Smu Mba Finance Assignments

SMU DRIVE FALL 2017 MBA 202 – financial management solved free assignment

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.
“Book value is an accounting concept”. Explain the factors of this concept.
Calculate the worth of the value of one share from the below details of Company ABC :
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 period. The investor’s required rate of return is 18%.
factors explaining the concept of book value
5
10
Solution to the problem
5
3.
Explain the Cash Flow Estimation Principles.
Cash Flow Estimation Principles.
10
10
Q. No
Assignment Set -2
Questions
Marks
Total Marks
1.
Explain EOQ and Re – order point.
A manufacturing company has an expected usage of 1,00,000 units of a certain 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 of two days usage.
Calculate EOQ and Re – order point. Assume 250 days in a year.
Explanation of EOQ and Re – order point
5
10
Calculation of EOQ 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
1,50,000
2,50,000
3
50,000
3,00,000
4
2,00,000
3,50,000
5
1,00,000
2,00,000
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. shares using the Walter’s 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 of the dividend policies on the share value of the firm for three different levels of r, taking the DP ratios as 20%, 40%, 60%, 80% and 100%.
Explanation of concepts of working capital
10
10

MB0045: Given the following information in terms of per unit costs, prepare a statement showing the working capital requirement.

Raw material            60

Direct labour            22

Overheads                44

Total cost                 126

Profit                        18

Selling price             140

The following additional information is available:

Average raw material in stock              one month

Average materials in process                15 days

Credit allowed by suppliers                  one month

Credit allowed to debtors                     two months

Time lag in payment of wages             15 days

Time lag in payment of overheads       one month

Sales on cash basis                               20%

Cash balance to be maintained            80,000

You are required to prepare a statement showing the working capital required to finance a level of activity of 100,000 units of output. You may assume production is carried out evenly throughout the year and payments occur similarly. Assume 360 days in a year.

Solution:

Estimation of Working Capital

 a)      Investment in inventory

1.      Raw material                        =          RMC x RMCP

 360

=          100,000 x 60 x 30

360

=          500,000

2.      Work in process inventory =          COP x WIPCP

 360

=          100,000 x 126 x 15

360

=          525,000

3.      Finished goods inventory     =          COS x FGCP

 360

=          100000 x 126 x 60

360

=          2,100,000

b)     Investment in debtors                 =          Cost of credit sales x DCP

360

=          80,000 x 126 x 60

360

=          1,680,000

c)      Cash Balance                               =          80,000

d)     Total Current Asset (A+B+C)   =          4,885,000

e)      Current Liabilities

1.      Creditors                                =          Purchase of raw materials x PDP

360

=          100,000 x 60 x 30 / 360 = 500,000

Wages                                     =          100,000 x 22 x 15 / 360 =91,667

3.      Overheads                              =          100000 x 44 x 30/360 = 366,667

f)       Total Current Liabilities             =          958334

                                    Net Working Capital (D – F)           =          3,926,666      

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Tags: Business, Capital IQ, Finished good, Fiscal year, Inventory, Raw material, Trailing twelve months, Working capital

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