IGNOU MCO-07 June 2019 Previous Year Question Paper

Q1.Examine the interrelationship among the investment, financing and dividend decisions.[10]

(b) Distinguish between systematic risk and unsystematic risk with examples. [10]

Q2.A company is considering a new project and the following is its data : [20] Capital outlay Rs. 2,00,000 Depreciation 20% p.a. Forecasted annual income before charging depreciation for five years is as given below : MCO-007/21000

( 1 ) [P.T.O.] Year Am ount (Rs.) 1 1,00,000 2 1,00,000 3 80,000 4 80,000 5 40,000 On the basis of above information, calculate and compare the following methods :

(a) Payback period

(b) Accounting rate of return

Q3.(a) Critically examine the MM approach-I to capital structure. [10]

(b) Discuss the determinants of dividend payout ratio. [10]

Q4.Explain the different types of marketable securities and discuss their role in cash management. [10+10=20]

Q5.The following is the information of two firms X Ltd. and Y I X Ltd. (Rs.) Y Ltd. (Rs.) Sales 50,000 1,00,000 Variable cost 20,000 30,000 Fixed cost 15,000 40,000 Interest 5,000 10,000 You are required to calculate different leverages : financial, operating and combined leverage for both the firms and also comment on their risk position.

Q6.What is safety stock ? How is it determined ?

Q7.What is the role of safety stock in inventory management ? [2+2+6=10]

(b) Discuss the objectives of inventory management.

Q8.What is lease ? How is it different from Hire-Purchase ?

Q9.What are its advantages and limitations ? [4+6+10=20]

Q10.(a) Write a note on Term Loan. [10]

(b) Discuss the advantages and disadvantages of equity financing. [10]

Q11.Write short notes on any two of the following : [10+10=20]

(a) Project Financing Arrangement

(b) Capital market

(c) NPV (Net Present Value)

(d) ABC analysis of inventory control MCO-007/21000

( 4 ) I TT.t.311. -007 cilibmi 4 tiirici -Arit utak (TT. OT) IlftWIT, 2019 71:ratail. 007: AST : 3 iirt7 : 100 c X51 : 70% : 1441 11 -4 5p91 Mr'

Q12.(a) ikkRT, ittzF utir itutzit 4 4 tttliZcb t161%511 Wrafur tft71 [10]

(b) c441Nci ,71112q4-1 4 31444fterd 4 \Amv.ii titql [10]

Q13.t cl)KIA1 t4R4Y1r11 ITT Tei3 4tichl 3itqr Tfi TRIT [20] tAliff wf zl . T. 2,00,000 iTiMi 20% TAW iFigru #71friff t fk al et) GiTzt Tfr > [10+10520] MCO-007/21000

(6) | 5,000] _ MCO-007/21000

(7) [PT.O] [10+10=20] MCO-007/21000

(8)