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

Assume today is december 31 2013 barrington industries

Assume today is December 31, 2013. Barrington Industries expects that its 2014 after-tax operating income [EBIT(1 – T)] will be $450 million and its 2014 depreciation expense will be $70 million. Barrington's 2014 gross ...

David cheung is an operations manager for a large

David Cheung is an operations manager for a large manufacturer. He earned $72,500 in 2015 and plans to contribute the maximum allowed to the firm's 401(k) plan. Assuming that David is in the 25 percent tax bracket, calcu ...

Hook industries capital structure consist of debt and

Hook industries capital structure consist of debt and equity . It can issues debt at 11% and it's common stock currently pays a dividend of $2 per share. The stock price is $24.75 and growth rate is 7%. It's tax rate is ...

Lesh inc has a bond in its capital structure that has 18

Lesh Inc. has a bond in its capital structure that has 18 years to maturity left. The bond has a 7.00% coupon paid annually, and has a par value of $1,000. If investors want to receive 8% from this bond, the bond price s ...

Abc company has annual sales of 166396 and cost of goods

ABC Company has annual sales of $166,396 and cost of goods sold of $40,514. The average accounts receivable balance is $25,839. How many days on average does it take the firm to collect its accounts receivable? That is, ...

Fq loans inc offers five for four or i knock on your door

F.Q Loans Inc. offers "five for four, or I knock on your door." This means you get $4 today and repay $5 when you get your paycheck in 1 week (or else). Whats the effective annual return F.Q earns on this lending busines ...

Suppose that you have 1000 to invest in the bond market on

Suppose that you have $1,000 to invest in the bond market on January 1, 2012. You could buy a one-year bond with an interest rate of 4%, a two-year bond with an interest rate of 5%, a three-year bond with an interest rat ...

Kevin is considering building a new studio to record his

Kevin is considering building a new studio to record his podcast. The studio costs $300,000 to build, but the higher quality will attract more downloads and subscriptions. If the new studio generates $80,000 per year in ...

Consider an index option the index is at 42548 and a

Consider an index option. The index is at 425.48, and a two-month call with an exercise price of 425 is priced at $15. You are in the 31 percent tax bracket. Compute the after-tax profit for the following cases. Assume 1 ...

Capital structure and dividend policy a large travel

Capital structure and dividend policy A large travel company owns a resorts and hotels. The CFO wants to change the company's capital structure. The change will mean that debtratio (debt-to-value-ratio) is increased to 5 ...

  • 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