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ASSIGNMENT
DRIVE SPRING 2016
PROGRAM BBA
SEMESTER 5
SUBJECT CODE &
NAME
BBA502 &
FINANCIAL MANAGEMENT
BK ID B1850
CREDITS 4
MARKS 60
Note: Answer all questions. Kindly note that answers for 10 marks questions should be approximately of 400
words. Each question is followed by evaluation scheme.
Q. No Questions Marks Total
Marks
1 Explain the role of a finance manager, understanding capital markets and equity and
borrowed funds.
Explanation of role of finance manager
Explanation of understanding capital markets
Explanation of equity and borrowed funds
3
3
4
10
2 Write short notes on :
a) Budgeting and forecasting
b) Financial Budgets
c) Cost Centre
Explanation of budgeting and forecasting
Explanation of financial budgets
Explanation of cost centre
4
4
2
10
3 Explain on cost of debt and cost of equity capital.
Explanation of cost of debt
Explanation of cost of equity capital
5
5
10
4
Solve the given problem below:
Sales 25,00,000 ; Variable cost 15,00,000 ; Fixed cost 5,00,000 (including interest on
10,00,000). Calculate degree of financial leverage.
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Determine the operating leverage :
Determine the degree of operating leverage from the following data:
S Ltd R Ltd
Sales 25,00,000 30,00,000
Fixed costs 7,50,000 15,00,000
Variable expenses 50% of sales for firm S 25% for firm R.
Calculation of financial leverage
Calculation of operating leverage
5
5
10
5 Explain the capital budgeting process. Why is Net Present Value (NPV) important?
Explanation of capital budgeting process
Importance of NPV
5
5
10
6 Write about cash planning and explain about cash forecasting and budgeting.
Explanation of cash planning
Explanation on cash forecasting and budgeting
5
5
10
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