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ASSIGNMENT
DRIVE FALL2017
PROGRAM MASTER OF BUSINESS ADMINISTRATION (MBA)
SEMESTER II
SUBJECT CODE& NAME MBA202 – FINANCIAL MANAGEMENT
BOOK ID B1628
NUMBER OF ASSIGNMENTS, 2, 4 Credits, 30 marks each
CREDITS & MARKS

Note –The Assignment is divided into 2 sets. You have to answer all questions in both sets.
Average score of both assignments scored by you will be considered as your IA score. Kindly
note that answers for 10 marks questions should be approximately of 400 words.

Q. Assignment Set -1 Marks Total

No Questions Marks
1. Financial planning means deciding in advance the financial activities to be carried on to
achieve the basic objective of the firm.Explain the factors that affect financial planning.
Factors affecting Financial Plan 10 10
2. ³ Book value is an accounting concept ´ . Explain the factors of this concept.

Calculate the worth of the value of one sharefrom the belowdetails of Company ABC : 10
Current dividend is Rs. 10.
It expects to have a supernormal growth period running to 6 years during which the growth
rate would be 30%.
The company expects normal growth rate of 10% after the period of supernormal growth
SHULRG. TKH LQYHVWRU¶V UHTXLUHG UaWH RI return is 18%.
factors explainingthe concept of book value 5 10
Solution to the problem 5
3. Explain the Cash Flow Estimation Principles.
Cash Flow Estimation Principles. 10
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Q. Assignment Set -2 Marks Total
No Questions Marks
1. Explain EOQ and Re ± order point.

A manufacturingcompany has anexpected usageof1,00,000 units ofacertain product during

the next year. The cost of processing an order is Rs 200 and the carrying cost per unit per
annum is Rs 2. Lead-time for an order is five days and the company will keep a reserve oftwo
days usage.
Calculate EOQ and Re ± order point.Assume 250 days in a year.
Explanation of EOQ and Re – order point 5 10
CalculationofEOQ and Re – order point 5
2. Explain the capital Budgeting process and its appraisals

Solve the below given problem:

Given below are the details on the cash flows of two projects A and B. Compute pay-back
period for A and B.
Cash flows of A and B
Year Project A cash flows (Rs.) Project B cash flows (Rs.)
0 (4,50,000) (5,50,000)
1 3,00,000 2,00,000
2,00,000
2 1,50,000 2,50,000
3 50,000 3,00,000
4 2,00,000 3,50,000
10
5 1,00,000
Explanation of capital budgeting process and its appraisals. 6 10
Solution for the problem 4
3. From the below details, show the effect of the dividend policy on the market price of company
XYZ Ltd. VKaUHV XVLQJWKH WaOWHU¶V Model.

Equity capitalisation rate Ke is 10%

Earnings per share is given as Rs. 10
ROI (r) may be assumed as follows: 10%and 15%
Show the effect ofthe dividend policies onthe share value ofthe firm for three differentlevels
of r, taking the DP ratios as 20%, 40%, 60%, 80%and 100%.
Explanation of concepts of working capital 10