Name of the University : Uttarakhand Open University
Degree : M.Com
Subject Code/Name : MCom04 Financial Management
Year : I
Document Type : Old Question Papers
Website : uou.ac.in
Download Model/Sample Question Paper : https://www.pdfquestion.in/uploads/uou.ac.in/4374.-MCom-04.pdf
UOU Financial Management Question Paper
M.COM.-10 (Master of Commerce)
First Year, Examination 2012
Time : 3 hrs
Maximum Marks : 60
Related : Uttarakhand Open University MCom01 Organisation And Management M.Com Question Bank : www.pdfquestion.in/4377.html
The question paper is divided into three sections A,B, and C. Answer the questions as per the direction given in each section.
Section –A
Long Answer’s questions
Answer any two questions. Each question carries 15 marks. 2×15 =30
1. “The use of equity and borrowed capital depends on certain factors and there should be a rational proportion between the two”. In the light of this statement discuss the factors influencing capital structure of a company.
2. Why is determining dividend policy more difficult today than in the last decades? Also examine the factors determining the dividend policy of a firm.
3. Every Manager has to take three major decisions while performing the finance function. Briefly explain these decisions. Also discuss the nature and importance of the finance function in the modern business.
4. i) Describe any three methods of evaluating capital investment proposals.
ii)Apex Ltd. is considering to purchase a machine. Two machines X and Y are available in the market. Cost of each machine is Rs 2,00,000.Expected cash inflows are as follows:-
Section-B
Short Answer’s Questions
1. How is shareholder’s wealth maximization a better objective than the maximization of profit?
2. How does the globalization provide importance to the International Financial Management?
3. What is weighted average cost of capital and how is it computed?
4. Sakshi ltd. has 8% redeemable preference shares of Rs 1, 00,000 @ 1000 each, which are redeemable at the end of 10th year. These were issued after allowing 2.5% underwriting commission. Calculate the cost of preference share capital. Assume 30% tax rate.
5. A firm with no fixed operating cost has no operating leverage.”Do you agree with this statement?
6. Distinguish between permanent and temporary working capital.
7. In a firm the materials used per week is as follows :
Normal Usage 100 units
Minimum Usage
Maximum Usage
Re-order Quantity
Re-order Period
Determine the followings-
a) Reorder Level
b) Minimum Level
c) Maximum Level
d) Average Level
8. What is meant by Trading on Equity?
Section-C
Objective Questions (Compulsory)
Answer all questions. Each question carries 1 Mark. 10x 1 = 10
Write True/False against the following.
1. Financial management deals with the maintenance and creation of economic value or wealth.
2. According to MM approach, dividend policy has no effect on the share prices of a company.
3. Capital Budgeting decisions are reversible in nature.
4. Financial planning means deciding in advance the financial activities to be carried on to achieve the basic objectives of the company.
5. To accelerate the turnover of receivables, a firm may increase the discount period.
Select the correct answer option :
6. Match the following Section A and B and choose the correct answer option as per the motives and needs of holding cash in an organisation-
7. Complete the given statement Cash flow from Operating Activities + Cash flow from Investing Activities + Cash flow from Financing Activities =…………………
a) Net Increase /Decrease in Cash and Cash Equivalents.
b) Working Capital
c) Fund Flow Statement
d) All the above
8. The formula for Economic Order Quantity(EOQ) is—————–where ( A= stock usage, C = cost of ordering, H= cost for holding stock per unit)
a) 2AC/H
b) 2ACH
c) 2CH/A
d) AH/2C
9. Which of the following is not a feature of an optimal capital structure?
a) Profitability
b) Safety
c) Flexibility
d) Control
10. Among the following, which is/are the method/s used for analyzing economic
feasibility of a project?
a) Economic Rate of Return
b) Domestic Resources Cost
c) Effective Rate of Protection
d) All the above