Question 1) Answer all the questions:
i) Explain the factors affecting financial plan.
ii) What do you understand by operating leverage? Explain with example.
iii) Explain the objectives of inventory management.
iv) Explain the meaning of Contribution.
v) What do you understand by cost of debt capital?
Question 2) Define the term financial management? What are the main characteristics of financial management?
Question 3) Explain the term ‘Dividend Policy’. Examine the various factors determining the sound dividend policy of a business enterprise.
Question 4) From the following information, you are required to estimate the working capital required:
Cost Per Unit
Rs.
Raw material 90
Direct Labour 40
Overhead 75
ADDITIONAL INFORMATIONS:
Selling Price 256 per unit
Output 1, 56,000 unit
Raw Material in Stock 1 month
Materials are in Process 2 weeks
Finished Goods in Stock 1 month
Credit Allowed by Supplier 1 month
Credit Allowed to Debtors 2 months
Expected Cash at Bank 60,000
It is assumed that production is carried on evenly thought out the year, wages and overhead accrue similarly and time period of 4 weeks is equivalent to a month and 52 weeks a year.