Tribhuvan University
Bachelor of Hotel Management
Semester 4 · TU Board 2080
Course Title: Financial Management (FIN311)
Full Marks: 60Pass Marks: 30Time: 3hrs
Candidates are required to give their answers in their own words as for as practicable.
Group A
Brief Answer Questions(10 × 1 = 10)
- 1.1
List out the objective of financial management.
- 2.1
Write the concept of 'time value of money'.
- 3.1
What is optimal capital structure?
- 4.1
What is payback period?
- 5.1
What is ordinary equity?
- 6.1
Determine the annual percentage cost of not taking discount of credit term of 3/10 net 45.
- 7.1
What is the present value of Rs 200,000 due in 10 years at 12% interest?
- 8.1
Makalu company is selling common stock at Rs 150 and expected dividend per share is Rs 15. What is the cost of equity share? Assume dividend remains constant.
- 9.1
What do you mean by ABC analysis system?
- 10.1
What is commercial paper?
Group B
Short Answer Questions(6 × 5 = 30)
- 11.5
What is financial management? Explain the functions of financial management.
- 12.5
What is short-term financing? Why does a firm need short-term financing?
- 13.5
Describe the factors affecting capital structure of decision of a firm.
- 14.5
Hi-Tech company's annual needs of raw material is 500,000 units and carrying cost is Rs 10 per unit. Cost of ordering per order is Rs 1,000. The lead time is 12 days. Required: a) Economic Order Quantity b) Cost of economic order quantity c) Re-order level
- 15.5
The following capital structure of a company is given below: 12% preferred stock0.310% debenture0.2Common stock0.5 The selling price of common stock is Rs 150 expected dividend Rs 10 which will grow 7% forever. The corporate tax is 30% Calculate: Weighted average cost of capital (WACC)
- 16.5
A company has the following information Sales units= 50,000 units, selling price per unit= Rs 100. Variable cost per unit = Rs 30 Fixed cost Rs 100,000. 10% debenture= Rs 30,000 Calculate: Degree of operating Leverage (DOL), Degree of financial leverage (DFL), and Degree of combined Leverage (DCL) also interpret the results.
Group C
Comprehensive Answer Questions(2 × 10 = 20)
- 17.10
A company borrows Rs 100,000 from Bank of Kathmandu. Interest rate is 10%. The loan will be amortized in 5 years. Required: a) Annual payments b) Loan amortization schedule
- 18.10
You are given the following information: The cost of plant and installation expenses will be Rs100,000 and Rs 100,000 respectively. Net working capital of Rs 40,000 is required at the beginning. The sales revenue and operating expenses will be Rs 500,000 and Rs 200,000 respectively for the five years. Book and cash salvage value of the machine expected at the end of five years are Rs 100,000 and Rs 80,000 respectively. The income tax rate applicable is 40% and cost of capital is 10%. Required: a) Net investment at the beginning. b) Annual cash flow after tax. c) Net Present Value (NPV). Would you accept the project?
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