JAYAWANT SHIKSAHN PRASARK
MANDAL’S
MBA PROGRAMME
Prelim Examination 2009-10
Semester –III (Finance Specialization)
Subject: Advance Financial Management (303)
Date: 10-11-2009
Marks: 70
Day: Tuesday
Duration: 3Hrs
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Instructions:-
- Attempt
any 2 questions from Section I and II each.
- Question
NO.1 is compulsory
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Q1) Discuss
the Concept of EVA as a tool of performance measurement. What causes EVA to increase? Differentiate EVA with ROI.
Give a suitable example in support of answer. (10 marks)
SECTION-I
Q2) Write a Detail Notes on:
a) Walter’s
Approach to Dividend policy
b) Gordon’s
Approach to relevance of dividend decision.
c) MM’s
irrelevance theory of Dividend Policy. (15 marks)
Q3) Write a Detail Notes on:
a) Net
Income approach of Capital Structure
b) Net
Operating Income approach of Capital Structure. (15 marks)
Q4) Write short notes on Any
three: (3X5=15 marks)
a)
RBI guidelines on Working Capital Finance
b)
Tandon Committee
report on Working Capital Finance
c)
Capital Rationing
d)
Capital Assets Pricing Model
e)
Buy Back of Shares
SECTION-II
Q5 (A) A company has made the following estimates of the
cash inflows for an investment proposal. The company intends to use a decision
tree to get a clear picture of the project’s cash inflows:
|
PARTICULARS
|
CASH INFLOWS IN RS
|
PROBABILITY
|
|
FIRST YEAR
|
25000
|
0.4
|
|
|
30000
|
0.6
|
|
SECOND YEAR
|
|
|
|
IF CASH INFLOWS IS RS 25000
|
12000
|
0.2
|
|
|
16000
|
0.3
|
|
|
22000
|
0.5
|
|
|
|
|
|
IF CASH INFLOWS IS RS 30000
|
20000
|
0.4
|
|
|
25000
|
0.5
|
|
|
30000
|
0.1
|
The equipment costs Rs 40000 and
the company uses 10 percent discount rate for type of investment
Construct a decision tree for the
proposed investment project
|
PRESENT VALUE OF RUPEE 1
AT 10 PERCENT
|
|
|
YEAR 1
|
0.909
|
|
YEAR 2
|
0.826
|
|
YEAR 3
|
0.751
|
|
YEAR 4
|
0.683
|
|
YEAR 5
|
0.621
|
(8 Marks)
Q5 (B) FOLLOWING
DETAILS ARE MADE AVAILABLE TO YOU:
|
PARTICULARS
|
PROJECT X
|
PROJECT Y
|
|
PROJECT COST IN RS
|
700
|
700
|
|
CASH IN FLOWS
|
IN RS
|
IN RS
|
|
YEAR 1
|
100
|
500
|
|
YEAR 2
|
200
|
400
|
|
YEAR 3
|
300
|
200
|
|
YEAR 4
|
450
|
100
|
|
YEAR 5
|
600
|
100
|
Assume no residual values at the end of the fifth year. The
firms cost of capital is 10 percent.
Required in respect of the two projects:
I)
Pay back period
II)
Net present value using 10 percent as discounting
factor
III)
Profitability index (7 Marks)
Q6) From the following information, you are required to
estimate the net working capital:
|
Particulars
|
Cost Per Unit Rs.
|
|
Raw Material
|
400
|
|
Direct Labour
|
150
|
|
Overheads Excluding
Depreciation
|
300
|
|
Total
|
850
|
Additional Information:
|
Selling Price
|
Rs.1000 Per unit
|
|
Output
|
52000 units per annum
|
|
Raw Materials in Stock
|
Average 4 weeks
|
|
Work-In-Progress ( assume
50% completion stage with full material consumption)
|
Average 2 weeks
|
|
Credit allowed by suppliers
|
Average 4 weeks
|
|
Credit allowed to Debtors
|
Average 8 weeks
|
|
Cash at bank expected to be
|
Rs.50000
|
Assume that the production is
sustained at an even space during the 52 weeks of the year. All the sales are
on credit basis.
(15 Marks)
Q7) The Summarized Balance Sheets of XYZ limited as at 31-12-1979 and 1980 are
given below:
|
|
|
|
|
|
Amount in Rs.
|
|
Liabilities
|
1979
|
1980
|
Assets
|
1979
|
1980
|
|
Equity share Capital
|
450000
|
450000
|
Fixed Assets
|
400000
|
320000
|
|
General Reserve
|
300000
|
310000
|
Investments
|
50000
|
60000
|
|
Profit and Loss A/C
|
56000
|
68000
|
Stock
|
240000
|
210000
|
|
Creditors
|
168000
|
134000
|
Debtors
|
210000
|
455000
|
|
Provision for Taxation
|
75000
|
10000
|
Bank
|
149000
|
197000
|
|
Mortgage Loan
|
-
|
270000
|
|
|
|
|
Total
|
1049000
|
12420000
|
|
1049000
|
12420000
|
Additional Information:
(a)
Investments costing Rs.8000 were sold during the year
for Rs.8500
(b)
Provision for tax made during the year was Rs9000
(c)
During the year part of the fixed assets costing
Rs.10000 was sold for Rs.12000 and the profit was included in Profit and Loss
A/c and
(d)
Dividend paid during the year amounted to Rs.40,000
You are
required to prepare Fund Flow Statement. (15 Marks)
Q8) From the following Balance
Sheets of M/s Patil Prepare a Cash Flow Statement:
|
|
|
|
|
|
Amount in Rs.
|
|
Liabilities
|
|
|
Assets
|
|
|
|
Bills Payable
|
50000
|
40000
|
Cash
|
25000
|
130000
|
|
Creditors
|
105000
|
230000
|
Debtors
|
80000
|
150000
|
|
Capital
|
260000
|
335000
|
Stock
|
60000
|
100000
|
|
|
|
|
Fixed Assets
|
250000
|
225000
|
|
Total
|
415000
|
605000
|
|
415000
|
605000
|
Additional
Information:
a.
During the year Mr. Patil Withdrew Rs.10000 for
personal use in cash
b.
Fixed Assets Purchased during the year Rs.75000 (15 Marks)
JAYAWANT SHIKSAHN PRASARK
MANDAL’S
MBA PROGRAMME
Prelim Examination 2009-10
Semester –III (Finance Specialization)
Subject:-Advance
Financial Services (305)
Date:-12/11/09 Marks:-70
Day: - Thursday Duration:-3Hrs
Instructions
to the candidates:
1) Attempt any five questions.
2) All questions carry equal marks.
Ql) 'Merchant bankers have
a significant role to play in India
Q2)
What are the guidelines of SEBI for
issuing debt capital through public offer?
Q3) Explain the R.B.I, guidelines on issue of
commercial paper and certificates of Deposits.
Q4) Discuss the utility of
Mutual Funds and comment on their future in India
Q5) Take an account of the development of
Indian Capital Market during the last two decades.
Q6)
What are N.B.F.Cs? What are the R.B.I. guidelines for NBFCs?
Q7)
Write short notes on any two of the following :
a) Repos and Reverse Repos.
b) Depository and Dematerialisation.
c) Derivatives in stock markets.
d) Securitisation.
JAYAWANT SHIKSHAN PRASARAK MANDAL’s
MBA PROGRAMME
Prelim Examination: 2009-10
Semester-III (Finance Specialization)
Subject- Banking and Financial Institutions (306)
Date:- 13/11/2009 Marks-50
Day- Friday Duration-2
Hrs
_______________________________________________________________________
Instructions-
1 All questions are compulsory.
2 All questions carry equal marks.
Q. 1 Discuss in detail the role of Indian Financial System
and Economic Development.
Q. 2 Explain recent reforms in banking sector.
Q. 3 Discuss in detail functions of Non-Banking Financial
Corporations.
Q. 4 Discuss the role of Reserve Bank of India
Union Budget.
Q. 5 Write Short Notes on: (any two)
a) Types of Bank
b) NPA
c) e- banking
d) Mobile Banking
Jayawant Shikshan Prasarak Mandal
MBA Programme
Prelim examination: 2009-10
Semester- III (Finance specialization)
Subject: Security Analysis &
Portfolio Management (307)
Date: 16/11/2009 . Marks:
-50.
Day: -
Monday. Duration:-
2.00 Hrs.
________________________________________________________________________
Instructions:
1.
Q.1 is
Compulsory
2.
Solve any 4
from the remaining questions
3.
All
Questions carry equal marks.
Q.1 How do the following
investments compare in terms of Risk, Return, Marketability, Tax Shelter &
Convenience?
a)
Equity
Shares
b)
Non-convertible
Debts
c)
Debt Scheme
d)
Equity
Shares
e)
Life
Insurance
f)
Bank
Deposits
g)
Public
Provident Fund
h)
Mutual Fund
i)
Gold &
Silver
j)
Real Estate
Q.2 Explain the Concept of
Portfolio Management? & also explain the Phases of Portfolio Management?
Q.3 Explain the Concept of
Financial Market? & also explain the New issue Market Concept?
Q.4 Difference between Fundamental Analysis & Technical Analysis?
Q.5 Explain the Concept of
‘Portfolio Management’ & types of portfolio Management?
Q.6 Explain the Concept of Derivates? & explain the Concept of
various types of it?
Q.7 Write Short notes on? (Any 2)
a)Stock Exchange
b)
Types of Risk
c)
SEBI
d)
Book Building
JAYAWANT SHIKSHAN PRASARAK MANDAL’S
MBA PROGRAMME
Prelim Examination: 2009-10
Semester-III (Finance Specialization)
Subject- (304) Direct Tax
Date: - 11/11/2009 Marks-70
Day- Wednesday Duration-3 Hrs.
________________________________________________________________________
Instructions-
1. Question
No. 1 is compulsory.
2. Solve
any five questions from the remaining.
3. All
the questions from Q.No.2 to Q.NO.7 carry equal mark
4. Give
appropriate syntax and examples wherever necessary.
5.
Use of programmable calculators is not
allowed
6.
Answers in Illegible Handwriting will not be
checked.
Q1) Write short notes on any four of the
following – [5 X 4 = 20 Marks]
1.
Agricultural
Income.
2.
Taxability
of Gratuity.
3.
Minimum
Alternative Tax.
4.
Deductions
from Income from House Property.
5.
Compulsory
filing of returns based upon economic criterions.
Q2) Explain in details any ten incomes which are
exempt from tax. [10 Marks]
Q3) Mr. Ashok is working as the General Manager
of a manufacturing company. Details of his salary for the Assessment Year
2005-2006 are as below –
a) Basic salary Rs. 90,000 per
annum.
b) Dearness Allowance - Rs. 2,000
per month.
c) Education allowance for two
children – Rs. 150 per month per child.
d) Traveling allowance for his
official traveling Rs. 40,000. However, he has actually spent only Rs. 30,000.
e) He stays in the furnished flat
provided by the company. Cost of the furniture is Rs. 1, 50,000. He pays Rs.
2,000 per month from his salary towards the rent. He is also provided with a
watchman and a servant whose salary is Rs. 400 per month and Rs. 300 per month
respectively and is paid by the company.
f) He has been provided with a
motor car of 1.8 Liter
engine capacity for his official as well as personal use. Repair and
maintenance expenses are born by the company.
g) The company has contributed Rs.
18,000 to his RPF. Interest credited to his account @ 14% per annum amounted to
Rs. 14,000.
Calculate
the Income from Salaries for Mr. Ashok for the Assessment Tear 2005-2006. [10 Marks]
Q 4) a) Explain in details various deductions
available while calculating the Income from House Property.
b) R Ltd. has a house property situated in Delhi
Particulars submitted to you. Compute the income from house property for the assessment year 2004-05.
·
Municipal valuation Rs. 90,000 (Per Annum)
·
Fair rent
Rs. 1,10,000 (Per Annum)
·
Standard rent
Rs. 1,00,000 (Per Annum)
The house property was let out w.e.f. 1-4-2003 for Rs. 8,000 p.m. which was vacated by tenant on 30-9-2003 . It remained vacant for 2 months. W.e.f. 1-12-2003, it was let out for Rs. 11,000 p.m. Municipal
taxes paid20%of municipal valuation Insurance premium paid 3000 Interest on money borrowed for purchase of house property 30000.
b) Mr. Ashok owns a building which
consists of three identical units. Mr. Ashok uses unit 1 for his own residence.
Mr. Ashok uses unit 2 for his business. Unit 3 is let out for residential
purposes. Mr. Ashok provided the following particulars in respect of the house
for the Assessment Year 2005-2006.
·
Fair
rent for each unit Rs. 60,000.
·
Actual rent received for Unit 3 is Rs. 72,000
per annum.
·
Municipal
taxes levied for the entire house were Rs. 18,000 out of which an amount of Rs.
15,000 has actually been paid.
·
On
1st April 2002 ,
Mr. Ashok borrowed an amount of Rs. 5, 00,000 for the construction of the house
at the rate of interest of 12% per annum.
The construction of the
property was completed on 21st
April 2004 . Calculate the Income from House Property of Mr. Ashok
for the AY 2005-2006. [10
Marks]
Q 5) Mr. Ashok purchased his
residential house in 1972 for an amount of Rs. 1, 00,000. He spent the
following amounts for the improvement of the house-
May 1980 – Rs. 50,000
Jan 1992
– Rs. 60,000
On
the death of Mr. Ashok in the month of July 94,m the house got transferred to
the son of Mr. Ashok, Mr. Anil spent the following amounts for the improvement
of the house –
September
1995 – Rs. 75,000
February
2000 – Rs. 30,000
Mr.
Anil sold the house in the month of July 2004 for an amount of Rs. 25 Lakhs and
paid the brokerage of 1% on the gross amount of sale. Mr. Anil made the
following investments –
a) In the month of September 2004,
he purchased the tax-saving bonds of ICICI amounting to Rs. 1, 00,000.
Similarly, in the month of May 2005, he purchased the capital gains bonds of
NABARD amounting to Rs. 1, 50,000.
b) In March 2005, he invested Rs.
10 Lakhs for purchasing a flat at his native place.
c) In January 2005, he purchased a
Honda City for an amount of Rs. 6 Lakhs.
Calculate the amount of capital
gains for the AY 2005-2006 assuming the FMV of the house as on 1st April 1981 to
be Rs. 2 Lakhs and due date for filing returns for AY 2005-2006 to be 31st July 2005 . [10 Marks]
Following
CII can be assumed –
FY
81 – 82 100
FY
91 – 92 199
FY
94 – 95 259
FY
95 – 96 281
FY
99 – 00 389
FY
04 – 05 480
Q 6) Write a detailed essay on
“Rebates as per the provisions of Income Tax Act, 1961” . [10 Marks]
Q 7) Discuss the tax treatment
of the following items which have been debited or credited while preparing the
Profit and Loss Account of A Limited for the year ending 31st March 2005 .
a) An amount of Rs. 30,000 is
debited to Profit and Loss Account of Rs. 30,000 is debited to Profit and Loss
Account towards the excise duty payable for the previous year ending on 31st March 2004 .
The said amount of Rs. 5 Lakhs was paid till the date of filing the income tax
return.
b) An amount of Rs. 5 Lakhs was
paid as lump sum for the acquisition of technical knowhow.
c)
A
technical consultant was paid the consultancy charges of Rs. 25,000 in cash and the
deduction was claimed for the expenditure.
d)
An
amount of Rs. 3 Lakhs was paid to the employees as bonus and the same was
debited to Profit and Loss Account. Amount payable as per the provisions of
Payment of Bonus Act, 1965 worked out to Rs. 2.5 Lakhs.
e) An amount of Rs. 3 Lakhs has
been debited to Profit and Loss Account being the cost of one van which was
purchased by the Assessee for promoting family welfare among the employees.
f) A trust has been formed for the
welfare of the employees working for the Assessee. The Assessee has paid an
amount of Rs. 2 Lakhs as the initial contribution for the formation of the
trust and debited the same to Staff Welfare Account.
g) During the year, the company
declared VRS. 50 employed of the company opted for the same. The company
debited the compensation amounting to Rs. 200 Lakhs o Profit and Loss Account
claiming the same to be revenue expenditure.
h) The company has borrowed an
overdraft from its bank for the purpose of paying the dividend to the
shareholders. Interest on the same amounting to Rs. 3, 50,000 has been debited
to Interest Account.
i) There has been delay in paying
the sales tax amount to the respective authorities in time. The sales tax
officer has charged an interest for the delayed payment amounting to Rs. 12,000
which has been debited to Profit and Loss Account.
During
the Assessment Year 2002-2003, the company had written off an amount of Rs.
45,000 as bad debts being the amount due from one of the customers. In that
year, the amount was allowed as expenditure. During the current previous year,
the company recovered the same from the customer but the said amount has not
been credited to Profit and Loss Account treating the same to be capital
receipt. [10 Marks]
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ALL THE BEST -----------
