Code No: 53118/MT

NR
M.Tech. – I Semester Supplementary Examinations,
September, 2008

FINANCIAL MANAGEMENT
(Industrial Engineering and Management)

Time: 3hours Max. Marks:60

Answer any FIVE questions

All questions carry equal marks
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1.a) What are the functions of the financial manager.

b) What is an income statement? How would you recognise revenue
and expenses while preparing an income statement?

2.a) What is a statement of changes in financial position? How does it

differ from funds flow or cash flow statements.
b) Explain:
i) Levenage ratios
ii) Profitability ratios.

3.a) Define Break–even point. How would you compute the Break–even
point? Also discuss the assumptions underlying the break-even
analysis.
b) Explain the advantages and disadvantages of budgeting.

4.a) What is capital budgeting? Why is it significant for a firm?

b) The expected value of the probability distribution of possible net
present value for a project is Rs. 30,000 and the standard deviation
about the expected value is Rs. 15,000. Assuming a normal
distribution, What is the probability that the net present value will
be:
i) Zero or less
ii) Greater than Rs. 45,000
iii) Less than Rs. 7,500.

5.a) The expected earnings of firms A and B are Rs. 120 000 with a
standard deviation of Rs. 30,000. Firm A is non-levered. Firm B is
levered and has to pay annual interest charges of Rs. 30,000.
Which firm is more risky? Why?
b) Briefly explain the factors which influence the planning of the
capital structure in practice.
Contd…2.,
Code No: 53118/MT ::2::

6.a) What is the importance of working capital for a manufacturing

firm?
b) Explain and illustrate the utility of cash budget.

7.a) What are objectives of the collection policy? How should it be

established.
b) Discuss in detail the ABC analysis.

8. Write notes on any three of the following:

a) Balance sheet
b) Credit policies
c) Financial leverage
d) RBI regulations
e) Risk and uncertainity.

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