Iibm Case Study Answers and Multiple Answers

CASE STUDY ANSWERS AND PROJECT REPORTS FOR MBA BMS EMBA PGDMA.

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FINANCIAL MGMT

Multiple choices:

1. The approach focused mainly on the financial problems of corporate enterprise

a. Ignored non-corporate enterprise b. Ignored working capital financing c. External approach d. Ignored routine problems

2. These are those shares, which can be redeemed or repaid to the holders after a lapse of the stipulated period

a. Cumulative preference shares b. Non-cumulative preference shares c. Redeemable preference shares d. Perpetual shares

3. This type of risk arise from changes in environmental regulations, zoning requirements, fees, licenses and most frequently taxes

a. Political risk b. Domestic risk c. International risk d. Industry risk

4. It is the cost of capital that is expected to raise funds to finance a capital budget or investment proposal

a. Future cost b. Specific cost c. Spot cost d. Book cost

5. This concept is helpful in formulating a sound & economical capital structure for a firm

a. Financial performance appraisal b. Investment evaluation c. Designing optimal corporate capital structure d. None

6. It is the minimum required rate of return needed to justify the use of capital

a. From investors b. Firms point c. Capital expenditure point d. Cost of capital

7. It arises when there is a conflict of interest among owners, debenture holders and the management

a. Seasonal variation b. Degree of competition c. Industry life cycle d. Agency costs

8. Some guidelines on shares & debentures issued by the government that are very important for the constitution of the capital structure are

a. Legal requirement b. Purpose of finance c. Period of finance d. Requirement of investors

9. It is that portion of an investments total risk that results from change in the financial integrity of the investment

a. Bull- bear market risk b. Default risk c. International risk d. Liquidity risk

10. _____________ measure the systematic risk of a security that cannot be avoided through diversification

a. Beta b. Gamma c. Probability distribution d. Alpha

Part Two:

1. What is Annuity kind of cash flow? 2. What do understand by Portfolio risk? 3. What do you understand by ‘Loan Amortization'? 4. What is the Difference between NPV and IRR?

Question:

1. Which type of financing is appropriate to each firm?

2. What types of securities must be issued by a firm which is on the growing stage in order to meet

the financial requirements?

1. How would you judge the potential profit of Bajaj Electronics on the first year of sales to Booth

Plastics and give your views to increase the profit.

2. Suggestion regarding Credit limit. Should it be approved or not, what should be the amount of

credit limit that electronics give to Booth Plastics.

1. Honey Well Company is contemplating to liberalize its collection effort. Its present sales are Rs.

10 lakh, its average collection period is 30 days, its expected variable cost to sales ratio is 85 per

cent and its bad debt ratio is 5 per cent. The Company's cost of capital is 10 per cent and tax are

is 40 per cent. He proposed liberalization in collection effort increase sales to Rs. 12 lakh

increases average collection period by 15 days, and increases the bad debt ratio to 7 percent.

Determine the change in net profit.