Wednesday 19 August 2015

bba502 smu bba summer 2015 Vth sem assignment

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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
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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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