting
·
Responsibility
centres for actual and budgeted costs
Answer:
Objectives
and principles of responsibility accounting:
Cost accounting is
required to serve three major objectives:
·
Cost determination for product or
services,
·
valuation of inventory and
Qus:3
“An annuity is a stream of constant cash flow (payment or receipt) occurring at
regular intervals of time”. Illustrate with examples.
You
wish to take a world tour that will cost you 10.00 lakhs the cost is expected to remain unchanged in
nominal terms. You are willing to save Rs. 80,000 annually to fulfil your
desire. How long will you require to wait if your savings reap an investment
benefit of 14 % annually ?
·
Explain
annuity with examples
·
Calculate
the number of years
Answer:
Explain
annuity with examples:
An annuity is a fixed
payment or receipt of each period for a specified number of periods. Let us
assume that an investor decides to deposit `100 at the end of each for 4 years
at 10 per cent rate of interest. Thus, `
Qus:4
How will you calculate WACC (weighted Average Cost of Capital) ?
Following
is the condensed financial statement of a firm in the current year:
The
firm’s existing capital consists of Rs. 150 lakh in equity capital having 15 %
cost and of Rs. 100 lakh of 12 % debt. Determine WACC.
·
Procedure
to calculate WACC (weighted Average Cost of Capital)
·
Calculate
WACC
Answer:
Procedure
to calculate WACC (weighted Average Cost of Capital):
The simple
average cost of capital is not appropriate to use because firms hardly use
various sources of funds equally in the capital structure.
The following
steps are involved for calculating the firm’s WACC:
·
Calculate
the cost of specific sources of funds.
Qus:5
How will you distinguish between Capital expenditure and Capital budgeting ?Compare
and contrast between NPV and IRR. Which according to you is more effective ?
·
Distinguish
between Capital expenditure and Capital budgeting
·
Compare
and contrast between NPV and IRR. Find which is more effective.
Answer:
Distinguish
between Capital expenditure and Capital budgeting:
Capital expenditure or
investment planning and control involve a process of facilitating decisions
covering expenditures on long-term assets. Since a company’s survival and
profitability hinges on capital
Qus:6
Critically explain the concept of optimum cash balance under certainty as per
Baumol’s model.
·
Critical
explanation of optimum cash balance under certainty referring to Baumol’s
model.
Answer:
Critical
explanation of optimum cash balance under certainty referring to Baumol’s
model:
The Baumol model
of cash management provides a formal approach for determining a firm’s optimum
cash balance under certainty. It considers cash management similar to an
inventory management problem. As such, the firm attempts to minimize the sum of
the cost of holding cash (inventory of cash) and the cost
Get fully solved assignment. Buy online from website
online store
or
plz drop a mail with your sub code
we will revert you within 2-3 hour or immediate
Charges rs
125/subject and rs 625/semester only.
if urgent then call us on 08791490301, 08273413412
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