JNTU
JNTU B.Tech III FINANCIAL MANAGEMENT Previous Question Paper (January/February - 2023 - R18)
Note: i) Question paper consists of Part A, Part B. ii) Part A is compulsory, which carries 25 marks. In Part A, Answer all questions. iii) In Part B, Answer any one question from each unit. Each question carries 10 marks and may have a, b as sub questions.
PART - A
Write a short note of the following:
Nature of Finance Function
Answer
The finance function is a core corporate activity concerned with the procurement of funds and their effective utilization. It involves decision-making regarding investment, financing, and dividend distribution to maximize shareholder value while maintaining liquidity and solvency.
Profit vs. Wealth Maximization
Answer
Profit maximization focuses on short-term earnings and ignores the timing and risk of cash flows. In contrast, wealth maximization aims to increase the market value of the firm's shares, considering the time value of money and risk, making it the superior objective for financial management.
Project generation
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Project evaluation
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Dividend Policy
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Cash and Bonus shares
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Net working capital
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Current Liabilities
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Credit policy
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Factoring
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PART - B
Define the term Financial Management and discuss its scope.
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Brief on the concept of time value of money.
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Explain the following:
Risk-Return trade off
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Maximizing vs. satisfying.
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Explain Investment decision process.
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Explain Capital budgeting decision under conditions of risk and uncertainty.
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Calculate NPV and Profitability Index for the project X. The firm’s cost of capital is 10%.
| Particulars | Project X | Present Value Factor @10% |
|---|---|---|
| Project Cost | 800 | 1.000 |
| Cash inflows: Year 1 | 150 | 0.909 |
| Year 2 | 250 | 0.826 |
| Year 3 | 350 | 0.751 |
| Year 4 | 400 | 0.683 |
| Year 5 | 500 | 0.621 |
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Brief on the concept of cost of capital.
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Explain EBIT-EPS Analysis.
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Discuss on dividend policies of Indian companies with illustrations.
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The following information pertains to Hasini Ltd. for the year 2021: Sales Rs.83,50,000, Variable Cost Rs.46,00,000, Fixed Cost Rs.6,60,000, 10% Debentures Rs.50,00,000, Equity Shares (Rs.100 each) Rs.60,00,000, Corporate Tax 30%. Calculate operating, financial and combined leverage of the firm.
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Write a note on Planning of working capital by a business unit.
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What is bank finance? Discuss about regulation of bank finance.
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From the following information estimate the working capital required to finance a level of activity of 3,60,000 units of output for the year 2021. Cost per unit: Raw material 40, Direct Labour 10, Overheads 30, Total cost 80, Profit 20, Selling Price 100.
Additional information: i) Minimum desired cash balance is Rs. 2,00,000. ii) Raw materials are held in stock for two months. iii) Work-in-progress (50% completion) for half a month’s production. iv) Finished goods for a month. v) Suppliers credit: one month, Debtors credit: two months; Cash sales 25%. vi) Wages lag: 1.5 months; Overheads lag: 0.5 month.
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Brief on trade credit in working capital management.
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Discuss about Management of receivables.
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Explain cash management techniques.
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What is meant by Corporate Mergers and Acquisitions?
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Describe the inventory control systems.
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