Ask Question, Ask an Expert


Ask Financial Management Expert

problem 1) We want flexible budget as costs are too hard to predict. We need the flexibility to change budgeted costs as input price change. Does a flexible budget serve this purpose? Describe.

problem2) Indirect method of reporting cash flows from operating could create a erroneous impression about non-cash expenses (such as depreciation). What type of impression it could create and why is it erroneous.   

problem 3) "Eeffect of price reduction is always to reduce the p/v ratio, to raise the B.E.P. and shorten the MOS." Describe with appropriate ex.

problem 4) Equipment A has a cost of  75,000/- and net cash flow of ` 50,000/- and generate net cash flow of ` 15,000/- per year for six years. The required rate of return of both equipments is 11 per cent. Compute the IRR and NPV for each equipment. Which equipment must be accepted?

problem 5) "Investment, Financing and Dividend decisions are interrelated."  describe this statement. 

problem 6) "There is nothing like the optimum capital structure for a firm" - Critically describe this statement.

problem 7) The following information are related to Sun Ltd.

Paid-up equity capital          10,00,000
Earnings of the company     1,00,000
Dividend paid                      80,000
Price - Earning ratio (PIE)     20
No. of equity shares            1,00,000

Determine whether dividend payout of Sun Ltd., is optimal. [Use Walter's model].

problem 8) The following information are available in respect of companies M and N

                                              Company M        Company N
Equity share capital (`10 each)    20,00,000        10,00,000
14% Debentures                        5,00,000        15,00,000
EBIT                                          5,00,000        5,00,000
Return on capital employed          20%              20%
Tax rate                                     40%             40%

From the above information, compute: 

a) Financial leverage

b) Rate of return on equity share capital

c) Earnings per share

Also state which company's shareholders are in a better position financially?

Financial Management, Finance

  • Category:- Financial Management
  • Reference No.:- M94747

Have any Question? 

Related Questions in Financial Management

Tim wants to have 257897 dollars in his investment account

Tim wants to have 257,897 dollars in his investment account in 7 years from today. He expects to earn a return of 9.57 percent per year in that account. Tim plans to make regular, equal savings contributions of X per yea ...

A describe the type of dividend policy the firm usesb would

A) Describe the type of dividend policy the firm uses. B) Would you recommend an alternative dividend policy? Explain. C) How would this policy affect the break points and imminent impact on investments recommended in pa ...

You are thinking of buying a stock priced at 100 per share

You are thinking of buying a stock priced at $100 per share. Assume that the risk-free rate is about 4.5% and the market risk premium is 6%. If you think that stock will rise to $117 per share by the end of the year, at ...

Jane opens an account on her daughters first birthday to

Jane opens an account on her daughter's first birthday to fund the college education. She deposits $2,000 to open the account. Each year on her daughter's birthday, she makes another deposit that is 10% larger than the p ...

One-year interest rates are currently 15 in the united

One-year interest rates are currently 1.5% in the United States and 4.8% in Great Britain. The current spot rate between the pound and the dollar is $1.85/£. What would you expect the spot rate for the pound to be one ye ...

The best manufacturing company is considering a new

The Best Manufacturing Company is considering a new investment. Financial projections for the investment are tabulated here. The corporate tax rate is 34 percent. Assume all sales revenue is received in cash, all operati ...

Hatefinance inc bonds have a 3 coupon rate with semiannual

HateFinance, Inc. bonds have a 3% coupon rate with semiannual coupon payments and a $1,000 par value. The bonds have 11 years until maturity, and sell for $925. What is the current yield for Messinger's bonds?

The manager of a 20 million portfolio of domestic stocks

The manager of a $20 million portfolio of domestic stocks with a beta of 1.10 would like to begin diversifying internationally. He would like to sell $5 million of domestic stock and purchase $5 million of foreign stock. ...

You plan to invest 1250 in a money market account which

You plan to invest $1,250 in a money market account which will pay an annual stated (simple) interest rate of 8.75 percent, but which compounds interest on a weekly basis. If you leave this money on deposit for two years ...

Take time corporation will pay a dividend of 440 per share

Take Time Corporation will pay a dividend of $4.40 per share next year. The company pledges to increase its dividend by 5.75 percent per year, indefinitely. If you require a return of 10 percent on your investment, how m ...

  • 4,153,160 Questions Asked
  • 13,132 Experts
  • 2,558,936 Questions Answered

Ask Experts for help!!

Looking for Assignment Help?

Start excelling in your Courses, Get help with Assignment

Write us your full requirement for evaluation and you will receive response within 20 minutes turnaround time.

Ask Now Help with Problems, Get a Best Answer

WalMart Identification of theory and critical discussion

Drawing on the prescribed text and/or relevant academic literature, produce a paper which discusses the nature of group

Section onea in an atwood machine suppose two objects of

SECTION ONE (a) In an Atwood Machine, suppose two objects of unequal mass are hung vertically over a frictionless

Part 1you work in hr for a company that operates a factory

Part 1: You work in HR for a company that operates a factory manufacturing fiberglass. There are several hundred empl

Details on advanced accounting paperthis paper is intended

DETAILS ON ADVANCED ACCOUNTING PAPER This paper is intended for students to apply the theoretical knowledge around ac

Create a provider database and related reports and queries

Create a provider database and related reports and queries to capture contact information for potential PC component pro