Financial Management TU Board 2025 question paper

Write major forms of business organization.

Define the term business ethics.

Write the limitations of IRR technique in the evaluation of capital budgeting.

Define minimum variance portfolio.

Differentiate between business risk and financial risk.

A firm has DOL of 1.5 times and DFL of 2 times. If sales increases by 25 percent, what will be the percentage increase in earnings before interest and tax?

What are the motives for holding inventories?

How does investment opportunity of a firm affect its dividend policy?

What do you mean by Multinational Corporation?

Assume that net profit margin is 10 percent, retention ratio is 60 percent and expected sales for coming year will be Rs 10 million. What is the addition to retained earnings?

Describe the importance of maintaining adequate cash in a business.

Explain the reasons for companies going global.

Describe the assumptions and application of CAPM.

Butwal Manufacturing Company (BMC) produces and sells tea kettles. BMC sells its kettles at Rs 60 per kettle. The variables costs are Rs 40 per kettle. Fixed costs are Rs 200,000. a. What is the break-even point for BMC? b. What is the degree of operating leverage for BMC at sales of 15,000 kettles? c. If BMC pays annual interest amount of Rs 10,000 to the debt, what is the degree of financial leverage for BMC at sales of 15,000 kettles? [2+1.5+1.5]

A television costs US dollar ($) 1,000 in United States. The same television costs Nepalese rupees (NPR) 133,330 in Nepal. If purchasing power parity holds, what is the spot exchange rate between NPR and US$? Also interpret the result. [4+1]

Consider the following probability distribution and returns for stock Alpha and Beta State of EconomyProbabilityReturn of Alpha (%)Return of Beta (%)Rapid economic growth0.22530Normal economic growth0.61520Recession0.2(5)(10) a. Calculate expected returns of stocks Alpha and Beta. b. Calculate expected coefficient of variation of stocks Alpha and Beta. Which stock is less risky? Why? [2+3]

Narayani Garden Centers (NGC) sells 580,000 bags of lawn fertilizer annually. NGC requires safety stock of 2,000 bags. Cost of fertilizer is Rs 16 per bag, inventory carrying cost is 10 percent and fixed cost for placing and receiving is Rs 50 per order. a. What is the optimal order quantity of lawn fertilizer for NGC? b. What are the total inventory costs of lawn fertilizer for NGC? c. How often must NGC place the order of lawn fertilizer? [2+2+1]

Explain the reasons of conflict of interests between manager and shareholders in a business organization. Also discuss the remedial to solve the conflict between managers and shareholders.

Consider the following shareholders' equity account of Beta Electronic Corporation (BEC) as on December 31, 2023: ParticularsAmount (Rs)Common stock (10,000shares @ Rs100 par)1,000,000Additional paid in capital (share premium)1,000,000Retained earnings1,000,000Total shareholders' equity3,000,000 The current market price of the stock is Rs 150 per share. a. What would be the number of shares outstanding and market price of stock after declaration of 20 percent stock dividend in the absence of signaling effect? b. Show the effect of 20 percent stock dividend on shareholders' equity account. c. What will be effect on number of shares and market price per share after 2-for-1 stock split? [4+4+2]

Dexter Metal House (DMH) is considering changing its credit terms from '2/15 net 30' to '3/10 net 30' in order to speed collections. At present, 40 percent of DMH's non-default customers take the 2 percent discount. Under the new terms, discount customers are expected to rise to 50 percent of non-default customers. Regardless of credit terms, half of the customers who do not take discount are expected to pay on time, whereas the remainder will pay 10 days late. The change does not involve a relaxation of credit standards; therefore, bad debt losses are not expected to rise above their present 2 percent level.