NMIMS Global Access
School for Continuing Education (NGA-SCE)
Course: Corporate Finance
Internal Assignment Applicable for December 2024 Examination
Assignment Marks: 30
Instructions:
ï‚· All Questions carry equal marks.
ï‚· All Questions are compulsory
ï‚· All answers to be explained in not more than 1000 words for question 1 and 2 and for question
3 in not more than 500 words for each subsection. Use relevant examples, illustrations as far
as possible.
ï‚· All answers to be written individually. Discussion and group work is not advisable.
ï‚· Students are free to refer to any books/reference material/website/internet for attempting
their assignments, but are not allowed to copy the matter as it is from the source of reference.
ï‚· Students should write the assignment in their own words. Copying of assignments from other
students is not allowed.
ï‚· Students should follow the following parameter for answering the assignment questions.
1. Compute the NPV and IRR for project whose initial cost is 30,000 and cash inflows are
14000, 8200, 12000, 15000, 22000. Discount Rate is 10%. Cost of Capital if borrowed
is 15%.
Show value of NPV at IRR as discount factor.
Based on the above calculations, should the project be considered? (10 Marks)
2. Calculate the Cash Cycle using the following information. (Assume 360 days in a year).
Opening Balances
Raw Material 4,00,000
WIP 80,000
Finished Goods 6,00,000
Debtors 2,50,000
Creditors 5,60,000
Closing Balances
Raw Material 5,00,000
WIP 70,000
Finished Goods 7,25,000
Debtors 3,15,000
Creditors 6,25,000
Costs Incurred during the year
Manufacturing Costs 10,45,000
Excise Duty 8,50,000
Selling and Distribution Expenses 4,20,000
Admin. Overheads 3,00,000
Total Sales 4,20,00,500
Total Purchases 3,23,00,000
30% of sales are on credit and 80% of purchases are on credit (10 Marks)
3. a. In the following balance sheet calculate the Current Ratio and the Acid Test Ratio
(5 Marks)
3. b. Sanghvi & Sons P.Ltd. is a private limited company with almost 80% shareholding
with the Sanghvi family. It has now a requirement of Rs. 400 crores for a project to be
undertaken. Currently it has a debt-equity ratio of about 1.5:1. The management of the
company feels that a ratio of up to 2:1 is acceptable. Discuss whether the company
should fund its requirements by Debt or Equity and various considerations for the same.
(5 Marks)
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