1) prepare down the sources of long-term funds? Describe factors affecting long term funds requirements?
2) What do you mean by capital structure? What are the main determinants of capital structure.
3) What do you mean by inventory management? Why is it necessary to a business concern?
4) Rank the projects given below in order of their desirability according to the Pay-Back Period Method and the Net Present Value Index Method (Discount rate10%).
Project Initial Outlay Annual Cash Flow Life
In Years Rs. Rs.
A 10,000 2,500 5
B 8,000 2,600 7
C 4,000 1,000 15
D 10,000 2,400 20
E 5,000 1,125 15
F 6,000 2,400 6
G 2,000 1,000 2
5) Sam wishes to begin a new trading business and provides the following information.
(a) The total estimated sales in a year will be Rs. 12, 00,000.
(b) His expenses are estimated as fixed expenses of Rs. 2,000 per month plus variable expenses equal to five percent of his turnover.
(c) He expects to fix a sales price for each product which will be 25 percent in excess of his cost of purchase.
(d) He expects to turnover his stock four times in a year.
(e) The sales and purchases will be evenly spread throughout the year. All sales will be for cash but he expects one month's credit for purchases.
(i) His estimated profit for the year.
(ii) His average working capital requirements.
6) What do you mean by lease financing? prepare down its advantages and limitations.