names Surabhi Pekhale foll- NO =2k19104e MB _Inlernal_Po per | NO] Approc —aliatinoe Company = LL @1_Write_notes_ one _——- _ 2 hibits Some feato _| efxe dependent Opan_ the Fiums! capited! stuctore.. “it Le cikfexenk Fromthe NI approoch 11 _au ini beh | Finance] Carin] bs of theories of Capita Steve _______—— te | Not _Approdcht with ©5054, t [copitel chucture axe_centdictony 16 200 othe, “ACcoxcting 41 /Apporach”— change nthe leg ~) | dept in capital _shucbure— mpacts The. eras, Be, | G_CoMpany . The t foncls ond market veil to . tho_othor hd ng cenvisages t,¢ t copitcd _Shuctore. has . funds or may, NANG le.) | of various cemponents— beaiaing either om overall Cos me irad [fakes cbalanted view, as it fa nd Nol Approdch= It wos prom | jointly byt neiat_experts._F27d_salom rand is alsa Known os _* 4p. re of boLS evidenp | Appovctch as it ex, and some_teatures of NOT. _approe | from the _fo Mowing Aphis _Similorie NL_Approdch. cuit supptvis_the fa | that the Cost of Capital_and total Vdlue ot ey [it does nok_agoe With the View that the value company Wovld a Jways shoo an 'ncreasing fea tos_incpeding__levels of levercige. Lt advocates one feature OF the Nol Appr be beyound Certain _level_ ot leverage, teas (osk OF Capital iMceccebes Which _resyltsin— a Scanned with CamScanner »eS ‘i : inthe. totar aluo_oF compa. ny Mowever. sg Joes fot —soppart_Nod._Appmdeich in assorning De ightel_averige cost of Capital (wace)_ Apo : Pe Ging _sidible for cl level of leverage ; —[ gosuity fay é This technique. Mmeasores the. change in the —Totitability OF project duets changes 10 the Factors a nt pecting the. _Ccuth inFlowx af the. payject +f posj ect Tic canserecl_to be more, censitive to the forcter, Je cuminor choing-e insoch Factor hots telethively Thigher ebfeck onthe prtijability_of Project= All being equcd_ +2 project Wit 4-235 gensifi= Lather things . Lit oT yity i iable._OVes the one _coith higher seai- Vikj : This is because a Spocul change {n-foctor qroy_diasticety peduce Aut profits of the pmgpect _gt_hnay yen Cause. Josses « Yanigus mecyures oF __ “TT pbtobiblty suchas NPYBEPO> PScR_pocty_te— |_used for observing the changes jp response +o | changes_\n critical Fattoss: —l-- Sensitivity analy cis shtis Ootpor changes Lo— ~L response. jo input varicttions 10 the mode! ~fnnoctel is — —leonsidered to be a sensitne. model _tsith regard to \ t jopok_Cheing.es-h ~A0inpok vif the changes invariable pel Chang “Lined inpak The variability: May be culocatect —\quantitutivery a qualitively to various Input Varian > . ~< This _appaoueh shows the void hle._twhich ties — ~~ fed the _probiietbiliey DF the pray ec Thi— ~Lanaivcic js uted far_delermining tre Pol loving — Scanned with CamScannerthe manner_inchich themed jel_is_esplaines ~~ "s A the_nedehing o£ f-medlel_procelUre “With Lohan jo | considered. |. tt helps 2 dletcamine the VOndblet—thich yi atiect the output - - : 4) 4) helps fo analyse tne inpok varigbler hich. Mojorly dkfect tre Mosel | r Lot Vaniahl - | ¢)_Unstdble and _optinnat —clrecl of let_for g> ection in accompanying sandcrdice —Sorvey, 14) mutoal or reciprocal action_hetwe-eh_scariahle, ~ ad wirite vole on_classificcuion _CashFlow_Statemey ~ — 3 | | MG -| readily convertidble into_Ccyh._ | According 40 1nd ian_hccounking__standards cfs) ~ | Cath Flow means inflows And outflows Of Cth and | cashequi valents ~Cash_Compases of Cosh in hand ay~ | demand deposits: with banks. Cash equiveclentsan |_shork=texm chighty Liquid invetments cht ch ay 1 operettt bg ACHWInet es |—____*cash Faw Frem thet opescuting _Activitiay— fom the Major pasition of the Total cash Flat andit Source is frm the Core $income. Gene! | Activity’ Of the entrense - the amount of ¢rasbl! igenercited_out of the _¢ opercling activities'i's {+—SO_mpurt ant _indicator_sten jes prase.’s_ paleHeciency ondit's abivity te pay divid }1oans ond. make investroente £$ new projects OU looking tortoany eyterna Mouse of fiDhe LT | Anformettion with regard fo the tevel ¢ of ecauh fl) — : Scanned with CamScannerFotho- specific codegory may {pith certcuin_o they. WN Formasi + | fopevacting ca: Sh flows? y he Veny vsefoli gion ion lon Lin Pedi ting Potore [en cash Hows Arising from_oy Perating aciy ites; ~[feash_recleved_from the caule ot ‘goods and Semicas ~Beosh_tecltved_as-cfees!, Commission" ~Heash paid to the supp rier's for_goeds and services ~Wicash_patid_te.and 1_on_beholP of ~|Acash_paid_to.and recieved _bom_an‘insorance 7 ~ Leompony.tin connecHon with ¢ pemium), LClaiins primo yi |_and other policy bene fits. The chetculs of (cash Flows’ generated out of | + Cath Flows in foture. and 'Royasstiew are ~[njdnvesting pctivitiess SSS —|“hnwesting Activities’ need _to obe_revelec Seprattly _ ~ This is si ank inwiew of the feck Hed such fcash Flows * symbolise the degee of the expend ture ~ incontd for besource_noeant to_4eNercte Income: and a — Leash payments Made fer the acquisition oF fixed “and {self- consirvctecl_ Fixed Assets’ are cilse, a! ~ 28+ of Cash Flows amsing hom “Lovesting Activitier. — Assets’: further + -Cosh_parymentstadde connection ——~ ~Kwith the. tea pital teserch_a pel development; costs? —loncicercel as ‘cash flows". aunts ing_fenm <= ~Towesting Activ ities ST Scanned with CamScannerenerated oof oF ‘Financing | Activities *axe_tequired f be Shoe sepocteyy 2 | facititcubes foreceesting of Claims oA Foture éogy ——|-_by_ the fond_provicle —|--Shosr term! ton tespmise —Levamples_of cash Flows Arising fom Finacing py —|dcash_prnceeds_oftshelre Issue and other son instoument's + _ —2.Lash_panceeds ote pebentore issue land other dest —|_ostuments_like ¢ Bonds! + Loa AS_ANd Notes and ety JRepaymenh Of bomanecl tune ip-Ccegh &3_ Sx plain_the_weten's model. of Relevance of dividend. =| Professor wetter 1963) pm sed mde} which mat the the 6 riv iat see eal mpany is sheath 72h —comparyy axe reinverkeel by them enwasss b— hoe higher rate ot returns. from lie Company! s- Pe Se pective 1 the cost of diyidendl «Pte fo» He —pahaiehslden'e is toncidened oy “coppostunity cost” —pthe cost of copiters 1¢ acl —[ dividend tee PICU be 10 f the company _} nnot paid to the share holders /*— Scanned with CamScanner[3 pad havebe: -en_vsecl_as “Copiteu_ “by the, company, 4nc qnother Scenario» A company decides Nat to pay “Givietene S— to_ills shane holders, aindinstect inveyy ot J aotont—F f dividends in Some _remuneradive avenue: _ in better rote of yeturne C14 + Tho vd{us_ok ¢y? 1 hoy Ty cessanlyerore than or AHecsr equaltoke. then theinvestment oppastunities wevid yikld bedier edtn ings For the company and tho: lavesting the seteuined earnings the company May decide _| insead_of paying dividends to it's shdaehelders saa — pstomptions of toa Lea's anode? Be eee ae eee EEE 11 Lnesne Financing + Jnvestinent_is_made ps Ps ly i jssve any oO - ee exclosivel ——Compr of ot relaine ee ee eee ~ re fesh equity ordebl IOs Insta ~Alconsiant getoin and cast af Coy piteul_~ —— oii Gade tment {the Rete, _ Of vetorn_on the_invest “by the companycr) and cost o-caplt yal C kad remains unchanged. : Scanned with CamScanneree geen Hons _ am oct __[ al Cenk perce 2 oaning iS either osed Foz ongst —the Shareholders | re i es, pe enti i iwidends amon __| sion of dividend prompt foann et ————__ Sted_i ofernally 19 PS = oe 7 ed censtanl EPS en Dede He vlc gp ~ age per shane Leps1 ard aivitend— Per sha ie bap —pEanng ee cider fo 29tiblish FeSetI 4, ht noe eta 7 Tc ouwever —eHheiniticl earnings, ; __|_ te main_uncha hanged _- | otividends do 1 do nat undergo any change —————__ le unfinite. Hone b ‘The lite. of the-G compan} —i5.\ ery exioFinite- ~ wack ex's fer mul mold For_celesmining the velluc ot shdres hs for_arsving ot the market pace_of Share; Prof walt. | ea had evckeecl the Folléuaing for nav icles -__— Mndrket_pnce per share _¢P)= Darce dD Jk. Gor Pe — Ke — D> 4 7(E-D> {ke | Ke ke _ where P= Matket price per Share q - Dds Dividend per shaie - _ bz Internal rate of xetuin > E= Eamings per share an Ke = CoS OF equiry_ capita \\ Scanned with CamScannerr_ctifherent_ alkene i © Rp la Compotation_st_prafit unde dati(vlar lection _pestod (days? —— unit) je puke (8 per unit) — ® | g001000 =a syolJuegs 2a Less: Expenses — voricble_cost CNo-of-unitxe) | 201000 aoe E004) | Fixed cosh (£1%.30/009)CNokeL). 301009 _| go 403 > Bacl debl's : patent (0Sx3.0/000), 1566 ea aaa | _Povp sged (4.4 63451000) | Addittond! wet working cap! it = (65 of investment (Note?) +2628 4h | _| Poo kit SRI Te Lemask: Tae propased polity should be ctdopted _ayit Sesults Into additional peofit of 24231 oe NG Computation of fixed cost per unit.’ 72 Gla Fired Cost pes unit: : a —}Nale2:_Computation_af cost of _jnvestment =~, Pagent Investment = h8o10c043ue00 +30xis1. —-—~ 360 ee i os we Scanned with CamScanner| pooposed investments 207000 440/000 4S x 1H 360 Stl \ Sa \ | \ Scanned with CamScannerGy ae © “Ompy! eae i Mpvtation ef Fund Flow Stadement 8 A iH e oe a tl Appliccttions _| fino “Fpecnectse2t nworking ces -te dumption of 7 “Veegite WEL peic00__\clebento. Jyse0e of Share __| —_| Purchase of Land _ | ‘tal |___—_——_Lioo.a09 | Od_boild tng ie _ of Fornitore. S020 _\Porchase of plant “Toperating pmifit 201000 | and machinery 4s.0c0 | 205,000 : : “[eroscce| - working Notes |) 41 Siodement Showing changer_1n working capital. > 2 _fpasticuten opening _closing : Ere Coren Assets:- stock 751000 __ 601000 a petbors. Jorooo _|_ooro00. Cash __ 8010600 _Ga1000 short teem invesinen—2.01000____15,000__- AD 21151000 2138,000 ~fCuned Lictbilibies: a a =] Cred ItOre : 2 a) 15/000 SSE,000 fare eee i 1 od | 35S,0°"—— _ Nel coring _capit (as ae Tr EC0CO ~|--Decreases_ in working Capital 21001000 Scanned with CamScanner| ¢ machinery + | qo_Loss on saleot a ____ | fuminie —— ____| ‘lo balance cl ug i Tp sn +} ee 1 eshdixe, Capital Al al a 0 . Particular Amount Particular Aint, a = & fe "By “balance bid 2i00ie9 1 t By bank ALG _}___ [no balance cid 00/000 Chectancing-- Fig] LL.00, Sc Debenture ALC [ axtivvlae Acrooont Partivolay | Amur © 2 —__|to Bank Alc CBcl-Fi92| 1100/000 By palancebld | 3.000% _| 30 beuante cla 2,60100 0 | 3, 007/660 Scanned with CamScannerfe TS eee Particole | Armount — @ oo. 71 panthld ——eoorone | by-cepitatian sie tase ne Plata 6c 0_| By balance cld— 0ST [40 Bar r ; —_ ee 2.60 ol eee Ss Se Plant machinery Pi 10 S | amount Part ticular lames a @ oo In yysord00 | Ty catia | | epank Ale #8085 ae | 1.Brs0o ” Le BY “pone ciel SOE. 95,000 1 [11951080 LN oo Be | Par ticalar — _|_tmwort @ @. [as palonte bid | Lro-orc00 | by cepriciatian — [ton 1000 — ee by Bank A ic_Lsale| 3° 000 __ +— xy prngit? locs Ala {11900 | 1 by pedonce <4 — | 701082 [0° 1000 Scanned with CamScanner