ASSIGNMENT QUESTIONS ON CORPORATE FINANCE COURSE (CF)

1) What is Corporate Finance and what does it include? (2 Marks)

2) What is the importance of corporate finance? (2 Marks)
3) Explain in detail the phases of Corporate Financing? (10 Marks)
4) What is the formula for NPV? (1 Mark)
5) Nice Ltd wants to expand its business and so it is willing to invest Rs 10,00,000. The
investment is said to bring an inflow of Rs.  1,00,000 in first year, 2,50,000 in the second
year, 3,50,000 in third year, 2,65,000 in fourth year and 4,15,000 in fifth year. Assuming the
discount rate to be 9%. Calculate NPV for each year using the formula and tabulate the
same. Based on the NPV so calculated, give reasons as to whether the project can be
accepted or rejected? (15 Marks)
6) Assume Company A invests Rs.1 million in a project that is expected to save the company
Rs.250,000 each year. What is the pay back period for this project?
Consider another project that costs Rs200,000 with no associated cash savings will make the
company an incremental Rs100,000 each year for the next 20 years at Rs2 million.
How long will it take to pay the investment back? Based solely on the payback period
method, which project is a better investment? (10 Marks)