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MB 0045 Set 1

MB 0045 Set 1

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Published by Pardeep Rohilla
MBA 0045 2nd semester
MBA 0045 2nd semester

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Published by: Pardeep Rohilla on Sep 24, 2012
Copyright:Attribution Non-commercial


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Completed assignments must be typed and formatted neatly and soft copies should beuploaded on or before the dates mentioned above.
(September 15,2012)
Ensure that you answer all questions according to the marks allocated.
Content that has been directly copied from the Internet or the Book will NOT beaccepted.
MBA- Semester 2 Assignment Set 1 -
Marks 60 (6X10=60)
MB0045 Financial Management - 4 credits
Subject Code -
*** Please fill in all the details in complete and only in CAPITAL letters
Registration Number
Please attempt all the assignments individually and independently. Assignments thathave been copied and shared among students will be automatically rejected anddisqualified.
Please attach correct assignments to correct subjects. Incase of any errors the studentwill be marked absent for the specific subject
Late submissions will NOT be accepted.
Follow assignment format and complete all the details for each assignment individually.
Roll no/Registration Number found mentioned anywhere else except the placeprovided, the assignments will be rejected.
Incase students extra details like contact number, Name found listed anywhere on thisdocument, the assignments will be rejected.
Note: Each Question carries 10 marks. Answer all thequestions.
Question 1- What is Financial Management? Explain its importance.
Answer -
Financial Management is the art and science of managing money. Regulatory andeconomic environments have undergone drastic changes due to liberalization and globalization of Indian economy. Financial Management of a firm is concerned with procurement and effectiveutilization of funds for the benefit of its stakeholders. It embraces all those managerial activitiesthat are required to procure funds at the least cost and their effective deploymentTraditionally, financial management was considered a branch of knowledge with focus on theprocurement of funds. Instruments of financing, formation, merger and restructuring of firms andlegal and institutional frame work occupied the prime place in this traditional approach.The modern approach transformed the field of study from the traditional narrow approach to themost analytical nature. The core of modern approach evolved around the procurement of the least
cost funds and its effective utilization for maximization of share holders’ wealth.
 There are three core elements of financial management show its importance are:
a. Financial Planning
 Financial Planning is to ensure the availability of capital investments to acquire the real assets.Real assets are land and buildings, plants and equipment. Capital investments are required forestablishing and running the business smoothly.
b. Financial Control
 Financial Control involves managing the costs and expenses of a business. For example, itincludes taking decisions on the routine aspects of day to day management of collecting money
due from the firms’ customers and making payments to the suppliers of various resources.
c. Financial Decisions
 · Decision needs to be taken on the sources from which the funds required for the capitalinvestments could be obtained.· There are two sources of funds
debt and equity. In what proportion the funds are to beobtained from these sources is to be decided for formulating the financing plan.

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