IGNOU MCO-07 June 2015 Previous Year Question Paper

Q1.Explain the meaning of financial management and critically evaluate the goals of financial management. 5,

Q2.What is meant by 'Present value of a future amount' ? How are the present values and future values calculated ? Explain with examples. 5,

Q3.What are various types of risks ? Explain them.

Q4.(a) What is cost of capital ? Explain its relevance in Capital Budgeting decisions. 4, 6

(b) 'X' Ltd. issues 100 face value preference 10 shares with a dividend of 12% payable after 10 years. The net amount realised per share is 92. Calculate the cost of preference share capital.

Q5.A firm whose cost of capital is 10% considering 20 two mutually exclusive projects 'A' and 'B'. The details are as follows : Cost cash inflows Year Project 'A' Project 'B' 0 80,000 85,000 1 10,000 50,000 2 20,000 40,000 3 30,000 20,000 4 45,000 10,000 5 60,000 10,000 The PVF of Z 1 at 10% for the year 1, 2, 3, 4 and 5 is .909, .826, .751, .683 and .621 respectively. Find out the Net present value at 10% for both the projects.

Q6.Explain the meaning of Financial leverage and Operating leverage. Also explain their applications. 8,

Q7.(a) What are the objectives of cash 10 management ?

(b) What is credit policy ? Explain the various 10 elements of credit policy.

Q8.What are various sources of raising long term finance ? Explain any two of them. 6,

Q9.Write explanatory notes on any two of the following : 10, 10

(a) Project financing

(b) CAPM

(c) Economic order quality

(d) Role of stock exchanges MCO-07 3 liukTti *1114) Tit fT (M.Com) TcTtRIATT .7,

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