1) Wcm | A newly formed company has applied to the Commercial Bank for the first time for financing its working capital requirements. The following information is available about the projections for the current year: Per unit Elements of cost: (Rs.) Raw material 40 Direct labour 15 Overhead 30 Total cost 85 Profit 15 Sales 100 Other information:
Required: (i) Prepare statement showing estimate of working capital needed to finance an activity level of 96,000 units of production. Assume that production is carried on evenly throughout the year, and wages and overhead accrue similarly. For the calculation purpose 4 weeks may be taken as equivalent to a month and 52 weeks in a year. | ||||||||||||||
2) Rm | H Ltd. has a present annual sales of 10,000 units at Rs. 300 per unit. The variable cost is Rs. 200 per unit and the fixed costs amount to Rs. 3,00,000 per annum. The present credit period allowed by the company is 1 month. The company is considering a proposal to increase the credit period to 2 months and 3 months and has made the following estimates: Existing Proposed Credit Policy 1 month 2 months 3 months Increase in sales - 15% 30% % of Bad Debts 1% 3% 5% There will be increase in fixed cost by Rs. 50,000 on account of increase of sales beyond 25% of present level. The company plans on a pre-tax return of 20% on investment in receivables. You are required to calculate the most paying credit policy for the company. | ||||||||||||||
3) CM | 1) The following is the sales for a BMS corporation. The sales are offered net 30 days, 80% of receivables are collected in the month following the month of actual sales and 10% are collected in each month thereafter, 15% of sales are cash sales. You are requested to prepare a schedule of cash inflows for the month of September, October, November and December.
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4) Coc | M/s. Monica enterprises believes in net operating income approach. Its capital structure has following parameters: Overall cost of capital 16% Cost of Debt 14% Market value of debts Rs.300 lacs Value of Equity Rs.260 Lacs Calculate 1. Cost of equity in current level 2. If cost of debt is reduced by 2% what will be cost of equity if the overall cost remains unchanged 3. If bonus shares are issued in the ratio of 1:1 and overall costs gets reduced to 15% If debt-equity ratio is adjusted ti 1.8 in current situation , then what will be cost of equity? | ||||||||||||||
5) WACC | A firm’s after – tax cost capital of the specific sources is as follows: Cost of Debt 4.77% ; Cost of Preference share 10.53% Cost of Equity share 14.59%; Cost of retained Earnings 14.00% The following is the capital structure: (Assuming external yield criterion)
Calculate the weighted average cost of capital using book value weights. | ||||||||||||||
6) CSP | The following figures are made available to you: Rs. Net profits for the year 18,00,000 Less: Interest on secured debentures at 15% p. a (Debentures were issued 3 months after the commencement of the year) 1,12,500 16,87,500 Less: Income –tax at 35% and dividend distribution tax 8,43,750 Profit after tax 8,43,750 Number of equity shares (Rs. 10 each) 1,00,000 Market quotation of equity share Rs. 109.7 The company has accumulated revenue reserves of Rs. 12 lakhs. The company is examining a project calling for an investment obligation of Rs. 10 lakhs; this investment is expected to earn the same rate of return as funds already employed. You are informed that a debt equity ratio (Debt divided by debt plus equity) higher than 60% will cause the price earning ratio to come down by 25% and the interest rate on additional borrowals will cost company 300 basic points more than on the current borrowal on secured debentures. You are required to advise the company on the probable price of the equity share, if (a) the additional investment were to be raised by way of loans; or (b) the additional investment were to be raised by way of equity. | ||||||||||||||
7) Lev | Calculate the operating leverage, financial leverage and combined leverage from the following data under Situation I and II and Financial Plan A and B: Installed Capacity 4,000 units Actual Production and Sales 75% of the Capacity Selling Price Rs. 30 Per Unit Variable Cost Rs. 15 Per Unit Fixed Cost: Under Situation I Rs. 15,000 Under Situation-II Rs.20,000 Capital Structure: Financial Plan A B Equity 10,000 15,000 Debt (Rate of Interest at 20%) 10,000 5,000 20,000 20,000 | ||||||||||||||
8) CB | Following are the data on a capital project being evaluated by the management of X Ltd.: Project M Annual cost saving Rs. 40,000 Useful life 4 years I.R.R 15% Profitability index (PI) 1,064 NPV ? Cost of capital ? Cost of project ? Payback ? Salvage value 0 Find the missing values considering the following table of discount factor only: Discount factor 15% 14% 13% 12% 1 Year 0.869 0.877 0.885 0.893 2 Years 0.756 0.769 0.783 0.797 3 Years 0.658 0.675 0.693 0.712 4 Years 0.572 0.592 0.613 0.636 2.855 2.913 2.974 3.038 | ||||||||||||||
9) BR |
under : Super Express Ltd. Balance Sheet as at 31st December, 1999 20,000 Equity shares of Buildings 10,00,000 Rs. 100 each 20,00,000 Machinery 4,00,000 Provident fund 1,00,000 Stock 3,00,000 Sundry creditors 60,000 Sundry debtors 2,40,000 Insurance reserve 1,00,000 Cash at bank 2,20,000 Cash in hand 1,00,000 22,60,000 22,60,000 Fast Express Ltd. Balance Sheet as at 31st December, 1999 10,000 Equity shares of Goodwill 1,00,000 Rs. 100 each 10,00,000 Buildings 6,00,000 Employees profit sharing Machinery 5,00,000 account 60,000 Stock 40,000 Sundry creditors 40,000 Sundry debtors 40,000 Reserve account 1,00,000 Cash at bank 10,000 Surplus 1,00,000 Cash in hand 10,000 13,00,000 13,00,000 The assets and liabilities of both the companies were taken over by the new company at their book values. The companies were allotted equity shares of Rs. 100 each in lieu of purchase consideration. Prepare opening balance sheet of Super Fast Express Ltd. |
Saturday, 17 September 2011
Fm Revision set 1(Request all CR to print and circulate)
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