IGNOU MMPF-002 June 2026 Previous Year Question Paper

Q1.Explain the concept of cost of capital and discuss how it is c lassified ? How is cost of long-term debt calculated ?

Q2.How are cash flows for Capital Budgeting estimated ? Explain the Present Value method and Internal Rate of Return method used for evaluating capital investment proposals.

Q3.What is the purpose of control in projects ?

Q4.Explain the three main types of contr ol systems used in projects implementation.

Q5.What is Social Co st Benefits Analysis (SCBA) ? Discuss the basic steps involved in conducting SCBA. [ 3 ]

Q6.Explain the application of Probability Distribution and Sensitivity Analysis in determining project risk.

Q7.Write short note s on any four of the

(i) Leasing and Hire Purchase

(ii) Suppliers Credits

(iii) Leveraged Buyout

(iv) External Commercial Borrowings

(v) Venture Capital

Q8.Discuss various forms of merge rs. What are the driving forces for mergers and acquisitions ? [ 4 ]

Q9.A company’s capital structure consists of the Equity share of ` 100 each 40,00,000 Retained earnings 20,00,000 9% Preference share 24,00,000 7% Debentures 16,00,000

Q10.00,00,000 The company earns 12% on its capital employed and tax rate is 40%. The company requires a sum of ` 50 lakh s to finance its expansion for which the followi ng alternatives are thought of :

(i) Issue 40 ,000 equity shares at a premium of ` 25 per share [ 5 ] MMPF–002

(ii) Issue 12% preference share

(iii) Issue 8% debentures It is estimated that the prices earning ratio in case of e quity shares, preference shares and debenture s financing would be 21.4,

Q11.0 and 15.7 respectively. You are required to evaluate th e proposal and recommend the best alternative.