SMU MBA FALL-2017

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SMU MBA FALL-2017 Assignments are available. For Booking Kindly mail us on
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DRIVE
FALL 2017
PROGRAM
MASTER OF BUSINESS ADMINISTRATION (MBA)
SEMESTER
II
SUBJECT CODE & NAME
MBA202 FINANCIAL MANAGEMENT

Assignment Set -1

1. Financial planning means deciding in advance the financial activities to be carried on

to achieve the basic objective of the firm. Explain the factors that affect financial
planning.
Factors affecting Financial Plan

Answer: Factors Affecting Financial Plan

Nature of the industry The first factor affecting the financial plan is the nature of the
industry. Here, we must check whether the industry is a capital-intensive or labour-
intensive industry. This will have a major impact on the total assets that a firm owns.
Size of the company The size of the company greatly influences the availability of
funds from

2. Book value is an accounting concept. Explain the factors of this concept.

Calculate the worth of the value of one share from the below details of Company ABC :
Current dividend is Rs. 10.
It expects to have a supernormal growth period running to 6 years during which the
growth rate would be 30%. The company expects normal growth rate of 10% after the
period of supernormal growth period. The investors required rate of return is 18%.
Factors explaining the concept of book value
Solution to the problem

Answer: Book value is an accounting concept. Value is what an asset is worth today in terms of
its potential benefits. Assets are recorded at historical cost and these are depreciated over
years. Book

3. Explain the Cash Flow Estimation Principles.

Cash Flow Estimation Principles.
Answer: Principles of Cash Flow Estimation
Separation principle: The essence of this principle is the necessity to treat investment element
of the project separately (i.e. independently) from that of financing element. The financing cost
is

Assignment Set -2
1. Explain EOQ and Re order point.
A manufacturing company has an expected usage of 1,00,000 units of a certain product
during the next year. The cost of processing an order is Rs 200 and the carrying cost per
unit per annum is Rs 2. Lead-time for an order is five days and the company will keep a
reserve of two days usage.
Calculate EOQ and Re order point. Assume 250 days in a year.
Explanation of EOQ and Re order point
Calculation of EOQ and Re order point

Answer: Economic order quantity (EOQ)

Economic order quantity (EOQ) refers to the optimal order size that will result in the lowest
ordering and carrying costs for an item of inventory based on its expected usage, carrying costs
and

2. Explain the capital Budgeting process and its appraisals

Solve the below given problem:
Given below are the details on the cash flows of two projects A and B. Compute pay-back
period for A and B.
Year Project A cash flows (Rs.) Project B cash flows (Rs.)
0 (4,50,000) (5,50,000)
1 3,00,000 2,00,000
2 1,50,000 2,50,000
3 50,000 3,00,000
4 2,00,000 3,50,000
5 1,00,000 2,00,000
Explanation of capital budgeting process and its appraisals.
Solution for the problem

Answer: Capital Budgeting Process

A proposal should be commercially viable. The following aspects are examined to

3. From the below details, show the effect of the dividend policy on the market price of
company XYZ Ltd. shares using the Walters Model.
Equity capitalisation rate Ke is 10%
Earnings per share is given as Rs. 10
ROI (r) may be assumed as follows: 10% and 15%
Show the effect of the dividend policies on the share value of the firm for three different
levels of r, taking the DP ratios as 20%, 40%, 60%, 80% and 100%.
Explanation of concepts of working capital

Answer: K Ke 10%, EPS 10, r 10%, DPS=20

 SMU MBA FALL-2017

Dear Students,

SMU MBA FALL-2017 Assignments are available. For Booking Kindly mail us on
kvsude@gmail.com OR call us to +91 9995105420 or S M S your Email ID us in the
following Format On +91 9995105420 we will reach back you with in 24H