MCO-07 Solved Assignment 2018-19
Course Code : MCO – 07
Course Title : Financial Managements
Assignment Code : MCO – 07 /TMA/2018-19
Coverage : All Blocks
Attempt all the questions
Q.1 (a) Explain Yield to Maturity Model (YTM) with an example?
(b) Discuss the concept of ‘risk’ and ‘return’. 10+10
Q.2 (a) What do you understand by Time Value of Money? Discuss its relevance in
Financial decision making?
(b) (i) Calculate the future value of Rs.1,00,000 if you deposit in the bank at 6%
. per annum rate of interest for 5 years.
(ii) A fixed deposit has a maturity value of Rs. 1,50,000 initially purchased of
Rs.1,00,000 for 3 years. Calculate simple interest rate per year? 10+5+5
Q.3 (a) What is Capital Budgeting? Explain the nature and types of capital Budgeting
decisions? Why do you think that capital budgeting decisions are important for
. the firm?
(b) XYZ Ltd. has a revenue of Rs. 8,00,000 and it has provided for depreciation at
10% SLM method. It has cash expenses of R.2,00,000. The taxes are 50% p.a.
show the net earning on accounting approach basis and cash flow basis. 12+8
Q.4 (a) Explain the Walter’s share valuation formula based on dividend. How is
Gordon’s formula different from Walter’s formula?
(b) If the cost of debt is less than the cost of equity, should the firm use only debt for
entire financing? Discuss. 12+8
Q.5 (a) What are the motives for holding cash and inventory? Point out the differences
and similarities between these motives.
(b) What is the degree of operating leverage and how can it be used for determining
the capital structure?