IGNOU BCOE-143 December 2024 Previous Year Question Paper

Q1.“Financial management is something more than an art of Accounting and Book-keeping.” Explain.

Q2.(a) Explain the short-term and long-term sources of finance. 10

(0) Explain the different techniques to measure risk.

Q3.(a) What is Capital Budgeting ? Describe the steps in capital budgeting. 10

(b) A project involves a_ total initial expenditure of % 2,00,000 and_ it is estimated to generate future cash inflow of % 30,000; % 38,000; % 25,000; % 22,000; % 36,000; % 40,000; % 40,000; & 28,000; % 24,000 and % 24,000 in its last year. Calculate payback period.

Q4.(a) A share of Star Ltd. is currently quoted at % 55. The retained earning per share being 40% is = 4 per share. If the investors expect annual growth rate of 10%, what would be the cost of equity of Star Ltd. ? 10

(b) What are the important factors to be considered in planning the capital structure of a company ?

Q5.(a) Explain the concepts of operating, financial and total leverage. 15

(b) Write a short note on ‘Trading on Equity’.

Q6.Discuss the Walter’s dividend valuation model.

Q7.Define Working Capital. Discuss the determinants of working capital needs of business.

Q8.Write explanatory notes on any two of the following : 10+10

(a) Techniques of inventory management

(b) Miller-Orr’s cash management model

(c) Different types of credit terms

(d) Operating cycle

Q9.Define Capital Structure. What are the general assumptions in capital structure theories ?

Q10.Write notes on the following : 10+10

(a) Capital Asset Pricing Model (CAPM)

(b) Economic Order Quantity (EOQ) ₹ 30,000; ₹ 38,000; ₹ 25,000; ₹ 22,000; ₹ 36,000; ₹ 40,000; ₹ 40,000; ₹ 28,000;