- On
- By
- 0 Comment
- Categories: Ignou, IGNOU Question Papers
IGNOU Financial Management: MCO-07 December: 2017 Solved Question Paper
Note: Answer any five questions.
Q1. (a) Explain the meaning of financial management ainancing decisions.
Ans. Refer to Chapter-1, Q.No.-1 and Q.No.-4 Click
(b) In what ways is the wealth maximisation criteria superior to profit maximisation criteria? Discuss.
Ans. Refer to Chapter-1, Q.No.-6 Click
Q2. (a) Explain the concept of ‘risk’ and ‘return’.
Ans. Refer to Chapter-4, Q.No.-1 and Q.No.-4 Click
(b) What is capital asset pricing model? Explain its assumptions and implications?
Ans. Refer to Chapter-4, Q.No.-8 Click
Q3. (a) Why do we use cash flow analysis instead of profit analysis in a capital budgeting decision? What are the general principles of cash flow estimation?
Ans. Refer to Chapter-6, Q.No.-4 Click
(b) A company decides to make an investment in a new project. Which costs `1,00,000. The working life of the project is expected to be 5 years after which it is expected to be sold for a scrap value of `10,000. The company’s incremental Profit after Tax is expected to be `6,000, `7,000, `8,000, `7,500 and `6,500 for the next five years. Assuming depreciation on a straight line basis and tax rate 40% find out Accounting Rate of Return.
Ans. For Full Answer Click
Q4. (a) What is the meaning of Cost of Capital? What is its significance in financial decisions of a firm? Explain different types of costs.
Ans. Refer to Chapter-5, Q.No.-1 Click
(b) ’XYZ’ Ltd. issues `100 face value preference shares with a dividend of 12% repayable after 10 years. The net amount realised per share is `92. Calculate the cost of preference share.
Ans. Refer to Gullybaba.com “download section” Click
Q5. What are the different sources of long term finance? Explain any two of them.
Ans. Refer to Chapter-8, Q.No.-2 Click
Q6. (a) What are the factors that affect choice of debt in capital structure?
Ans. Refer to Chapter-14, Q.No.-3 Click
(b) What is project finance? Discuss any two types of project financing arrangements.
Ans. Refer to Chapter-11, Q.No.-1 and Q.No.-2 Click
Q7. (a) Explain in brief different types of leverages.
Ans. Refer to Chapter-13, Q.No.-1 Click
(b) Company ‘A’ has sales of `15,00,000; variable cost of `4,50,000; fixed cost of `3,00,000 and pays interest of `1,00,000; Company ‘B’ has sales of `20,00,000; variable cost of `6,00,000; fixed cost of `3,00,000 and pays interest of `1,25,000. From the above information calculate the financial leverage of both the companies. Which company is more riskier and why?
Ans. Same as Dec-2009, Q.No.-5(a) Click
Q8. (a) Explain the different types of marketable securities a firm will choose to invest surplus cash.
(b) Discuss the ABC analysis of inventory control.
ANS. HERE YOU THE FULL ANSWER Click
Q9. Write short notes on any two of the following:
(a) Factoring
(b) Net present value method
(c) Working Capital Cycle
(d) Role of stock exchanges
Ans. HERE YOU GET FULL ANSWER Click