Sub. code 4181
NEB — GRADE XII
Set B
Model Question
Class 12 Finance Model Question Set B
The candidates are required to give their answers in their own words as far as practicable. The figures in the margin indicate full marks.
Pass Marks : 32
सबै प्रश्नको उत्तर दिनुहोस् । (Attempt All Questions)
This model question paper is for Class 12 Finance, Set B (subject code 4181), carrying full marks of 75 with a pass mark of 32, to be completed within 3 Hours. Model answers are available for questions that have one — reveal them with a free account (a few reveals) or a paid plan (unlimited).
Group A
Very short answer questionS
Define financial management.
Mention any two objectives of preparing financial statements.
What is meant by liquidity ratio?
State any two differences between debt capital and equity capital.
What is meant by capital budgeting?
Define financial market.
Mention any two factors affecting the requirement of working capital.
What is meant by systematic risk?
Define mutual fund.
A company has total current assets of Rs. 240,000 and current liabilities of Rs. 120,000. Calculate its current ratio.
If US 200.
Group B
Short Answer Questions.
Explain any five major roles and responsibilities of a financial manager in a business organization.
Describe the major components of an annual report of a company.
Explain the different sources of business funds on the basis of time and ownership.
A manufacturing company provides the following information:
Particulars | Amount |
|---|---|
Annual fixed operating cost | Rs. 240,000 |
Variable cost per unit | Rs. 30 |
Selling price per unit | Rs. 50 |
Required:
a. Calculate contribution per unit.
b. Calculate operating break-even point in units.
c. Calculate operating break-even sales in rupees.
Explain the major steps involved in evaluating a capital investment proposal.
A trading company provides the following information:
Particulars | Details |
|---|---|
Annual cost of goods sold | Rs. 720,000 |
Inventory turnover ratio | 6 times |
Receivables collection period | 40 days |
Payables deferral period | 25 days |
Assume 360 days in a year.
Required:
a. Calculate the inventory conversion period.
b. Calculate the cash conversion cycle.
Explain the dividend payment procedure followed by a company.
Differentiate between multinational financial management and domestic financial management on any five bases.
The exchange rate between British Pound and US Dollar is £1 = US 1 = Rs. 133.
Calculate the cross exchange rate between British Pound and Nepalese Rupees.
Group C
Long answer questions.
The following financial information is obtained from Sunrise Company:
Particulars | Amount |
|---|---|
Cash | Rs. 45,000 |
Accounts receivable | Rs. 75,000 |
Opening inventory | Rs. 50,000 |
Closing inventory | Rs. 60,000 |
Prepaid expenses | Rs. 10,000 |
Current liabilities | Rs. 95,000 |
Net sales | Rs. 750,000 |
Cost of goods sold | Rs. 450,000 |
Net profit | Rs. 90,000 |
Fixed assets | Rs. 360,000 |
Total assets | Rs. 600,000 |
Total debt | Rs. 240,000 |
Shareholders' equity | Rs. 360,000 |
Assume all sales are made on credit and there are 360 days in a year.
Required: Calculate the following financial ratios. [8 × 1 = 8]
a. Current ratio
b. Quick ratio
c. Net profit margin
d. Fixed assets turnover ratio
e. Return on total assets
f. Debt-equity ratio
g. Inventory turnover ratio
h. Average collection period
Answer the following questions:
a. A company has issued a bond with the following particulars:
Face value = Rs. 1,000
Annual coupon rate = 9%
Maturity period = 5 years
Required rate of return = 11%
Calculate the present value of the bond.
b. A company has recently paid a dividend of Rs. 4.50 per share. The dividend is expected to grow at a constant rate of 5% annually. If the required rate of return of investors is 11%, calculate the current market value of the share using Gordon Growth Model.
Write the meaning of ordinary share. Explain any five features of ordinary share.
Himalayan Manufacturing Company is considering purchasing a new machine for its production activities. The initial cost of the machine is Rs. 450,000. The expected annual cash inflows are as follows:
Year | Cash Inflow (Rs.) |
|---|---|
0 | (450,000) |
1 | 120,000 |
2 | 150,000 |
3 | 160,000 |
4 | 140,000 |
5 | 100,000 |
The company's required rate of return is 10%.
Required:
a. Calculate the payback period of the investment.
b. Should the company accept the project if the maximum acceptable payback period is 3.5 years? Give a reason.
c. Calculate the Net Present Value (NPV) of the project.
Paper Overview & Analysis
Set B
Year
Model Question
Type
75
Full Marks
32
Pass Marks
3 Hours
Duration
22
Question Items
Question Type Breakdown
Group Breakdown