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SET-1 MB0029Page 1
DINA BUSINESS SCHOOLDINA INSTITUTE OF HOTEL AND BUSINESS MANAGEMENTPUNE –411 028CENTRE CODE –02758ASSIGNMENT –SET 1 / SET 2NAME: TAHA MOHAMMED DHILAWALAROLL.NO.: 520850852PAPER / SUBJECT :
 
Financial ManagementCODE: MB0029SEMESTER:I / II / III / IV
SIKKIM MANIPAL UNIVERSITY
 
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1.a. Explain why wealth maximization is superior overprofit maximization.ANS.
Its is based on cash flow, not based on accounting profit.
Through the process of discounting it takes care of the qualityof cash flows. Distant cash flows are uncertain. Converting distant uncertaincash flows into comparable values at base period facilitates better comparisonof projects. There are various ways of dealing with risk associated with cash flows. These risks are adequately to arrive at the net present value of any project.
In today’s competitive business scenario corporateplay a keyrole. In company form of organization, shareholdersown the company butthe management of the company rests with the board of directors. Directorsare elected by shareholders and hence agents of the shareholder . companymanagement procures funds for expansion and diversification from capitalmarkets. In the liberalized setup, the society expects corporate to tap thecapital market. There fore to keep the investors happy through the performance of value of shares in the market, management of the companymust meet the wealth maximization criterion.
When a firm follows wealth maximization goal, it achievesmaximization of market values of share. When a firm partices wealthmaximization goal, it is possible only when it produces quality goods at lowcost. On this account society gains because of the societal walfare.
Maximization of wealth demands on the part of corporate toDevelop new products or render new services in the most effective andefficient manner. This helps the consumer as it will bring to the market the product and services that consumer need.
Another notable features of the firms committed to themaximization of wealth is that to achieve this goal they are forced to render efficient service to their customers with courtesy. This enchances consumer welfare and hence the benefits to the society.
From the point of evaluation of performance of listed firms, themost remarkable measures is that of performance of the company in theshare market. Every corporate action finds its reflection on the market valuesof share of the company. Therefore, shareholder wealth maximization could be considered a superior goal compared to profit maximization.
 
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Since listing ensures liquidity to the share held by the investors,Shareholder can reap the benefits arising from the performance companyonly when they sell their shares. Therefore it is clear that maximization of market will lead to maximization of the net wealth of shareholders.Therefore , we can conclude that maximization of wealth is the appropriateof goal of financial management in today’s context.
1. b. Briefly explain the steps involved in financial planAns.
Establish corporate objective:-corporate objective could begrouped Into qualitative and quantitative. For example,acompany’s mission statement may specify‘create economic – value added.’ But this qualitative statement has to be statedinquantitative teams such as a 25% ROE or a 12% earnings growthrates. There is a need to formulate both short run and long runobjectives.
 Next stage is formulation of strategies for attaining the objectives set.In this connectioncorporate develop operatingplans. Operating plansare framed with a time horizon. It could be a five year plan or ten year  plan.
Once the plans are formulated, responsibility for achieving salestarget, operating targets, cost management bench marks, profitstargets etc is fixed on respective executives.
Forecast the various financial variables such as assets required, flowof funds, cost to be incurred and then translate the same into financialstatements. Such forecasts help the finance manager to monitor thedeviations of actual from the forecasts and take effective remedialmeasures to ensure that targets set are achieved without any timeoverrun and cost overrun.
Develop a detailed plan for funds required for the plan period under various heads of expenditure.
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Hussain9993

Salaam Taha, I need MB0033...Set 1...please help me... I have cross the submission date Hussain

reply09 / 01 / 2009
Hussain9993

Please help me... I need MB0033...Project Management.. SET-1 Please send to my email fastmemo@yahoo.com

reply09 / 01 / 2009
janjay

pls help.ive only 1 week left ..thanks

reply08 / 18 / 2009
janjay

hi taha ...do you have the assignments for first semester financial accounting

reply08 / 18 / 2009
farah naseem

Dear taha..salaam, im unable to access the assignment..can u plz help !

reply08 / 11 / 2009
tahamohd

hi.. please contact me this is my cell number 09824690267

08 / 23 / 2009
GauravTinu

Dear Taha, Kindly remove the 'Do not copy' status from this file so that I can download the same. I need to submit this by tomorrow positively Thanks Buddy

reply06 / 24 / 2009
devainet

Dear TAHA Please upload the whole file.

reply06 / 18 / 2009
devainet

What's this? only 1 cover page!

reply06 / 18 / 2009
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