Finacial Management

In: Business and Management

Submitted By arjunk
Words 1608
Pages 7
Examination Paper of Financial Management

IIBM Institute of Business Management Examination Paper Financial Management Subject Code-B-103 Section A: Objective Type & Short Questions (30 marks)    This section consists of multiple choice & Short Notes. Answer all the questions. Part One carries 1 mark each & Part two carries 5 marks each. MM.100

Part one: Multiple choices: 1. The approach focused mainly on the financial problems of corporate enterprise. a. Ignored non-corporate enterprise b. Ignored working capital financing c. External approach d. Ignored routine problems 2. These are those shares, which can be redeemed or repaid to the holders after a lapse of the stipulated period. a. Cumulative preference shares b. Non-cumulative preference shares c. Redeemable preference shares d. Perpetual shares 3. This type of risk arises from changes in environmental regulations, zoning requirements, fees, licenses and most frequently taxes. a. Political risk b. Domestic risk c. International risk d. Industry risk 4. It is the cost of capital that is expected to raise funds to finance a capital budget or investment proposal. a. Future cost b. Specific cost c. Spot cost d. Book cost 5. This concept is helpful in formulating a sound & economical capital structure for a firm. a. Financial performance appraisal b. Investment evaluation c. Designing optimal corporate capital structure d. None of the above

IIBM Institute of Business Management

1

Examination Paper of Financial Management

6. It is the minimum required rate of return needed to justify the use of capital. a. From investors b. Firms point c. Capital expenditure point d. Cost of capital 7. It arises when there is a conflict of interest among owners, debenture holders and the management. a. Seasonal variation b. Degree of competition c. Industry life cycle d. Agency costs 8. Some guidelines on shares…...

Similar Documents

Finacial Derivatives

...” The underlying is often a fi nancial asset or rate, but it does not have to be. For example, derivatives exist with payments linked to the S&P 500 stock index, the temperature at Kennedy Airport, and the number of bankruptcies among a group of selected companies. Some estimates of the size of the market for derivatives are in excess of $270 trillion – more than 100 times larger than 30 years ago. When derivative contracts lead to large fi nancial losses, they can make headlines. In recent years, derivatives have been associated with a few truly notable events, including the collapses of Barings By René M. Stulz Financial Derivatives Third Quarter 2005 21 Bank (the Queen of England’s primary bank) and Long-Term Capital Management (a hedge fund whose partners included an economist with a Nobel Prize awarded for breakthrough research in pricing derivatives). Derivatives even had a role in the fall of Enron. Indeed, just two years ago, Warren Buffett concluded that “derivatives are fi nancial weapons of mass destruction, carrying dangers that, while now latent, are potentially lethal.” michael morgenstern 22 The Milken Institute Review But there are two sides to this coin. Although some serious dangers are associated with derivatives, handled with care they have proved to be immensely valuable to modern economies, and will surely remain so. the nuts and bolts Derivatives come in fl avors from plain vanilla to mint chocolate-chip. The plain vanilla......

Words: 5924 - Pages: 24

Finacial Mangment Quetion and Answer

...shares, which can be redeemed or repaid to the holders after a lapse of the stipulated period A).Redeemable preference shares 3. This type of risk arise from changes in environmental regulations, zoning requirements, fees, licenses and most frequently taxes. A). Political risk 4. It is the cost of capital that is expected to raise funds to finance a capital budget or investment proposal A). Future cost 5. This concept is helpful in formulating a sound & economical capital structure for a firm A). Designing optimal corporate capital structure 6. It is the minimum required rate of return needed to justify the use of capital A). Firms point 7. It arises when there is a conflict of interest among owners, debenture holders and the management A). Agency costs 8. Some guidelines on shares & debentures issued by the government that are very important for the constitution of the capital structure are A). Legal requirement 9. It is that portion of an investments total risk that results from change in the financial integrity of the investment A). Default risk 10. _____________ measure the systematic risk of a security that cannot be avoided through Diversification A).Beta Part Two: 1. What is Annuity kind of cash flow? A).An annuity is stream of equal cash flows. Annuities involve calculations based upon the regular periodic contribution or receipt of a fixed sum of money. 2. What do understand by Portfolio risk? A).The portfolio risk not simply measure of its......

Words: 895 - Pages: 4

Finacial

...$294,000 Long-term debt 70,000 Net fixed assets 126,000 Common equity 280,000 Total assets $420,000 Total liab. and equity $420,000 Sales $280,000 Net income $ 21,000 The new CFO thinks that inventories are excessive and could be lowered sufficiently to cause the current ratio to equal the industry average, 2.70, without affecting either sales or net income. Assuming that inventories are sold off and not replaced to get the current ratio to the target level, and that the funds generated are used to buy back common stock at book value, by how much would the ROE change? p. 4.28% q. 4.50% r. 4.73% s. 4.96% t. 5.21% 5. Quigley Inc. is considering two financial plans for the coming year. Management expects sales to be $301,770, operating costs to be $266,545, assets to be $200,000, and its tax rate to be 35%. Under Plan A it would use 25% debt and 75% common equity. The interest rate on the debt would be 8.8%, but the TIE ratio would have to be kept at 4.00 or more. Under Plan B the maximum debt that met the TIE constraint would be employed. Assuming that sales, operating costs, assets, the interest rate, and the tax rate would all remain constant, by how much would the ROE change in response to the change in the capital structure? u. 3.83% v. 4.02% w. 4.22% x. 4.43% y. 4.65%...

Words: 627 - Pages: 3

Finacial System

... | Pre-reforms Phase Until the early 1990s, the role of the financial system in India was primarily restricted to the function of channeling resources from the surplus to deficit sectors. Whereas the financial system performed this role reasonably well, its operations came to be marked by some serious deficiencies over the years. The banking sector suffered from lack of competition, low capital base, low Productivity and high intermediation cost. After the nationalization of large banks in 1969 and 1980, the Government-owned banks dominated the banking sector. The role of technology was minimal and the quality of service was not given adequate importance. Banks also did not follow proper risk management systems and the prudential standards were weak. All these resulted in poor asset quality and low profitability. Among non-banking financial intermediaries, development finance institutions (DFIs) operated in an over-protected environment with most of the funding coming from assured sources at concessional terms. In the insurance sector, there was little competition. The mutual fund industry also suffered from lack of competition and was dominated for long by one institution, viz., the Unit Trust of India. Non-banking financial companies (NBFCs) grew rapidly, but there was no regulation of their asset side. Financial markets were characterized by control over pricing of financial assets, barriers to entry, high transaction costs and......

Words: 1571 - Pages: 7

Personal Finacial

...o. The ability to receive promotions and wage increases p. All of the above 5. Which of the following elements of a comprehensive financial plan involves analyzing future needs, such as saving for retirement or college funding for dependents? q. Building wealth r. Securing basic needs s. Establishing a firm foundation t. Protecting wealth and dependents Directions Respond to the following short-answer questions in 50-to 100-words: 6. People have different styles when it comes to handling their money. List the two things that affect your personal beliefs and opinions about financial planning. How well do you feel you manage your money? Can you spot areas for improvement in your money management style, and if so, where/how? 7. Which element of the comprehensive financial plan focuses on your housing needs, setting aside money for emergencies, and establishing a career path? Consider your own finances. Do currectly own a vehicle and/or home? If yes, how well do you manage monthly home and auto expenses? How well do you save for unforeseen expenses? 8. The economy is unpredictable and can affect your personal financial planning. List one factor in economic conditions that may affect your financial future. How could you reduce the impact of that factor on your finances? 9. Which step in the five-step financial planning process requires you to organize your financial information, create personal financial......

Words: 515 - Pages: 3

Finacial Management

...Examination Paper of Financial Management IIBM Institute of Business Management 1 IIBM Institute of Business Management Examination Paper MM.100 Financial Management Subject Code-B-103 Section A: Objective Type & Short Questions (30 marks)  This section consists of multiple choice & Short Notes.  Answer all the questions.  Part One carries 1 mark each & Part two carries 5 marks each. Part one: Multiple choices: 1. The approach focused mainly on the financial problems of corporate enterprise. a. Ignored non-corporate enterprise b. Ignored working capital financing c. External approach d. Ignored routine problems 2. These are those shares, which can be redeemed or repaid to the holders after a lapse of the stipulated period. a. Cumulative preference shares b. Non-cumulative preference shares c. Redeemable preference shares d. Perpetual shares 3. This type of risk arises from changes in environmental regulations, zoning requirements, fees, licenses and most frequently taxes. a. Political risk b. Domestic risk c. International risk d. Industry risk 4. It is the cost of capital that is expected to raise funds to finance a capital budget or investment proposal. a. Future cost b. Specific cost c. Spot cost d. Book cost 5. This concept is helpful in formulating a sound & economical capital structure for a firm. a. Financial performance appraisal b. Investment evaluation c. Designing optimal corporate capital structure d. None of the......

Words: 1607 - Pages: 7

Finacial Terms and Goals

... Week 1 Financial Terms and Roles FIN370 January 14, 2014 Week 1 Financial Terms and Roles 1) Finance Finance is considers the management of how income acquired and used. Whether dealing with corporate or personal issues, finance may consist of how individual or business acquires, invest, and manage money. Financial decisions are the role finance plays, which consist of money as the resource and how and the source of how the organization obtain the revenue. 2) Efficient Market Efficient markets are a hypothesis that prices in a market are continually fair. This consists of incorporated market prices reflecting associated information completely. Keeping values current is the role efficient markets play by keeping market price fair and prohibiting anyone to make a high returns unless he or she buys a much high risk investment. 3) Primary Market A primary market is a marketplace where securities are distributed for the first time. The government, businesses, and other groups issue debt or equity-based securities permissible to raising finance. In primary market prices are the same for every buyer; however, investors in a primary market do not purchase securities from other investors. 4) Secondary Market A Secondary Markets is a marketplace where securities that already issued are sold or purchased by investors. Prices in a secondary market vary from the issue price and prices can vary from the original cost, although prices are affected by......

Words: 844 - Pages: 4

Finacial Performance

...simulations do not provide for computation of stock prices and in those that do, market values are often not emphasized. Since return on equity has been shown to be highly correlated with market value/equity and other market value measures, it can be used as a proxy for market value indicators. In 1982, management consultant Keith oliver was help a client to better align its typically excess inventory level with its sales goals. oliver’s insight was to consider all the processes that went into stocking the company’s ware-houses as one “chain of supply” rather than as a group of siloed activities executed by unrelated players. History doesn’t tell us what happened with oliver’s client, but the engagement helped birth the concept of the supply chain, and with it a new way of thinking about manufacturing. ever since, the supply chain concept has enjoyed enormous influence as companies around the world have met customer needs and delivered shareholder value by efficiently managing the logistics around sourcing, production, and distribution; outsourcing non-core activities; and moving manufacturing to low-cost territories. at the core of all these innovations is supply chain management. Objective But here’s a question: What if there had been a different paradigm used instead of focusing on chain of supply? What if, instead of approaching his client’s issue from the angle of changing the way supply was managed, oliver had decided to try and boost customer......

Words: 681 - Pages: 3

Outline Finacial

...On-Line Web Based E-Grade Exam Management System Introduction: This Aim of this project is to produce an On-Line Web Based Exam Management System to help in the exam marks submission and the generation of the final results. The system would also be used to aid in preparing course mark reports to be presented before the examination board meeting for discussion and approval. When module tutors have all marks ready, they submit the marks for the module components to the system. Once they are in the system and after ratification by the exam board, the marks may be made available for students for viewing below Functional requirements. Web-based Application Functional Requirements: * On-line EMS System deals with all kind of student details, academic related reports, course details, curriculum, batch details and other resource related details too. * This program can facilitate us explore all the activities happening in the college, even we can get to know which teacher / faculty is assigned to which batch, the current status of a batch, attendance percentage of a batch and upcoming requirements of a batch. * Different reports and Queries can be generated based of vast options related to students, batch, course, teacher / faculty, exams, semesters, certification and even for the entire college. * Extensive information is available at your fingertips through this System. Viewing student data, managing admission and reshuffling ,managing seats, quota, board,......

Words: 2508 - Pages: 11

Amazon Fiinance Finacial

...The top three players in this market account for less than 20% market share. • The company also has great potential in Mexico, which has an abundance of old cars, a shortage of quality parts, and few organized chains. AutoZone now operates more than 80 stores in Mexico, up from six stores at the end of fiscal 1999. Bears: • AutoZone's comparable-revenue growth was flat in fiscal 2004 and declined 2% the following year, while its major competitors have been growing same-store sales. • Higher gas prices could lead to reduced demand in the near term as the company's low- to moderate-income customers defer maintenance on their cars. • Although the company has generated impressive free cash flow, there is a risk that management has underinvested in the business. • Continued consolidation in the auto-parts manufacturing industry may lead to less favorable prices for AutoZone. • Former chairman and CEO Steve Odland resigned in March 2005 to join Office Depot. Although he leaves behind a strong team, his vision and leadership may be missed. III. Company Description AutoZone is the nation's leading specialty retailer of auto parts and accessories, with most of its sales to DIY customers. The company operates 3,592 stores in 48 U.S. states and 81 stores in Mexico. More than 2,100 domestic stores also have a commercial sales program, which delivers parts and other products to local, regional, and national repair garages, dealers, and service......

Words: 5225 - Pages: 21

Marketing Finacial Services

... [pic] MIDLANDS STATE UNIVERSITY DEPARTMENT OF MARKETING MANAGEMENT MODULE: MARKETING OF FINANCIAL SERVICES (MMRK812) [pic] LECTURE NOTES CHAPTER 1: AN OVERVIEW OF THE FINANCIAL SERVICES SECTOR IN ZIMBABWE 1. Introduction Zimbabwe’s financial sector is relatively sophisticated and consists of the Reserve Bank of Zimbabwe (RBZ) at the apex of banking institutions, commercial banks (e.g. CBZ, NMB, FBC, ZB, MBCA, Kingdom, Trust, Stanbic, Barclays, Chanchart), merchant banks, building societies (e.g. CABS, CBZ building society, FBC building Society etc), the People’s Own Savings Bank (POSB), insurance companies (e.g ZIMNAT, NICOZ DIAMOND, Old Mutual, First Mutual, Nyaradzo), pension funds (e.g Allied workers pension fund, NRZ pension fund), asset management companies (Imara and Edwards), developmental financial institutions, the Zimbabwe Stock Exchange (ZSE), microfinance institutions (e.g MicroKing) and money transfer agencies (e.g Western Union, Moneygram, Homelink). Discount and finance houses have closed and their functions taken by commercial and merchant banks. The growth of the financial services sector is largely attributed to the financial liberalization of the early 1990s, through the Economic Structural Adjustment Programme (ESAP). 2. Structure of the banking sector Number of operating banking institutions (including POSB) declined to 25 from 26 following the voluntary surrender of a banking license by Genesis......

Words: 14699 - Pages: 59

Finacial Accounting

...Abstract This paper will analyze if the practice of earnings management through the use of deferred maintenance is ethical. The paper will analyze if the practice of earnings management through the use of deferred maintenance is allowed in the United States. This paper will analyze how United States generally accepted accounting principles (GAAP) differ in the treatment from International GAAP. Ethics is basically being able to distinguish between right and wrong. When I was in the Army, ethics was defined as simply doing what is right even when no one is looking or checking. Ethics in accounting is a form of professional ethics. The nature of the work done in accounting can affect the livelihood of all those connected to a business. Accurate and ethical accounting practices are crucial to a company. Earnings management is a process in which companies manipulate earnings to match a pre-determined target amount. The purpose is known as “income smoothing” and the intent is to keep earnings stable over a period of time (Investopedia, 2014). Practices like a company’s use of reserves for deferred maintenance are also known by the disingenuous accounting practice called cookie jar accounting or reserves (Investapedia, 2014). This practice is not ethical because it misleads investors on the company’s performance if there is not full disclosure of the company’s financial picture. In the United States, the SEC typically......

Words: 266 - Pages: 2

Finacial Data Anlysis

...p. 3). In conclusion I found there to be some very powerful differences between the 2008- 2009 on the two statement of revenue and expenses as well as the balance sheet. It doesn’t matter if the differences between 2008 and 2009 were accounted for by various factors whether these prove to be positive or negative. Then generous donations of a million dollar along with favorable settlements of managed care contract disputes, investments in new discounted equipment as well as the underestimated of the expenses from the supplies purchased. References Apollo Group. (2006). Patton-Fuller Community Hospital [Multimedia]. Retrieved from Apollo Group, HCS577 - Financial Management in Health Care website...

Words: 780 - Pages: 4

Chapter1 of International Finacial Management

...1. What are the advantages Blades could gain from importing from and/or exporting to a foreign country such as Thailand? First of all, Blades, Inc. will lower its cost of goods sold from importing from Thailand, leading a increase in the net income due to the fact that the inputs from foreign countries such as Thailand are cheaper than they are in the US. One of the reason making Blades, Inc. ‘s prices to be one of the highest in the roller blade industry is not importing rubber and plastic from foreign countries that their competitors are already doing it. Furthermore, there will be a long rage plans in Thailand that they can seek the opportunities of creating connection which some Thai suppliers. When the chance comes, Blades will be the first firms to sell roller blades in Thailand which its has a huge competitive advantage. 2. What are some of the disadvantages Blades could face as a result of foreign trade in the short run? In the long run? Entering the international business world will bright some potential disadvantages to Blades, Inc. Current fluctuations in the Thai baht is the first problem. Without adjusting the price of the Thai suppliers, the cost of the inputs can become more expensive over time if the bat appreciates. However, if Blades start selling rolling blades in Thailand, the sales would increase in dollar if the baht appreciates, even if Blades does not increase its prices. And the opposite will also be true, when dollar appreciate, it will......

Words: 668 - Pages: 3

Finacial Planning

...PROJECT WORK -- GUIDELINES 1.1 WHY PROJECT WORK? Project Work is the best way to practice what you have learnt. The purpose of including project report in the Diploma Programme is to provide you an opportunity to investigate a problem applying management concepts in a scientific manner. It enables you to apply your conceptual knowledge in a practical situation and to learn the art of conducting a study in a systematic way and presenting its findings in a coherent report. As managers, you are constantly seeking information to base your decision. How well you collect, synthesize and make the data meaningful is what you learn through this process. 1.2 WHAT IS A PROJECT? A project is a scientific and systematic study of real issue or a problem intended to resolve the problem with application of management concepts and skills. The study can deal with a small or a big issue in a division or an organization, the problem can be from any discipline of management. It can even be a case study where a problem has been dealt with through the process of management. The essential requirement of a project is that it should entail scientific collection, analysis and interpretation of data leading to valid conclusions. 1.2.1 How to undertake Project Work? Step I – Select a suitable topic, prepare synopsis and submit it online to IMT - CDL, Ghaziabad for approval. Step II – Once the approval is received you can start project work. Thereafter project report should be prepared and...

Words: 1144 - Pages: 5