Financial Management TU Board 2023 question paper

Write the meaning of financial management.

What is ordinary annuity?

List out the major sources of capital.

Annual need of a company is 10,000 units, holding cost per unit per year is Rs 10, cost of placing per order Rs 2,000, calculate economic order quantity.

What are the major sources of short term financing?

Define net present value.

What is present value of Rs 3,000 due in 10 years if interest rate is 12 percent?

Calculate the cost of non-taking discount of credit term 2/15 net 45.

What do you mean by line of credit?

Interpret the value of DOL 5 times.

Explain the functions of financial management.

Why short term financing is needed? Explain.

If you deposit a sum of money today into a bank account that pays 15 percent interest, how long will it take for you to double your money?

The following relationships for inventory costs have been established for the Rejina Corporation. Annual sales are 500,000 units The purchase price per unit is Rs 50 The carrying cost is 10% of the purchase price of goods The cost per order place is Rs 2,000 Desired safety stock is 10,000 units (On hand initially) Two weeks are required for delivery a) What is the economic ordering quantity? b) What is the cost of ordering and carrying inventories at the EOQ? c) What is the optimal number of orders to be placed? d) What is re-order level?

J and Son's common stock is currently trading at Rs 300 a share. The stock is expected to pay a dividend of Rs 30 a share at the end of the year (D₁ = Rs 30), and the dividend is expected to grow at a constant rate of 5 percent a year. If the company were to issue external equity, it would incur a 10 percent floatation cost. What are the costs of retained earnings and common stock?

Find the present value of the following annuities: a. An ordinary annuity of Rs 9,000 per year for 10 years at 18 percent. b. An annuity of Rs 9,500 per year for 5 years at 16 percent if payments are due at the beginning of the period (annuity due).

Himalaya Trekking is negotiating with Kumari Bank for Rs 400,000 one-year loan. Kumari has offered to Himalaya Trekking the following three alternatives: a) A 15 percent interest rate, no compensating balance, and due at the end of the year. b) A 13 percent interest rate, a 20 percent compensating balance and interest due at the end of the year. c) A 11 percent rate, a 15 percent compensating balance, and the loan is discounted. If Himalaya Trekking wishes to minimize the effective Annual Rate (EAR), which alternative will it choose? Why?

Lumbini Hotel is considering including two pieces of equipment, a truck and an overhead pulley system, in current capital budget. The projects are not mutually exclusive. The cash outlay for the truck is Rs 17,000 and that for the pulley system is Rs 23,000. The firm's cost of capital is 14 percent. Cash flow after tax (CFAT) from the equipment's are as follows: YearTruckPulley1Rs 10,000Rs 15,000210,00015,000310,00015,000 Calculate the payback period (PBP) Net present value (NPV) and internal rate of return (IRR) for each project. Which alternative or alternatives would you recommend? Why?