BBA502 &FINANCIAL MANAGEMENT

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ASSIGNMENT

DRIVE	SPRING 2016
PROGRAM	BBA
SEMESTER	V
SUBJECT CODE & NAME	BBA502 &FINANCIAL MANAGEMENT
BK ID	B1850
CREDIT	4
MARKS	60

Note: Answer all questions. Kindly note that answers for 10 marks questions should be approximately of 400 words. Each question is followed by evaluation scheme.

Question.1. Explain the role of a finance manager, understanding capital markets and equity and borrowed funds.

Answer:Financial activities of a firm is one of the most important and complex activities of a firm. Therefore in order to take care of these activities a financial manager performs all the requisite financial activities.

company should go for issue of debentures and other loans.

Choice of investors- The company’s

Question.2. Write short notes on :

a) Budgeting and forecasting

Answer:In essence, a budget is a quantified expectation for what a business wants to achieve. Its characteristics are:

·         The budget is a detailed representation of the future results, financial position, and cash flows that management wants the business to achieve during a certain period of time.

Question.3. Explain on cost of debt and cost of equity capital.

Answer:In corporate finance, capital – the money a business uses to fund operations – comes from two sources: debt and equity. While both types of financing have their benefits, each also carries a cost.

Debt capital

Question.4. Solve the given problem below:

Sales 25,00,000 ; Variable cost 15,00,000 ; Fixed cost 5,00,000 (including interest on10,00,000). Calculate degree of financial leverage.

Determine the operating leverage :

Determine the degree of operating leverage from the following data:

S Ltd R Ltd

Sales 25,00,000 30,00,000

Fixed costs 7,50,000 15,00,000

Variable expenses 50% of sales for firm S 25% for firm R.

Answer: - . Calculation of financial leverage:-

Sales                                                                                                                                                      25,00,000 Rs.

– Variable cost                                                                                                  15,00,000 Rs.

– Operating fixed costs (5,00,000 Rs. – 1,50,000 Rs.)            3,50,000 Rs.

Question.5. Explain the capital budgeting process. Why is Net Present Value (NPV) important?

Answer:Net Present Value (NPV) is the difference between the present value of cash inflows and the present value of cash outflows. NPV is used in capital budgeting to analyze the profitability of a projected investment or project.

The following is the formula for calculating NPV:

Question.6. Write about cash planning and explain about cash forecasting and budgeting.

Answer:As an integral element of public expenditure management, governments need to develop cash planning and management to keep within budgeted expenditure in cash terms; to prevent unanticipated borrowing that might disrupt monetary policies; and to help identify the need for in-year remedial fiscal action. Variations in in-year actual versus planned patterns of expenditure are not without cost.

cash inflows from investing activities can indicate whether the business is investing excess funds to grow the business or whether growth is stagnating. A financing activities analysis is a major indicator of whether the business has a good cash management plan. Frequent borrowing and injections of outside capital can indicate the business is financially unstable.

Dear students get fully solved assignments

Send your semester & Specialization name to our mail id :

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or

Call us at : 08263069601

(Prefer mailing. Call in emergency )