Sub. code 4181
NEB — GRADE XII
Set E
Model Question
Class 12 Finance Model Question Set E
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 E (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 question
Define financial management.
Which financial statement presents assets, liabilities and equity?
What is meant by profitability ratio?
Mention any two examples of long-term sources of debt financing.
Define financial risk.
What is a zero-coupon bond?
State any two methods of evaluating capital investment proposals.
What is meant by permanent working capital?
Define stock dividend.
A company has total debt of Rs. 9,00,000. If 60% of the total debt is financed through long-term debt, calculate its short-term debt.
If US$ 1 = Rs. 140, calculate the amount of US dollars equivalent to Rs. 4,80,000.
Group B
Short answer questions
Explain any five important functions of a financial manager in a business organization.
What are financial statements? Explain the major components of financial statements and their significance.
Classify the sources of business finance on the basis of time period and ownership. Explain each classification with suitable examples.
Explain any five factors that influence the capital structure decision of a business organization.
Explain any five important factors that should be considered while evaluating long-term investment proposals.
A trading company has an inventory turnover ratio of 8 times per year. Its average collection period is 35 days and payable deferral period is 25 days. Assume 360 days in a year.
Calculate:
a. Inventory conversion period.
b. Operating cycle.
c. Cash conversion cycle.
Explain any five factors affecting the dividend policy of a company.
Differentiate between domestic financial management and multinational financial management on any five bases.
The exchange rate between Euro and US Dollar is €1 = US 1 = Rs. 139.
Calculate the cross exchange rate between Euro and Nepalese Rupees.
Group C
Long answer question
The following information is extracted from the financial statements of Himalayan Trading Company Ltd.:
Particulars | Amount (Rs.) |
|---|---|
Cash | 60,000 |
Bank balance | 40,000 |
Debtors | 1,00,000 |
Closing inventory | 1,00,000 |
Machinery and building | 4,00,000 |
Creditors | 80,000 |
Bank overdraft | 20,000 |
Long-term loan | 1,50,000 |
Share capital | 3,00,000 |
Retained earnings | 1,50,000 |
Additional information:
Opening inventory = Rs. 80,000
Cost of goods sold = Rs. 6,00,000
Net sales = Rs. 9,00,000
Net profit = Rs. 90,000
Required: 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.
a. A company has issued a bond with a face value of Rs. 1,000 carrying an annual coupon rate of 8%. The bond will mature after 3 years. If the required rate of return is 10%, calculate the present value of the bond.
b. A company has just paid a dividend of Rs. 12 per share. The expected annual growth rate of dividend is 5%, and shareholders require a rate of return of 11%.
Calculate the current market value of the common stock.
Explain the meaning of common stock and discuss any six important features of common stock.
The following information regarding two alternative investment proposals is available:
Year | Cash Flow | Project A (Rs.) | Project B (Rs.) |
|---|---|---|---|
0 | Initial Investment (NCO) | (4,00,000) | (4,00,000) |
1 | CFAT | 1,50,000 | 1,00,000 |
2 | CFAT | 1,60,000 | 1,40,000 |
3 | CFAT | 1,80,000 | 1,80,000 |
4 | CFAT | 1,70,000 | 2,20,000 |
Additional information:
- Required rate of return = 10%
Required:
a. Calculate the Net Present Value (NPV) of Project A.
b. Calculate the Net Present Value (NPV) of Project B.
c. Which project should the company select? Give reasons.
Paper Overview & Analysis
Set E
Year
Model Question
Type
75
Full Marks
32
Pass Marks
3 Hours
Duration
22
Question Items
Question Type Breakdown
Group Breakdown