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DIPLOMA EXAMINATION, 2011

(ACCOUNTING AND FINANCE)
(PAPER-IV)
140. CORPORATE ACCOUNTING AND FINANCIAL MANAGEMENT
May)

(Time: 3 Hours
Maximum: 100 Marks
Answer any FIVE questions
(520=100)

1.

Discuss the objectives and scope of financial management?

2.

What is Financial management? Briefly explain the functions of financial

manager in small scale organisation?

3.

Discuss the merits and demerits raising funds by issuing different types of
debentures?

4.

Describe the various methods in raising long term finance?

5.

Enumerate the different sources of short term finance?

6.

Explain the role and importance of trade credit and Bank credit.

7.

What is inventory management?

techniques?

8.

State the techniques involved in capital Budgeting and explain the importance of
capital Budgeting?

9.

From the following particulars prepare a statement showing working

needed to finance a levels of activity of 10,000 units of output per annum
Analysis of selling price per unit
Raw materials
Labour
Overheads
Total cost

Explain the various inventory management

Profit
Additional information
a) Raw materials are to remain in store on an average one month
b) Materials are in progress, on a average two months
c) Finished goods are in stock on average three months

capital
Rs.
04
03
02
09
03
12

2
d) Credit allowed to debtors is four months
e) Credit allowed to suppliers is two months
f) May be assumed that production and overheads accure evenly throughout the
year
10.

A Company is considering on investment proposal to install new milling controls

at a cost of Rs 50,000. The facility has life expectancy of 5 years and no salvage
value. The tax rate 35 percent, Assume the Firm uses straight line depreciation
and same is allowed for tax purpose. The estimated cash flow betfore depreciation
and tax (CFBT) From the investment proposal are as follows
Year
1
2
3
4
5

CFBT
10000
10692
12769
13462
20385

Compute the following

i)

Pay back period

ii)

Average rate of return

iii)

Net present value at 10% discount rate

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