3443

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DIPLOMA EXAMINATION, 2011

(ACCOUNTING AND FINANCE)

(PAPER-IV)

140. CORPORATE ACCOUNTING AND FINANCIAL MANAGEMENT

May) (Time: 3 HoursMaximum: 100 Marks

Answer any FIVE questions (5×20=100)

1. Discuss the objectives and scope of financial management?

2. What is Financial management? Briefly explain the functions of financial manager in small scale organisation?

3. Discuss the merits and demerits raising funds by issuing different types of debentures?

4. Describe the various methods in raising long term finance?

5. Enumerate the different sources of short term finance?

6. Explain the role and importance of trade credit and Bank credit.

7. What is inventory management? Explain the various inventory management techniques?

8. State the techniques involved in capital Budgeting and explain the importance of capital Budgeting?

9. From the following particulars prepare a statement showing working capital needed to finance a levels of activity of 10,000 units of output per annum Analysis of selling price per unit Rs.Raw materials 04Labour 03Overheads 02 Total cost 09 03

Profit 12Additional information

a) Raw materials are to remain in store on an average one month

b) Materials are in progress, on a average two months

c) Finished goods are in stock on average three months

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d) Credit allowed to debtors is four months

e) Credit allowed to suppliers is two months

f) May be assumed that production and overheads accure evenly throughout the year

10. A Company is considering on investment proposal to install new milling controls

at a cost of Rs 50,000. The facility has life expectancy of 5 years and no salvage

value. The tax rate 35 percent, Assume the Firm uses straight line depreciation

and same is allowed for tax purpose. The estimated cash flow betfore depreciation

and tax (CFBT) From the investment proposal are as follows

Year CFBT1 100002 106923 127694 134625 20385

Compute the following

i) Pay back period

ii) Average rate of return

iii) Net present value at 10% discount rate

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