FM Assignment
FM Assignment
Q2. A firm is evaluating a proposal costing Rs.1,60,000 and expected to generate cash flows of Rs.
40,000, Rs.60,000, Rs.50,000, Rs.50,000 and Rs. 40,000. there is no salvage value there after.
Q3. Hunny Projects Ltd. Is evaluating two mutually exclusive investment proposals X and Y, The
company's required rate of return from such projects is 10%. The cash flows pattern of both the
proposals are given. Evaluate the proposals as per NPV and IRR methods.
Q4. A Business firm has to chose one of the two proposals.The relevant data for both of them is as
follows:
Projects A B
Evaluate both the projects using financial function NPV (at 12% rate of Interest) and IRR and
recommend which project should be accepted.
Q5. EPS 10
P-Eratio 10
Ke 10%
No. of Outstanding shares 20,000
Expected Dividend 5
Expected Net Income 200,000
New Investment 400,000
As per MM Approach, show that the payment of dividend does not affect the value of the firm. Use the
above data to prove the statement.
Q6.
Following are the details regarding 3 companies
Using Walter model, calculate the effect of dividend payment on the value of share of the above companies under:
Q7. Assuming that the rate of return expected by investors is 11%, internal rate of return is 12% and
earning per share is 15. Calculate price per share by Gordon Model if C/P ratio is 10% and 30%
Calculation of price per share by "Gordon model" if dividend payout ratio is 10% and 30%.
Q8. The following information for a particular year has been extracted from the books of a
manufacturing company:
Purchases 1,600,000
Consumption 1,500,000
Total Production cost 2,500,000
Total cost of goods sold 2,800,000
Total Cost of sales 3,000,000
Sales 3,600,000
Q9. A performa cost sheet of a company provide you with the following particulars of Estimated
Cost per unit. Calculate working capital requirement from the data given below.
Additional information:
Selling Price 250 per unit
Level of activity 104,000 units of production
Raw materials in stock 4 average weeks
Work in progress 2 average weeks
Finished goods in stock 4 average weeks
Credit allowed by suppliers 4 average weeks
Credit allowed to debtors 8 average weeks
Lag in payment of wages 2 average weeks
Cash at bank is expected to be 10% of gross working capital.