This document provides information about getting fully solved assignments for various MBA programs and semesters by emailing or calling with your semester and specialization. It then provides 6 sample assignments with solutions on topics like financial management, time value of money, capital structure, project evaluation, and Walter's model. Students are encouraged to contact for help with their MBA assignments.

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ASSIGNMENT
1 When a firm follows wealth maximization goal, it achieves maximization of market value of a
share. Do you agree? Substantiate your arguments.
Answer:-Explain Wealth maximization
The term wealth means shareholder’s wealth or the wealth of the personsthose who are involved in
the business concern. Wealth maximisation isalso known as value maximisation or net present
worth maximisation. Thisobjective is an universally accepted concept in the field of business.
Wealth maximisation is possible only when the company pursues policies that would increase the
market value of shares of the company. It has beenaccepted by the finance managers as it
overcomes the limitations of profit maximisation.
DRIVE SPRING 2014
PROGRAM MBADS/ MBAFLEX/ MBAHCSN3/ MBAN2/
PGDBAN2
SEMESTER II
SUBJECT CODE & NAME MB0045 - FINANCIAL MANAGEMENT
BK ID B1628
CREDIT 4
MARKS 60

2. 2 A) If you deposit Rs 10000 today in a bank that offers 8% interest, how many years will the
amount take to double?
Solution :-9 years (using rule of
B) What is the future value of a regular annuity of Re 1.00 earning a rate of 12% interest p.a. for 5
years?
Solution: FVAn= A *
3 The concept of financial leverage is a significant, as it has direct relation with capital structure.
Do you agree? If so, substantiate your arguments.
Answer:-Financial leverage relates to the financing activities of a firm and measuresthe effect of
EBIT on Earnings Per Share (EPS) of the company.A company’s sources of funds fall under two
categories:
 Those which carry fixed financial charges

 4 A project requires an initial outlay of Rs. 1,00,000. It is expected to generate the cash
inflows shown in table
Table: Cash Inflows Year Cash inflows
1 50,000
2 50,000
3 30,000
4 40,000
Solution:-

3. Step 1: The average of annual cash inflows is computed as shown in table 8.16.
5 Below Table gives the complete details of sales and costs of the goods produced by XYZ ltd for
the year 31.03.12.Table -Sales and Costs Produced by XYZ Ltd.
Sales 80,000 Inventory
Cost of goods 56,000 31.03.07
31.03.08
Accounts Receivables
31.03.07
31.03.08
Accounts Payable
31.03.07 7,000
31.03.08
9,000
12,000
12,000
16,000
7,000
10,000
What is the length of the operating cycle? What is the cash cycle?
Assume 365 days in a year.
a) length of the operating cycle
b) cash cycle
Solution
Operating Cycle = Inventory Conversion Period + Accounts ReceivablesConversion Period
From the above formula we need
Year Cash flows

4. 6 Facebook bought WhatsApp on Feb, 19, 2014 for $19 billion. This was split between $4 billion in
cash, $12 billion worth of Facebook shares, and $3 billion in restricted stock units to be paid in
four years. Do you think the market capitalization has played a significant role in pricing the
valuation. Discuss the Walter’s model assumptions in this context.
Answer:-Prof. James E. Walter considers that dividend pay-outs are relevant andhave a bearing on
the share prices of the firm. He further states thatinvestment policies of a firm cannot be separated
from its dividend policyand both are inter-linked. The choice of an appropriate dividend
policyaffects the value of the firm.
Walter model clearly establishes a relationship between the firm’s rate ofreturn “r” and its cost of
capital “k” to give a dividend policy that maximizes
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