B.Com DCM2102 FINANCIAL MANAGEMENT

Description

SESSION	Sep 2023
PROGRAM	BACHELOR of cOMMERCE (bcom)
SEMESTER	III
course CODE & NAME	DCM2102 – Financial management
CREDITS	4

 

 

Assignment Set – 1

Questions

 

1. Explain the functions of a financial manager in any organization.

Ans: Financial managers play a crucial role in the financial health and success of an organization. Their responsibilities are diverse and cover various aspects of financial management.

Here are the key functions of a financial manager: 

Financial Planning:  Develop and implement financial plans that align with the organization’s strategic Its Half solved only

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2. Calculate the present value of the following cash flows assuming a discount rate of 10% per annum.

Year	Cash flows [₹]
1	10000
2	20000
3	30000
4	40000
5	50000

Ans:The present value of future cash flows can be calculated using the formula for the present value of a series of cash flows:

 

3. Explain the significance of the concept of cost of capital. Discuss different component of cost of capital with example.

Ans:The cost of capital is a critical concept in financial management that reflects the minimum rate of return a company must earn on its investments to satisfy its investors, whether they are shareholders, debt holders, or other sources of financing. It represents the cost a company

 

Assignment Set – 2

Questions

 

4. Explain the sources of finance. Discuss the short term and long term sources of finance for the firm.

Ans:Sources of finance refer to the various means through which a business or firm acquires the funds necessary for its operations, expansions, or investments. These sources can be broadly categorized into short-term and long-term sources based on the time frame for which the funds are obtained.

Short-Term

 

5.The details regarding three companies are given below:

X Ltd	Y Ltd	Z Ltd.
r = 12%	r = 8%	r = 10%
Ke = 10 %	Ke = 10 %	Ke = 10 %
E = Rs. 100	E = Rs. 100	E = Rs. 100

Compute the value of an equity share of each of these companies applying Walter’s formula when the dividend pay-out ratio is (a) 0%, (b) 20%, (c) 40%,

Ans: Walter’s formula is used to determine the value of a firm’s equity shares based on the relationship between the required rate of return (Ke), the internal rate of return (r), and the dividend per share (D).

The Walter’s

 

6. Explain Working capital management. Discuss various factors that affect working capital requirement?

Ans: Working capital management refers to the administration of an organization’s short-term assets (current assets) and liabilities (current liabilities) to ensure the efficient operation of day-to-day business activities. It involves maintaining a balance between liquidity and profitability, as well as managing the