Register Number :

Name of the Candidate :

6382
M.B.A. ( Human Resource Management )
DEGREE EXAMINATION, 2010
( FIRST YEAR )

( PAPER - V )

150 / 120 / 140. FINANCIAL MANAGEMENT

[Common with M.B.A. (Marketing

Management) & M.B.A. ( Financial
Management )]

December ] [ Time : 3 Hours

Maximum : 75 Marks

SECTION - A (5 × 3= 15)

1. Write short notes on any FIVE :

(a) Activity budget.

(b) Capital budget.

(c) Sensititivy analysis.

(d) Proforma statements.

Turn Over
 2 3

(e) Master budget. 8. Why do companies not employ very large

amount of debt in their capital structures ?
(f) Management by exception.
9. What is financial distress ? How does it
(g) Investment centre.
affect the value of the firm ?
(h) Forecasting.
SECTION - D (1 ×15= 15)
SECTION - B (3 ×10= 30)
( Compulsory)
Answer any THREE questions.
10. Consider two firms, L and U, that are
All questions carry equal marks.
identical except that L is levered whereas V
2. Explain the important steps in the capital is unlevered. Let V1 and Vu stand repsectively,
budgeting . for the market values of L and U. In a
perfect market, would one expect V u to be
3. Explain the concept of financial leverage.
less than, greater than or equal to V 1 ? Ex-
4. What is an EBIT -EPS analysis ? Illustrate. plain.

5. What do you think is appropriate combination

of financial and operating leverage ?

6. Briefly discuss the capital budgeting practices

of companies in India.

SECTION - C (1 ×15= 15)

Answer any ONE question.

7. What is financial risk ? How does it differ

from business risk ?