Class XI

Subject – Business Studies

1. Ratnamani metals & tubes Ltd. Is a multi location, multi-product company. Manufacturing tubes and
pipes in stainless steel/exotic material in wide size ranges, for wide spectrum of applications. It now
wants to cater to the Aslan market and decided to invest in new hi-tech machines. Since the investment
is large, the finance manager wants to raise funds through cheapest long term source of finance On the
basis of the given information about Ratnamai Metals & Tubes Ltd, answer the following questions:

a) Identify and explain the source of finance to be used by company to meet its funds requirement.
b) State any four merits of the source of finance identified in part (a).

2. Automotive systems corporation Ltd. Is one of the largest suppliers of road vehicles electronic and
mechanical security system. The company has a diversified product portfolio encompassing from
mechanical and electronic security system, electronic controllers for electric vehicles and plastic interiors
across the globe. The company plans to set up a new unit to manufactures die casting parts and high
class surface finishing parts for auto and consumer durable industry.

The company needs rupees seventy crore as additional capital to fund its new unit. Atul Jalan, the CEO of
the company wanted to raise funds through issue of equity shares. On the other hand, the Finance
Manager Nimi Sahdev said that the public issue may be expensive on account of various mandatory and
non-mandatory expenses. Therefore, it was decided to borrow from a special financial institutions

On the basis of aforesaid information, answer the following questions:

a) Identify and explain the source of fund used by company to its new unit.
b) State any two merits of raising funds through the source specified in part (a)
c) State any two demerits of raising funds through the social specified in part (a)

3. Emami paper mills, a part of Emami Group, specializes in the manufacture of newsprint, writing and
printing paper and multilayer coated board. Emami paper Mills had been successful in increasing
capacity of multi-layer coated board manufacturing unit at Balgopalpur in Odisha at an estimated cost of
Rs. 650 crore, Encouraged by good market response and growth in packaging sector, the company is now
conceptualising another big ticket expansion in the form of similar plant at Balasore with somewhat
similar capacity is looking for a suitable source of finance. On the basis of aforesaid information about
Emami paper Mills, answer the following questions:

(a) Specify the most suitable source of fund for meeting the financial requirements of Emami paper
mills.
(b) State any two merits of raising funds through the source specified in part: (a).
(c) State any two demerits of raising funds through the source specified in part (a).

4. In 2002 as an electrical-contracting Agency by Mr. Surinder Singh, Amber Electrtitech has now
evolved into a full-fledged tumtury solution provider with activities ranging from sutistation, internal
and external electrification for conventional as well as high end solutions. Amber Electroter works
with an aim to provide best-in-clan electrical-services for internal and extemal electrification and
substation jobs at highly competitive prices

With a highly-passionate team of engineers on board, amber Electrotech believes in not only
meeting customer expectations, but to exceed them by miles. Right now, the company needs large
amount of funds to a new electrical substation project of western ratlways for which it receivert
some advance from railway department Currently the company is incurring very high fixed operating
costs. So, the company needs funds to meet. Its working capital requirements On the basis of the
given information about Amber Electrotech, answer the following questions

(a) Suggest two sources through which amber Electrotech can meet its working capital requirement.
(b) State two merits and dements of any one the source specified in part (a).