Sub. code 4181
NEB — GRADE XII
Set D
Model Question
Class 12 Finance Model Question Set D
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 D (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 business finance.
Mention any two objectives of preparing financial statements.
What is the purpose of calculating the debt-equity ratio?
State any two characteristics of a bond.
Differentiate between gross working capital and net working capital.
Define capital budgeting.
What is meant by cash dividend?
Define spot exchange rate.
A company has total debt of Rs. 8,00,000, of which 25% is short-term debt. Calculate its long-term debt.
If US$ 1 = Rs. 138, calculate the amount of US dollars required to pay Rs. 4,14,000.
Group B
Short answer question
Explain any five major responsibilities of a financial manager.
Describe the major components of financial statements and explain their importance.
A supplier offers credit terms of 5/10, net 40.
Calculate:
a. Annual percentage cost of not taking the cash discount.
b. Effective annual rate, assuming 365 days in a year.
A manufacturing company sells its product at Rs. 80 per unit. Its variable cost is Rs. 50 per unit and total fixed cost is Rs. 2,40,000.
Calculate:
a. Contribution per unit.
b. Break-even point in units.
c. Break-even point in sales value.
Explain any five important factors that should be considered while making an investment decision.
A company has an inventory turnover ratio of 9 times, an average collection period of 32 days and a payable deferral period of 22 days. Assume 360 working days in a year.
Calculate:
a. Inventory conversion period.
b. Operating cycle.
c. Cash conversion cycle.
Explain any five factors affecting dividend decisions of a company.
The exchange rate between British Pound and US Dollar is £1 = US 1 = Rs. 136.
Calculate the cross exchange rate between British Pound and Nepalese Rupees.
Explain any five major characteristics of multinational corporations.
Group C
Long answer questions
The following information is extracted from the financial statements of Sunrise Company Ltd.:
Particulars | Amount (Rs.) |
|---|---|
Cash | 80,000 |
Bank | 70,000 |
Debtors | 1,50,000 |
Inventory | 1,00,000 |
Machinery | 4,00,000 |
Building | 3,00,000 |
Creditors | 1,20,000 |
Bank overdraft | 30,000 |
Long-term loan | 2,00,000 |
Share capital | 4,00,000 |
Retained earnings | 2,50,000 |
Additional information:
Net sales = Rs. 12,00,000
Cost of goods sold = Rs. 7,20,000
Net profit = Rs. 1,80,000
Calculate the following financial ratios:
a. Current ratio
b. Quick ratio
c. Debt-equity ratio
d. Inventory turnover ratio
e. Total assets turnover ratio
f. Gross profit margin
g. Net profit margin
h. Return on total assets
Write the meaning of Preference share. Explain the features of Preference share.
a. What is a bond? Explain any four characteristics of bonds.
b. A company issues a bond with a face value of Rs. 1,000 carrying an annual coupon rate of 10%. The bond has a maturity period of 4 years. If the required rate of return is 12%, calculate the present value of the bond.
Two alternative investment projects, Project A and Project B, have the following estimated cash flows:
Year | Cash Flow Details | Project A (Rs.) | Project B (Rs.) |
|---|---|---|---|
0 | Initial Investment (NCO) | (3,00,000) | (5,00,000) |
1 | Cash Flow After Tax (CFAT) | 0 | 1,50,000 |
2 | Cash Flow After Tax (CFAT) | 0 | 1,50,000 |
3 | Cash Flow After Tax (CFAT) | 2,00,000 | 1,50,000 |
4 | Cash Flow After Tax (CFAT) | 80,000 | 1,50,000 |
5 | Cash Flow After Tax (CFAT) | 2,20,000 | 1,50,000 |
The required minimum rate of return for both projects is 10% per annum.
Required:
a) Calculate the Net Present Value (NPV) of Project A.
b) Calculate the Net Present Value (NPV) of Project B.
Paper Overview & Analysis
Set D
Year
Model Question
Type
75
Full Marks
32
Pass Marks
3 Hours
Duration
21
Question Items
Question Type Breakdown
Group Breakdown