IGNOU BCOE-143 June 2025 Previous Year Question Paper

Q1.What do you mean by _ Financial Management ? How has financial management evolved as a discipline ? Should the goal of financial decision-making be profit maximisation or wealth maximisation ? Explain. (2+8+10)

Q2.(a) What is cost of capital ? Explain the significance of cost of capital. 2+6

(b) A firm sales of % 20,00,000; variable cost % 14,00,000 and fixed cost of ¥ 4,00,000 and debt = 10,00,000 at 10% rate of interest. What are operating leverage, financial and combined leverage ?

Q3.A company is considering the purchase of a machine out of two machines with the following details : Machine I | Machine IT Life (estimated) 3 years 3 years Initial z zg Investment 10,000 10,000 Cash inflows : 1st year 8,000 2,000 2nd year 6,000 7,000 8rd year 4,000 10,000 You are required to suggest which machine should be preferred by using : 20

(0) Payback period method. Gi) Net present value method. Using 10% discount rate. P. V. of % 1 at 10% for three years is .909, 0.826 and 0.751 respectively. Note : Ignore Depreciation.

Q4.(a) Explain the earning capitalization approach of dividend. 10

(b) Explain the residual theory of dividend.

Q5.(a) What is working capital ? What are the different kinds of working capital ? Explain with examples. 10

(b) Explain the importance of adequate working capital.

Q6.Discuss the various techniques for inventory management.

Q7.(a) Discuss the concept of Weighted Average Cost of Capital and Weighted Marginal Cost of Capital, with examples. 6

(b) Explain long-term sources of finance.

Q8.Write explanatory notes on any two of the following : 10+10 @) Types of Preference Shares

(i) Systematic risk and Unsystematic risk

(ii) NPV vs. IRR

(iv) Payable Management z z Gii) NPV vs. IRR (faa adam ArT aa