Ask Question, Ask an Expert


Ask Financial Management Expert

problem 1)a) A Rs. 2500 face value bond carries a coupon rate of 10% and matures after 5 years. The bond amount will be amortized equally over its life. Find out the present value of the bond if the investors required rate of return is 12%?

b) The following financial statements are provided for certain company for the calendar year 2003- 2004 (Rs.lakh):

Balance sheet @ Dec 31                 2003              2004
Share capital                                  100                 100
Reserves and surplus                       80                   90
Long term debt                              120                  150
Short term bank borrowings             70                    90
Trade creditors                                80                    70
Provisions                                       60                    50
Total                                              510                  550
Net fixed assets                              250                  280
Inventories                                     100                  120
Debtors                                         130                   120
Cash                                               20                     15
Other assets(Intangible)                   10                      15
Total                                             510                    550

Income Statements:

Particulars                                     2003               2004
Net sales                                        650                700
Cost of goods sold                          460                450
Operating expenses                         160                170
Non operating surplus                        50                 10
Interest                                             35                30
Tax                                                   10                30
Dividends                                           25                20

Consider depreciation as 20% of operating expenses.


• Create a table of changes in the items of the Balance Sheet.

• Create amplified funds flow statement.

• Create sources and uses of funds on cash basis.

problem 2)a) prepare a brief note on

i) Price – Earning Ratio

ii) Cost of a Specific Source of Finance.

b) Estimate the net working capital from the following information:

Particulars                  Cost(Rs per unit)

Raw materials               42.4
Direct labor                   15.9
Overheads                     31.8

Selling price Rs.106 per unit. Production 1,00,000 units per year. Raw materials in stock 4 weeks. Work-in-process stage 2 weeks. Finished goods stage 4 weeks. Credit allowed by suppliers 4 weeks. Credit allowed to debtors 8 weeks. Lag in payment of wages 1.5 weeks Lag in payment of overheads 4 weeks Cash on hand Rs.1, 25, 000. 80% of sales are credit sales. Assume 52 weeks a year.

Financial Management, Finance

  • Category:- Financial Management
  • Reference No.:- M96600

Have any Question? 

Related Questions in Financial Management

March inc recently paid a dividend of 580 per share the

March, Inc., recently paid a dividend of $5.80 per share. The dividend on March’s stock is expected to grow at a rate of 6% per year forever. Your required rate of return on March’s is 11.5%. How much would you be willin ...

The us standard is 2500 per fine ounce of gold the uk

The U.S. standard is $ 25.00 per fine ounce of gold. The U.K. standard is £ 5.00 per fine ounce of gold. Transatlantic shipping costs are $ 0.75 per fine ounce of gold. The spot rate is $ 4.80 / £ 1.00 How much profit pe ...

Northern specialties just purchased inventory-management

Northern Specialties just purchased inventory-management computer software at a cost of $1,518,950. Cost savings from the investment over the next six years will produce the following cash flow stream: $181,340, $326,240 ...

To forecast future cash flows sometimes companies use

To forecast future cash flows sometimes companies use top-down and sometimes bottom-up approach (and sometimes both)? What are the advantages and disadvantage of each of them? In forecasting your company (Walmart Store, ...

The risk free rate on treasury bill is very low right now

The risk free rate on Treasury bill is very low right now. Let's say it is 0.25%, annualized. Suppose, you also looked up the annual rate of change in the S&P500 market index, and it is 7%. You are considering a stock wi ...

100 is received at the beginning of year 1 200 is received

?$100 is received at the beginning of year? 1, $200 is received at the beginning of year? 2, and? $300 is received at the beginning of year 3. If these cash flows are deposited at 12? percent, their combined future value ...

Common stock valuemdashconstant growthmccracken roofing inc

Common stock value—Constant growth McCracken? Roofing, Inc., common stock paid a dividend of ?$1.35 per share last year. The company expects earnings and dividends to grow at a rate of 6?% per year for the foreseeable fu ...

Referring to problem suppose transaction costs amounted to

Referring to problem, suppose transaction costs amounted to 0.5 percent of the value of the stock index. Explain how these costs would affect the profitability and the incidence of index arbitrage. Then calculate the ran ...

Suppose you conduct currency carry trade by borrowing 1

Suppose you conduct currency carry trade by borrowing $1 million at the start of each year and investing in New Zealand dollar for one year. One-year interest rates and the exchange rate between the U.S. dollar ($) and N ...

Company z raises 30 on 40 with vc taking convertible

Company Z raises 30 on 40 with VC taking convertible preferred with a conversion price equal to the current share price implied by post money valuation. The conversion rate is 1 PS for 1 CS. Founders originally had 10M s ...

  • 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

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

Describe what you learned about the impact of economic

Describe what you learned about the impact of economic, social, and demographic trends affecting the US labor environmen