IGNOU MMPC-014 December 2022 Previous Year Question Paper

Q1.Discuss different types of Financial Decisions that are taken in an organisation.

Q2.What is the meaning of Investment Risk ?

Q3.Explain briefly the various sources of risk in investments.

Q4.Explain the need for ‘Valuation’. Describe the Three-Step (EIC) Valuation Process.

Q5.What is ‘Cost of Capital’ ? What are the basic characteristics of ‘Cost of Capital’ ? Discuss the different classes of Cost of Capital.

Q6.What is ‘Money Market’ ? What is its significance ?

Q7.Discuss different pa rticipants in the Money Markets.

Q8.Why is Dividend decision important for a firm ?

Q9.Discuss different forms of Dividends.

Q10.What is Financial Restructuring ? Discuss ‘Buy-back of Shares’ as a method of financial restructuring.

Q11.Cimbla Ltd. is consid ering investing in a project. The expected original investment in the project will be < 2,00,000, the life of the project will be 5 years with no salvage value. The expected net cash inflows after depreciation but before tax during the life of the project will be the following : Year 1 2 3 4 5 < 85,000 1,00,000 80,000 80,000 40,000 The project will be depreciate d at the rate of 20% on original cost. The company is subjected to 30% tax rate. Required :

(a) Calculate Payback Period.

(b) Calculate N et Present Value and Profitability Index, if cost of capital is 10%. The P.V. factors at 10% are : Year 1 2 3 4 5 0909 0826 0751 0683 0621