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Financial Management
Q3. Abacus Ltd. Has the following book value capital structure on 31st March,2004
Sources of finance Book Value (Rs.) After tax cost of capital (%)
Share capital 4,50,000 22
Reserves & surplus 3,00,000 22
Preference share capital 1,00,000 12
Debt 4,00,000 14
Compute WACC of Abacus Ltd...
Q4. What is Working capital Management? What are the factors that affect the quantum of
working capital requirement?
Q6. Phoenix Company is considering two mutually exclusive investments, Project P and
Project Q. The expected cash flows of the project are given:
Year Project P Project Q PVIF @10%
0 (1,000) (1,600) 1
1 1,200 200 .909
2 600 400 .826
3 250 600 .751
4 2,000 800 .683
5 4,000 100 .621
If the cost of capital is 10%, which of the two projects should be accepted?