Scribd
Upload
316 views2 pages

BBA Financial Management Exam Questions

This document contains a 10-question exam on financial management for a Bachelor of Business Administration program. The exam covers topics such as the importance of financial management, time value of money, calculating internal rate of return and expected rate of return, indifference point analysis for capital structure decisions, signaling theory and pecking order theory, the differences between leasing and hire purchasing, calculating call option value, break-even analysis, and proving the Modigliani-Miller hypothesis. Students have 2 hours to answer any questions worth up to 50 marks.

Uploaded by

Arun Reddy
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
316 views2 pages

BBA Financial Management Exam Questions

This document contains a 10-question exam on financial management for a Bachelor of Business Administration program. The exam covers topics such as the importance of financial management, time value of money, calculating internal rate of return and expected rate of return, indifference point analysis for capital structure decisions, signaling theory and pecking order theory, the differences between leasing and hire purchasing, calculating call option value, break-even analysis, and proving the Modigliani-Miller hypothesis. Students have 2 hours to answer any questions worth up to 50 marks.

Uploaded by

Arun Reddy
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

BML MUNJAL UNIVERSITY

Bachelor of Business Administration (BBA)


Batch 2014-17
END-SEMESTER EXAMINATION

Financial Management

MaxMarks : 50 Semester-04
Duration : 2 Hours

INSTRUCTIONS
Attempt any questions out of the following up to 50 Marks. Students may use scientific
calculators but financial and programmable calculators are not allowed. Provide brief and
concise answers only with real life examples.

Questions.1 Why is Financial Management important for every business? (5 Marks)

Questions.2 “Time value of money is an important concept in Finance”. Explain.


(5 Marks)

Questions.3 Calculate the Internal Rate of Return of the following project. Investment
done in the Year 0 is Rs. 10,000. (10 Marks)
Year 1 Rs 15,000 (Cash Inflow)
Year 2 Rs 10,000 (Cash Inflow)

Questions.4 Calculate Expected Rate of Return and Standard Deviation of Return for
the following example (10 Marks)

Return Probability
20% 0.3
30% 0.2
35% 0.1
40% 0.26
50% 0.14
Questions.5 The finance manager of a firm has the following plan for raising Rs.
30,000,00. The first plan is to raise all with equity capital of Rs. 30,000,00. The second
option is to raise Rs. 15,000,00 as equity and rest Rs. 15,000,00 as 10% debentures. Assume
35% as Corporate Tax Rate and Face Value as Rs. 100 of equity shares. Calculate
Indifference Point of EBIT or that value of EBIT where the two plans would provide the
same benefit to the firm. (10 Marks)

Question.6 Explain the concept of “Signaling Theory” and “Pecking Order Theory”.
Give Examples. (5 Marks)

Question.7 Explain the difference between Leasing and Hire Purchasing.


(5 Marks)

Question.8 Assuming no stock volatility, calculate the value of the call option of a share if
the following is true:-
Spot Price - Rs. 40
Exercise Price – Rs. 30
Risk free Rate of Return – 5%
Time to expiration – 1 Year
(10 Marks)

Question.9 If Fixed Cost is Rs. 1 Lakh, Variable Cost per unit is Rs. 150 and Sale Price per
unit is Rs. 150, find the Break Even Point in number of units and amount. (5 Marks)

Question.10 Prove the Modigliani Miller Hypothesis that dividends are irrelevant.
No need to state assumptions.
(5 Marks)

You might also like