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DRIVE
summer
2016
PROGRAM
BACHELOR
OF BUSINESS ADMINISTRATION (BBA)
SEMESTER
V
SUBJECT
CODE & NAME
BBA502
– FINANCIAL MANAGEMENT
1 Explain Real and
Financial Assets, Finance & Management Functions and equity and borrowed
funds.
a) Explanation of Real and
Financial Assets
b) Explanation of Finance &
Management Functions
c) Explanation of equity and
borrowed funds
Answer: Real and
Financial Assets
A
firm requires real assets to carry on its business. Tangible real assets are physical
assets that include plant, machinery, office, factory, furniture and building. Intangible
real assets include technical know-how, technological collaborations, patents and
copyrights. Financial assets, also called securities, are financial
2 Write short notes
on :
a) Budgeting and
forecasting
b) Financial
Budgets
c) Cost Centre
Explanation of budgeting and
forecasting
Explanation of financial budgets
Explanation of cost centre
Answer: a) Budgeting
and Forecasting
A
budget is not the same thing as a forecast. A forecast is the likelihood of events
happening, given the past data and expected changes. There is no assumption
regarding the commitment of management for realizing the forecast. A budget is
an expression of the management’s intentions of achieving forecasts through
positive
3 Explain on cost
of capital and cost of preference capital.
a) Explanation of cost of capital
b) Explanation of cost of
preference capital
Answer: Cost of
Capital
We
should recognise that the cost of capital is one of the most difficult and disputed
topics in the finance theory. Financial experts express conflicting opinions as
to the correct way in which the cost of capital can be measured. Irrespective of
the measurement problems, it is a concept of vital importance in the financial decision-
4 Solve the given
problem below:
Determine the
degree of operating leverage from the following data:
S Ltd R Ltd
Sales 25,00,000 30,00,000
Fixed costs 7,50,000 15,00,000
Variable expenses
50% of sales for firm S 25% for firm R.
Calculation of Degree of
operating leverage of the two firms
Answer: Calculation of operating leverage
S Company
|
R Company
|
5 Explain the
phases of Capital Investment Planning and Control. Why is Net Present Value
(NPV) important?
a) Explanation of phases of
Capital Investment Planning and Control.
b) Importance of NPV
Answer: There are
five phases of capital expenditure planning and control, which are:
1.
Identification (or origination) of investment opportunities
2.
Development
6 Write about cash
planning and explain about cash forecasting and budgeting.
Explanation of cash planning
Explanation on cash forecasting
and budgeting
Answer: Cash Planning
Cash
flows are inseparable parts of the business operations of firms. A firm needs
cash to invest in inventory, receivable and fixed assets and to make payment
for operating expenses in order to maintain growth in sales and earnings. It is
possible that the firm may be making adequate profits but may suffer from the
shortage of cash as its growing needs may be consuming cash very fast. The
‘cash poor’ position of the firm can be
Get fully solved assignment. Buy
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