Code No: 53118/MT M.Tech.

– I Semester Supplementary Examinations, September, 2008 FINANCIAL MANAGEMENT (Industrial Engineering and Management) Time: 3hours Answer any FIVE questions All questions carry equal marks --1.a) b) 2.a) b)

NR

Max. Marks:60

What are the functions of the financial manager. What is an income statement? How would you recognise revenue and expenses while preparing an income statement? What is a statement of changes in financial position? How does it differ from funds flow or cash flow statements. Explain: i) Levenage ratios ii) Profitability ratios. Define Break–even point. How would you compute the Break–even point? Also discuss the assumptions underlying the break-even analysis. Explain the advantages and disadvantages of budgeting. What is capital budgeting? Why is it significant for a firm? 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. 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? Briefly explain the factors which influence the planning of the capital structure in practice. Contd…2.,

3.a) b) 4.a) b)

5.a)

b)

Code No: 53118/MT 6.a) b) 7.a) b) 8.

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What is the importance of working capital for a manufacturing firm? Explain and illustrate the utility of cash budget. What are objectives of the collection policy? How should it be established. Discuss in detail the ABC analysis. Write a) b) c) d) e) notes on any three of the following: Balance sheet Credit policies Financial leverage RBI regulations Risk and uncertainity. *****