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FM- MOCK PAPER (1)

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34 views4 pages

FM- MOCK PAPER (1)

Uploaded by

2116tanvi
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PDF, TXT or read online on Scribd
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FM-BCH-MOCK PAPER

M. Marks: 20 M. Time: 3 Hours (including viva)


Instructions:
1) Each question carries 5 Marks.
2) There are 6 questions in the paper, you are required to do any 4.
3) Create a folder on your desktop with last five digits of your University Roll Number.
4) Name your excel file with your first name followed by your Roll Number. [ex-
BHAWNA-369]
5) Save your excel file in your folder.
6) Fill the Evaluation Sheet carefully.

Q 1. You are given the following information about a project having life span of 5 years.
Particulars Year Project X
Cost 0 110000
PBD&T 1 20000
PBD&T 2 25000
PBD&T 3 30000
PBD&T 4 26000
PBD&T 5 24000

Compute NPV at 12% if tax is 50%

Q2. Compute the Payback Period for an asset costing Rs 66,000 with life of 6 years and no
salvage value at the end of its life, from the following information.

Year Profit After Tax (Rs)


1 5000
2 8000
3 10000
4 15000
5 20000
6 18000

Q3. The capital structure of ABC Ltd. Is as follows:

Equity shares capital (₹ 100 each) ₹ 200000


Earning for equity shareholders ₹ 20000
Price of share in the beginning ₹ 100
Equity capitalization rate 12%

1
a) Calculate the theoretical market price of equity share under MM model if the
company is considering a payout of 0% and 60%.
b) Calculate the value of the firm using MM model if the dividend payout ratio is 0%
and 60%. The company proposes to make a new investment of ₹ 26,00,000.

Q4) The earning per share of the company is 50 ₹ and the capitalization rate applicable to it is
10%. The company has before it the option of adopting payout of 0% or 75% or 100%. Using
Gordon model formula compute the market value of the company’s shares if the productivity of
the retained earnings is 12%, 10% and 8%. Write comment on its computed value.

Q5) Following information is given for AB Ltd.

Cost elements Amt. per unit


Raw Materials ₹ 150.00
Direct Labour ₹ 60.00
Production Overheads ₹ 70.00
Selling and Disribution Overheads ₹ 30.00
Selling Price ₹ 330.00

Raw materials in stock Average 3 Weeks


Finished goods in stock Average 3 Weeks
Credit allowed by suppliers Average 4 Weeks
Credit allowed to debtors Average 2 Weeks
Lag in payment of wages Average 3 Weeks
Lag in payment of overheads Average 2 Weeks

Cash at bank is expected to be is 30% of Gross Working Capital. Credit sales are 50%. Annual
Production 1,56,000 units. Calculate Working Capital Required by the firm.

Q6) ABC Ltd. Has the following capital structure ;


Equity share capital(400000 shares of rs 10 each) Rs 100000
12% Prefrence shares Rs100000
10% Debentures Rs 150000
The equity shares of the company are quoted at Rs.120 and the company is expected to declare a
dividend of Rs. 12per share . Rate of growth of dividends is 8% which is expected to be
maintained. Assuming tax rate@50%;
a. Calculate WACC.
b. The company wants to raise additional term loan of Rs 300000 at 10%. Calculate the
revised WACC assuming the market price of equity share has gone to Rs 105.

2
EVALUATION SHEET- MOCK PAPER

UPC 2412082302

College Roll No.


Machine No.
University Roll No.

Q1) Fill the information in following table as computed by you in Excel

Calculation of Cash Flows


Particulars 1 2 3 4 5
Depreciation
Tax
Cash Inflow

NPV

Q2) Fill the information in following table as computed by you in Excel

Year Cash Inflows Cumulative Cash Inflows

PBP

Q3)

Share Price DP Ratio is 0% DP Ratio is 60%

Value of Firm after making


new Investment

Q4) Share Price Share Price Share Price


DP Ratio 0% 75% 100%
Rate of Return
12%
10%
8%

3
Q5)

Particulars Amount
Raw materials in stock
Finished goods in stock
Debtors
Cash
GWC
Creditors
Lag in payment of wages
Lag in payment of overheads
Net Working Capital Required

Q6)
Particulars Specific Cost of Capital Revised Specific Cost of Capital
Equity share capital
12% Preference shares
10% Debentures
Additional Loan

Overall Cost of Capital- _______________


Revised Overall Cost of Capital- _______________

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