IGNOU MCO-07 December 2015 Previous Year Question Paper

Q1.(a) Discuss the risk-return trade off in financial decision making. 10, 10

(b) Differentiate between financing decisions and investment decisions.

Q2.Explain different approaches to value equity 20 shares with the help of examples.

Q3.(a) Explain the capital budgeting process. 10, 10

(b) A company is considering to spend

Q4.00,000 on a new project. The cash in flows are expected as follows : Year Cash in flows (Z) 3 30,000 Calculate the payback period.

Q5.A firm has a sales of Z 10,00,000, variable cost of 20 Z 7,00,000 and fixed cost of Z 2,00,000 and debt of Z 5,00,000 at 10% rate of interest. Calculate the operating, financial and total (combined) leverages. If the firm wants to double its Earning Before Interest and Tax (EBIT), how much increase in sales is needed ?

Q6.Explain the various reasons for payment of dividend by the firm. 15, 5 What is Gordon share valuation formula ?

Q7.Discuss the concept of lease financing. Explain its different forms. 6,

Q8.(a) How does international financial management widen the scope of a firm ?

(b) Who are the various participants in a foreign exchange market ? 10,

Q9.(a) Explain the meaning and types of working capital.

(b) Discuss the different methods of 8, 12 ascertaining working capital requirement.

Q10.Write explanatory notes on any two of the following :

(a) Capital structure 10, 10

(b) Inventory control techniques

(c) Systematic risk

(d) Capital market MCO-07 2 3 30,000 .

Q16.-4 rch.67 t fat-ciRvict) fatcrt ffffti -R :

(a) 4\41 10, 10

(b) rich femur oct)414)

(d) GliAlk